“The Evolution of the Small Package Express Delivery Industry,1973-2010”

“The Evolution of the Small Package Express Delivery Industry,1973-2010”

Consider the attached Case Study – entitled “The Evolution of the Small Package Express Delivery Industry, 1973-2010”

Assignment Task

Consider the attached Case Study – entitled “The Evolution of the Small Package Express

Delivery Industry, 1973-2010” – and answer the following questions:

1. Identify and explain the initial business level strategy of Federal Express, at the time it

sought to commence operations in 1973.

? Your answer should include identification of the competitive advantage sought

by Federal Express and how it intended to realise this competitive advantage.

2. Identify and explain the various strategies (or strategic responses) adopted by Federal

Express as it responded to the challenges and opportunities that arose in the Small

Package Express Delivery industry in the period 1973 to 2010. Furthermore, as part

of your answer you must explain why the strategic response in each case was an

appropriate response.

In summary format, the major challenges and opportunities you need to consider are:

? deregulation of the US air cargo industry in 1977

? the entry of major new competitors in the period 1979 to 1982, including

Emery Worldwide, Airborne Express and UPS

? the slowing in the growth of demand for air express delivery services in the

late 1980s

(Note: As part of your answer you need to identify why there was a slowing in

the growth of demand for these services in the US through this period)

? the 1990-91 recession

? innovation in product offering by both major competitors and by Federal

Express itself, particularly through the late 1980s, including:

* second day delivery

* premium services

* logistics services

* information systems

* bundling

? the growth of a global market for the express delivery of small packages

through the second half of the 1980s and into the 1990s

? the 2001 recession and the Global Financial Crisis (which began in 2008/09

onwards)

BUSN3055, BUSN9032 Assignment Page 2

(Note: As part of your answer you need to recognize that the strategic

response of Federal Express was different on these occasions than it had been

to the 1990-91 recession. You need to identify and explain why it was

different.)

? the significant expansion of ground networks by all the major carriers in the

late 1990s and early 2000s

(Why did this occur? That is, what was the strategic reason for the expansion

of ground services?)

? the entry of DHL into the US market

? the various shifts in demand patterns throughout the 1990s and the 2000s due

to changes in technology and management practices

3. Explain why the longer term outlook for profitability for Federal Express (now called

FedEx) and the other major firms in the US Small Parcel Express Delivery industry

was better at the end of 2010 than it had been through much of the 1980s and 1990s.

You should apply Porter’s Five Forces model in attempting to answer this question.

More on the Assignment Task

There are a number of things to note about undertaking this assignment task:

i. While the case study considers the evolution of the overall small package express

delivery industry the assignment questions are focused on identifying and

understanding the strategies of one particular firm in the industry, namely Federal

Express (now known as FedEx).

ii. The assignment questions are also focused primarily on the U.S.A. small package

express delivery service industry, rather than the global industry. (Although, this is

not to say that one doesn’t affect the other.)

iii. The assignment is an exercise in analysis and in applying the concepts studied in this

topic. Particularly relevant in properly analyzing the case study and in correctly

answering the assignment questions are an appreciation of the dynamic nature of

industry competition and a good understanding of Porter’s Five Forces Model.