...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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...TABLE OF CONTENT 1.0 Introduction 2 2.0 Measurement of Success 2 3.0 Reasons Behind FedEx Corporation’s Success 4 3.1 Excellent and Leading Service Quality 4 3.2 Effective Employee Management 4 3.3 Intended Acquisition Strategy 5 3.4 Sustained Innovation 5 3.5 Global Reach and Further Expansion 5 3.6 Pursuance of International Market Dominance 5 4.0 Justification of FedEx Corp. Success 6 4.1 Value Chain Framework 6 4.1.1 Support Activities 6 4.1.2 Primary Activities 7 4.2 VRIN Framework 7 4.2.1 Value 7 4.2.2 Rarity 8 4.2.3 Inimitability 8 4.2.4 Non – Substitutability 9 4.3 International Strategy 9 5.0 Contribution of Leadership 11 5.1 Traits Theory of Leadership 11 5.2 4E’s of Leadership 11 5.1.1 Envision 11 5.1.2 Enable 12 5.1.3 Empower 12 5.1.4 Energise 12 6.0 Challenge for Future Success 13 6.1 Intense Competition 13 Reference List 14 LIST OF FIGURES Figure 2.1: Annual Financials of FedEx Corp…….……………………………………………………………………2 Figure 2.2: FedEx Market Share…………………………………………………………………………………………….3 Figure 2.3: Air Freight & Logistics Market Growth…………………………………………………………………3 Figure 2.4: Customer Satisfaction Benchmark……………………………………………………………………….4 Figure 4.1: Porter's Value Chain Framework………………………………………………………………………….6 Figure 4.1.2: FedEx Primary Activities……………………………………………………………………………………7 1.0 Introduction According to Amsler et al (2010), the market of shipping and transport logistics has become a leading...
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...Jon Michaud Wendy Rowley Kim Waldbillig Joe Wyson Presented May 9, 2011 Introduction Key Issues Faced By FedEx & UPS Porter’s Five Forces Analysis Resources and Capabilities Business-Level Strategies Corporate Strategy Canvas Firm Performance Industry Dynamics Affecting Profitability Sustainability of Competitive Advantages Recommendations & Chosen “Winner†•  Are UPS and FedEx colluding and violating antitrust law? •  Do UPS and FedEx meet the market definition of duopoly? •  Is it ethical that rising fuel costs are passed on to the consumer? •  What are the pros and cons of unionized versus non-unionized employees? •  How to capitalize on trends in trade globalization and make it cost-efficient? MODERATE LOW Power of Suppliers •  Fuel vs. Alternatives •  Power of Laborers •  Maintenance & TCO •  Global Network •  Supply Chain Solutions •  Reliability & Experience Power of Buyers •  Long Term Contracts •  Small Subsidize Large •  Few Global Integrators •  Capital Intensity •  International Regulation •  Brand Name Credibility Intensity of Competitive Rivalry MODERATE Threat of Substitutes LOW Threat of New Entrants LOW Porter’s Five Forces Analysis }ï½â€¯ Four business segments ◦  Ground, Express, Freight, Services }ï½â€¯ }ï½â€¯ }ï½â€¯ }ï½â€¯ }ï½â€¯ Boeing 777 Aircraft ◦  Fastest international Integrated Express & Ground Delivery assets IT Infrastructure ◦  COMPASS...
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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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...reference for other industries, FedEx is chosen as the case study. FedEx, one of the world’s biggest express transportation and logistics companies, has been used many times as an excellent case to help people learn strategy management and acquire experience. It was founded in 1973. With the development of the company, FedEx transferred itself from a traditional express transportation company to a technical global logistics company. It absorbed the upcoming technology and make itself adapting to the change of the industry and the world to acquire the advantage of competition. FedEx spent a large amount of its resources and money on Information Technology and the R&D department to invent new information systems and develop new services. As the competition of the express transportation industry became more intense and took more consideration on customer segmentation, pricing and quality of service. FedEx developed new products and services to consolidate its advantages to acquire cognition from more customers. Also, many acquisitions occurred so that FedEx was capable of broaden its service portfolio and enhancing its market share. Due to those acquisition, FedEx achieved its commitment that was more than just an express transportation company. With the businesses of the company and the distribution of facilities, like warehouses, constantly widened, FedEx’s business covered more than 90% of the world’s GDP. Furthermore, with the launch of internet, FedEx...
