To determine: Why certain companies would choose to use an intermediary like FX instead of taking on distribution responsibilities themselves.
Case summary: FX is the largest express delivery company in the world. However, in spite its success it is not a self-sufficient firm. Much of its income depends on other businesses that use the freighter to ship their wares. If these clients become big enough, though, they could start to look for ways to consolidate their business. Moreover, FX provide businesses with more than just delivery services. They add important utility to existing products and services.
Many companies opine that FX are at an advantage improving their services with the help of outside firms instead of setting up their own departments from scratch. The greatest asset of the business is its fast-acting infrastructure. Its retail clients don't need to waste precious sales floor space by overstocking products due its speed. It can also keep its prices below what it would cost the wholesaler to maintain its own fleet of delivery vehicles.
Characters in the case: The important elements discussed in this case are FX, companies using FX as an intermediary, and retail clients.
Adequate information: FX is the largest express delivery company in the world. However, in spite its success it is not a self-sufficient firm. They are at an advantage improving their services with the help of outside firms instead of setting up their own departments from scratch. The greatest asset of the business is its fast-acting infrastructure.
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Chapter 15 Solutions
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