Federal Express Corporation (FedEx) - Assignment Example

Federal Express Part A: Long Term Objectives Five-Year Plan (2011-2016) FedEx strives to achieve the following long-term objectives in the specific areas: O.1.) Profitability: Being the premium supply chain network of logistics and transportation in the world’s 200 countries, FedEx has to continue moving forward and higher in terms of profitability. According to 2011 financial highlights, FedEx revenues have increased by 13% to reach nearly $40 billion, 22% increase in earnings per share and 23% increase in net earnings. Projection for the next five years would be that FedEx should increase its revenues by 15% every year to reach nearly $70 billion in 2016, 22% increase in earnings per share and 23% increase in net earnings. O.2.) Competitive Position: Manning-Schaffel highlighted that though FedEx has become the world’s renowned logistics partner of corporations and individuals around 200 countries, it still has a promised competitor. According to his article, UPS is redesigning its services to make it tough for FedEx in the upcoming years to maintain its leader position in supply chain transportation services. Until now, FedEx is leading the world market with its entrepreneurship quality, very strong brand visibility and wide variety of logistics services to its customers. UPS on the other hand is lower on all these points with a leading position in one logistic service. Nevertheless, it has a very strong balance sheet that makes it the next challenging competitor for FedEx. In view of the future competition, FedEx’s five year objective for competitive position is to remain on the top position in the global logistics market. O.3.) Productivity: According to the Financial Highlights of FedEx for 2011, the global shipping demand is growing upwards annually. The expected amount for growth of global trade is 3.3% from 2010 to 2015. China, India and Brazil are leading the global trade as the emerging and manufacturing markets in the world. In order to meet this high demand in the future, FedEx has to increase its productivity from its FedEx Solutions to reach the next optimum level and sustainability. O.4.) Public Responsibility: Energy efficiency and green innovation is significant for our next generations. Due to the emissions of CO2 gas, the Ozone layer is continuously damaged. The FedEx fleet of 777F aircraft are now being installed with green energy efficient technology to reduce its emission to the lowest in order to safeguard its environment and ultimately the public. FedEx’s five year objective to fulfill its public responsibility is to ensure that all its fleet has installed green energy technology and ensures that it contributes to the environment in a positive and healthier way. O.5.) Employee Development: To meet the unprecedented high shipping demand in the world in next five years, FedEx has to ensure that it has a strong and trained team of personnel in all its offices in 200 countries. The goal is to upgrade the knowledge and expertise of existing employees as well as to hire, train and develop new employees to assume the work of existing employees. O.6.) Employee Relationships: FedEx has to improve its relationships with its employees to ensure that they are fully motivated, energized, loyal and enthusiastic to meet the next level of global challenges. O.7.) Technological Leadership: From the technological perspective, FedEx has been leading the global top position in logistics through its extensive control over technological innovation. It has to continue its hold on this front and develop new innovative technologies to retain its technological leadership position in the world. Part B: Recommendation of a Grand Strategy(ies) for Achievement of FedEx Long-Term Objectives R.1) Profitability through Efficient Services and Cutting Down Expenses: In order to meet the first objective regarding achievement of $70 billion by 2016 benchmark, it is recommended to focus on making its services more efficient which in other words mean cutting down the expenses. This can be achieved through the incorporation of Total Quality Management techniques which are aimed at improving the quality of each step of a particular work process. Every step will be ensured to have zero defect through precision tactic. Thus, focusing on ensuring that all aspects are up-to-the-level to remove any chances of a defect. Revenues are increased through effective and efficient provision of services to the customers. FedEx can achieve its long term objectives through its focus on the existing services to all customers that is corporate clients as well as individuals. FedEx has to ensure that all its departments like client management, human resource management, database management, taking orders, packaging, delivery, aircraft, shipments and all other related aspects are adhering to the benchmarks that have to be met in every courier order. R.2) Competitive Position through Improving its Entrepreneurial Spirit and Human Resource Management: In order to maintain its leader position in the supply chain transportation services (i.e. O.2), FedEx can maintain its entrepreneurial spirit to improve its balance sheet and human resource management. Globalization has brought every competitor to a cut-throat competition situation. All the information is available online and there are no more secretive ways that the competitor is unaware of. The intelligence networks have made it additionally hard for the companies to remain updated of the activities of their competitors without being watched. In fact, every company invests a substantial percentage of its expenditure on the market intelligence and watch activities to remain ahead of its competition. FedEx has to maintain its leader position by adopting hands-on and practical methods designed to achieve results in the present challenges. Knowledge has become a powerful instrument and a tool for the companies to survive with the global competition. However, the human resources of an organization become the drivers of competitive advantage for a firm through the high level of knowledge they possess. FedEx can maintain its leader position through recruitment of human resources who have strong knowledge monopoly which competitors