Q3. Discuss the role of IT in FedEx’s Business Strategy

IT facilitate the globalization of business which could provide advantages to customers in the international market. The role could be considered as internal, external and global aspects.

For internal

1.      IT creates more business opportunities in Logistics Management

With the integration of internet and intranet system, company could redefine themselves to re-engineering the supply-chains and associate with e-tailing and business-to-business e-commerce. For instance, information sharing between departments in company or between organizations could enhance efficiency and reduce costs. Also, it enabled company to integrate with customer supply-chains which could improve customer services.

2.      Provide real-time information

FedEx has a Global Operations Command Centre which is a worldwide central nervous system of FedEx’s. It enabled the company to provide efficient gathering and dissemination of real-time data. When new information was entered to the system by FedEx or customer via the Net, related database was updated instantly and automatically with 24-hour, seven-day operation. With system, FedEx could further differentiate itself by generating high operational efficiency and provide excellent customer services.

For external

1.      Enhance relationships with customers

With IT, relationship between FedEx and customers could be enhanced by increasing the customers’ loyalty and switching cost. PowerShip System is a technology to provide add-value services. It provides additional services to the customers such as storing of frequently used addresses, label printing, on-line package pick-up requests or package tracking. These activities highly improve the efficiency and control for on-line services. Electronic data interchange (EDI) would be another useful technology. It helps to build one-to-one relationships with their customers. More benefits are matching supply to demand without wastage, providing management services and one-point access for customers. All these services could improve the customer relationship.

For Global Market

1.      Provide new service

FedEx Home Delivery is a new services which arose by the use of IT. The services could facilitate business-to-consumer e-tailing. Customers around the world could place order and raise requests online. Also, order checking number are given to customers to check parcel situation online easily by themselves. Moreover, customers could also receive an electronic signature receipt through the internet.

2. Expand the market

After acquiring Calibers system, market could be expanded by forming five subsidiary companies.

3. Allow global sourcing

IT allow global sourcing and choose alternatives parties in the global market. It lower the costs a lots.