Sales and Distribution Management
Sales Force Integration at
FedEx
Submitted by- Group 12
Ayush Agarwal (PGP10011)
Hatim Cyclewala (PGP10021)
Mohini Singh (PGP10032)
Mona (PGP10095)
Rishabh Gupta (PGP10103)
Shubham Jalan (PGP10113)
Sudhanshi Parakh (PGP10055)
Background of the Company
Company Customers Collaborators Competitors Context
Beginning: 1973, FedEx corporation started FedEx Express- 1.5 million Largest acquisition - FedEx Express Technological advancement
overnight delivery of packages through a FedEx Ground- 65000 Caliber and all its -UPS
dedicated air network subsidiaries (especially -Airborne Freight Emergence of Internet
After acquisition of RPS (catering to ground FedEx Express : RPS) -US Postal Services communication – which took
delivery services), the company came up with Businesses with more than -DHL document delivery out of
Project ARISE to integrate their operations to $10 million in Acquisition of regional -TNT Post Group business
form a single sales automation system annual FedEx billings and air cargo companies - Deutsche Post
clients like General such as Tiger Just in time inventory
Strength: Electrics, Daimler Chryslers International (1989), FedEx Ground management techniques
• Overnight industry leader – 46% Share and Wesco Corp, Evergreen International -UPS
• High brand recognition geographically covering Airlines(1995) -Trucking firms Rise of e-commerce and
• Best on time express performance and a ~50 states need for home delivery
good tracking system Independent
Weakness: Fed Ex Ground: contractors who were Deregulations in air Freight
• Two sales forces leading to two point of Entire continent of US and responsible for vehicle industry
contact for customers majorly metropolitan cities ownership,
• Weaker position in ground maintenance and
Opportunities: Later, expansion to fueling
• Cost savings from Sales Force integration countries led to key
• Bundled Pricing opportunity companies’ addition in the
• International expansion customer base
Threats:
• Intense industry competition
• Increase in prices of fuel
• UPS strong market share in ground services
Decision 1. Need to integrate Sales Force to bring unified customer
contact
Problem 2. Redesign compensation plan of the sales force
Alternatives
01 Integrate the sales force of FedEx Express and FedEx Ground
02 Do not integrate but coordinate
03 Maintain Status Quo – not considered
Evaluation of Alternatives
Integrate Do not integrate but coordinate
Develop one point of contact for Maintain two SF’s but create
customers coordination mechanisms.
One shipping system Option B
(versus two today)
Set Ground goals at corporate to match
More focus on consultative selling Option A Express approach
Create sales support specialists to
do the technical integration with
Build Ground Services Business customer systems
Sales strategy followed in both the units is very different from Couldn’t take the advantage of bundled price
one another ( for Express it was consultative selling while for approach (which can be gained by selling through
ground, affiliative strategy was used) single account executive)
Salesforce motivation was also different (recognition for
Express and commissions for Ground)
Recommendations
Recommended alternative - Integrate the systems
Make the best use of transaction specific assets of individual sales force (leverage on their contacts)
Redefine the compensation system by the kind of expertise one possesses
Target should be profit/yield based and must have minimum qualification criteria where cross sell
is necessary (minimum 20% target to be achieved from each segment)
Compensation plan for all must comprise of 25% of incentives and rest, salary(fixed)
Segregation of customers should be prioritised on the basis of relationship or cross sell done
Training – Job rotation to be introduced to make everyone comfortable with different processes
As UPS has higher share on ground services so focus should be paid to advertise a bit more to earn
back RPS client base
Integration of consultative and affiliate strategy would result in higher revenues and loyal customers
Thank You
