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Introduction: Federal Express achieved a great deal of success in the 1970’s with a pioneering approach to overnight delivery of letters and packages in the U.S.A. After several booming years of catering to customers needs, FedEx’s growth in the United States slowed considerably. This was due to direct competition from United Parcel Service, and the increased popularity of the fax machine. At this time FedEx founder, Fredrick Smith began to look elsewhere for opportunities for new growth. Problems: FedEx made more than 20 international acquisitions, including courier services and trucking operations. But strong overseas rivals, DHL Worldwide Express and TNT were becoming deep-rooted in Europe. In addition, government regulations posed a problem, resulting in a million dollar a month loss for an entire year. In 1988, FedEx acquired Tiger International, the worlds biggest air heavy-cargo company, which included the Flying Tiger Line. However this acquisition brought a number of challenges: · The move more then doubled FedEx’s debt · Tiger’s system was designed for slow-moving, heavy freight – a sharp contrast to FedEx’s high speed network · European rivals were likely to also make global acquisitions · FedEx stood to lose customers that had traditionally used Flying Tiger It was clear that the European Market was much harder to crack then FedEx thought. They had a strong push from their competitors, but most importantly they overestimated the size of the market and failed to do market research on the what and how the European market would be utilizing their services. Current Situation: S.W.O.T Analysis: Strengths: · Accomplished great success in the 1970’s, pioneering the service of distributing packages and letters in the United States. · Successfully served customers for many years (1970’s-1982, when rivals approached the market). · The founder, Frederick Smith was very motivated and has a great desire to be the best; he has a goal to be, “the largest and best transportation company in the world” (359). He also stated in 1988: “We consider our international business to be as important as our domestic business” (359). This statement is showing his determination to be the best he can be in both markets.
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