Merge's Blog

Tag Archives: FedEx

Survival depends on how you transform to fit your environment

Fred Smith, the man who founded Federal Express in 1971, is a classic example of someone who built a successful company by being responsive to changes in customers’ expectations and in the business environment.  FedEx originally started as an idea in a term paper that Smith wrote for an economics class in 1965, while he was still an undergraduate at Yale University.  His premise: as productivity increases with the use of machinery, breakdowns in equipment can easily destroy any efficiency and profitability.  Therefore, a system needs to be developed to ensure that organizations have rapid access to spare parts and materials as they are needed.  With this as a starting point, in 1973, Smith created the now-famous hub-and-spoke-system with his “hub” in Memphis, Tennessee.  Success followed, but the world began to shift more towards a knowledge-based economy.  Continue reading