Final Project Presentation: FedEx

Team Members

• Amanda Coop
• Lanise Davis
• Chelsea Fairchilds
• Phoebe Garrett
• Bradley Gay

Topics Covered

• Introduction
• History
• Organizational Structure
• Product and Strategy Overview
• SWOT Analysis and Financial Overview
• Current News and Projects
• Performance
• Competitive Analysis
• Summary and Recommendations

Introduction

• FedEx Corporation: American multinational conglomerate focused on transportation, e-commerce, and business services
• Based: Memphis, Tennessee
• First Company: Offered overnight delivery (Federal Express)
• Subsidiaries: FedEx Ground, FedEx Office, FedEx Supply Chain, FedEx Freight
• Publicly Held: 550,000+ employees, services in 220+ countries
• Mission: Superior financial returns for share owners through high value-add logistics and business services. High standards in customer service, relationships, safety, and ethics.

History

• 1965: Frederick W. Smith’s term paper at Yale on time-sensitive shipments
• 1973: Federal Express operations begin in Memphis
• 1975: First Dropbox installed
• 1977: Purchase of Boeing 727s after deregulation of air cargo
• 1978: Listed on NYSE as FDX
• 1983: First company to reach $1 billion in revenues in 10 years without mergers/acquisitions
• 1984: Started intercontinental operations
• 1986: Introduced SuperTracker barcode scanner
• 1988: Service to Japan
• 1994: Rebranded as FedEx, launched fedex.com with online tracking
• 1995-1996: Expanded service with FedEx Internet Ship Manager
• 2005: Started World Flights, unveiled large solar power installation in Oakland
• 2006: Launched FedEx Cup with PGA tour
• 2009-2010: Introduced SenseAware, first all-electric trucks
• 2013: Launched FedEx Delivery Manager
• 2017: $100M international express and cargo hub in Shanghai
• 2021: Unveiled Priority Earth, goal of carbon-neutral operations by 2040
• 2023: Celebrated 50 years

Key Acquisitions

• 1989: Tiger International - Expanded international air presence
• 1998-2001: Viking Freight, American Freightways led to formation of freight opco
• 2004: Acquired Kinkos, rebranded as FedEx Office
• 2004-2011: Various acquisitions to expand international and ground economy presence
• 2016: TNT Express acquisition for European presence, cybersecurity issues increased costs
• 2017: Acquired Northwest Research

Organizational Structure

• Key Executives: Frederick W. Smith: Founder and Executive Chairman
• Raj Subramaniam: President, CEO, Director
• Mike Lenz: EVP, CFO
• Several other key VPs for Information Services, General Counsel, Sales, Customer, Transformation, Operations, Advanced Technology, and People

Strategy and Product Segments (Phoebe Garrett)

• Segments: Air, ocean, rail
• FedEx Logistics: Global freight movement, air/ocean cargo transportation, customs clearance
• FedEx Services: Marketing, technical support, billing collection
• FedEx Ground: Low-cost B2B and B2C trucking
• FedEx Freight: Bulky commodity transportation
• FedEx Dataworks: Supply chain visibility and growth

SWOT Analysis

Strengths

• Extensive Global Network: 220+ countries
• Strong Brand Image: Reliability, speed, quality
• Broad Service Portfolio: Express delivery, freight forwarding, supply chain management, etc.
• Technological Innovation: Real-time tracking, automation, partnerships for autonomous delivery

Weaknesses

• Vulnerability to Market Fluctuations: Fuel prices impact profitability
• Complex Operations: Coordination, logistics, and management
• Competitive Landscape: Traditional (UPS, DHL) and emerging (Amazon)

Opportunities

• E-commerce Growth: Demand for reliable delivery
• Supply Chain Optimization: End-to-end solutions
• Sustainability Practices: Electric vehicles, alternative fuels
• Priority Earth Initiative: Carbon-neutral by 2040

Threats

• Regulatory Changes: Trade, customs, security implications
• Geopolitical Risks: Trade disputes, political instability
• Technological Disruptions: Autonomous vehicles, drones, AI, blockchain

Financial Overview

• Q4 FY 23 Results: Revenue down $3.36B YoY, net income up $146M YoY
• Trends: Revenues tapering from pandemic highs
• Margins: Operating margins down to 5.45% from 6.68% (FY 22) and 6.98% (FY 21)
• Earnings: EPS at $15.48 (FY 22: $14.33)
• Return on Equity/Assets: Decreasing trend since FY 21
• Market Cap: Downward trend since FY 21
• Book Value: Increased to $26.1B at FY 23

Current News and Projects (Phoebe Garrett)

• 50 Years Celebration (April 17, 2023): Giving back through events
• Operational Consolidation: Into one organization, aiming for $4B cost reduction by FY 25
• Airline Pilot Contract Negotiations: Potential contract by August 2023
• Efficiency Strategies: Process optimization, advanced technologies, data analytics
• Technological Enhancements: AI, blockchain, tracking systems
• Customer Experience Focus: Real-time updates, personalized delivery options
• Sustainability Initiatives: Eco-friendly transportation, recycling, waste reduction

Competitive Analysis

• Main Competitors: DHL, UPS
• Pricing: FedEx cheaper domestically, UPS cheapest overall, DHL cheaper internationally
• Geographical Presence: FedEx strong in US, Europe, Asia; DHL leads in Europe, strong in Asia; UPS leads in North America
• Strengths: Brand recognition, customer loyalty, innovation, acquisitions, partnerships (e.g., Microsoft, neuro)

Summary and Recommendations

Summary

• Leading in transportation, e-commerce, business services
• Strengths: Global presence, brand reputation, service portfolio, innovation
• Opportunities: E-commerce growth, supply chain solutions, sustainability
• Financial Trends: Mixed, with some growth in income but declining revenues
• Competitiveness: Fastest domestic service, strong international reach

Recommendations

• Optimize Efficiency: Streamline cargo operations
• Customer Focus: Enhance customer loyalty
• Workplace Culture: Improve employee well-being
• Global Expansion: Increase market opportunities