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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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...FOR DISCUSSION 1. FedEx entered in to China in 1984 through a joint venture, while UPS entered China in 1988 through an agent partnership relationship. Critically examine the contrasting strategies adopted by both the companies, while entering and expanding their service network in China. The case discusses in detail about the entry and expansion strategies of the two US-based logistics companies - FedEx and UPS in the Chinese market .The case examines the contrasting strategies adopted by FedEx and UPS in their efforts to establish presence in China. FedEx followed an aggressive, high risk, more investments approach to expand its services network in China which enabled the company to capture higher market share .On the contrary, till the late 1990s, UPS followed a conservative, low risk, low investment approach to establish its presence in China. The case brings out the contrasting elements of the strategies adopted by both companies including establishing the services network, advertising and promotion, targeting customers and the investments made. Finally, the case examines how the expansion strategies of both companies have changed with the improving business prospects in China, following its entry into WTO. The case discusses in detail the entry and expansion strategies of the two US-based logistics companies - FedEx and United Parcel Services (UPS) - in the Chinese market. The case examines the contrasting strategies adopted by FedEx and UPS in their efforts to establish...
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...The Battle for Value, 2004 FedEx Corp. vs. UPS, Inc. FedEx was form in economic class by Fred Smith in Yale University. In 1971, Smith invested 4 million dollars of his own capital and raises an addition of 91 million dollars to launch the firm. His key innovation was a hub and spoke distribution pattern. By 2003, FedEx owned 50,000 ground vehicles, 625 aircraft, 216500 employees and shipped more than 5.4 million packages daily. The company had $15.4 billion in assets, $830 million net income, and generated $22.5 billion revenues. UPS was founded in 1907 by Jim Casey. He started a bicycle messenger called American Messenger Company and changed its name to United Parcel Service of America in 1929. The success key of UPS was efficiency. UPS was the largest package-delivery company in the world. Both ground and air parcel delivery was the primary business. Gradually, the company offered more specialized transportation and logistics service. By 2003, UPS owned 88,000 ground trucks, 583 planes and 360,000 employees. | FedEx | UPS | Ground Vehicles | 50,000 | 88,000 | Aircraft | 625 | 583 | Employees | 216,000 | 360,000 | Packages shipped/ day | 5.4 million | 13 million | Assets | $15.4 billion | $28.9 billion | Net Income | $830 million | $2.9 billion | Revenue | $22.5 billion | $33.4 billion | Problem: Market observers of the air-package delivery industry considered how FedEx and UPS would develop. Was the performance of the companies in recent years predictive...
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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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...1.0 INTRODUCTION An American global courier delivery service, Federal Express (FedEx) Corporation was founded by Frederick W. Smith in 1971 (Ferrell & Hartline, 2011). Formerly known as FDX Corporation, its headquarter is in Memphis, Tennessee, U.S. There are four segments that the company is divided into which are FedEx Express Segment, FedEx Ground Segment, FedEx Freight Segment and FedEx Services Segment. The FedEx Express Segment includes two companies which are FedEx Express and FedEx Trade Networks. In the FedEx Ground Segment includes FedEx Ground and FedEx SmartPost, For FedEx Freight Segment consists of FedEx Freight, FedEx Custom Critical and Caribbean Transportation Services. As for FedEx Services Segment comprise of FedEx Services, FedEx Office, FedEx Customer Information Services as well as FedEx Global Supply Chain Services. FedEx has experience tremendous success domestically and internationally since it began operations, however FedEx is still does not has the main market share in both markets as UPS dominates the ground delivery and DHL dominates the international express delivery. So in this paper, we will be answering three questions regarding FedEx’s methods of expansion, reasons for its global operations problems, SWOT considerations, competitive landscape and recommendations to encroach upon the two competitors. 2.0 QUESTION 1 Evaluate the methods used by FedEx to grow domestically and internationally. Why do you think that the company initially...
