FedEx (Group 5) Brittany Fitch, Max Fontaine, Jeff Fox, Micah George

Bottom Line Up Front - The change FedEx need's to make is to make weak segments of TNT's operations strong by leveraging strengths FedEx can provide for it's recent acquired segment in Europe for $4.8 billion dollars. The integration of the two's operations is of vital importance to FedEx as it positions the company to run side by side with UPS behind DHL in a market that will grow by 15% in e commerce and other logistics services yearly.

Strengths

  • Top 3 third-party logistics worldwide
  • Innovation
  • Diversity in services that contribute to their bottom line
  • "Their advanced IT infrastructure provides them with a leading edge over competitors, and they continue to invest heavily in this area." -ukessays
  • Culture - positive reviews from employees on indeed in all segments(FedEx) Culture for TNT is very enjoyable, events are hosted where employees compete their ability to to their jobs.
  • One of the reasons for the smooth progress (so far) has been FedEx Express’ familiarity with TNT’s corporate culture - aircargoworld
  • Timeliness

Weaknesses

  • Overdependent on US markets
  • The logistics services are independently great but are not integrated well together
  • Losing Market share in the US (amazon)

Opportunities

  • Expanding upon printing services - minor - operations are broad and it should compete in every segment
  • Continuing to focus on cost-cutting initiatives
  • Europe - Leveraging TNT - 15% growth per year in e commerce (Logisticsmgmt)
  • Asia
  • Planting more real estate throughout Europe
  • FedEx Trade Networks - continuing to expand it's influence globally
  • Western Europe- Even neighboring markets such as Britain and France are very different, with different types of customers and providers (logisticsmgmt)

Threats

  • Fuel Prices
  • Political & Macroeconomic Risk
  • DHL & UPS

SWOT Analysis

FedEx has to focus on keeping key employees

Jeff Berman - “Egos and hubris come into play and invariably it ends up in valuable employees exiting and with them go their book of business. After all what FedEx is buying, at the end of the day, is TNTs customer list. The secret to success is holding onto that book of business while rationalizing the network and optimizing routes."

The key to making the merger successful is leveraging the growth in e commerce and using innovation, strategic alliances, and cost cutting initiatives to take market share and increase cash flow by cutting costs.

Merger with TNT is of vital importance. Ch 10 class textbook statistics showed that many mergers do not add value and the combination of two cultures has four outcomes only one of which is healthy, we believe that the two cultures will work together well, and communication between Dutch based TNT and FedEx will not be hindered by language barriers.

Create a Sense of Urgency

There are 80,000 employees under TNT. combined there are 400,000.

300 million USD in funding will go to the integration between the two companies

There needs to be an understanding that the goal is to be competitive in every aspect. Customer Service, Timeliness, Services. FedEx specializes in implementing new ideas very swiftly from it's innovation team from a prototype phase to a full transition into operations.

Focus on understanding how to merge the operations and helping TNT to refocus around FedEx's strategic plan, while not abandoning their niche's and geographic's.

Urgency requires efficiency and the process of restructuring can be eliminated of errors through tests such as six sigma and other methods of analysis and adjustment.

Drive to defend a career - employees under FedEx and TNT - the fear of bad performance

Form a Guiding Coalition

An understanding that FedEx values TNT's Culture and does not want to dismiss the value employees find in it.

TNT management needs to be part of US operations and vice versa so that there will be consensus in what works best for both locations and how each party operates.

TNT does not have to let all changes occur, rather it takes some of the new changes proposed and adjust. It's a learning process, some things work in some markets and some things don't and TNT knows from experience what does in it's niche.

Ego's need to be set aside and both parties need to focus on the purpose of it's existence which is to it's shareholders, and the ongoing growth & sustainability of it's business.

Management needs to communicate in an optimistic manner to employees of what is to come. When changes are in the process of being made there is a sense of neutrality to negative temporary circumstances due to the understanding that it is needed to achieve such goals.

Create a Vision

focus on a strong internal environment with the changes happening. By focusing on who they are and not the external environment innovation will not be aligned with current trends rather it can find new ways to do logistics. The focus on internal operations will benefit customer satisfaction.

Hybrid vehicles

Ground services Asia

Communicate the Vision

400,000 employees

emphasize the vision often

Empower others to Act on the Vision

Reward employees who find cost cutting initiatives.

compensation needs to be competitive so competitors do not acquire key employees.

Create Quick Wins

Quarterly benchmarks - previous year performances through a perspective of where it should be.

Gaining more competitive global ground services to leverage freight operations

Build on the Change

start at a flow of operations that does affect customer satisfaction and once the two companies operations start meshing more, then allow that channel to handle the mass amounts of shipments.

continue to raise standard

sharing technical information between the two ongoingly

continue to increase the ratio of hybrid vehicles to non hybrid less fuel efficient vehicles

continue to raise standards

Institutionalize the Change

continue to add value in all segments

Conclusion

  • What does the audience think FedEx should focus on globally after some of the insight we've given you and changes we proposed?
  • What about in the US based on what you know and experience.

References

http://aircargoworld.com/air-cargo-executives-of-the-year-fred-smith-david-bronczek/

http://www.logisticsmgmt.com/article/fedex_executives_offer_up_additional_insights_on_tnt_acquisition

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