List of Topics

SfC Home > Business > Entrepreneurship >

 

Case Study of Starting FedEx

by Ron Kurtus (5 April 2018)

FedEx or Federal Express is a company that delivers packages world-wide. It main competition in the United States is UPS (United Parcel Service). FedEx was created by Fred Smith, who outlined the plan for the business as a paper for a college Economics class. He funded the start of the company through his inheritance money and venture capital. The company was started in 1971.

Examining this case study can teach you and perhaps inspire you in starting your own business.

Questions you may have include:

This lesson will answer those questions.



Background of Smith

Fred Smith was the son of entrepreneur James Frederick Smith, who was the founder of the Toddle House restaurant chain and the Smith Motor Coach Company, which he later sold to the Greyhound Corporation. His father died while Fred was only 4. Thus, Fred was not able to learn any entrepreneurial lessons from his father. However, he probably inherited the personality traits necessary to be an entrepreneur.

As a teen Smith became interested in flying and became an amateur pilot. This interest would stimulate his idea of FedEx.

In 1962, Smith entered Yale University to study economics. While at Yale, he became friends with both future U.S. President George W. Bush and future senator John Kerry. Smith and Kerry shared shared an enthusiasm for aviation and were flying partners.

Fred was a member of Delta Kappa Epsilon fraternity and Skull and Bones. He had a dynamic personality and was able to befriend others who could help him in his business enterprises.

Idea and business plan

Smith wrote a paper for an economics class, outlining overnight delivery service in the computer information age. The paper became the idea of FedEx.

After he received his Bachelor's degree in economics in 1966, Smith joined in the U.S. Marine Corps, where he was able to observe the military logistics system, as well as their procurement and delivery procedures. This research helped in fine-tuning his dream and create a business plan for an overnight delivery service.

He served two tours of duty in Vietnam, receiving the Silver Star, the Bronze Star and two Purple Hearts. He was honorably discharged in 1969 with the rank of Captain.

In 1970, Smith purchased the controlling interest in an aircraft maintenance company, Ark Aviation Sales, and by 1971 turned its focus to trading used jets. This allowed him to gain access to aircraft to use in his future business.

Starts FedEx

On June 18, 1971, Smith founded Federal Express with $4 million of inheritance money. Also, through is college connections he was able to raise $91 million in venture capital.

In 1973, the company began offering service to 25 cities, and it began with small packages and documents and a fleet of 14 Falcon 20 (DA-20) jets. His focus was on developing an integrated air-ground system, which had never been done before.

Smith developed FedEx on the business idea of a shipment version of a bank clearing house where one bank clearing house was located in the middle of the representative banks and all their representatives would be sent to the central location to exchange materials.

Summary

FedEx is a company that delivers packages world-wide. It main competition in the United States is UPS (United Parcel Service).

FedEx was created by Fred Smith, who outlined the plan for the business as a paper for a college Economics class. He funded the start of the company through his inheritance money and venture capital. The company was started in 1971.


Try something new


Resources and references

Ron Kurtus' Credentials

Websites

FedEx Corporation History

FedEx - Wikipedia

Entrepreneur Resources

Books

Top-rated books about FedEx

Top-rated books on Starting a Business

Top-rated books on being an Entrepreneur


Questions and comments

Do you have any questions, comments, or opinions on this subject? If so, send an email with your feedback. I will try to get back to you as soon as possible.


Share this page

Click on a button to bookmark or share this page through Twitter, Facebook, email, or other services:

 

Students and researchers

The Web address of this page is:
www.school-for-champions.com/entrepreneurship/
starting_fedex.htm
.

Please include it as a link on your website or as a reference in your report, document, or thesis.

Copyright © Restrictions


Where are you now?

School for Champions

Entrepreneurship topics

Case Study of Starting FedEx




Entrepreneur topics

Basics

Getting started

Case studies

Also see



Let's make the world a better place

Be the best that you can be.

Use your knowledge and skills to help others succeed.

Don't be wasteful; protect our environment.

You CAN influence the world.





Live Your Life as a Champion:

Take care of your health

Seek knowledge and gain skills

Do excellent work

Be valuable to others

Have utmost character

Be a Champion!



The School for Champions helps you become the type of person who can be called a Champion.