...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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...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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...Financial PerforamAnce Analysis Contributors: Seydi Abdishev, Slavik YA Alexander Filchev, Christine Soghomonyan Prepared for: BUS321a_S2016 (Intermediate Accounting II) Supervised by: Marenglen Berisha Date: 4/30/2016 Contents Introduction 2 Financial performance of UPS 3 Growth 3 Profitability 3 Efficiency 4 Liquidity 5 Working capital management 5 Solvency 5 Conclusion 6 Financial performance of FedEx 6 Growth 6 Profitability 7 Efficiency 7 Liquidity 8 Working capital management 8 Solvency 8 Conclusion 9 Financial performance of Coca Cola Co 9 Growth 9 Profitability 11 Efficiency 11 Liquidity 12 Working capital management 12 Solvency 13 Conclusion 14 Financial Performance of PepsiCo 15 Growth 15 Profitability 15 Efficiency 15 Liquidity 15 Working Capital Management 16 Solvency 16 Comparison between UPS and FedEx 16 Profitability 16 Efficiency 17 Liquidity 17 Comparison between Coca Cola Co and PepsiCo 18 Profitability 18 Efficiency 19 Liquidity 19 Solvency 20 Comparison between the freight shipping industry and the soft drinks industry 20 Introduction This report discusses the performance and ratio analysis of UPS and FedEx from the air delivery & freight industry and Coca Cola Co and PepsiCo from the beverages - soft drinks industry. Key ratios reported in Appendixes...
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...Besides that, competitive advantage can be gained through maximal capitalization of the attributes and resources of the organization. Thus, competitive advantage is a strategy that organizations use to differentiate itself from its’ competitors. Superior value Superior value is a type of competitive advantage when value of products and services that are produced is superior to the competitor’s value. Superior value can be gained by differentiating the company products and service from its’ competitors. For example, FedEx was one of the first companies to introduce package-tracking capability. This tracking capability allows FedEx customer to track their package along its’ route of being delivered. Thus, FedEx gained superior value over its’ competitors by providing such a service. Although other courier services eventually provided such service, FedEx capitalized on its’ superior value and continuously upgrade it. Therefore, other courier services could not match up its package tracking services. Rarity When a company capitalizes on its product/service rarity, it gives the company a competitive advantage where no other firms have the capabilities needed to provide the quality and quantity of product and services it produces. Rarity competitive advantage can be gained through technological breakthroughs or innovation of product and services in differentiating from competitors. For example, Apple built a rare and sustainable competitive advantage by introducing iCloud. iCloud...
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...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 2003 to 2004. Despite this, rival UPS still held the title...
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...There are numerous assumptions on which the HRM’s soft model can be said to rest on and these assumptions include, for example, that a lot of people have a lazy attitude or mentality towards work in spite of the fact that work is practically a necessity for their existence. In other words then, the reason why they are compelled to work is perhaps because of the benefits they can derive as reward for working. One other very important assumption of the HRM’s soft model is that people tend to try and equate the remuneration they get for working with the amount of their perceived effort and vice versa. And so, morale is high when they perceive payment or reward to be at least equal to or greater than effort put in. And when it is the reverse case, people are not motivated to give their best efforts. Suffice to state that people naturally quite innovative; which could count as priceless asset to an organization. Unfortunately, it has come to the observation that this valuable characteristic of people has been far from being optimally exploited. In certain other cases, the attribute has not seen the light of day let alone put to use. On account of the initially stated, the apparent conjecture of the soft model is that people will be inclined to work to the best of their abilities and by extension bring positive returns to the organization they work for if they by any means become committed to their organization (Beaumont, 1992; Dunham and Smith, 1979; Lundy, 1994). Hope (1994, p.3)...
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...Fedex AnnuAl RepoRt 2011 poweRFul, lonG-teRM tRendS in GlobAl tRAde Revolve ARound Fedex. The global shipping arrow poinTs up We’ve reached a tipping point in how the world works. The largest economy in the world is no longer the economy of any one country — it’s the economy of global trade of goods and services. Value: $18.3 trillion in 2010. At FedEx, our job is to facilitate these transactions, the heart of commerce, by providing access — moving goods across the global supply chain. Macroeconomic trends that drive global trade continue to intensify: > Production of high-tech and high-value-added goods continues to rise. > Global sourcing and selling are increasing. > Supply chains are accelerating. > E-commerce is expanding. Manufacturing and emerging markets, including China, India and Brazil, are leading the charge. Thanks to the disciplined execution of our long-term strategies, FedEx is at the center of these powerful global trends: 2-2.5x 50% 30% The percentage of global GDP represented by total trade in goods and services in 2010, which continues to grow.2 The amount by which we expect global trade to outpace projected annual global GDP growth of 3.3% from 2010 to 2015. The percentage emerging markets are expected to contribute to global GDP by 2013.1 4x The amount the international express market is expected to grow as part of the total air cargo market — from 3.7% in 1991 to 17.7% in 2015.3 Scan to see videos and more. fedex.com/annualreport 2011/mobile 1...
