Porter’s Five Force Analysis
Supplier Power
New Entrants
Substitutes
Buyer PowerCompetitive Rivalry
• Alternative for Fuel- rising
fuel prices are often passed
on.
• large pool of suppliers exists-
suppliers have little power
over the Industry
• Entry Barriers are low,
• Brand equity of Fedex poses
highest barrier to enter.
• Buyers have multiple options
, demand for high quality
and timely service but at low
costs.
• Buyer power is high
• Low threat- Info movement
instead of fright movement
has become possible due to
better available IT
• Contracts are short term,
unless integrated
• Fixed costs are high
• Constant need to reduce
order cycles
• Term paper to 45 Billion Dollar Creation
• 186 to 5,000,000
• Began operations in 1973
• Uses Super tracker Computers
• First to input COSMOS (Customer Operations Service Master On-line System) in their system
• Founder Fredrick W Smith
• Headquartered Memphis, Tennessee
About FedEX
Blue Ocean Strategy
• Quick to adopt new technologies in the logistics industry
• They were successful in interconnecting and then distributing the information.
• Businesses began to outsource supply chain management to FedEx and this led to partnerships.
• FedEx provided greater automation to its customers
IT in FedEx
• Widespread use of Internet threw
open significant opportunities
• Existing EDI based system and decided to use a
combination of Internet and the EDI.
• Used IT to improve upon its customer service
• Integrates both old and new technology
IT in FedEx contd…
• Integrates Wireless Solutions, Bluetooth, and
RFID
• Use of Package Scanning and Package Tracking
• Use of Microsoft Powerpad and Bluetooth
• Adoption of Velcro Wristband RFID
transponders