Frederick W. Smith - The Entrepreneur who Created an Industry
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Case Details:
Case Code : LDEN023
Case Length : 15 Pages
Period : 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : FedEx Corp.
Industry : Logistics
Countries : USA
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
A Globalization Advocate
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Smith had always been a strong advocate of globalization. After performing
exceedingly well in the US, Smith felt that FedEx should commence international
operations. In 1984, FedEx started operations in Europe and Asia. In his pursuit
to expand rapidly in global markets, Smith acquired several major foreign
companies.
For instance, FedEx's acquisition of Tiger International,13
in 1989, transformed it into the world's largest full-service, all-cargo
airline, with flying routes to 21 countries. Smith was also a strong advocate of
open sky policy. In 1995, he lobbied intensively to pressurize the US Federal
Government to allow FedEx's planes to fly on 11 new routes in Asia...
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Smith - The Entrepreneur
Smith transformed FedEx from a loss-making company during its early years to a
$1 bn revenue company in 1983. Thus, FedEx became the first company to cross
$1 bn revenue figure within 10 years of inception, without going in for any
mergers and acquisitions. Under the leadership of Smith, FedEx continued to
register significant growth in the next two decades. For the fiscal ending
May 2003, the company reported a net income of $830 mn on revenues of $22.5
bn...
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The Criticism
Though Smith was appreciated for his entrepreneurial qualities and
management style, a few analysts criticized him as well. Analysts accused
Smith of resorting to unethical means to arrange money for FedEx during the
initial years of its operations. For instance, in 1973, in a desperate bid
to finance the purchase of Falcon aircrafts, Smith forged papers of his
family trust to secure loans from banks. As per the reports,16
Smith even went to the extent of gambling at Las Vegas to earn $27,000 to
mobilize the additional amount required to finance the Falcon deal... |
Exhibits
Exhibit I: Parameters for Peter Drucker Strategic Leadership
Award
Exhibit II: Financial Performance of FedEx
Exhibit III: Hub and Spoke Model
Exhibit IV: Technology Innovations at FedEx
Exhibit V: People Service Profit Philosophy at FedEx
Exhibit VI: Awards and Recognitions Received by FedEx
Exhibit VII: Smith's Five Secrets to be a Successful Entrepreneur
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