FedEx Business Strategies

By | November 25, 10

FedEx Business Strategies

Here are strategies, key business decisions, and actions that have enabled FedEx to attain so much success in the relative short years of its existence, which you can, as business owner, entrepreneur, or manager, adopt.

Finding a Profitable Niche

The best way to get into business is to identify a niche with good profit potential, but little or no competition. This gives your business a greater chance to succeed, rather than trying to compete headlong with industry giants.

FedEx carved out a niche in the courier service business, by targeting people who needed to ship their packages fast. By this focus, it found itself almost not in any competition, and therefore benefited greatly over the years with increasing need for people to ship items quickly and also when the industry was deregulated.


Success may not happen as quickly as you desire, however, with patience, and dedication to building your business, success will surely come.

FedEx made loses in the first 26 months in business, so much that investors wanted the founder, Frederick Smith, removed in 1975. But only two years after, the company bounced to profitability and later hit a billion dollars in annual revenue within ten years in business.

Preparing For the Breakthrough Event

In business, there will always be a time when certain events, ‘the Breakthrough Events’, will occur that will greatly boost your industry. You need to therefore prepare for such events by gradually and consistently developing your business.

FedEx major breakthrough came for its business in 1977 when the airline industry was deregulated.

Getting To the Market First

Becoming the first business to offer a certain product or service is a great key to business success. This puts you first in the minds of customers as the one to seek if one needs the product or service.

FedEx has enjoyed clear leadership position and dominance of the U.S. airfreight industry because it was the first to emphasize speed in its package delivery. People have come to associate the name FedEx with overnight or speedy package delivering.

Expanding Your Business

If you don’t expand your business, you will be depriving it of the revenues that would have come from other regions or territories. It is therefore important that after you business is firmly established, you should start expanding it to other regions.

FedEx moved into international business in 1984, after it was firmly rooted in the U.S. Having achieved market dominance in the U.S., it was ready to achieve the same success on the global stage.

Diversifying Your Business

You also need to diversify your business after it has been firmly rooted, and so explore opportunities in related industries. This brings in revenues from different sources, and therefore keeps your business financially healthy. Your business continues to thrive even if one or two of your subsidiaries are not making good sales. To be more effective, the subsidiaries should be operated independently, but should collaborate with each other to achieve their individual goals.

FedEx Corp. is a heavily diversified company, consisting of several independently run subsidiaries in different related industries. Although independent, the subsidiaries function collectively in competing with other companies, and collaborate with one another to achieve individual success. This undoubtedly explains why FedEx Corp. is the world’s premier shipping and information services provider.

Read FedEx Success Story here.



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