significantly lack. R.3) Productivity through Development of New Solutions: To achieve Objective No. 3, FedEx will require to focus on the future issues and problems that will be faced by the customers in regard to transportation. Productivity is dependent upon two factors, namely: (1) Optimizing existing products and (2) Develop new products. FedEx Solutions is the existing product of FedEx that has substantially contributed to the growth of the company. FedEx will have to optimize productivity of its existing products through promotion and marketing campaigns that are targeted at the loyal customers. However, it requires new product development to remain ahead of the competition. In order to achieve this, FedEx will have to think out-of-the-box and observe the current consumer needs. By analyzing the consumer trends and the frequency of changes will determine the most promising product for the company. FedEx should design its logistic solutions around these problems with a complete and unique solution to win the customers’ hearts. R.4) Public Responsibility through Energy Efficiency: Public responsibility is one aspect of corporate and social responsibility that every Fortune 500 company is expected to fulfill. FedEx being one of the Fortune 500 company is very considerate of ensuring that it fulfills all its public responsibilities effectively. However, one of its major concern is regarding its fleet of aircraft for which FedEx should provide green technology that reduces CO2 emissions that harm the Ozone layer. To achieve this objective no. 4, FedEx will have to install green energy technology in all its fleet of aircraft and ensures that it contributes to the environment in a positive and healthier way. It can form a project team that follows the project till its completion, implementation and maintenance in the long run. The project team should develop a Work Breakdown Structure and follow the Waterfall method to highlight all the important steps of the project. The cost of each element, workers and the resources should also be developed to analyze the associated and derived costs. The project team can distribute the work among themselves and ensure the benchmark of 2016 is ensured to have achieved with the top quality product installed correctly. The achievement of this project within the deadline will leverage FedEx to remain on the top position without much effort on other arenas. R.5) Employee Development through Upgrading Knowledge of Existing Employees and Training New Ones: In order to achieve this objective, FedEx will have to carefully focus on its employees as they are its cornerstones. The existing employees having proven excellent performance should be provided with bonuses and they should be given higher challenging tasks. For that purpose, proper training sessions should be designed for them to upgrade their knowledge and develop their capacity to meet the required expectations. For the new employees, training sessions should be organized to develop their skills, capacity and ability to takeover the challenges effectively and efficiently. However, one aspect has to be kept in focus that is the type of training programs that are designed for the employees. There are two types of trainings conducted based on their nature and outcome. The first relates to reactive type of trainings that are used to control quality through strict methods. The participants are forced and compelled to follow a particular method instead of being motivated to use them by their own free will. As a result, the trainings result in frustration and layoffs instead of otherwise. The second method is most popular and practiced globally in all leading companies of the world. It is related to proactive type of training that aims to address the skills of the participants and to improve them individually. This method of training is based on the Total Quality Management approach that encourages the participant to improve each aspect and develop the ones that are missing. R.6) Employee Relationships through Bonuses and Rewards: As mentioned before, the human resources are the drivers of competitive advantage for a firm. Therefore, FedEx has to ensure that its best and most promising human resources remain working with the firm instead of joining its competitors. In order to achieve the objective no. 6, FedEx is recommended to offer regular rewards and bonuses to the employees who are performing well and have potential to work better for the organization. These measures keep the employees motivated and satisfied with the company they are working for. Also, the competitors remain at a loss when FedEx will continue to satisfy all its employees and maintain its leader position. R.7) Technological Leadership through Innovation: In order to achieve objective no. 7, FedEx is recommended to maintain its leadership position through its high level of innovative ideas in the shape of its services and products. For innovation, it has to spend on research and development arena that will help it to innovate out-of-the-box and far-reaching needs of the consumers in logistics and supply chain network. Any new inventions can be patented to gain patent rights over them. These rights will act as an asset for FedEx as well as the major source of revenue. FedEx will attain a leader with innovation status in the world that will be unbeatable and unmatchable for a long time to come. Also, these patent rights will give FedEx a monopoly over the market and help it to achieve its profit objects successfully. References Annual Report FedEx Corporation. Web 3 November 2011. Link: http://investors.fedex.com/phoenix.zhtml?c=73289&p=irol-reportsannual Clabo, Howard. “FedEx Announces Goals and Reports on Progress to Reduce Aircraft Emissions and Increase Vehicle Fuel Efficiency 20 Percent by 2020.” (2011). Web 3 November 2011. Link: http://www.businesswire.com/news/home/20081112005340/en/FedEx-Announces-Goals-Reports-Progress-Reduce-Aircraft “Financial Goals of FedEx.” Web 3 November 2011. Link: http://investors.fedex.com/phoenix.zhtml?c=73289&p=irol-financialgoals Manning-Schaffel, Vivian. “UPS and Federal Express Compete to Deliver.” (2004). Web 3 November 2011. Link: http://www.brandchannel.com/features_effect.asp?pf_id=210 Read More