Value Chain AND OFFER Chain Analysis Commerce Essay

The description of value chain analysis includes evaluation of business activities which impacts the business's competitive strength. Providing a product on time is the result of multiple business operations working perfectly to make a Value Chain leading a firm greater profit over costs (Dess, Lumpkin, & Eisner, 2007). You will discover two main value string activities in the organizations. The first one is main activities which could straight add value for the ultimate products, for occasion, marketing and sales, businesses, service and etc. The next the first is support activities that could support the effective of principal activities, for example, the infrastructure, RECRUITING Management, technology and etc. (Campbell, 2002) All these departments work together to produce the business's profit. Inside the contest for global domination, the components of this value string need to be optimized on a worldwide scale, in any way levels of the organization - Global Headquarters, Regional Head office, and country level, as well as within the critical product portfolios, locations, and countries that the firms operate in. (Johnson, 2008)

2. 1. 1 The Value-Chain activities for the industry and FedEx Corporation

Transportation is one of the most significant industries in the world, and its sector range is very vast which include taxis, truck, train, boats, barges, airplanes, pipelines, warehouse and logistics service. For the industry, the three main styles were globalization of business, it development and new technology to support process productive, and the market demand for more value-added. Hence, the companies in vehicles and logistics industry be based upon the global network of circulation centres to gain quick payment routine and cheaper resources. In FedEx Company, as a leader firm in the industry, its centralized constructions have always required, and facilitated billion buck purchases in IT and established the web site from 1994. It provided an effective technology for the FedEx Firm as a pioneer in the complete industry for e-business. This plan became an edge that they used to undermine their rivals' talents and localized customer support. With a globally connected IT network, FedEx was able to leverage their IT benefit to service their corporate and business accounts on a worldwide basis, rather than on a country by country basis. While using best HR system in the business, FedEx also has had a dynamic strategic procurement search engine optimization initiative that is adopted by the rest of the industry, producing cost savings in excess of millions of dollars, straight to the bottom line. The main area of the value chain is found in the mature management of the companies. FedEx has already established stable, strong groups running the critical components of the value chain and the associated departments. (Latinamericanlogistics. org, 2009)

For further support activities of infrastructure, in the first years, most companies developed on buying space on commercial airlines or contracting their shipment to the 3rd celebrations. However, FedEx emphasize on creating its own fleet, the strategy could effectively reduce the price tag on business process, boost the dependability and acceleration of delivery and improve the length of order circuit. Furthermore, for solving the transportation amount growth decelerate, the FedEx Organization reorganized in the year of 2000, its five subsidiary companies could operate independently but be competitive collectively on the market.

2. 1. 2 The primary activities for the industry and FedEx Corporation

Global Transportation and Logistics Industry as the service industry, its center activity of value chain ought to be the service. The companies should remain competitive on customer segmentation, pricing and quality of service. On the market, USP was the largest company for transportation. Most companies should highlight on reducing the cost, well-managed logistics procedure could effective decrease the amount of order cycle and relieve the stress of cash flow. FedEx Organization was introduced as federal Exhibit to the early marketplace. At that time, the business fought to a fresh logistics' method, which was overnight delivery. It been successful and done well enough for their competitors in the market and bring more interesting to the logistics market. The most interesting thing is that FedEx provides fast delivery services which has been called as' FedEx Earth'. This service supplies the delivery day in 2-3 days and nights and within a less expensive cost to every shipper.

On the other area, FedEx's value chain is embedding into Earth, Cargo and other divisions. Initially time when company talking about FedEx ground, the business's president and CEO (Frederick, 2008) suggested that the decision to split Surface apart was to 'Broaden and deepen' FedEx's products, in order to have advantage of customer focus, and the range of the marketplace. In the package business of FedEx Surface, it offers low value products which don't need to be at final destination as a result of short offer time of FedEx Express. Smith (2006) announced the model is taken from 3M Company, which includes 250 separate operating companies, each which is focused on a specific market segment. Relating the physique 1, FedEx possessed specific aims and strategies in every Value-chain activities.

Figure 2 FedEx value chain activities

(Source: http://www. fedex. com/us/about/today/mission)

2. 2 Source String Management Analysis

Supply Chain Management is the monitor and management of materials, information, and finances, as those elements move around in an activity from dealer to producer to wholesaler to merchant to consumer (SearchManufacturing. com, 2007). For running the full range of products and services, companies rely on SCM expedient strategies and ways to move goods. I. e. FedEx promises the fast delivery within the less costly cost. FedEx is in the business of providing businesses the capability to manage their supply chains.

In the Global Transport and Logistics Industry, the level of supply-chain should be from supplier, inbound, manufacturing, order management to the outbound. For your process, the firms must have effective management on inventory management, warehouse management, the purchasing process, the merchandise distribution, travel and the customer service. (Lynch, 2006) In FedEx Organization, they have advanced management system in each process. The number 2 implies that the several management system usage in FedEx's resource chain management. For example, the Customer Oriented Service and Management OPERATING-SYSTEM is one of unique system in FedEx Corporation which could incorporate the info of goods shipping and delivery and the information about the mode of travel. Besides, the Global Resources for Information Syndication which launched in 1998 could improve the quality and quantity of their delivery. Furthermore, its Global Inventory Visibility System, Inventory Management System, Travelling Management System Business Resources Planning, Customer Clearance System are all forceful supporting for every steps in the supply-chain management.

