Introduction
Federal Express Corporation is a company that provides delivery services to customers in different parts globally. Since being founded in 1973, it has expanded both infrastructurally and marketwise to a point that it is targeting to use technological innovations such as bots to deliver packages. With continuous integration of technology to its operations, FedEx has become one of the best in the world. This paper examines a case study about the organization, its strategy, the changes implemented, opportunities for innovation, challenges, and solutions.
FedEx’s Previous Strategy and Reason for Change in Business Model
Since its founding, FedEx has transitioned from an express delivery firm to a worldwide logistics and supply chain management organization. Previously, it mainly focused on using manual means of delivering goods to destinations. With time, from 1973, it invested greatly in information technology systems (Ng & Farhoomand, 2000). After internet was launched in 1994, the capacity for more IT systems integration to enable offering services to clients through the entire supply chains grew which was their reason for change.
Some of the changes included investing in the infrastructure over several years and acquiring Caliber System Inc. thus building a great technical architecture with capability to pioneer in online commerce. The Federal Express Corporation has established superior virtual, physical as well as people networks to prepare for change and shape it on the international scale (Ng & Farhoomand, 2000). Additionally, to change how individuals connect with one another in the novel network economy. It is rearranging its operations to attract more consumers by embracing integration of technological innovations.
Opportunities for Innovation
Federal Express Corporation has envisioned advantages provided by the next-generation innovation consisting of artificial intelligence, computer-aided vehicles, drones, and robotics. Some of the opportunities include delivery by drone (Ng & Farhoomand, 2000). The company participated in a pilot event with the Wing Aviation LLC in its attempts in testing a small package transported by a drone. In 2021, the firm completed testing opting to prioritize study as well as development of other technologically innovative programs.
The other opportunity for innovation in terns of delivery service is using Roxo, which is a same day bot. In February of 2019, Federal Express Corporation revealed that there was a prototype ready created with the intention of responding to the quick growth of online commerce. Additionally, it sought to deal with the costs of last mile delivery and its complexities and as a sign of the company being committed to environmental sustainability (Ng & Farhoomand, 2000). The plan is that the bot can use a reasonable speed on the sidewalks and roadside and safely deliver goods at destinations.
Challenges in Situations of Uncertainty and their Solutions
One of the challenges facing the company is that it is overdependent on the United States market. A large fraction of the firm’s revenue comes from this region which is about fifty billion dollars out of close to seventy billion dollars (Aseri, 2021). In case the nation is affected economically, the earnings of FedEx will greatly drop. It is important that the company expands their services to other countries, for instance, Canada. This will offer them a chance to gain revenue even if the U.S. market fails financially.
Apart from this, the behavior of the delivery drivers is questionable. Mishandling of packages, rash driving and rudeness can be detrimental for the company’s image. Usually, the drivers are hired based on contracts which can be difficult to act accordingly. The solution to this problem would be employing individuals in a different manner. For instance, avoiding the use of contracts since someone might misbehave and the company fails to act due to trying to adhere to the terms of the agreement.
The other challenge facing Federal Express Corporation is the increase in transport expenses. To meet the high demand, the company hires third party contractors (Aseri, 2021). This consists of around twenty-four percent of its cost in the 2019 financial year. Its bought transportation expenditure continues to rise quickly throughout the world. In case they maintain the same trend, it can lead to losses in the near future. The firm can solve this by investing more on internal transportation to avoid the high prices charges.
The last challenge facing the company is frustrating claim guidelines and policies. More clients are becoming increasingly irritated by Federal Express Corporation’s rules if their goods are damaged during transportation. In the event the firm fails to address the problem, it can lose potential online consumers (Aseri, 2021). The company should seek feedback from the customers by circulating questionnaires to some of their loyal clients and commit to act on them.
Change Situation for Future Opportunities and Resulting Challenge
The COVID-19 pandemic has revealed to businesses that there is an opportunity for them to explore the online or e-commerce. Customers are more inclined nowadays to purchase or consume goods or services from companies that have an online presence. This is a chance worth exploring by ensuring that Federal Express Corporation has a team that caters to this need. The individuals in the group will be responsible for engagement with consumers through the social media pages and website. This allows the organization to understand what the clients desire and how they embrace particular products or services.
However, even with this opportunity, there is a challenge of cybersecurity whereby conducting business online has been impacted greatly when attackers access personal information of customers such as the credit number. There are cases of individuals losing money from their accounts as soon as they pay for something online (Aseri, 2021). Others have reported that some of the data they share with the websites are used without their permission to advertise other goods to them.
Business Plan
The goals of the company include to offer satisfaction to customers and expand into other markets globally. This means Federal Express Corporation can start by investing more in other countries outside the United States. By advertising through the social media platforms, potential clients in those countries will be attracted to the services. Additionally, the firm should always seek consumer feedback to ensure that they understand what the customers need.
Conclusion
Every company has its challenges, and the best ones acknowledge and identify their weaknesses and work on them. Federal Express Corporation used a strategy that at this point in time cannot be effective in the market. Over time, the management chose to acquire and integrate the use of information technology systems to the services offered by the company. The goal was to ensure that the customers continue to be satisfied. This as well guarantees that they remain loyal to the firm. It is important that FedEx explores other ways to better themselves to ensure that they gain more market share by selling more and having more clients.
Reference
Aseri, A. M. (2021). e-Commerce–Leaders and Customers. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(6), 1445-1450. Web.
Ng, P., & Farhoomand, A. F. (2000). FedEx corp: Structural transformation through e-business. Centre for Asian Business Cases, School of Business, University of Hong Kong.