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FedEx's Operating Model: Diversification
Features of the Diversification Operating Model
Features of the Diversification Operating Model
Few shared customers
Independent transactions
Operationally unique business units
Autonomous business management
Business unit control over business processes
Few data standards across business units
Most decisions are made within the business unit
Reasons:
Fedex is an organization that is made up of many different companies and business units. FedEx Express, FedEx Ground, FedEx Services, FedEx Office, FedEx Freight, FedEx Logistics and FedEx Dataworks are all operationally unique business units.
Each business has autonomous business management. Meaning, each business unit has their separate sets of standards, targets, visions and the infrastructures.
Each business unit maintains separate financial reports for their independent business transactions.
FedEx has few, shared customers and suppliers, which means that all the business units have their separate databases and they do not need to share the date.
FedEx has the shared services of Information Technology (IT), called FedEx Services, which provides centralized services to its business units. It is responsible for collecting and managing all the data right from generating a shipping label to delivery of the package, which is shared between the other business units for their operations.
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