Embry-Riddle University: Case Analysis on Federal Express Success

This case analysis examines the factors contributing to the success of Federal Express (FedEx), the world's largest express delivery firm. The study highlights the company's rapid growth, attributed to its efficient business model guaranteeing high reliability and speed. The analysis identifies key problems, including stabilizing margins with B2C deliveries and generating cash flow to support e-commerce demands. It explores alternative actions like integrating supply chain capabilities and reducing delivery costs. The recommendation emphasizes expanding on-site networks for drop-off/pickup, improving e-commerce capabilities, and leveraging digital assets for efficient delivery solutions. The analysis underscores the importance of adapting to the evolving e-commerce landscape and optimizing operations to maintain profitability and customer satisfaction.

Running Head: REASONS FOR THE SUCCESS OF FEDERAL EXPRESS 1
Reasons for the success of Federal Express.
Student’s name
Institution affiliation

REASONS FOR THE SUCCESS OF FEDERAL EXPRESS 2
Abstract
Federal express forms the largest continuous process flow in the world thus offering it a
chance to deliver services to customers in a reliable, fast overnight flight. Its success has been
attributed to various factors including its model for business and performance. The dissertation
therefore explores in detail the contributing factors to its success.
Case analysis: reasons for the success of federal express
Summary
Federal express serves as the world’s largest express delivery firm. The company,
founded in 1971 experienced rapid growth and returns after its inception with an increase of 63%
in its share price within the past five years. Its business model has greatly contributed to its
success. It guarantees reliability and speed of up to 90% unlike other companies. (Gardner,
2017). It is therefore able to consistently capture value by delivering the best to its customers. Its
mode of operation also helps to deliver customer requirements quickly without overcharging
them. The alignment of the operating and business models resulted in a healthy margin of up to
8% while generating higher revenues. Besides, the pricing model used by the company has also
attributed to its success greatly. The models are highly efficient to suit the increasing e-
commerce in the globe today making the company more successful.
Problem
The first problem is stabilizing its margins at the expense of B2C deliveries. It is because
they can be packed inefficiently, can be expensive or bulky. The second is the generation of cash
flow while stepping up the capital spent on networks to service the demand in e-commerce
especially during peak seasons. (Jung, 2019).

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Significance of the problem
The problems may help to expand the network of deliveries to suit the demand of the
customers thus improving on the generation of cash for the company. The ground margin is also
likely to be expanded thus benefiting the company to a greater extent. (Mohamad Radzi, Nor,
Nazri & Ali, 2017).
Development of alternative actions
Alternative I: integrating supply chain capabilities for the company as well as networks of
transportation to broaden solution portfolio. It encourages fulfillment driven by comprehensive
customer input thus supporting e-commerce activities. (Jung, 2019).
Advantage: it will help to satisfy the demand of B2C approach using online platforms.
Disadvantages: loss of residential customers.
Alternative action II: reduction of the costs of delivery by introducing federal express smart
post and ground operations
Advantages: stabilization of margins irrespective of B2C dominance.
Disadvantages: reduction of cash flow generation from deliveries made to customers.
(Dhir, 2019)
Recommendation
The company should greatly expand its on-site network to allow for drop-off and pickup.
It also reduces the costs incurred in service delivery because multiple packages can be delivered
to one location rather than delivering single packages at a time. At the same time, the delivery
can be easily managed using a tablet or smart phone to track, reroute, schedule, receive, and sign

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them. (Gardner, 2017). The company also needs to improve its E-commerce capabilities and gain
profitability. It must combine its digital capabilities and physical assets to create secure, efficient,
and effective alternatives for delivery. The basis of the same is that economics will need
innovative methods to deliver commodities or services ordered online rather than delivering the
services to residences ,which may be costly.

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References
Gardner, J. A. (2017, November). The Puzzling Success of'Federal Democracy'. In CITC
Conference Volume, November.
Jung, D. (2019). " Assessing citizen adoption of e-government initiatives in Gambia: A
validation of the technology acceptance model in information systems success". A critical article
review, with questions to its publishers. Government Information Quarterly, 36(1), 5-7.
Mohamad Radzi, K., Nor, M., Nazri, M., & Ali, S. M. (2017). THE IMPACT OF INTERNAL
FACTORS ON SMALL BUSINESS SUCCESS: A CASE OF SMALL ENTERPRISES
UNDER THE FELDA SCHEME. Asian Academy of Management Journal, 22(1).
Dhir, S. (2019). Federal Express. In Cases in Strategic Management (pp. 91-105). Springer,
Singapore.

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