Fedex

FedEx Corporation Assignment

Jake Nansel

BUS 630

May 30, 2011

John Kuhn

FedEx Corporation Assignment

FedEx’s strategy for success is a combination customer intimacy, operations excellence and product leadership customer value proposition. Noreen, Brewer, and Garrison (2011) describe companies that adopt a customer intimacy strategy are in essence saying to their target customer, “You should choose us because we understand and respond to your individual needs better than our competitors” (p. 4). Evidence of this strategy within FedEx is shown in the Form 10-K by stating “We intend to continue to leverage and extend one of our greatest assets, the FedEx brand, and to provide our customers with convenient, seamless access to our entire portfolio of integrated business solutions. We are pursuing a number of initiatives to continue to enhance the FedEx customer experience, including improving the capabilities of our sales professionals. For instance, through our FedEx OneCall program, we assign a single customer service agent to handle virtually all issues of a customer’s account” (p. 4). Further evidence of FedEx’s strategy for success in the Form 10-K is explained by saying “Our “operate independently, compete collectively, manage collaboratively” strategy also provides flexibility in sizing our various operating companies to align with varying macro-economic conditions and customer demand for the market segments in which they operate” (p. 4).

The four main business segments of FedEx are FedEx Ground, FedEx Express, FedEx Freight, and FedEx Kinko’s. Noreen, Brewer, and Garrison state “A cost is considered traceable to a segment only if the cost is caused by the segment and could be avoided by eliminating the segment” (p. 446). A fixed cost for FedEx express would include the costs of operations at the airports such as maintenance, training, and administrative offices. Fixed costs for FedEx Ground include the cost of operating the administrative...