Fedex Adaptation to Changes and New Challenges of The Market as a Key of Success

In order to become successful and sustain in the market, a company must always mold quickly to changes and new challenges in this world. Many companies fail to do so while some of the companies excel and set forth an example of how it is done. One such exemplary company is FedEx.

Founder and CEO of the organization, Fred Smith, found out the need and the demands of the customers were changing rapidly and in order to meet these demands and become successful FedEx must implement major strategical changes to become more versatile and mobile and achieve higher customer satisfaction. In the year of 1980s, FedEx implemented revolutionary techniques to accomplish the target, by aggressively taking the decision of penetrating and expanding its business in Asia. FedEx worked hard to build an international network, the organization was well-aware of what the customers wanted so they planned accordingly on how to achieve that level. After thorough research Smith accepted that China had an evergreen market and its potential was yet to be tested. FedEx first step towards entering China was, finding a direct way of connecting with the country. FedEx started its operation in China by introducing a direct flight to its land on the year of 1996.

FedEx showed greater interest in Asia by buying an international corporation which had rights to fly to most of the Asian airports, which made the transports of the freights easier and less costly as there was no involvement of the third party. This step proved worthy for the organization as the profits and the expansion skyrocketed, with an increase in products shipped around the world. FedEx took one step forward to success when the organization bought a local trucking fleet company and opened several hubs in China. As a result of this action FedEx was able to dig deep into China’s market and aim for more customers, not only that industries and factories which were located on the outskirts of the country were also using FedEx services. With an increasing profit, there were arousal of challenges, one such challenge was communication with customers and giving them details about their package. This time company applied innovative approach towards facing this hinderance using technology. FedEx had a whole team of IT developed to create a software that could help customers track the details of their orders and shipments, this ended most of the communication barrier and customers seemed highly satisfied with it.

With the increase in global economy and the use of technology such as E-Commerce, it is a good idea for competitors to imitate what FedEx implemented but to think of taking market share from the company would be a difficult task to achieve but not impossible. FedEx spent tons of money and time to study and overcome the challenges that came forth, nevertheless the organization formed its own managerial techniques to contrive major crisis. Any future organization planning to follow the same path what FedEx chose must accept the fact that, the risk FedEx took on investing on China after an intensive study, was one in a million shot that became successful. Risk is one of the major factors of Management, and every organization must take risks to take it to next level. But risks taken without thorough study and planning will result in regret and loss, so risk must be taken when an organization has enough information and planning about the step it is going to take. There had to be a series of questions that he should be able to answer if not accurately but at least approximately, like What are the consequences following the step taken? What are the hinderances organization must expect after taking the risk? And most importantly, what is the backup plan if the risk taken fails? Etc. An organization planning to take market shares away from FedEx by copying approach on management would be a difficult task, the move made by FedEx to penetrate in Asia was on 1980s, in this time period the market was static and there were no technological advancements such as IT, so it was easier for the FedEx to create a market research of China and other Asian countries, also the number of competitors were also less, but if we look at today’s scenario the market is totally changed, the dynamicity of today’s global market is more than ever, the technology is at its peak and plays a major role in management. To overcome a company like FedEx, an organization would need advanced management skills to stand out of the competitors by producing value added services at cheaper or reasonable price.

Closing its hub in the Philippines and build a new super hub in the heart of Guangzhou one of China’s fastest growing manufacturing districts is one of the best steps ever taken by FedEx. During an interview, FedEx chairman and Chief Executive Federick Smith, said that the company have been expanding and growing so fast that in the near future the port in Philippines won’t be able to handle the production, he also added, “The main issue about the new Baiyun airport is that it is located in the epicenter of some of the fastest growing business and trading entities in the world, with about a third of China's exports coming from this area, " Smith (2005). This reply from the executive of the company helps us form a future sight of how courier service by the organization is going to be, the company not only planned to expand at the present times but also kept in mind what measures and move they should make beforehand that can simplify processes in future, and that is one example of excellent management strategy and planning. But due to the closure of the hub in Philippines, company employees will get affected as this step will force the people to lose the job, also at the same time people will get employed in one of the fastest growing cities in china, Guangzhou.

The first thing FedEx did was planning, a proper thorough planning for which the organization had to do thorough research on entering Asia, by taking its first step to China. Not only did the organization take a giant leap to a country thousands of miles away but also bought a struggling airline, which had rights to travel most of the Asian countries, which was thus the outcome of exceptional planning and organization. Secondly the organization took a step further ahead towards success by taking control over a local trucking fleet and 89 new distributing hubs, which helped the company to reach to the secondary cities of China, after getting full command from the major cities. By this way FedEx took control over everything that can help increase their shipments and similarly profits.

FedEx journey from a small firm to a huge organization tells us about the exceptional managerial skills decisions that were formed within the organization after a detailed study, progressive planning, extraordinary organizing and full control, that helped the organization get through the hurdles that came in the path and reach one objective that was “to grow”.