Attacking and Defending Through Operations - FedEx

Assignment submitted by: Pradeep Devkar

Student id: 20140155
Word count: 159
!mai": pradeepdevkar#gmai"$com
%ontact: &'4 22 195 1925
(ecturer detai"s: )ay *ino+
Paper: 4$2, -S.
Index
1
1.0 Facts and Figures of the company
!
".0 Executi#e $ummary
.. %
!.0 Introduction
&
%.0 'istory of FedEx
.. &
&.0 Attacking through operation
.. (
(.0 Identifying capa)i*ities
. (
+.0 Defending through operations
.. ,
,.0 -onc*usions
. 10
..0 /ecommendations
. 11
10.0 /eference *ist
.. 1"
2
Important Facts and Figures a)out FedEx 0$ource1
222.nasda3.com4
3
Executi#e $ummary
-perations strategy is t/e key deciding 0actor 0or any company to ac/ieve
competitive advantage over t/eir competitors$ ./ese strategies are no
"esser t/an a +ar and /ence re1uire bot/ attacking and de0ending
tec/ni1ues$ ./e decision makers must se"ect t/e rig/t strategy at t/e rig/t
time to s/ie"d t/e organisation 0rom t/e surrounding attacks$ 2ed!3
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disp"ayed t/e same be/aviour +/ic/ is brie4y discussed in t/is report$
2ed!3 starting 0rom a sma"" company de"ivering 1,' packages a nig/t
turned to be a "eader in courier +or"d by de"ivering , mi""ion packages per
day$ ./is took 2ed!3 "ess t/an 50 years to ac/ieve$ 2redrick
Smit/ +/i"e serving in 6arine %orps in 7ietnam a"+ays c/eris/ed t/e
advice o0 a veteran marine sergeant 8./ere9s on"y t/ree you gotta
remember: s/oot: move and communicate8 ./is inspired (t$ Smit/ to
operate t/e business +/i"e it +as in its gro+ing stage$ ;o+ever /e a"so
used t/e de0ending tactics +/en /e needed more time to attack t/e
competition$ Attacking t/roug/ operations is by positioning and e3ecuting$
;ere +e speak about positioning our se"0 to be ab"e to address t/e
customer<s needs and to deve"op t/e tec/no"ogica" abi"ity to meet t/e
needs$ Attacking t/roug/ e3ecution is about 0o""o+ing t/e same or simi"ar
processes /o+ever e3ecuting t/em e=ective"y t/an t/e competitors$
De0ending
t/roug/ operations is about e3p"oiting t/e strengt/s +it/in t/e
organisation to attack t/e in/erent +eaknesses o0 t/e opponent$ )eacting
1uick"y to t/e c/ange and t/e surrounding attacks is a"so an e=ective +ay
o0 de0ending$ ./is reduces t/e co""atera" damage and gives t/e company
to make t/ere counter attack more e=ective and "ong "asting$ 2ed!3
constant"y drove on a cart po+ered by t+o +/ee"s naming 8attack8 and
8de0end8 /ence succeeded t/e race and a"+ays stayed amongst t/e top
rankers in t/e industry$
1. Introduction1 Staying on top and a"+ays a/ead in t/e
corporate +or"d can be described as 8%orporate tug o0 +ar8$ .o +in
t/is +ar every company needs to t/ink coup"e o0 steps a/ead o0 its
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competitors$ -ne +rong move and t/e cookie crumb"e$ Attacking
t/e competitor is not a"+ays t/e best option: sensib"e companies
8de0end8 +/en re1uired and strike back at t/e rig/t time$ 2ed!3 is
one e3amp"e o0 suc/ a company +/ic/ managed to rise 0rom
obscurity to a market "eader by app"ying t/ese concepts$ (et us
ana"yse and understand /o+ did 2ed!3 managed to ac/ieve t/is
success +/ic/ t/ere competitors mig/t /ave taken ages to obtain$
2. 'istory1 2ormer marine 7ietnam veteran 2redrick Smit/
0ounded 2edera" !3press in 195$ %ompany moved its /ead1uarters
0rom (itt"e )ock: Arkansas to 6emp/is: .ennessee due to t/e
geograp/ic 0avourabi"ity<s$ -n t/e >rst day o0 operations 2edera"
