...memberikan rekomendasi mengenai apakah akan berinvestasi di FedEx atau UPS, mengingat bahwa pasar transportasi udara di Cina sekarang terbuka untuk kedua perusahaan. Diuraikan dalam memo ini adalah penilaian terhadap pendekatan strategis dan evaluasi kinerja keuangan dan non-keuangan kedua perusahaan, yang menyebabkan kesimpulan bahwa UPS adalah peluang investasi yang unggul. 1.0 Pendekatan Strategis untuk FedEx dan UPS FedEx dan UPS adalah perusahaan paket pengiriman yang bersama-sama memberikan supply chain, transportasi, logistik dan layanan informasi terkait. FedEx telah berkembang dari yang beroperasi di 25 kota di AS, untuk melayani pasar internasional. Demikian pula, UPS awalnya dioperasikan hanya di AS sebelum ekspansi ke Kanada, Eropa, Amerika Latin dan yang terbaru, Cina. FedEx dan UPS menargetkan pasar yang sama dan bersaing untuk kehadiran di dalamnya. FedEx dan UPS memiliki beberapa perbedaan penting berkaitan dengan pendekatan strategis mereka untuk bisnis (lihat Tabel 1). FedEx, yang dianggap sebagai pemimpin yang inovatif, kewirausahaan, dan operasional memiliki strategi yang berfokus pada penyediaan layanan berkualitas tinggi kepada para pelanggannya. Inovasi teknologi FedEx, termasuk antarmuka COSMOS, memungkinkan untuk menyediakan layanan pengiriman tepat waktu kepada pelanggan dan klien besar. UPS memiliki strategi yang didorong oleh upaya untuk efisiensi dan pengurangan biaya. Di masa lalu, UPS dianggap sebagai "finansial dan operasional konservatif"...
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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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...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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...contrasting strategies Analyst felt that FedEx and UPS established themselves in China till the late 1990s following different corporate styles. While FedEx believed tackling foreign competition head-on, UPS believed in partnering with them. UPS, was happy to enter into lease agreements with other companies already having its presence in China. While FedEx’s main thrust was on capturing the accounts of its multinational customers operating in China, UPS tried to build an image of a local company. Advertising and promotion However, during the late 1990’s, as the competition in the logistics business in china intensified, both FedEx and UPS started emphasizing on promotion to attract Chinese customers. Till the late 1990s there was a marked distinction in the approach of FedEx and UPS towards advertising and promotion in China. FedEx followed an approach which emphasized on heavily publicizing its services offering in China. It launched intimidating ad campaigns to attract customers. One of the ad’s showed the tail of a FedEx plane parked in front of a forbidden city saying, “ Call FedEx , it’s almost forbidden not to.” FedEx stressed on promoting its service offerings and enhancing brand awareness among the customers in China. For this purpose, it hired a popular media partner, OMD based in Hong Kong. On the other hand UPS emphasized less on advertising because it preferred to project itself as a local company, but still it held up a six-week T.V campaign the company...
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...is about FedEx vs. UPS China & US agreement for the establishment of air-cargo hubs in China and landing rights for commercial airlines at any available airport China is battleground for the two package delivery giants Assumption: success in China was widely seen as the litmus test for corporate survival in the new millennium No guarantee for how new cargo routes would be allocated between UPS and Fed Ex Which company was better positioned to attract the capital necessary to win this competitive battle? Current facts FedEx had largest foreign presence in China invented customer logistical management innovative, entrepreneurial, operational leader 2003 assets: $15.4 B Net Income: $830 M Revenue: $22.5 B Performance assessment: superior financial returns No unions – flexible with costs Model asset attentive UPS world’s largest package-delivery company historically bureaucratic and industry follower overhaul of image repositioning as leading provider of logistics and supply-chain management services small-package market - $60 B vs. worldwide supply-chain market is $3.2 T everything from the moment something gets made until it gets delivered for final delivery, and then after market, it’s parts replacement 2003 assets: $28.9 B Net Income: $2.9 B Revenue: $33.4 B Performance assessment: long-term competitive return History of FedEx 1971 Fred Smith Yale Purchase planes instead of using cargo space on passenger airlines like competitors Largest venture-capital start-up at the time...
