FedEx and UPS are major package delivery companies. FedEx was founded in 1971 and focuses on international overnight delivery, while UPS was founded earlier in 1907 and has a larger ground transportation network in the US. Both companies have strengths and opportunities for growth. The recommendation is for FedEx to improve customer loyalty and service reliability through initiatives like text message notifications and a mobile app, while expanding globally. For UPS the recommendation is to improve operating margins through efficiency and expanding high quality services. Overall both companies offer different strengths and strategies for package delivery.

1. 2012
Marketing Management
Case Study:
vs.
Group Members:
Mohammad Mahdi Mesbahi GM04701
Mina Ali Ab Bar GM04665
Wong Cing Yee GM04616
Atousa Jafarian GM04704
Azhan Bin Mohd Husain GM04423
Somayeh Rezaei GM04675

2. INTRODUCTION

3. • Started by Frederick Smith in 1971
• First Investment
• 1980’s:
– FedEx reached its maturing stage.
– First US company to reach $1 billion in
revenues.
• FedEx handles 3.3 million packages
• History of FedEx Express
• Frederick W. Smith incorporated Federal Express in June 1971.
• Officially began operations on April 17th, 1973, delivering 186 packages to 25
cities.
• Rapid growth in the industry began in 1977 following air cargo deregulation.
• In 1984, the company expanded to global coverage with services in Europe and
Asia.

4. • Founded in 1907 in Seattle,
Washington by Jim Casey.
• Headquartered in Atlantic, Georgia.
• UPS’s early fleet of delivery included a Model T and a few motor
cycles.
• Has a fleet of 15,000+ trucks & over 500 planes, and serves every
company in Fortune Magazine’s list of the 1,000 largest
companies in US.
• Service to and from more than 200 countries & territories.
• 423,300 employees worldwide (9th largest global employer)

5. • In spring 2000 – FDX was under attack from UPS
• UPS handled three times as many packages as the FedEx
• UPS practically owned the business of moving packages
economically by ground and delivering them to any address
in the country
• Kelly , the company’s president : “ The consumer will have a
access to goods anywhere in the world “

6. SCENARIO

7. • UPS ‘s return on equity for the past ten years was almost 20%
• UPS was the owner of 150,000 trucks
• UPS almost spent $1 billion a year on information system.
• UPS announced a money-back guarantee for its
ground delivery

8. • UPS had been gaining on FedEx in its core business by buying
the airplanes in the early 1980s.
• UPS sales reps seemed more aggressive than ever in taking
business away from FedEx.

9. •Bought a trucking company and named it FedEx
Ground.
•Created a new operation called FedEx Home
Delivery.

10. •Invested $ 100 million in operations
•Noticing the world’s build-to-order
manufacturing trend, JIT inventory and delivery
system and trying to grab opportunities
in that regard.
•Sponsoring golf events
•Installation of the tracking equipments

11. LOGICAL
QUESTIONS

12. Industry Environment
Porter’s Five Forces
SWOT analysis
Marketing Strategy

13. INDUSTRY
ENVIRONMENT

14. classified as being in the mature stage
of the industry life cycle
few competitors in this industry
this industry is very dynamic

15. PORTER’S
FIVE FACTORS

16. Potential
Competitors
Low
Supplier’s Low
Existing High Buyers’
Power Power
Rivals
Low
Substitute
Products

17. SWOT
ANALYSIS

18. Strengths Opportunities
 Direct delivery capability  Global business growth
 Can serve from existing site (e-commerce)  Online consumer services
 Spare manufacturing capabilities  Increase demand in logistics
 Details customers list  Alliance with USPS
 Ongoing product innovation  Expanding China market
 Brand image
 Pizzazz marketing
 Large scale operation
 International Overnight air fleet
Weaknesses Threats
 Limited budget due to low operating income  Foreign competition entry into home
(declining operating efficiency)  Economic standing
 Lack of ground transportation forces  Online competitive advantages of rivals
 Delivery staff need training  Gain in competition service costs
 Judgment for late delivery  Market demand very seasonal
 Costly technology innovation
 Discrimination issues
FedEx

19. Strengths Opportunities
 Higher sustainability  Increase economic scale by improving B-2-B
 Ongoing expanding network services
 Great financial strength (Grade AAA credit  Increase market by producing high quality
rating) product
 High operating margin  Increase business by increase logistic
 High dividend value solution
 Well-known brand  Adding new facilities to accommodate rapid
 Better on-time-performance (ground growth in healthcare
delivery)  Increase profit margin by having more price
control
Weaknesses Threats
 Limited flexibility  Rising fuel prices
 Unionized labor force (result in high labor  Weather conditions
cost)  Intense competition
 Less innovative  Government regulation
 Brand Lag (people may don’t know its full
capability)
UPS

20. RECOMMENDATION

21. • Improve services reliability by
implementing “text message before
send”
• Implementing mobile application to
improve the accessibility – “FedEx always
with you”
• Expansion of Money-back Guarantee
(currently applicable at U.S. and to
Canada only)

22. • Expanding its market in China as the
demand growing
• Globalized its business to all uncovered
area (25 countries) such as North Korea,
Central African Republic
• Expanding its business by providing
alternative ocean shipping which is less
costly

23. • Enhance its ground transportation
services by provide training to driver or
using GPS
• Stay in contact with existing or past client
on a consistent basis to improve
customer satisfaction such as sending a
warming email or postcards on certain
date

24. • Improving its public image by involving in
charity program or sponsoring in the
larger sport activities such as Olympic
“Improve Customer Loyalty,
Improve Services Reliability,
Increase Business Revenue”

25. CONCLUSION

26. • FedEx is best for International overnight
delivery as well as technology innovation
leader
• UPS is best for Ground transportation
with in US and the expanding operation
margin

27. • FedEx’s strategy are out of core skills and technology
• UPS’s strategy are more focusing on services provided
• FedEx more people-oriented; UPS more business focus

28. FedEx is better than UPS?
different people
different perception

29. left to right or right to left ?

30. Present like Professionals
Created by:
Mahdi Mesbahi
mahdi.mesbahi@gmail.com