Q&A: Change and Effect

What forces are rewriting business rules? How is the competitive landscape being reshaped? What are the net effects on global business and emerging markets? We pose those questions and more to FedEx leaders from across the company.


ACCESS: What are some primary factors driving change and growth in today’s business world?

Fred Smith: Without question, e-commerce is an important one. It’s exploding around the globe. By some estimates, global online B2C e-commerce sales will reach $2 trillion within two years.

Karen Reddington: E-commerce is happening in the Asia-Pacific region on a massive scale. To give you a sense of it, consider Taobao, which is an online store similar to eBay. It has something like 800 million product listings — and it’s only one of Alibaba’s e-commerce enterprises.

Jill Brannon: At the same time, today’s communications infrastructures are leveling the e-commerce playing field. They allow even small- and medium-sized businesses to participate in cross-border e-commerce.

Raj Subramaniam: We certainly are seeing an explosion in micro-multinationals. One example is Nicole Snow, our 2013 FedEx Small Business Grant Contest Winner. She essentially used her laptop and FedEx to create Darn Good Yarn. It’s a thriving company based in a small Maine town that sources yarn from India and Nepal and sells it around the world.

ACCESS: Has the competitive landscape shifted as a result?

Fred Smith: In 1927, Charles Lindbergh flew from New York to Paris in 34 hours. With a tap on your mobile device, you can now ship a FedEx® package to many major world markets overnight. “Getting it there” used to be a miracle. Now, if you’re not providing speed, ease, and reliability to your customers, you’re out of business.

Brian Philips: The way people do business has changed — it’s mobile, well-informed, and lightning fast. And their expectations are incredibly high.

Rob Carter: It used to be that you needed to amass a lot of capital to build a business. Now it’s possible to deploy information to create wealth very quickly — a few people with a relatively small amount of capital can create a company like Instagram and turn it into a $1 billion dollar asset within two years.

Jill Brannon: Nearly every industry seems ripe for disruption. Think about what advances in self-driving cars, nanotechnology, and robotics will do in the next few years. And then there’s digital manufacturing, which is predicted to fundamentally reshape supply chains.

Rob Carter: There’s a Gartner Research phrase that gets to the heart of it: Every industry is being digitally remastered. The result is that companies need to rethink how they operate. For example, I’d argue that cab companies aren’t the only ones who need to be concerned about Uber. Automakers also need to think about it, because Uber is making people question whether they actually need cars

ACCESS: What impacts are these sorts of changes having on the global economy?

Fred Smith: On one hand, we’re seeing a rise in protectionism. Over the last few years, almost every trading nation has instituted policies that permit greater regulatory intervention in the trade process. It’s discouraging to watch nations made prosperous by the opening of markets and the growth in global trade attempt to throttle the very forces that have created their prosperity. One exception is Mexico, which has free trade agreements with 44 countries. Those are helping boost its economy — particularly its auto manufacturing and aerospace sectors.

Raj Subramaniam: Standards of living are also rising measurably faster in countries with more open and connected economies. McKinsey released a study last year showing that connected economies earn a 40 percent boost in GDP versus non-connected ones.

Karen Reddington: Another key consideration is the emerging middle class in countries such as China. Consumers there will start dictating the nature of market engagement. To succeed, Western companies will have to innovate in ways that show they understand and are sympathetic to the needs of Chinese consumers. At the same time, Western companies can’t underestimate the capabilities and reach of businesses in the developing world.

ACCESS: How does a company like FedEx adapt in a business environment marked by relentless change?

Jill Brannon: FedEx was built on innovation, and we’ve spent the past 40-plus years evolving based on marketplace trends. We also listen to businesses and work hard to give them solutions they need. Change is in our DNA.

Brian Philips: Here’s an example. Preparing items for shipment is a pain point with online transactions. Our new FedEx Pack Plus offers dedicated space inside FedEx Office stores with the tools and materials that allow our team members to address customers’ packing needs. We’re also testing technology like FedEx Ship&Get® locker systems at FedEx Office stores and third-party locations. And we’re continuing to invest in FedEx SameDay® City because last-mile delivery — point to point within a metroplex — is often the missing link for online retailing.

Fred Smith: One larger point to consider is that we’re all citizens of the world now, and we can’t prosper in isolation from one another. Not in a world that’s become so infinitely interconnected. Nothing can lift up a community faster and more sustainably than a vibrant and connected economy.

As a company, we have to continue to forge connections and pursue innovation, growth opportunities, and ultimately, a better world.

Comments

  1. In transportation all my years and seeing the evolution of the field has been exciting! Filled with pride and anticipation knowing that working for FEDEX, I'm in the hands of a company that keeps it's fingers on the pulse of e-commerce and world economy! Looking forward to more illumination with ACCESS 25!

    Robert Romando January 9, 2015
  2. Exciting times and opportunities.
    It seems, we must excel at enterprise collaborative management, innovation and enterprise change management. We must shift inovation into measured risk taking to extend persistent competitive advantage and develop adjacent core competencies (e.g. Tech Connect and FedEx Space Solutions). At its core, the FedEx strategy needs to assure our evolvution into proactive business operational spaces (i.e. customer facing and backoffice). We must redefine and refocus FedEx as the world reinvents the marketplace.

    Charles Hawk January 19, 2015

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