Overview and History of FedEx
FedEx is a huge package delivery company that was founded in 1971 by Fred Smith. The idea of this company previously was a topic of the course paper of young Fred at the university of Yale. After he graduated, he was lucky to make his dream come true. Several years later, the company called Federal Express established its headquarter in Memphis. The company first experienced losses because of huge expenditures on the planes (Murray). After almost ten years have passed, the Federal Express gained a reputation as one of the most prosperous and highly financed companies in the U.S. In 1978, the company managed to set positions in the equity market and gain huge annual revenue.
Nowadays, the company is highly recognized and has a great investments basis. FedEx offers different services from local mail delivery to international logistics services (Forman). The company uses both air and auto transport to provide logistic services. FedEx owns the greatest amount of transport for international shipments. It has the fourth-largest fleet in the whole world.
How FedEx’ Operations Were Improved by Its Location?
The central point of a successful logistics company is its location and hubs all around the world, chosen to be points of departure. FedEx chose a very convenient location to develop business overseas in many countries. In 1987, the founder started with Britain, the Netherlands, and the United Arab Emirates (Murray). Nowadays, the company has over two hundred hubs in different countries. Later, Federal Express opened a subsidiary company in China (Murray). It let the company move forward and develop international delivery in Asia. Thus, carefully and logically chosen location of the hubs, subsidiary companies, and constant development help FedEx to be one of the leaders in the delivery sphere.
How does FedEx’ Location Strategy Differ from Its Competitors?
The main differentiating factor in the location strategy of FedEx and other logistics companies is the choice of the locations of hubs. FedEx always strives not only for the quality development of the delivery but also to erasing the borders and expanding companies’ horizons (Heizer and Render). Thus, the company was the first to plunge into the Asian market of the package. This courage, determination, and ability to monitor the market and demands in different countries let the company gain a competitive advantage. Moreover, FedEx was one of the first logistics companies which successfully adopted e-commerce on all hubs territory (Bhasin). Even though the expenditures were quite high first, the losses paid off quickly, and the company equipped all the hubs with modern technologies and internet awareness. This decision definitely leveled the quality of the services and gave another competitive advantage.
How has FedEx Affected Memphis, TN area?
FedEx has six large hubs in the U.S., but the main one is located in Memphis, Tennessee. Most of the packages go through the hub in Memphis because it is the central logistic hub where all the parcels are distributed (Bhasin). The headquarters and the storage of the air and auto transport are also located there. The opening of FedEx definitely influenced Memphis in both positive and negative ways. First of all, Memphis became a huge package operational center which includes only the newest technologies and machinery. FedEx contributed to the technological transformation of the TN area. Speaking about negative aspects, it necessary to mention the crowdedness with machines and people. As far as Memphis was earlier, the small quiet area now the constant overnight aircraft and massive storages of technologies, automobiles, and planes can leave an unpleasant impression on the citizens.
Works Cited
Bhasin, Hitsen. Marketing Strategy of FedEx. Marketing91. 2018. Web.
Forman, Janis. “7. DIGITAL STORIES FOR BUSINESS: FEDEX“. Storytelling in Business, Redwood City: Stanford University Press, 2020, pp. 126-143. Web.
Heizer, Jay, and Render, Barry. Operations Management, 13th ed. Prentice Hall, 2020.
Murray, Martin. The History of FedEx. The Balance of Small Business. 2019. Web.