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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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...FedEx: The World on Time Shipping, Logistics, and Supply Chain Management Indiana Wesleyan University Facilitator FedEx: The World On Time History of FedEx Today FedEx Corporation is the premier provider of shipping and information services worldwide. Headquartered in Memphis, Tennessee, the company functions under the motto "operate independently, compete collectively and manage collaboratively."(FedEx.com, 2011) By operating independently, each company can focus exclusively on delivering the best service for its specific market. In 1965, Yale University undergraduate Frederick W. Smith wrote a term paper about the passenger route systems used by most airfreight shippers, which he viewed as economically inadequate. (FedEx.com, 2011) Smith wrote of the need for shippers to have a system designed specifically for airfreight that could accommodate time-sensitive shipments such as medicines, computer parts and electronics. In August of 1971 following a stint in the military, Smith bought controlling interest in Arkansas Aviation Sales, located in Little Rock, Arkansas. Smith identified the tremendous difficulty in getting packages and other airfreight delivered within one to two days. This dilemma motivated him to do the necessary research for resolving the inefficient distribution system. Thus, the idea for Federal Express was born: a company that revolutionized global business practices and now defines speed and reliability. Federal Express was so-named due to the...
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...Perspective Alexander Niehues Edward Tse Justin Zubrod Express Opportunities In China Packaging a Strategy For the International And Domestic Express Delivery Market Booz & Company is a leading global management consulting firm, helping the world’s top businesses, governments, and organizations. Our founder, Edwin Booz, defined the profession when he established the first management consulting firm in 1914. Today, with more than 3,300 people in 58 offices around the world, we bring foresight and knowledge, deep functional expertise, and a practical approach to building capabilities and delivering real impact. We work closely with our clients to create and deliver essential advantage. For our management magazine strategy+business, visit www.strategy-business.com. Visit www.booz.com/cn to learn more about Booz & Company in Greater China. CONTACT INFORMATION Hong Kong/Shanghai Edward Tse Partner edward.tse@booz.com McLean Justin Zubrod Stuttgart Partner justin.zubrod@booz.com Alexander Niehues Partner alexander.niehues@booz.com Originally published as: Express Opportunities in China: Packaging a Strategy for the International and Domestic Express Delivery Market, by Ed Tse, Justin Zubrod, Alexander Niehues, Simon Gillies, and Paolo Pigorini, Booz Allen Hamilton, 2007. 1 Express Opportunities in China Packaging a Strategy for the International and Domestic Express Delivery Market Introduction China is on its way to becoming a global trade...
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...THE BATTLE FOR VALUE, 2004: FedEx Corp. vs. United Parcel Service, Inc. Executive Team Summary 1. Introduction a. Main facts of the case In the context of the U.S. & China agreement of liberalization of commercial cargo flights, determine which of the two companies has created more value and is in a better position to take the advantages of the new agreement. b. Most important Characteristics of the company studied in the case i. Industry: Air Delivery & Freight Services ii. Position in its industry & Main competitors 2. Answer the Questions presented at the end of the 1st session and reviewed and answered in the second session. * How have FedEx and UPS performed financially? How do we measure its financial performance? Financial performance measures that can be obtained from a firm’s financial statements consist of absolute data and financial ratios. Absolute measures such as income, net assets and equity, reveal trends and allow a company to be compared to its performance over time, while financial ratios, including return-on-assets and current ratio, adjust for scale and allow for comparisons of different-sized companies. Financial ratios are ideal to compare FedEx and UPS, since UPS has $13.5 billion more in assets and $11 billion more in revenues than FedEx. Please see Table 2 for a comparison of the most common and widely used financial ratios. UPS is outperforming FedEx in liquidity, solvency and profitability...
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...CONTENTS PAGE 1.INTRODUCTION 03 2.LITERATURE REVIEW 04 3.ANALYSIS & DISCUSSION 09 4.CONCLUSION AND RECOMMENDATION 12 5.REFERENCES 14 Introduction: A coin has two sides, its universally accepted and there are no argument about it. But when it comes to Human Resource Management and Personnel Management there is a heated argument whether they are two independent sides of a coin, or one is the successor of the other or both are different or are they share mutual processes/ideas. Human resource management is the pillar stone or the rock on which all the managent activities of an organisation or a business rests upon but that does not make it the base of all business activity (Torrington, Hall and Taylor, 2005, p. 1). Personnel mnagement on the other hand was more of an administrative or book keeping function making sure that there were adequate workers to carry out the desired jobs and keeping a check on the relationship between employer and the employee. It is also to be noted that Human resource Management did not evolve on one fine day, it was a long journey starting from absorption and synthesis of various working environments and a combination of pre and...
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