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Changing Competitive Priorities at FedEx

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Changing Competitive Priorities at FedEx

FedEx is a $ 38- billion- a- year a$38-billion-a-year delivery service company that thrives on deliv-ery speed and reliability. FedEx delivers 7.5 million packages each day. Because 60 percent of the packages go by plane, FedEx charges premium prices for the service. For years, companies traditionally chose FedEx because of its on- time delivery and technological superiority in tracking packages. The Internet, however, changed things drastically. Many busi-nesses use complex Web- based processes designed to eliminate much of the unpredictability in their operations by communicating directly with cus-tomers and suppliers. E- mail delivers documents instantaneously, and low-cost truck lines, discount air carriers, and even ocean vessels can now track shipments via the Internet.
These technological advances cut into the demand for FedEx's tradi-tional services. The growth potential now lies in ground transportation, presently dominated by United Parcel Service. This demand is fueled by Internet companies, such as Amazon. com, which relies on ground trans-portation services to deliver packages directly to the customer's door, and by the vast business- to- business supply networks created by Web- based purchasing systems. To remain competitive, FedEx created two new ser-vices: FedEx Ground and FedEx Home Delivery. FedEx Ground focuses on business- to- business deliveries via a recently procured trucking company. FedEx Home Delivery specializes in deliveries to residences. In addition, FedEx invested $ 100 million in processes to coordinate the flow of goods. The goals are now low- cost operations and dependable delivery? a change from past operations goals that stressed speed.

1. Analyze the case study.
2. Using APA-style writing format, provide a written summary of the case study. Indicate the operations management technique that was used and recommend a technique that was not used and its potential outcome.


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FedEx Operations Management Technique
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FedEx Operations Management Technique
FedEx's traditional ways of doing things were changing. Originally, FedEx was a company that provided quick service faster than any competition for a premium price. Price was no object to most companies because the cost of doing business quickly far outweighed not getting it there in time. Bids on new business needed to be there overnight! This brought in more business to most organizations and so the cost was no so important. As times changed and some companies fell on harder times, they could not afford the exhorbinate amount of money it cost to send items overnight. Organizations started to look for new ways to do this.
The Internet was one of the saving ...

Solution Summary

The expert examines changing competitive priorities at FedEx.