TABLE OF CONTENTSChapter I: HISTORYF. Opportunities and ThreatsChapter III: INTERNAL ANALYSISA. Competitive AdvantageB. Distinctive CompetenciesC. StrategiesD. Four Building BlocksE. StrengthsF. WeaknessesG. ImageChapter IV: BUSINESS-LEVELA. FedEx’s Business Level StrategyB. Issues in DifferentiationC. Targeting Customer NeedsD. Market SegmentationE. Differentiation of QualityF. Distinctive CompetenciesG. Differentiation in the WorldH. The Advantages of DifferentiationI. The Disadvantages of DifferentiationJ. The Impact of their StrategyChapter V: VALUE CHAIN, TECHNOLOGIES, GLOBAL STRATEGYA. Value ChainB. Product TechnologyC. Impact of national context on the industryD. Response to Differences Among NationsE. Global Dimensions of StrategyChapter VI: CORPORATE-LEVEL STRATEGYB. FedEx ExpressC. FedEx GroundD. FedEx New OfferingsE. Horizontal IntegrationG. Fill in the BlanksH. White SpacesI. Premier Plus 10J. Mega OpportunitiesREFERENCESFedEx CorporationStrategic Management ProjectPrepared for:DR. Robert Ch. WoodBUSINESS 189 – Strategic ManagementPrepared by:SAN JOSE CONSULTING GROUP:Billy CRANEBrad LANDTHORNBob MIRIJeremy RELPHChris SANCHEZAndrea VERNEROVADecember 9, 2003TABLE OF CONTENTSEXECUTIVE SUMMARY ……………………………………………………………… 3-5Chapter I: HISTORY ……………………………………………………………… 6 -9Chapter II: EXTERNAL ANALYSIS ……………………………………………….9-15A. Industry Life CycleB. Industry DynamicsC. Porter’s Five ForcesD. Global Competition E. National ContextF. Opportunities and ThreatsChapter III: INTERNAL ANALYSIS………………………………………………16-23A. Competitive AdvantageB. Distinctive CompetenciesC. StrategiesD. Four Building BlocksE. StrengthsF. WeaknessesG. ImageChapter IV: BUSINESS-LEVEL ………………………………………………………23-28A. Business Level StrategyB. Issues in DifferentiationC. Targeting Customer NeedsD. Market SegmentationE. Differentiation of QualityF. Differentiation in WorldG. Advantages of DifferentiationH. Impact of Strategy Chapter V: VALUE CHAIN ……………………………………………………… 28-34A. Value ChainB. Product TechnologyC. Impact of National Context of IndustryD. Response to Differences Among NationsE. Global Dimensions of StrategyChapter VI: CORPORATE-LEVEL STRATEGY ………………………………………. 35-41A. Fedex CorporationB. ExpressC. GroundD. New OfferingsE. Horizontal IntegrationF. Vertical IntegrationG. Fill in the Blanks, H. White SpacesI. Premier Plus 10, J. Mega OpportunitiesREFRENCES………………………………………………………………… 42-44San Jose Consulting Group 2EXECUTIVE SUMMARYDuring one of his two combat tours in Vietnam, Federal Express CEO Frederick Smith gota quick lesson in survival from a crusty Marine sergeant. “Lieutenant,” the sergeant told Smith, “there’s only three things you gotta remember: shoot, move, and communicate.”(Fortune, Nov. 1997)Some thirty plus years later, and at the helm of one the shipping industry’s largest competitors, Smith has utilized that same tactical advice in the business world. His maneuvering of FedEx has incorporated an aggressive shooting strategy as the company has emerged into numerous shipping regions around the world such as Asia, and furthermore, FedEx continuously has been pursuing and developing a solid foundation and infrastructure for the company and its future. One example is the addition of a new hub in the Philippines, at Subic Bay. His movement has guided the company to innovate its products and develop with the needs of its customers. Finally, the use of communication has emerged as one of the company’s greatest competencies, not only with customers, but internally as well. “FedEx has always been a technology trailblazer, and the success of fedex.com is testament to that.” The company was one of the first to harness the power of the Internet, launching its Web site in 1994 with a bold new package tracking application one of the first true corporate Web services. Soon after, FedEx became the first transportation company with Web site features that allowed customers to generate their own unique bar-coded shipping labels and request couriers to pick up shipments. FedEx Ground is taking advantage of the wireless LAN technology by expediting the movement of shipping information from delivery workers' terminals to a central database.San Jose Consulting Group 3It is with these tactics along with FedEx strong competencies and worldwide infrastructure, which will be discussed in further detail hereafter, that will foster the companies success and eventual competitive advantage in years to come.FedEx provides many benefits to its customers. The shipping industry, however, is one of extreme competition. Not only are customers confronted with the choice of carrier, they are also confronted with a choice of means of shipment. It is further complex, as the pricing strategy of the sector has companies, for instance, who lead cost in one form of shipment such as ground and follow in another form of shipment such as international delivery. FedEx foresaw the importance of differentiation early on, as did most of the sector players. FedEx realized that it was in the information business. Customers are not only concerned withthe product getting from point A to B, but further, are interested in the knowledge of where thecargo originated from, its present whereabouts, destination, estimated time of arrival, price andcost of shipment. All these elements are just as important to some businesses and consumers as receiving a safe delivery. To support this need, and differentiate itself from competitors, FedEx created state-of-the-art technology for customers to track and validate shipments. Shipments are virtually traceable from their origin to their destination all with the convenienceof the personal computer. Additionally, FedEx has forecasted the important strategic trend of acontinuously global shipping market. The differentiation of products is a continuous process in this competitive industry as innovations are often quickly imitated. FedEx strives to develop innovations and listens to customers wants and needs.Further meeting the needs of customers worldwide, the company has invested extensively in global infrastructure.