Fedex Strategy

FedEx Strategy

Karen Smith

BUS630: Managerial Accounting

Professor John Luxemberg

November 13, 2011

The FedEx Strategy

FedEx is using a business strategy that is centered on product leadership. FedEx is not boasting about being the least expensive in comparison to its competitors nor do they have a customer intimacy focus such as Starbucks. FedEx’s goal is to use its various divisions to create a product that leads its industry. By doing so, customers may not necessarily pay the least amount, but they will be apart of a company that is focused on being the best. That attitude trickles down to the customer who may be willing to pay a little more to latch onto a company who is striving to excel. “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” (United States Securities and Exchange Commission, 2005, p.4). While FedEx does service the public, its customers are varied and not exclusive to solely the public.

Business Segments

FedEx has four business segments: (1) FedEx Express; (2) FedEx Ground; (3) FedEx Freight; and (4) FedEx Kinko’s. Each of these four business segments has different business focuses therefore, each business segment may have different traceable fixed costs. For example, the FedEx Express segment may have printing of the FedEx Express envelopes that, should this segment cease to exist, so would the printing for this particular segment. In addition, the drop-off boxes exclusively for the FedEx Express service provided for public use for its customers may also vanish, as these drop-off boxes are exclusive to this business segment. FedEx Ground may have personnel that work specifically...