Case Study Analysis

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Fedex.docx

FedEx: From a portfolio of brands to a single company

FedEx was founded in 1973 as an overnight delivery company. It has since established itself as a leading company in global air transportation, securing a strong reputation for service and reliability. The company faced some stiff competition from rival UPS and service novel ventures in the express carrier market during the 1990s. In addition, FedEx acquired Caliber Systems – which included a suite of logistics and express companies – in the late 1990s. Both these developments triggered the need within the FedEx corporation to rethink its corporate brand and communication. In particular, there was the belief that rather than slowly assimilating these companies whilst keeping marketing activities separate, customers increasingly requested a ‘one-stop’ transportation interface – a single point of contact with the same company. In January 2000, FedEx responded and rolled out a single corporate brand across all its operating companies. The company name was badged on all its services and operations, with sub-brands such as FedEx Express for express services and FedEx Freight for less-than-truckload services. Whilst the structural alignment within FedEx and the choice for a monolithic brand made a lot of sense, strategically stakeholders were initially not convinced. Media journalists were skeptical of the new structure and questioned its viability, employees continued to identify with their own operational units and financial analysts felt that the new structure did not provide additional synergies over the model of having a portfolio of separate brands and companies.

Bill Margaritis, the vice president for corporate communication at the time, aimed to address these stakeholder opinions through a campaign that set out to gain recognition for the new business model and that would also help in creating acceptance and support across stakeholder groups. Before the campaign was developed, Margaritis and his team carried out extensive research on the current awareness of, and attitude towards, the new FedEx structure. They surveyed employees, journalists and financial analysts, who each expressed a lack of understanding and even skepticism about the new model. Margaritis used these research findings to develop change communication programmes internally that would create understanding of the new structure. The research also led them to intensify their efforts to convince journalists and financial analysts of the advantages of the new structure and to demonstrate to them some early successes.

The themes for the change campaign, which was labelled as ‘The Change Ahead’, and for the exchanges with journalists and analysts came directly out of the initial research study. For the media, for example, Margaritis felt that it would be key to demonstrate the positives of the new structure and to nip any negative rumors in the bud – a point that had been drawn out by the initial survey. He therefore set up a system for educating the media. Margaritis and his team identified an inner circle of media contacts and conducted personal briefings with these journalists to forge and strengthen relationships with them and to reinforce messaging and reduce any gaps in understanding. They also set up a ‘FedEx Truth Squad’, analogous to political campaign tactics. This squad monitored the media coverage of FedEx in real time and kicked into action when inaccuracies or negative news were reported, which were then immediately corrected or challenged. Continuous measurement during and after the initial communication efforts demonstrates that media coverage turned increasingly supportive of the new business model. The Truth Squad had done its job effectively; few inaccuracies about the new structure had been reported. Employees demonstrated an improved understanding of how the new structure worked. Customer successes proved the merits of the business model and the power of having an integrated brand. The FedEx brand has since gone from strength to strength; since 2001 FedEx has been ranked amongst the top 100 global brands and is also recognized for its strong corporate reputation. in turn, when the company had such positive news to tell, this informed a new cycle of activity; FedEx, for example, released a series of global ads in 2002 that celebrated the company’s achievements and reputational accolades, and which recognized the importance of FedEx employees.

Question for reflection

Reflect on the research and planning cycle and how it was used within FexEx. Could the same results have been achieved without research informing their messaging along the way?