...UPS: Strategic Analysis United Parcel Service, Inc. (“UPS”) was founded in 1907 as a private messenger and delivery service in Seattle, Washington. Today, UPS is the world’s largest package delivery company and the premier provider of global supply chain management solutions. They deliver packages each business day for 1.1 million shipping customers to 7.7 million consignees in over 220 countries and territories. In 2011, they delivered an average of 15.8 million pieces per day worldwide, or a total of 4.01 billion packages. Total revenue in 2011 was $53.1 billion (UPS, 2011). UPS serves the global market for logistics services, which include transportation, distribution, forwarding, ground, ocean and air freight, brokerage and financing. Their technology seamlessly binds their service portfolio. They have three reportable segments: U.S. Domestic Package, International Package and Supply Chain & Freight. An in-depth SWOT analysis was performed in order to develop new strategies for the company. External Analysis: Customer Analysis According to the UPS website (Datamonitor, 2011), the company does well in providing a diversified set of services through its three business segments of the end markets: UPS’ US domestic package business segment; UPS’ international package business segment; and the supply chain and freight business segment. UPS’ US domestic package business segment is engaged in air and ground delivery of small packages up to 150 pounds in weight and letters...
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...[pic] United Postal Service [pic] [pic] UPS [pic] S&P 500 Original Purchase Rational The Educational Investment Fund (EIF) purchased 500 shares of United Parcel Service, Inc. (NYSE: UPS) on March 10, 2000 at a price of $53 5/8 per share. Nicholas Finn, the EIF analyst who brought UPS to the EIF cited the following reasons supporting his buy recommendation: ▪ Largest and most profitable carrier ▪ Most global reach ▪ Offers the most diverse product mix ▪ AAA/Aaa credit rating by Standard & Poor and Moody’s In November of 2001, EIF analyst Ajay Jamuar added the company’s ability to perform during a difficult economy, the growth in the logistics segment of the company, risk management of fuel costs, and a loyal customer base as reasons to hold this stock. Portfolio Considerations UPS is classified as a capital appreciation and income stock in the industrials sector. At the time of this report, the summer targets for capital appreciation have not been set, but we were satisfactorily close to our most recent target of 75% with a current weighting of 75.88%. Based on a spring target of 11% we are underweighted in our industrials sector by 180 basis points. UPS represents 33.3% of our current holdings in the industrials sector and is accompanied by Automatic Data Processing (ADP), Convergys (CVG) and Fastenal (FAST). The current portfolio holdings, date acquired, shares...
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...The Success of FedEx vs. United Parcel Service (UPS) Executive Summary In today’s ever advancing world, shipping services are an essential part of our everyday lives. The two largest companies’ in the shipping industry today are Federal Express Corporation (FedEx) and the United Parcel Service (UPS). FedEx is an international company that believes in quality customer service. With its consistently high quality and innovative services, FedEx has achieved a relatively high market share in the global package delivery market. FedEx is currently the global leader in the express package delivery market, and it offers delivery services in over 220 countries and territories. The biggest competition that FedEx faces today is UPS. UPS is the largest package delivery company in the world, and it offers services in over 215 countries and territories. With its consistently low priced shipping offerings, UPS has earned a reputation as the low-priced market leader. Attaining a competitive advantage in the package delivery market is a challenging task, but UPS and FedEx have found innovative ways to accomplish this objective. Although these companies essentially offer the same delivery options, each of them has carved out its own market niche within the package delivery market. Table of Contents Introduction 4 Federal Express (FedEx) 6 United Parcel Service (UPS) 6 COMPETITIVE ANALYSIS 7 United Parcel Service (UPS) 8 Threat of Substitute Product 10 Delivery Confirmation...
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...1. What is the history of airborne express? Airborne express is the third largest express delivery company in the United States. The company keeps a lower profile than rivals FedEx and United Parcel Service of America Inc. (UPS). Airborne boasts the lowest cost structure and targets high-volume corporate customers. It had grown faster than either of its bigger, better known rivals. In 1997 it held 16% of internal market. Progress came slowly and competition was stiff. To begin with, Airborne of California merged with Pacific Air Freight of Seattle. The airline moved there headquarters and changed its name to Airborne Freight Corporation. In 1980, the airline changed their name to Airborne Express. After buying Midwest Air Charter, Airborne Express made history by buying the Clinton County Air Force Base in Wilmington and became the first airline in the history to own and operate an airport. In 1988, Airborne started offering same day delivery after buying Sky Courier in worldwide. In 1991, Airborne received awards from 3 major companies, which including Volvo, and In 1992, the airline introduced Flight-Ready SM, and a prepaid express letters and pack systems. In 1993,Airborne introduced the Airborne Logistics System, which provided Airborne with warehousing and distribution services. In 1994, Airborne opened the Ocean Services Division, and ALS established the first new film distribution program for Hollywood since 1944. In addition, relations were established with...