!3press de"ivered 1,' packages$ %ompany turned t/at number to
over 10:000 packages per day by t/e year 194$ %ompany reac/ed
2 mi""ion packages per day by 1994 and ac/ieved s/orter de"ivery
time and /ence adapted to s/orter name 82ed!38$
1. Attacking through operations1 %ompany 0ounder
2red Smit/ cou"d make t/is /appen by Attacking t/roug/ operations$
W/i"e attacking t/roug/ operations company must ba"ance t+o key
areas: Positioning and !3ecution$ 2ed!3 positioned itse"0 as t/e
courier company o0 t/e nation by sticking +it/ t/e name 80edera"8
company identi>ed t/e need o0 ne3t day or same day de"ivery and
capita"ised t/e opportunity gap$ 2ed!3 addressed t/e need o0 t/e
di=erent market nic/e and used a di=erent approac/ to 0u"" >"" t/e
need$ 2ed!3 +as indeed 0ar a/ead o0 t/e competition in terms o0
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e3ecution$ ./ey not on"y 0ocused on imp"ementing ne+ tec/no"ogy
0or improved per0ormance but a"so e?cient"y used t/e e3isting
kno+n processes better t/an t/e ot/er p"ayers$
2. Identifying the capa)i*ities1 Attacking t/e
competitors t/roug/ operations is possib"e i0 t/e organisations
deve"op certain capabi"ities$ ./ese capabi"ities can be c"assi>ed in
to various categories depending on t/e industry$ ;o+ever
capabi"ities o0 any organisation must be "ess visib"e 0or an outsider:
di?cu"t to imitate and more dynamic in nature$ 2ed!3 /as t/ere
disaster management centre at a secret "ocation +/ic/ is monitored
and tested once in a mont/$ %ompany /as kept t/e "ocation /ig/"y
con>dentia" /ence making it t/ere capabi"ity to operate even i0 one
o0 t/e /ub gets non operations due to un0oreseen circumstances$
@Attacking and de0ending t/roug/ operations A ;arvard Business
Sc/oo"C
3. Types of capa)i*ities1 2ounder and %!- o0 2ed!3
2red<s 0amous 1uote appears in /is biograp/y D2at/er o0 t/e
overnig/t de"ivery businessE 5They6#e got to ki** us a hundred
times. A** 2e ha#e to do is ki** them once.7 ;e cou"d say t/is
because /e kne+ t/e capabi"ities t/e company /ad +ere not on"y
/ard to identi0y but a"so very di?cu"t to imitate$ (et us understand
di=erent types o0 capabi"ities 2ed!3 possesses and "earn /o+ t/ese
capabi"ities provide competitive advantage to t/em over t/e ot/er
competitors$
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1$ 8rocess )ased capa)i*ities1 %ompany /as constant"y reF
engineered t/ere processes t/roug/ constant innovation$
Gntroduction o0 /ub and spoke met/od in t/e courier industry
broug/t instant success to t/e company$ ./is /e"ped 2ed!3 to keep
t/e operating cost "o+ and t/e e?ciency /ig/$
2$ $ystem )ased1 %ompany /ad state o0 t/e art /ub and
seam"ess operations system in p"ace 0or time"y de"ivery o0 t/e
packages$ 2ed!3 /as scanners t/at can scan t/e contents inside t/e
packages and te"" +/at temperature t/ey are at: at +/at speed are
t/ey moving: +/et/er or not "ig/t /as entered into t/e packageF
+/ic/ means package /as been opened etc$ 2ed!3 /as a"+ays done
massive investments in tec/no"ogy 0rom time to time$ ./ey /ave
comp"icated *ASA "ike contro" systems and computer programmes
to manage tra?c at sky and on t/e ground$ @)obert %arter A %G-
2ed!3C
5$ Organisation )ased1 !very organisation deve"ops its o+n
uni1ue capabi"ities +it/ time$ ./ese capabi"ities separate t/em 0rom
t/e competition because it is earned due to e3perience /ence
making it /ard to imitate$ 2or e3amp"e Wa"Fmarts organisationa"