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...Cerita Pertandingan nilai perusahaan antara FedEx dengan UPS Perusahaan FedEx maupun UPS merupakan dua perusahaan pengiriman barang yang besar dan namanya sudah dikenal. Kedua perusahaan ini telah menguasai pasar hingga pasar internasional yaitu AS dan Cina. Perusahaan FedEx lebih fokus untuk menguasai pasar di Cina akan tetapi untuk secara global kedudukan UPS lebih tinggi dari Fedex. Dengan semakin berkembang segmentasi pasar, FedEx lebih dikenal sebagai perusahaan yang melakukan inovatif dan menguasi kondisi pasar, sedangkan UPS lebih dikenal sebagai "pengikut" yang besar dan termasuk jenis pasar birokrasi. Akan tetapi dengan seiringnya waktu, UPS juga melakukan pembaharuan dengan mengubah image perusahaan mereka menjadi perusahaan yang lebih inovatif dan kreatif dan merupakan musuh yang sangat kuat bagi FedEx. Meski perusahaan fedex yang menemukan system manajemen logistik costumer, tetapi perusahaan UPS juga tidak ingin kalah dengan satu perusahaan ini dan pada akhirnya UPS berhasil mengambil alih kedudukan fedex dalam logistik dan servis SCM. Pada akhir tahun 2003, FedEx memiliki aset senilai $15.4 miliar dengan net income sebesar $830 juta. Perusahaan FedEx memiliki 50.000 kendaraan darat, 625 kendaraan udara, dan memiliki karyawan sebanyak 216.000 orang dengan pengiriman sebanyak 5,4 juta paket perhari. Sedangkan UPS pada akhir tahun 2003 memiliki aset sebesar $28,9 miliar dengan net income sebesar $2,9 miliar. Perusahaan UPS memiliki kendaraan darat sebesar 88.000, kendaraan...
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...UPS and FedEx Air Hubs: Comparing Louisville and Memphis Cargo Hub Operations by Alex Cosmas and Bastien Martini The economies of scale afforded to passenger airlines by the use of a hub-and-spoke model are also enjoyed, sometimes to an even greater extent, by cargo carriers. The world’s two largest integrated carriers, UPS and FedEx, run their central air hubs in Louisville (SDF) and Memphis (MEM), respectively. We present a case study of the air hub operations at SDF and MEM. The land-side and air-side operations are contrasted between SDF and MEM, and generalizations are drawn regarding issues prevalent to cargo versus passenger hubs. I. Air Cargo in History The beginning of the last century saw the dawn of flight. Since the Wright brothers’ first flight, the transfer of goods through air mail and air freight has grown tremendously. The first cargo flight ever took place between Dayton and Columbus, Ohio in November 1910, when a department store shipped a bolt of silk. Even though the shipment was of small size, the flight stayed in the records because it was achieved in less time than possible by train. Some time elapsed before the first commercial cargo airline was created. In the 1920s passenger carriers created entities to carry freight, but it remained a very low fraction of their business. In fact, the first all-cargo airline was created after World War II, but bankruptcies and accidents in the early 1950s made most of the carriers quit the business...
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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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...Competitive Advantage Paper In this report we focus on the two main competitors in the package delivery industry: Federal Express Corporation (FedEx) and United Parcel Service of America, Inc. (UPS). Studying FedEx, UPS and their competitive relationship gives a good insight for the companies' and industry's future. The two companies have different strategic goals and are operating in the same industry but in different main markets: FedEx is working on "producing outstanding financial returns" and focuses on the profitability of overnight air market whereas UPS is looking for "earning reasonable profit" and its core business that is the ground delivery. Sustainable competitive advantage Attaining a competitive advantage in package delivery business appears to be a challenging task. The main reason is that it is an easy-to- duplicate business both for the competitors and any new entrants. This is obvious in FedEx's case: the company always has distinguished itself through technologically advanced services, expanding in many places and new products over other competitors, especially UPS. UPS was the main choice for low-priced ground delivery services however being a market follower in the air delivery sector could negatively affect its reputation and cause loss of market in the long term. Taking the above into consideration the combination of high-service quality, convenience and low rates can give a company a sustainable competitive advantage. Federal Express "We will...