Figure 2, FedEx solution in the source chain process. (Source: Case study of FedEx)

In one expression, FedEx Corporation could always capture the demand and changing needs quickly and effectively on the market, their leader strategies in value-chain activities and supply-chain management could correctly support the company to accomplish its center value and take the command position in the Global Vehicles and Logistics Industry.

3. Mergers and Acquisitions in Global Transportation and Logistics Industry and FedEx Corporation

Mergers and Acquisitions (M&A) identifies the facet of corporate strategy, corporate and business finance and management dealing with the buying, offering and merging of different companies that can certainly help, financing, or help an evergrowing company in confirmed industry grow quickly and never have to create another business entity. (Lynch, 2006) A merger make the shareholders of the organizations come together to talk about the resources for enlarging the business and the all the old shareholders in the merger can be the shareholders in the new company. (Campbell, 2002) However the acquisition is one firm buying and subsuming the unequal partners. The stocks in the smaller company will be bought by the large one. (Ansoff, 1988) Using the development of real human society, economical globalization is progressively clear that M&A between companies has become a common thing, but a offer is not as simple as writing the word and its own connotation of much beyond the superficial meaning, and thus a proper knowledge of mergers and acquisitions are particularly important.

Apparently, it has both benefits and constraints for M&A in the Global Vehicles and Logistics Industry. From view of advantages, first of all, the M&A could raise the market share in the whole industry. I. e. the DHL bought Airborne Express to increase its market show in surface delivery market. (Lyne, 2003) Second, it could decrease the competition on the market. Thirdly, it might gain preferential access for the circulation channels. For example, FedEx acquired the united kingdom express company called ANC for increase the distribution channels in the UK. (Business Line, 2006) In addition, M&A may help the company develop the new products or exploit product amounts for looking more opportunities in the market of Global Transport and Logistics Industry, this technique will be more speedily than the organization to start it from the beginning step. Besides, the M&A could help the company to get new creation and it for reducing the cost, enhance the quality and differentiation of the products. For example, FedEx purchased Caliber Systems in 1998. Moreover, the business could entre in a fresh market by M&A. For cases, Amazon. com choose the joyo. com in China for the Chinese circulation market. (uk. reuters. com, 2004) On top of that, the M&A in the Global Transport and Logistics Industry may improve the awareness and reputation in the market, especially for the business may under the alleged misdemeanour. Last but not least, the M&A could support the firms in Global Vehicles and Logistics Industry to achieve asset strip which means break up an attained company and recovering more than the purchase price paid by reselling the parts individually. (Campbell, 2002)

On the other aspect, the M&A in the Global Travel and Logistics Industry likewise have constraints and potential problems. The main factors of integrations inability could be summarize in the following six elements. The first one is insufficient research for the conditions of the mark company. Hence, it could not achieve the expectation after the integration. The next factor is the ethnical inappropriate between the two parties. The third issue is the two parties lacking of marketing communications before of following the integration. Another failing factor is the fact loss of key staff in the mark company after the M&A performance. Furthermore, a potential problem is the over paying for the bought company lead the acquiring company to get into the financial risk. The past issue for M&A in the Global Travel and Logistics Industry is assuming that the growth in the market is uncertain which include the market tendency, economic pattern and etc.

3. 2 Evaluation of FedEx acquisition of Caliber System

To evaluate the success or inability for FedEx Firm obtained Caliber Systems in 1998 should also form the various factors of view. From the positive side, the business use $88 million received the Caliber System, Inc. , it could supply the company a robust tech support team on Internet commercial in those days. In the period, the e-commercial was on the development level in the Global Travelling and Logistics Industry, the long-term investment and acquisition of Caliber System made the FedEx Company own the capabilities and opportunities to be the pioneer and innovator in this field. According to brief summary of benefits for M&A, The strategy helped FedEx Firm entre a fresh market, broaden the business enterprise range, develop the new product and also gain new it. From the effect, following the acquisition, in the next year, the company had an outstanding performance, the net income increased 30 per cent and publishing record making risen 73 per cent. (Gelis, 1999)

However, as the passage of time, the competition in the market became more extreme, despite of the e-tailing and electric business supporting, the statement shown that both level and the income have a negative trend. From view of financial report, the result possessed an evident falling. This condition was reason behind several factors. First of all, the fuel costs jumping was sudden, it will increase the cost for the company. Second, it also recommended the Caliber System didn't blend in the organization completely. The organization was enormous, the operation was complicated, hence, just acquisition strategy without well connection could not make the new get together perform beautifully. For solving the issues, the FedEx Company declared reorganization on 19, Jan, 2000.