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...Chapter 12 Segment Reporting and Decentralization Solutions to Questions 12-1 In a decentralized organization, decision-making authority isn’t confined to a few top executives, but rather is spread throughout the organization with lower-level managers and other employees empowered to make decisions. 12-2 The benefits of decentralization include: (1) freeing top managers to focus on strategy, higher-level decision making, and coordinating activity; (2) improving operational decision making, since lower-level managers often have better information about local conditions; (3) enabling quicker response to customer needs; (4) training lower-level managers to take on greater responsibility; and (5) providing greater motivation and job satisfaction for lower-level managers. 12-3 A cost center manager has control over cost, but not revenue or investment funds. A profit center manager has control over both cost and revenue. An investment center manager has control over cost and revenue and investment funds. 12-4 A segment is any part or activity of an organization about which a manager seeks cost, revenue, or profit data. Examples of segments include departments, operations, sales territories, divisions, product lines, and so forth. 12-5 Under the contribution approach, costs are assigned to a segment if and only if the costs are traceable to the segment. Common costs are not allocated to segments under the contribution approach. 12-6 A traceable cost of a segment...
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...Undergraduate Student Managed Investment Fund United Parcel Service, Inc. (UPS) Type of Report: Recommendation & Analysis Recommendation: $58.40 Date: April 14, 2003 Limit order to buy 175 shares at $55.00 Market order to buy 175 shares Industry: Transportation - Air Delivery, Freight & Parcel Services Analysts: Michael Vida - mvida24@hotmail.com Carmela Miele – carmela37@aol.com Salvatore Samà – samasalvatore@yahoo.it Share Data Price - $58.40 Date – April 14, 2003 Target Price - $60.35 52 Week Price Range - $53.00 - $67.10 Market Capitalization - $ 64.644 Billion Shares Outstanding – 1.12 Billion Revenue - $31.272 Billion Proj. LT EPS Growth Rate: 14% ROE 2002: 26.10% Earnings Per Share and Projections FY Ending Full Year 12/01A 2.13 12/02A 2.84 12/03E 2.29 12/04E 2.67 12/05E 2.94 Fundamentals P/E (12/02): 20.2 P/E (12/03E): 26.46 Book Value/Share: $11.09 Price/Book Value: 5.167 Dividend Yield: 1.46% Consensus Est. Avg=2.33 (yahoo) Avg=2.67 (yahoo) N/A 2 of 34 Executive Summary We are recommending the purchase of 350 shares of UPS, currently trading on the NYSE at $57.30. United Parcel Services has one of the most extensive global ground and air networks for transportation. The largest transportation company, UPS, has been outperforming S&P by 30%. UPS is not solely a transportation company; they also act as consultants for the logistics of major companies in 130 countries. UPS has always been a leader in technology, for this reason, they have almost...
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...StubHub reinvented the ticket resale market in 2000 and continues to lead it through innovation. The company's unique online marketplace, dedicated solely to tickets, provides all fans the choice to buy or sell their tickets in a safe, convenient and highly reliable environment. Despite the competition, StubHub managed to attract 2.1 million unique visitors per month and generate over $100 million in revenue. [1] The adjustments made over time to its business model have proven to be effective. StubHub consistently ranks #1 and remains the nation's leading secondary ticketing Web site, according to exclusive industry rankings by TicketNews. However, a new strategy is required to create additional growth and profit. A situational analysis (SWOT analysis) is an assessment of the strengths and weaknesses in an organization’s internal environment and the opportunities and threats in its external environment. StubHub’s strengths include its basic strategy and unique transaction capabilities. Their system is well developed and unique. It is comprised of ticket exchange, event information, and guaranteed delivery. The StubHub Fan Protect guarantee program enhances trust and substantiates their commitment to the consumer. The company guarantees to the buyer that the tickets will be authentic and delivered in time for the event. If the event that the buyer has purchased tickets for is cancelled or rescheduled, he/she may receive a full refund. StubHub also ensures that a seller will never...
