Continuous Improvement Strategies
This essay will discuss how the FedEx Corporation strategically used IS to exploit the
Internet to compliment their core business, and dramatically increase company profits.
Based on this case study It will explain how formulating an IS strategy can help a company achieve its business objectives, and it will also discuss the importance of strong leadership and management support for the IS strategy.
Fred Smith founded FedEx Corporation formerly known as Federal Express in 1973 in
Memphis, Tennessee. An Express Transport and Logistics company, Federal Express was joining a domestic market dominated by the US Postal Service and UPS (United
Parcel Service). Fred Smith understood for the company to prosper, he had to embrace technology and use it strategically to improve his business. Smith understood the importance of information in his industry, his vision being: "information on a package is as important as the package itself."
FedEx instantly broke the mould by bucking the trend for courier companies to lease space on 3rd party airplanes; instead they invested in their own fleet. FedEx did not have to rely on other companies to ensure their customers received their packages on time, and it meant they built up a strong, early presence in the market. This trend continued and now FedEx have the largest fleet of vehicles of any company in the world (Fedex.com, 2006). This early outlay by Fred Smith was seen as a necessary and important investment. Smith continued to defy the trend in the 1980 's with the
"PowerShip" program, when FedEx gave away 100,000 computers loaded with the company 's software. At a time when personal computers were relatively rare and expensive this investment was very unusual, however by linking client companies into the FedEx network and effectively "locking-in" customers it could be argued that the costs would have been quickly recuperated.
In 1994 Federal Express launched www.FedEx.com. The Website offered the ability
Internet to compliment their core business, and dramatically increase company profits.
Based on this case study It will explain how formulating an IS strategy can help a company achieve its business objectives, and it will also discuss the importance of strong leadership and management support for the IS strategy.
Fred Smith founded FedEx Corporation formerly known as Federal Express in 1973 in
Memphis, Tennessee. An Express Transport and Logistics company, Federal Express was joining a domestic market dominated by the US Postal Service and UPS (United
Parcel Service). Fred Smith understood for the company to prosper, he had to embrace technology and use it strategically to improve his business. Smith understood the importance of information in his industry, his vision being: "information on a package is as important as the package itself."
FedEx instantly broke the mould by bucking the trend for courier companies to lease space on 3rd party airplanes; instead they invested in their own fleet. FedEx did not have to rely on other companies to ensure their customers received their packages on time, and it meant they built up a strong, early presence in the market. This trend continued and now FedEx have the largest fleet of vehicles of any company in the world (Fedex.com, 2006). This early outlay by Fred Smith was seen as a necessary and important investment. Smith continued to defy the trend in the 1980 's with the
"PowerShip" program, when FedEx gave away 100,000 computers loaded with the company 's software. At a time when personal computers were relatively rare and expensive this investment was very unusual, however by linking client companies into the FedEx network and effectively "locking-in" customers it could be argued that the costs would have been quickly recuperated.
In 1994 Federal Express launched www.FedEx.com. The Website offered the ability
References: [1] David Baum (1998), "FedEx Tracks Customers on the Move"; [Online:] http://www.informationbuilders.com/new/magazine/v10-1/fedex.html, [2] David Boddy, Albert Boonstra, Graham Kennedy (2002), "Managing Information Systems – an Organisational Perspective", Pearson Education Ltd, Harlow; Pg 73, 76, Systems", Oxford University Press, Oxford; Pg 376 [4a] FedEx Corporation (2002) [Online:], http://www.fedex.com, [4e] Corporation Facts: http://www.fedex.com/us/about/corporation/facts.html [5] David Plant (2001), "FedEx.com – Building a Killer Application", [Online:] http://www.davidplant.net/examples/fedex.htm [6] David Strom (1995), "Creating Private Intranets: Challenges and Prospects for IS"; [7b] Company History : http://www.ups.com/content/corp/about/history.html, [8] John Ward, Joe Peppard (2002), "Stategic Planning for Information Systems", Wiley, Chichester; Pg 23-25 [9] John Ward (1995), "Principles of Information Systems", Routledge, New York; Pg 29-32, 43, 182 [10] Robert H 'Obbes ' Zakon (2002), "Hobbe 's Internet Timeline – Version 5.6",