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...UV2561 Rev. Sept. 7, 2011 FEDEX CORP. VERSUS UNITED PARCEL SERVICE OF AMERICA, INC.: WHO WILL DELIVER RETURNS FROM CHINA? On April 17, 2006, the International Air Cargo Association hosted its first-ever meeting in China. The location could not have been more appropriate. China was shaping up to be the world’s most significant market for air cargo, and Yan Yuanyuan, director general of China’s General Administration of Civil Aviation, had just announced that China would be opening up its air cargo market to an even greater degree. The major global cargo companies had been picking up their level of investment in China and were poised for growth: FedEx Corp. had just begun construction of a major regional hub in Guangzhou and already had over 200 Chinese cities in its international network, and United Parcel Service of America, Inc. (UPS), was just completing a new logistics hub in Shanghai and had recently begun domestic Chinese express package services. The question on the minds of many was which of these two cargo giants was going to make the most of this opportunity. Spurred in part by entry into the World Trade Organization in 2001, growth in trade with China had accelerated and the need for cargo shipment and logistics support had skyrocketed. On June 18, 2004, the United States and China reached a landmark air-transportation agreement that quintupled the number of commercial cargo flights between the two countries. The agreement also allowed for the establishment...
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...[pic] Introduction FedEx Corporation (FedEx) is a US based company mainly engaged in offering logistics solutions. The company, through its subsidiaries, provides transportation, e-commerce and business services under the FedEx brand. The major benefit of using the company is its ability to provide “day-certain” service to every business address in the US and Canada, as well as provide “time-certain” delivery to those areas within one to three business days. The company was founded in 1973 by Frederick W. Smith, whose vision was to provide overnight delivery services for his clients. The company is divided into eight major divisions: [pic] The mission of FedEx is to provide superior financial returns for shareowners by providing high value-added supply chain, transportation, business and related information services through focused operating companies. Customer needs will be met in the highest quality manner appropriate to each market segment served. FedEx strives to develop gratifying relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations and all activities will be conducted to the highest ethical and professional standards (FedEx Corporation – Financial and Strategic Analysis Review, 2011). FedEx’s vision is a world where goods and information move quickly and seamlessly. The company’s goal is to connect the world in such a way that consumers will view them as a provider of convenient...
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...Case #4: THE BATTLE FOR VALUE, 2004: FEDEX CORP. VS. UNITED PARCEL SERVICE, INC. Synopsis and Objectives • Set in June 2004 • To assess the financial performance of FedEx Corp. and United Parcel Service, Inc (UPS). The two firms have competed intensely for dominance of the overnight express package industry. • This case is intended for use in an introductory discussion of corporate value creation and its sources. It requires no numerical computations; rather, the tasks are to interpret the results and to reflect upon their implications. The contrasting record of the two firms affords a platform to: • Assess economic profit analysis (also known as Economic Value Added) and, more generally, the measurement of financial performance and health. The case provides a complete historical economic profit analysis for both firms, and permits comparison with other classic approaches to historical performance analysis. This comparison affords the opportunity to discuss the attributes of healthy and successful companies, and to explore the strengths and weaknesses of economic profit. Key learning points about economic profit include its dependence on the conventions of generally accepted accounting principles (GAAP) and its ignorance of strategic option value. • Evaluate the financial implications of rigorous competition and corporate transformation. Questions 1. What are the enabling and inhibiting factors facing the two firms as they...
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...CASE STUDY FOR FINANCIAL MANAGEMENT CASE 4: The Battle for Value, 2004: FedEx Corp. vs. United Parcel Service, Inc. VALUE CREATION AND ECONOMIC PROFIT I. OUTLOOK OF CASE 4 Case 4 mentions about the competition between two leading companies in package- delivery market. FedEx which is the largest foreign presence in China, with 11 weekly flights, serving 220 Chinese cities, so the company’s volumes in China had grown by more than 50% between 2003 and 2004. UPS which is the world’s largest package-delivery company and dominant parcel carrier in US, serving 200 cities in 2003. FedEx had virtually invented customer logistical management, and was widely perceived as innovative. Historically, UPS had reputation for being big, bureaucratic and an industry follower. Two companies have their own market, an individual characteristics, and inconclusive. Thus, not only based on the development and operation of the two companies, the analysis also relied on the special purpose financial ratios ( especially Economic Value Added (EVA), an effective measure and rapid for firm within an industry) to find which company has more competitive advantage. II. INTRODUCTION 1. FedEx corporation: [pic] FedEx, formally known as Federal Express, started delivering packages and freight on April 17, 1973. The company was...