capabi"ity is t/ere "ogistic system$ Gn case o0 2ed!3: t/eir
organisationa" capabi"ities come 0rom t/e "argest a"" cargo 4eet in
t/e +or"d and t/e centra"ised +eat/er tracking team coFordinating
+it/ a"" t/e pi"ots and t/e ground sta=$ 2ed!3 is a"so strengt/ening
by its subsidiary companies "ike 2ed!3 !3press: 2ed!3 Hround:
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2ed!3 2reig/t: 2ed!3 -?ce: 2ed!3 %ustom %ritica": 2ed!3 .rade
*et+orks: 2ed!3 Supp"y %/ain So"utions and 2ed!3 Services$ A"" t/e
above subsidiaries specia"ise in certain 0unction and cater to a
particu"ar group o0 customers$
4$ 8aired1 Wit/in t/e organisation 2ed!3 pairs up +it/ severa"
subsidiaries to improve t/e customer satis0action and ac/ieve above
average returns$ 2ed!3 a"so paired up +it/ severa" G. companies to
create products "ike 8Sensea+are8 and scanners embedded g"oves
0or 0aster product scanning +/i"e /and"ing t/e packages$ 2ed!3
Gnnovation is a crossFdiscip"ine team aimed at identi0ying emerging
customer needs and tec/no"ogies to c/ange +/at<s possib"e t/roug/
innovative so"utions and businesses$ ./e team systematica""y
researc/es and demonstrates bo"d ne+ concepts in key opportunity
spaces and deve"ops t/e best concepts +it/ acce"erated
prototyping: incubation: and commercia"iIation$ (ongFrange goa"s to
increase revenue and drive strategic advantage are supported
t/roug/ 0ostering a "eadingFedge innovation cu"ture: met/ods: and
t/inking t/roug/out 2ed!3 and its internationa" net+ork o0 a""iances
and customers$ @+++$0ede3$comJ0ede3FinnovationC
1$ Defending through operations1 *o+ "et us
understand /o+ 2ed!3 de0ended t/roug/ operations 0rom time to
time$ As pub"is/ed in t/e ;arvard sc/oo" artic"e any organisation
must !3p"oit: Attack and )eact to success0u""y de0end t/e
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competitors attack$ (et us brie4y "earn +/at t/ese t/ree terms
means in rea" business 0or 2ed!3$
". Exp*oit9 Attack and /eact1
1$ Exp*oit1 !3p"oiting t/e strengt/s o0 t/e organisation$ 2ed!3<s
innovative approac/ to+ards parce" /and"ing is t/ere maKor strengt/
and /ence became t/eir core competency$ Gn 19,: 2red Smit/ +as
0amous"y 1uoted as saying: D./e in0ormation about t/e package is
Kust as important as t/e package itse"0$E .oday: 2ed!3 provides
customers access to near rea"Ftime in0ormation t/at /as enab"ed
ne+ supp"y c/ain mode"s and e?ciencies$ 2ed!3 0urt/er e3p"oited
severa" ot/er possibi"ities in severa" businesses di=erent but re"ated
to courier industry$ %ompany t/en identi>ed +ays o0 doing t/ings
di=erent"y to stay a/ead o0 t/e competition$
2$ Attack1 Attacking t/e in/erent +eakness in t/e opponent<s
operations strategy gives t/e company ne+ +ings to ac/ieve ne+
/eig/ts and a"+ays stay over t/e ot/er p"ayers$ 2ed!3 attacked t/e
sma"" p"ayers in t/e market and ac1uired businesses "ike Wor"d
.o+er %orporation and Linko9s$ ./ese ac1uisitions made 2ed!3
made stronger as a competitor and more ab"e as an industry "eader$
S"o+er conveyor be"ts at MPS resu"ted in /ig/er package /and"ing
time: 2ed!3 introduced ' sided scanners +/ic/ cou"d scan t/e
package 0rom a"" t/e sides +it/out "o+ering t/e conveyor speed$
Packages at 2ed!3 sti"" moved at 500 0eet per minute resu"ting in
10
0aster average /and"ing time per package$ @Len Spang"er A %G-
2ed!3C
5$ /eact1 )eacting 1uick"y to t/e competitors attack is essentia"
to minimise t/e e=ect o0 t/e attack and /e"ps sooner recovery$
