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Case Analysis of Exel Case

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Case Analysis for Exel PLC
Fei Xue
3/20/2014
Exel plc was established in 2000 by the merge of MSAS and Exel Logistics. The merger also boosted Exel plc’s business in both freight management (FM) and contract logistics (CL). In 2003, Exel plc ranked the 1st in contract logistics area and the 5th in freight management area. At the same time, Exel plc was the largest provider of both freight management and contract logistics, which enables Exel plc to serve its customer from manufacture to store. Also in 2003, freight management industry and contract logistic industry totally worth 270 billion dollars.
As a logistic provider, Exel plc’s core business was freight forwarder and warehouse operation, other business included local transportation, value-added services and software installation, etc. From another point of view, we could safely draw a conclusion that those businesses were also Exel plc’s clients’ most interested outsourcing supply chain activities. But why? By taking a close look of those activities, we could categorize them into capital intensive, labor intensive and talent intensive. For example, freight forward and warehouse/distribution operation need investment in building warehouse/distribution center and transportation tools, which are very capital intensive. Other activity like value-added services are always labor intensive, such as assembling. Talent incentive can be seen in coordination and software installation, which also need a lot specialized investment.
However, although those activities are important to those companies, they are not adding core value to company’s products while they always need heavy investment. Especially when business go globally, those investment can increase dramatically. (The core value here means the value connected to product’s competitive advantage. For example, the core value of I-Phone is its design

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