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...Introduction Business SegmentsFedEx ExpressFedEx GroundFedEx FreightFedEx ServicesCorporate Strategy“Compete Collectively, Manage Collaboratively” • 3. Brand Planning AssessmentThe FedEx PositionWho is the target market?“anyone who needs to send something anywhere in the world. Whether it’s the one and only package you'll ever ship in your life or you have 1000 packages to ship every day.” • 4. Brand Planning AssessmentThe FedEx PositionWho are the main competitors?UPS • 5. Brand Planning AssessmentThe FedEx PositionWhat are the points of parity?-Both companies ship packagesBoth online services allow you to track packages, order supplies and pay bills.What are the points of difference?-FedEx has 3 times as many planes-Print and ship from anywhere services-FedEx has been known to update technology more frequently than UPS • 6. Brand Planning AssessmentThe FedEx PositionFast Forward MovingPrecise • 7. Brand Planning AssessmentKey Marketing ActivitiesAlliances with NFL, NBA, FedEx cup, FedEx racing, the FedEx orange bowl, and the FedEx field Senior Vice President of International Marketing, Rajesh Subramaniam, said, “FedEx sponsors and associates with several sports that share its attributes of speed, reliability, precision, teamwork and flawless execution.” • 8. Brand Valuation Assessment Building EquityFavorability & Awareness Through Six ElementsMEMORABLEMEANINGFULLIKEABLETRANSFERABLEADAPTABLEPROTECTABLE • 9. Brand Valuation...
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...CONTENTS I. Introduction……………………………………………………………………………….2 II. Company Overview……………………………………………………………………..3 Company Background……………………………………………………………...3 Services Offered……………………………………………………………………..4 SWOT Analysis……………………………………………………………………...5 III. Environmental Analysis………………………………………………………...……13 PESTEL Analysis…………………………………………………………………..13 Competition Analysis………………………………………………………………16 IV. Marketing Plan…………………………………………………………………………16 Marketing Goals…………………………………………………………………….16 Marketing Strategies……………………………………………………………….17 Marketing Mix……………………………………………………………………….20 Marketing Budget…………………………………………………………………..22 V. Recommendation………………………………………………………………….…..23 INTRODUCTION The competition in the business arena has been very stiff and complex. In this regard, the organization must be able to utilize a strategy and management system that will enhance the performance of the business so as to outgrow its rivals (2000; 2003). There are certain ways or techniques that can be considered in order to emerge and continue to be competitive within the market place. The marketing concept has been defined as ‘the key to achieving organizational goals’ and the marketing concept rests on ‘market focus, customer orientation, coordinated marketing and profitability’. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit. Traditionally, marketing...
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...strategies to achieve competitive advantage over each other but the basic infrastructure and activities among the companies were similar. Here Federal Express is the market leader which covered 45% of the domestic express mail and UPS took second place and covered 25% share .Federal Express and UPS always tried to copy each other’s action and when a competitor came up with a formula that attracted the attention of potential customers, the other were compelled to follow suit with similar services, or better yet, an improved version .On the other hand Airborne Express is the third largest and fastest growing international mail expresses company in America. It held roughly 16% of the domestic express mail market by 1997. The company has several advantages over its rivals, such as it provides delivery services at a lower cost of up to 20% over FedEx and UPS; it operates the nation’s only privately owned foreign trade zone in Wilmington; it is more flexible and provides more customer-tailored services. It charges lower price but still much guarantee delivery dates .In case of adapting or installing any technology Airborne competitive behavior was response and when there was a clear derived benefit for their customer that time they adapt new technology. Airborne chose to be being selective in case of targeting the customer and they selected to serve the business customer. In case of international operation Airborne did not invest heavily like Federal Express and UPS. They invested wisely...