Consequently, it is hard to simply evaluate whether success or inability for the acquisition of Caliber System. The acquisition helped bring benefits, opportunities and also new procedure way for FedEx Firm. The negative lead to the next years was also cause of multiple factors, i. e. your competition in the industry, the gas price rapid increasing and etc.

4. FedEx's financial and non-financial performance in the web and e-tailing market

The popular using of Internet has changed most business in the world. The use of Internet advanced the structure of group, the collection, keeping and dealing with data and information management. Furthermore, it also provided the ability for companies improve the awareness and deal channels in the market.

FedEx Firm created its website form 1994, it is the first step and basis for the business to build up its e-commerce. FedEx. com is the first transport website that could accept the main one lines order for deal tracking and allow the customers to transact the business by Internet. Both shippers and recipients could access shipping information and printing documentation via Internet. As the pioneer on the market, FedEx should constantly improve their system and service due to its competitor also created the web service and Internet software. For instance, the DHL launched the web site in 1995(Exelby, 2000), UPS put in billions onto it and electronic business (Blackmon, 1999). The express transportation associated with e-tailing would reach $7 billion in the entire year of 2000, but FedEx only completed with 10 percent of purchase on-line goods. All of these helped bring heavy pressure to FedEx. In 1998, the business paid more than $2 billions to obtain the Caliber System, Inc. to improve the abilities and vitality on Online sites and e-tailing. (Payne, 1997)

Because of the top potential market and less expensive, the web and e-tailing market was continually enlarging in the Global Transport and Logistics Industry. To evaluate the performance of FedEx in Internet and e-tailing market should be from the view of five performance objectives. (Slack, 2007) First of all, from the view of cost, FedEx as the first one for Internet and e-tailing in the Global Travelling and Logistics Industry, it centered on long-term investment on IT and led the company to have the specific position in the area. For the extreme competition, the company paid more than $2 millions to acquire Caliber System. It could effectively increase their market talk about in business-to-consumer delivery service. Hence, the investment partially constructed the weakness against with UPS. Second, flexibility, the web service and e-tailing provide the convenience for the customers, increase a easy and quick route for the travel and e-tailing business. For instance, in the year of 1999, FedEx Current market created a link to the on-line shopping, the on-line shopper could click to the very best on-line stores and with FedEx delivery. Finally, stability, the establishing of the website enhanced the dependability between the firm and customers. The computer system reinforced the customers to learn their goods conditions in the whole delivery process. For instance, the business created software called FedEx Virtual Order in 1999 which provide Internet order and also provide the customers' catalogues for them on the website. In addition, the IT system also improved the inner management of FedEx Firm. For the great organization, the dependable information system ought to be the basis for the busy procedure process. (I. e. in 1995, FedEx launched AsiaOne Network, this can be a transportation routing system) Fourthly, velocity, for the vehicles and logistics industry, rate is one of the key elements for the customers choosing a travelling company. The web order and the unique information system in FedEx offer with the order and storage, goods and delivery process, every process could decrease the time than before. For example, the FedEx Software industry provided quick access to on-line vendors to offer fast FedEx delivery. Lastly, quality, every one of the strategies and shows about Internet and e-tailing could be linked to enhance the quality providing for the customers and partners. For example, the FedEx created e-business Tool in the year of 1997 which could support a less strenuous reference to FedEx transport applications. And the EuroOne network proven also provide a robust transport routing system which linking more than 30 towns. All of this would improve the service quality of FedEx's Internet and e-tailing.

Consequently, the FedEx got an explicit aim in the web and e-tailing market, for both financial and non-financial performance of business in this field was give attention to achieving their objective. For the customers and partners, FedEx try to provide more flexible, convenient, fast service by the Internet and e-tailing channel, created dependable and loyal associations with them and build a perfect reputation in the market. For the own group, it insisted on long-term investment on Internet and e-tailing area, it would lead to earn a long-term benefits. Besides, the organization continuously emphasized on the infrastructure building and technology improvement, to create a dependable operation system and transportation team which could support the simple operation in Internet and e-tailing market. Many of these performances lead the development of FedEx. It might not satisfy only by the pioneer of Internet business in the Global Vehicles and Logistics Industry but try to be the long-term command in this market.

5. Conclusion

As has been mentioned and evaluated, the Global Travel and Logistics Industry as a substantial industry on earth, your competition is intense and its changes is large and quick. For the primary organization in the industry, such as FedEx Company, must have clear objectives in its long-term operation and management. It offers the right decisions in the value-chain activities the specific process in the supply-chain management. Furthermore, the company should have a penetrating view for the marketing craze in the following years and relating the judgment and other factors provide a right decision for Merger and Acquisition strategies. Additionally, the organizations should also give attention to the infrastructure building, enhance the performance in their operation and management process. Internet market should still play a substantial role in the Global Travel and Logistics Industry and its potential benefit is great. Hence, to gain the leadership position in the web and E-commerce area may lead the business to consider the control in the Global Vehicles and Logistics Industry.

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