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...Class: 1 Type: Lecture Introduction Nobody will dispute the fact that operations are becoming increasingly international or even global in nature. Less clear, though, is what this actually means for operations. Drivers of globalization include increased competitiveness through offshore manufacturing and increased sales by expanding into new markets, but the associated opportunities and challenges are totally different and highly industry-dependent. Clearly, the issues facing a hi-tech firm are different than those facing a global consulting firm, software is a different ballgame than textile, etc. "Global operations" can refer to, among others, global sourcing, to having manufacturing or service or R&D facilities world-wide, or to supplying global markets, each of which have very different ramifications: Global sourcing Global manufacturing Global distribution . dealing with foreign . facility location . local content regulations suppliers . coordinating networks . managing global . managing international of plants distribution logistics . coordinating networks . managing risk . managing risk of R&D facilities . operations in other countries Page intentionally left blank. Class: 2a Type: Lecture Supply Chain Management & Service The goal in this part is to introduce the two main sections of the course, international...
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...Porter’s analysis: 2. The second factor is rivalry among existing firms. * Office Depot’s major competitors include: IKON Office Solutions, Staples, United Stationers, OfficeMax, and Wal-Mart Stores. The competition among these firms is highly intense. Another competitor is Fedex Kinko’s (14% of the market segment) * Staples, Office Depot and OfficeMax) comprise about 11% of the market combined. * print and ship services are approximately 17%, ranking it as one of Office Depot's most profitable offerings * Office Depot, Staples and Officemax are the market leaders in the office supply industry. However they only account for 10% of the market. The rest is divided widely between supermarkets, wholesale retailers, discount stores (including Wal-Mart) and smaller independent companies. * Office Depot has made efforts to increase its profitability by offering copy and print services, * One advantage Office Depot has over Staples is its international market. * Company has integrated copy and print services into retail and commercial businesses. Staples provides those services as well= intense competition among rivals. * In an effort to increase their sales, Office Depot decided to implement direct sourcing, which allows companies such to offer its own line of private label goods, and branded goods. Office Depot and Staples are very competitive in this regard, with about one-fifth of all goods sold coming from respective private labels. * We...
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...Management Contracts; International Joint Ventures; Fully-Owned Subsidiaries; e-Business Proactive Reasons Management Focus: Mexico's Cemex Reverses Course to Comparative Management in Focus: Strategic Planning for the EU Market Strategic Choice of Opportunities in South Africa Reasons for Going International Respond to Global Downturn Strategic Formulation Process Steps in Developing International and Global Strategies Mission and Objectives Environmental Assessment Institutional Effects on International Competition Sources of Environmental Information Internal Analysis Competitive Analysis Strategic Decision-Making Models Global and International Strategic Alternatives Approaches to World Markets Global Strategy Regionalization/localization Ali Sulaiman 71859876 aassbk@gmail.com Timing Entry and Scheduling Expansions The Influence of Culture on Strategic Choices Conclusion Summary of Key Points Discussion Questions Application ic Exercises Experiential Exercise Internet Resources Case Study: YouTube LLC: Going Global by Acting Local AUL_KASLIK – MBA Helen Deresky International Management OBJECTIVES 1. To understand why companies engage in international business. 2. To learn the steps in global strategic planning and the models available to direct the analysis and decisionmaking...
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...Emotional Intelligence on leadership and success. Emotional intelligence, Leadership and success are very subjective terms and can be interpreted in various ways.. Hence an attempt is made to define them and set the boundaries of the analysis. Firstly the foundations of emotional intelligence are established and boundaries of it is defined. The scope of leadership and success is defined in the organisations in OECD countries. Couple of examples from India and China is added to differentiate how diverse the leadership and success in these countries compared to US corporations. The leadership excludes the political leadership as such and ability to win votes even though the shared vision, hope (President Obama’s Hope) and mass communication is as much an application of EI as any corporate leaders. Some of the practical aspect of the EI is added in this article to make it more direct and meaningful to practical organisational life. The applications of Intentional Change Theory, shared visions are discussed as useful tool. At an individual level the Positive Emotional Attractor and Negative Emotional Attractor are established. Scientific basis of EI measurement and the research from neurological study is presented to complete the analysis. How the meditation, mindfulness and Yoga fit into overall scheme is discussed. . 1. Introduction The main intent of the theoretical treatise is four fold. The theoretical back ground and body of knowledge on the subject of emotional...
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