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...EMBA 810 Financial Statement Analysis Final Exam Summer 2014 – EMBA 20 12 July 2014 United Parcel Service Initial Public Offering Case Analysis Darrell W. Kent, Jr. 1. What are the key success factors and risks for UPS given its business strategy? United Parcel Service’s (UPS) strategy is to be the market leader within the package delivery industry with operations primarily focused on international air and ground package delivery services and secondary focus on the logistics and supply chain management services. UPS management is now prepared and ready to bring UPS from a privately owned firm to a company that is publicly traded on American and international stock exchange markets. The key success factors for UPS are as follows: i. Strong financial performance. ii. Low-Risk AAA Rating. iii. Technological leadership. iv. Operational advantage – centralized air and ground operations. v. Employee owned structure, with very strong loyalty and minimal conflicts of interest. The key risk factors for UPS are as follows: i. Unionized workforce – 58% of UPS employees and these employees are able to maintain flexible work arrangements. ii. Weak presence in the air express market. iii. Between 1998 and 1999, UPS spent more than $1billion dollars per year upgrading its infrastructure. iv. Expansion of the scope of the business with the formation of UPS Logistics Group. 2. Where, if at all, do the financial statements reflect these...
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...Assignment 2: FedEx Strategic Options and Opportunities Anthony Anderson JWI 540: Strategy Dr. John Dorociak 8/3/2014 Executive Summary This paper will provide discussion and analysis concerning various strategic options and opportunities as they relate to the FedEx Corporation (FDX) in their current industry market. Competition will be assessed to create an understanding of the current landscape of the industry from the perspective of traditional, potential, and oblique competitors in FDX’s current industry. FDX will then be analyzed utilizing the SWOT model that will be utilized to identify three strategic options in the current market that will foster corporate growth in the future. Once identified, each strategic option will be evaluated via three criteria based on three simple questions as follows: Is it big? Is it us? Is it time? After this evaluation is complete there will be one strategic option selected that best meets the selection criteria in totality. FedEx Corporation: The Competition Competition in the transportation market is intense both domestically and globally and is the heart of every organizations strategy within this industry. Freight and courier services are at a high demand throughout the world due to growing distribution channels, technology, and a marked increase in demand. Market volume and value are...
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...Introduction There is no doubt that FedEx Freight is a leading U.S. provider of less-than-truckload (LTL) freight services. It is known for exceptional service, reliability and on-time performance. (History of FedEx Operating Companies About FedEx) With the rapid rise of virtually instantaneous electronic mail, some wondered if FedEx overnight mail delivery was as important as it was in the past. Margaritis pointed out that the company received only 9.3 percent of its revenue from overnight express mail, and that much of that mail could not be delivered electronically, such as gifts, electronic components, and medical equipment. (FedEx Cooperation) Nevertheless, “While FedEx Ground and FedEx Freight posted solid financial results, the third quarter was very challenging for FedEx Express due to continuing weakness in international airfreight markets, pressure on yields due to overcapacity, and customers selecting less expensive and slower transit international services,” said aid Frederick W. Smith.( Jeff B. 2013) In view of these issues, this essay is aimed to discuss how the business environment, company 3 resources and segmentation are related to the business performance. The paper analyzes these three elements using Porter’s five forces and SWOT. Porter’s five forces model analysis The five competitive forces model was came out from Porter’s first book "Competitive Strategy" in 1980. From that on, the model is broadly used by business managers as a guide tool to analyze...
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...Leighton Red = Karissa Brown = Adam Black = Jane The Battle for Value, 2004: FedEx Corp. vs. United Parcel Service, Inc. FedEx will produce superior financial returns for shareowners by providing high value-added supply chain, transportation, business, and related information services through focused operating companies competing collectively, and managed collaboratively, under the respected FedEx brand. FedEx Mission Statement (Excerpt) We serve the evolving distribution, logistics, and commerce needs of our customers worldwide, offering excellence and value in all we do. We sustain a financially strong company, with broad employee ownership, that provides a long-term competitive return to our shareowners. UPS Mission Statement (Excerpt) UPS hubs in China as of 2009: Shanghai and Shenzhen FedEx hubs in China as of 2009: Guangzhou Figure [ 1 ] - Source: http://www.travelchinaguide.com/map/ Introduction June 18, 2004 marked the start of an important international trend in logistics and carrier services. The U.S. and Chinese government came to an agreement that allowed the development of air cargo hubs and landing rights for commercial airlines in China. This pact not only opened up extensive new opportunities for the airborne market in general, but gave FedEx and United Parcel Service (UPS) exclusive cargo transportation rights (Bruner & Carr, 2010). At the time, FedEx was winning the battle for China, with its Chinese volumes nearly doubling from...
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