W/en a video o0 2ed!3 driver care"ess"y c/ucking a package over
t/e 0ence +as re"eased nation +ide$ Be0ore t/is video cou"d tarnis/
t/e company9s brand image: 6at/e+ ./ornton A Sr$ 7$P at 2ed!3
!3press reacted in t/e press con0erence by saying D./is c"ear"y goes
against a"" 2ed!3 va"ues8 /e 0urt/er added t/at t/e emp"oyee +i"" no
"onger be /and"ing t/e packages$ 2ed!3 did not >re t/e emp"oyee
but gave /im di=erent responsibi"ities$ ./is reaction a"so gave 2ed!3
an image o0 peop"e oriented organisation$ ./e care"ess"y /and"ed
package +as rep"aced by 2ed!3 and t/e situation +as kept under
contro"$
%.0 -onc*usion1 ./us 2ed!3 /as a"+ays been ab"e to keep itse"0 up
in t/e competition +it/ p"ayers "ike MPS: D;( and !3peditors
Gnternationa"s$ 2ed!3 may not /ave stayed at number one position
a"+ays /o+ever /ave a"+ays pioneered t/e success pat/s and
created /istory +it/ t/eir innovative moves$ ;aving a mi3ed
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approac/ o0 attacking and de0ending t/ey /ave created 0avourab"e
business conditions to provide t/e organisation +ings to invade
une3p"ored areas$ (et us compare 2ed!3 +it/ t/ere c"ose competitor
MPS +it/ some 0acts and >gures sourced 0rom >nance$ya/oo$com
Detai"s 2ed!3 MPS
)evenue @2012C N45 Bi""ion N54 Bi""ion
*et Gncome N2$05 Bi""ion N,0 6i""ion
Pro>t percentage 4$51O 1$49O
*o o0 !mp"oyees 500:000 59:100
2"eet SiIe '54 25
(oad turnover 1':12 6i""ion tonne 10:5,4 6i""ion tonne
./e above >gures c"ear"y indicate t/at MPS t/oug/ /ad /ig/ revenue
is sti"" 0ar be/ind 2ed!3 in terms o0 operating pro>t margin$
M"timate"y 0or s/are/o"ders a"" t/at maters is return on t/ere
investment +/ic/ 2ed!3 /as s/o+n consistent"y +it/ imp"ementing
various strategies o0 attacking and de0ending t/e competitors$
&.0 /ecommendation1 2ed!3 /as no+ gro+n to suc/ an e3tent
t/at t/ey don<t /ave to 0ocus too muc/ on t/e competition$ ./ey
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/ave enoug/ resources to constant"y scan t/e /oriIons in t/ere
business space and identi0y t/e ear"y t/reats to t/e organisation$
2ed!3 can be more responsib"e and uti"ise its cas/ surp"us in areas
suc/ as deve"oping re"iab"e e"ectric ve/ic"es 0or greener tomorro+$
2ed!3 no+ can support t/e government posta" services in countries
"ike Gndia: 6a"aysia: and Sri(anka etc to make t/em more e?cient
and save t/em 0rom being in t/e /istory te3t books$ 2ed!3 can s/are
t/ere courier tec/no"ogy +it/ t/ese government agencies to make
t/e nationa" posta" service more a=ordab"e and sustainab"e$ 2ed!3
a"+ays /ave some aircra0ts 0rom t/ere 4eet on stand by 0or t/e "a+
makers to 4y across t/e country: company can a"so consider t/e
same p"anes on stand by to assist medica" services in case o0
emergency$ 2ounder and %!- 2redrick Smit/ a0ter retiring 0rom /is
marine services said 8G +anted to do some t/ing productive a0ter
b"o+ing so many t/ings up8 ./e time /as arrived 0or t/e Gndustry
giant to 0ocus on contributing more to t/e /ea"t/ care industry
beyond preserving and supp"ying medica" and bio medica"
packages$
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/eference :ist1
/ttp:JJ+++$nasda1$comJsymbo"J0d3
+++$0ede3$comJ0ede3Finnovation
>nance$ya/oo$com
)obert %arter A %G- 2ed!3
Len Spang"er A %G- 2ed!3
Attacking and de0ending t/roug/ operations A ;arvard Business
Sc/oo"
Biography Father of the overnight delivery b!ine!!"
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