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...The World’s Two Largest Air Cargo Companies: FedEx and UPS Introduction In the packaging industry there are two main competitors which are FedEx and UPS. The leader of the market is FedEx in my opinion. These companies both are using technology to try to stay ahead in the industry and to maintain a hold on the consumer base. Their consumer base includes both individuals and businesses market. The beginnings of new technologies every day as our world is continuously starting to grow smaller. The rate at which we receive and relay information and the ease at which it is accessed has increased exponentially. With this comes an increased awareness and demand by the average consumer for goods and services rendered which is to be received equally as fast. This creates an increased responsibility and burden, for the logistics supply chains and corporations to their stakeholders, to ensure that they maintain the competitive advantage needed to compete in today’s global market. FedEx and UPS begin as the United States major parcel service and has a unique challenge compared to other companies providing goods and services, but they are more than capable to handle the challenges. They both have strong backgrounds and greats services that they provide. We will discuss the history of the companies, their missions, services, geographical converges, and technology. History FedEx was formed in 1971by Fredrick Smith who started the idea of the business as an undergraduate term paper for...
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...FedEx and SAP Team Up to Provide Integrated Logistics Solution Federal Express and SAP are working together to provide software that integrates FedEx’s shipment tracking capability and logistics with SAP’s R/3 ERP software. A module of the software runs on R/3 and automatically generates FedEx shipping documents and tracking numbers for products ordered using SAP’s R/3 software. When the products are delivered by FedEx, transactions are sent from FedEx to update data in R/3. The goal is to make R/3 work like a standard business process and automatically trigger other processes, such as proof of delivery and payment. The applications are designed to give the 13,000 enterprises deployed on SAP R/3 real-time package life-cycle information. The SAP/FedEx applications, dubbed The Product, dovetail with SAP’s development of a suite of supply-chain products. “We think this is a turning point in the industry,” said Paul Wahl, chief executive officer of SAP AG. Wahl says that applications for spotting bottlenecks, reacting to customer orders, and linking transportation with production schedules are among the five top priorities for SAP. Others include electronic commerce buying tools and systems for meshing Internet transactions with financial systems. “Most of our customers are in the process of integrating an enterprise system,” says Laurie Tucker, senior vice president of logistics, electronic commerce, and catalog, a $500 million FedEx unit. “They are looking for ways...
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...Starting with the End in Sight: Integrating Finance After a Merger 2 When two companies merge, integrating their Finance functions is a major imperative. Variations in financial standards and procedures can prevent the merged entity’s Finance function from effective daily operations, impacting both internal and external stakeholders. Integration of this key function is also time-sensitive: the entity’s leaders, not to mention investors, demand consolidated financial statements, earnings and projections as soon as possible. Additionally, a majority of the potential gains from a merger cannot be achieved without committed support from Finance. Many companies recognize this challenge and give substantial attention to financial integration soon after announcing the deal. However, this urgency creates its own problems. Under time pressure, finance professionals will feel rushed to combine disparate numbers and harmonize divergent processes. If they do not yet have a clear vision of the new company’s future state, they may implement manual temporary work-arounds, such as preparing manual reconciliations of customer accounts, that require incremental work effort, cost and risk to Finance. By focusing only on interim integration work and not considering the future state in parallel, many companies risk that the manual interim state will one day become the future state. Maintaining disparate and manually integrated systems limits opportunity for future standardization and cost...
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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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...Case 9 FedEx vs. UPS—Competing with Contrasting Strategies in China Fiona 11125231 Introduction FedEx and UPS are two U.S based logistics corporations which entered into China in the 1980s. However, both two companies adopted contrasting entry approaches. As for expanding strategies, FedEx adopted a forceful approach while UPS followed a conservative strategy till the late 1990s. With the improved business prospects in the Chinese logistics industry, the intensified rivalry between FedEx and UPS reached its peak gradually. Following Chinese entry into the World Trade Organization (WTO), FedEx and UPS continuously implemented various new services and agreements to grab Chinese logistics market. Obviously, these strategies helped both companies increase their revenues significantly so both companies expected to gain more market share in the future. Entering and Expanding Services Network At first, FedEx commenced its operation in China in 1984 by means of joint venture while UPS entered into China through an agent partnership relationship. FedEx partnered with multinational companies in China to build service network thus FedEx focused on building infrastructure and distribution centers in the first decade of its operations in China. Though joint venture provided FedEx with greater opportunities that are inaccessible through other strategies, it brought much higher investments and risks. On the contrary, an agent partnership relationship saved UPS from high risks. Unlike...
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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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