1. Structural Transformation Through E- Business
Ezgi Öztörün
Onur Okut

2. Agenda A) About FedEx Information About Company Establishment
Industry Development- FedEx Innovations (timeline)
Competitor Analysis
B) Structural Transformation Through E- Business
FedEx Problem
Impacts of E-Business on the Industry
As of January 2000 Announcement - New Implemented Structure
C) Between FedEx
Evaluation of 2000 Announcements
Post - Implementation Strategies
D) Final Comments & Questions and Answer Session

3. A) About FedEx 1) Information About Company Establishment
Began operation as a customs broker in Niagara Falls, N.Y. (1903)
Frederick W. Smith - Federal Express in June 1971
Officially began operations on April 17th, the modern air/ground express industry was born
“Since its inception in 1973, Federal Express Corporation has transformed itself from an express company to a global logistics and supply-chain management company.”

4. A) About FedEx
2) Industry Development- FedEx Innovations a) The Express Transportation and Logistics Industry
3 main trends:
The globalisation of businesses
Advances in information technology and the application of new technology to generate process efficiencies
The changing market demand for more value-added services

5. The breakthough for the industry!

6. A) About FedEx
With the advent of IT, express transportation became an aggregation of two main functions:
The physical delivery of parcels
The management and utilization of the flow of information pertaining to the physical delivery

7. A) About FedEx 2) Industry Development- FedEx Innovations
b) The FedEx Innovations (timeline)
1979 COSMOS (Customer Oriented Services and Management Operating System)
1984 PowerShip
1985 Bar-code Labelling
1994 FedEx Website
1996 FedEx interNetShip
1999 Partnership with NetScape

8. A) About FedEx 3) Competitor Analysis
To competitiveness of transportation companies depended upon 3 factors:
Their global network of distribution centers
Their ability to delivery wherever their customers conducted business
Speed- in order to avoid from the effects of rising inflation and global competition 
The 4 leading companies - UPS,TNT,DHL and FedEx-
held more than %90 of the worldwide market

9. A) About FedEx SWOT Analysis Strengths: 1) global scale Weaknesses:
2) new technology
3) strong brand image
Weaknesses:
1) prices
2) labor disputes
Opportunities:
1) global expansion
2) joint-ventures
Threats:
1) relations with foreign countries
2) world economic and political conditions

10. “Although FedEx pioneered the Web-based package-tracking system such systems became the industry norm rather than a competitive advantage”

11. B) Structural Transformation Through E- Business
1) FedEx Problem
After the acquisition of Calibar Systems Inc. in 1998
Compatibility problem between Caliber and FedEx’s logistics
UPS’s competitive advantage
FedEx- confused customers
Effects of rising fuel prices in 1999
Pressure to re-think its business strategy and its supply-chain channels

12. B) Structural Transformation Through E- Business
2) Impacts of E-Business on the Industry
The effects of the internet on express transportation and logistics market was twofold:
Opportunities in logistics management -using the internet through engineer their supply chain.
(Integration with customer supply chains was the key)
The express transportation needs presented enourmous opportunities for companies such as FedEx.
(Growth in e-tailing and business to business (B2B) e-commerce)

13. By integrating these e-business trends, FedEx renovated its structure to get rid of duality problems in supply–chain organizations

14. B) Structural Transformation Through E- Business
3) As of January 2000 Announcement - New Implemented Structure
A new branding strategy-extending the FedEx brand to four of its subsidiary companies:
FedEx Express (formerly Federal Express)
FedEx Ground (formerly RPS)
FedEx Custom Critical (formerly Roberts Express)
FedEx Logistics (formerly Caliber Logistics)
Viking Freight (no change in 2000 however changed in 2002 and became FedEx Freight)

15. B) Structural Transformation Through E- Business
FDX Corp.
Federal Express
RPS
FDX Logistics
FDX Supply Chain Services
Caribbean Transportation
Viking Freight
Roberts Express
At the end of 1999
FedEx Corp.
FedEx Express
FedEx Ground
FedEx Home Delivery
FedEx Logistics
Caribbean Transportation
Viking Freight
FedEx Custom Critical
FedEx Trade Networks
January 2000 Reorganization

16. B) Structural Transformation Through E- Business
Introduction of a new low-cost residential delivery service - FedEx Home Delivery
Changes for B2B solutions
Growth in consumer e-commerce (B2C e-tailing)
BEFORE
Multiple brands
Separate sales force
Multiple invoices/ accounts
Multiple automation
Separate customer service
AFTER
Single branding
Single sales force
Single invoice/account
Streamlined automation
Single customer service

17. Was the January restructuring going to bring the harvest?

18. C) Between 2000 - 2010 FedEx 1) Evaluation of 2000 Announcements
Did it provide the right ingredients to achieve the objectives of creating value for FedEx customers while at the same time improving profitability for FedEx?
Return on Sales Ratio

19. C) Between 2000 - 2010 FedEx 1) Evaluation of 2000 Announcements
In short term, new transformation of e-business and January 2000 announcements did not have a great impact on the profitability.
Sales Volume - Revenue

20. C) Between FedEx
2)  Post - Implementation Strategies
Given the speed at which technology and the marketplace were changing, would the new organization structure be adaptable to the FedEx’s business?
Restructuring of some of the subsidiaries such as Viking Freight and Home Delivery Services via B2C e-commerce modal completed in 2002
After the restructuring process completed, the FedEx Corp. preferred to grow with the acquisitions.

21.   D) Final Comments
The primary reason for the transformation in 2000 was the result of acquisition strategy. FedEx, however, grew after 2003 with acquisitions. We believed that this acquisition oriented strategy can create new compatibility problems again and affect FedEx’s performance negatively in long-run.
The adaptation problems of FedEx can easily be solved if our expectations will realize. FedEx implemented an integrated system(like FedEx Corp.) The acquisition strategy should always be complemented with integration strategy.
The problems in supply-chain of FedEx was solved with the support of internet technology. Since 2000 transformations, FedEx renovated itself with e-commerce applications such that B2C was a new idea for FedEx, unlike its competitor –UPS.

22. D) Questions and Answers
In 2000, FedEx did not only combine its subsidiaries but also transform its supply chain systems. What factors gave rise to the structural transformation of FedEx?
Fill in the blanks:
______became of significance to achieve competitiveness, not only for the transportation companies but also for their in ____________________industry.
True or False?
After the 2000 implementations, FedEx did not anticipate to meet needs of businesses specializing in B2C e-tailing.
The internet forced the company to consolidate its supply chain systems and solutions as customers demanded global solutions .
Customers were confused because of decentralized structure of FedEx. Integration with customer supply chains was the key.
Speed
customers
express transportation
False

23. THANKS FOR YOUR ATTENTION 