Business Transformation and

Organisational Turnaround

Turnaround Strategy of FedEx

Presented By:
Akansh Arora 43122
Agenda Style
01 Introduction
About FedEx

02 Moment of Truth
Supply Chain Disruption

03 Problems & Changes Undergone

Problems faced during pandemic and measures taken

04 Emergency & Stabilization Stage

Emergency measures taken and how they helped

04 Evolution Stage
Return to Normal
05 You can simply impress your audience and add a unique zing.
Restoration stage
 Introduction
About FedEx

- Founded by Frederick Wallace Smith in 1971 in Little Rock, Arkansas

- based in Memphis, Tennessee
- The name "FedEx" is a syllabic abbreviation of the name of the company's original air division, Fed-
eral Express
- focused on transportation, e-commerce, and services.
- Creates value by offering high value-added package delivery to over 220 countries

FedEx Express is one of the world's largest express transportation companies, providing fast
and reliable delivery to every U.S. address and to more than 220 countries and territories. Fe-
dEx Express uses a global air-and-ground network to speed delivery of time-sensitive ship-
ments, usually in one to two business days with the delivery time guaranteed
 Moment of Truth
Supply Chain Disruption

With the onset of the pandemic, almost all companies came to a sudden standstill. Their operations were im-
pacted. Companies belonging to shipping/transport domain were majorly affected. Soon, with the passage of
time, FEDEX could witness a cut in its financial outlook as labor shortages caused expenses to soar in the
latest quarter (in 2021) and shipping demand unexpectedly slowed due to supply-chain disruptions.

The company said that, meantime, problems across the supply chain—from factories starving
for parts to congested ports and rail yards—have dented demand for shipping packages. On-
line sales are taking a hit, too, it said, as more consumers shop in store or pick up their online
orders themselves
 EVOLUTION STAGE
•Fred Smith developed the idea of a global logistics company when he was a student at Yale University with other notable students
such as future President George W. Bush and Democratic presidential candidate John Kerry.
•Smith submitted a paper that proposed a new concept where one logistics company is responsible for a piece of cargo from local
pickup to ultimate delivery, while operating its own aircraft, depots, posting stations, and ubiquitous delivery vans
•After graduating from Yale, Smith began Federal Express in 1971 with a $4 million inheritance from his father and $91 million of
venture capital. He based the company on the ideas that he developed at Yale, focusing on an integrated air-ground system.
•He started the company at the Little Rock National Airport in Arkansas, but after two years of lackluster cooperation by the airport,
Smith moved the Federal Express operation to its current location in Memphis, Tennessee, which was Fred Smith’s hometown

Federal Express started air operations from the Memphis airport on April 17, 1973, with 14 Dassault
Falcon, 20 jet aircrafts that were used to move packages between 25 cities.
However, 40 years later, the company has the world's largest airline in terms of freight tons flown and
is the world's fourth-largest in terms of fleet size. The company has almost 300,000 employees and
sales revenue in excess of $40 billion.
 P&C
•In 2000, the company consolidated
four out of its five subsidiaries and
moved most of its IT, Sales, Market-
ing into a new company called as
FedEx Corporate. R H
•Realignment of relationships of one
subsidiary to another, aiming to O A
B N
provide customers with a single
point of access to sales, billing and
automation systems.
•Rising fuel prices had an adverse
impact on the company's profit L G
E
which was been overlooked by the
management
•High labour costs and high net-
E
work inefficiencies due to inad-
equate staffing M S
S
•Poor management of capacity de-
mand leading to under-utilized ca-
pacity
•Frustrating claim policies in case
product was damaged in transit
 Emergency & Stabilization Stage
- The Emergency stage is the third stage in then TURNAROUND STAGES. This is the stage where the company does what is necessary to ensure the
survival of the company. It’s the stage where the company moves beyond the recognition of the problem and comes boldly into action
- In 1973, Frederick Smith moved his operations to Memphis to gain the advantage of the centralized location- it was the ideal location! They now had
14 Dassult Falcon, 20 jet aircrafts that were used to move packages between 25 cities
- despite this bold move, FEDEX was still losing money due to the rise in cost of Air Travel and the exuberant cost of the fuel, FEDEX was now on the
brink of BANKRUPTCY!
- Fred Smith had tried all the measures to save the company by pitching his model to several investors in hope of scoring some additional funding to
keep FEDEX afloat. All his efforts were rendered useless. NOTHING WORKED FOR HIM!
- The situation had worsen to such an extent that FEDEX had only 5000 USD in its name.

•Fedex spent $100 million on the changes in manage-

Over the years, reorganization de- ment over the years
cision brought huge growth in the •It enjoyed competitive advantage over the years, be-
came a renowned brand for delivery services
performance and standard of the •Increased presence in various markets to expand foot-
organization. It was followed by END print and capture market share by players
•Increased importance in current market with pressure
other competitors like DHL, UPS RESULTS> on margins though players have generally kept pricing
e.t.c. discipline
 Return to Normal
•The corporation estimated that the recommended modifications for the business turnaround would cost US$ 100 million over three years.
•The firm expects to acquire a competitive edge in the future by allowing each subsidiary to operate autonomously while providing a wide
variety of business solutions as a group.
•Consumer EC was expected to expand, and the corporation planned to launch a new service called FedEX home delivery to meet the grow-
ing d
•emand from businesses who cater directly to clients.
•Huge investments were made in their networks, according to a high-ranking management executive, and the results will be realised soon.

The return to normal stage is all about thinking ahead and making plans for the next five to ten
years. It entails devising a plan for integrating the improvements made during the company
turnaround phase. The following are some details on how FedEx got back to normal
Thank you