... 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 founded by Frederick W. Smith, a Yale University...
Words: 3275 - Pages: 14
...COMPANY PROFILE FedEx Corporation REFERENCE CODE: 3FB515C6-44D5-4A30-BC7E-556271B4A308 PUBLICATION DATE: 28 Feb 2013 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED. FedEx Corporation TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..............................................................................................3 Key Facts...............................................................................................................3 SWOT Analysis.....................................................................................................4 FedEx Corporation © MarketLine Page 2 FedEx Corporation Company Overview COMPANY OVERVIEW FedEx Corporation (FedEx or “the company”) offers overnight courier services, freight services, logistics solutions, and business support services. The company is one of the largest express transportation companies, delivering small packages worldwide. FedEx is headquartered in Memphis, Tennessee and employed 101,000 permanent full-time and 48,000 permanent part-time employees as of May 31, 2012. The company recorded revenues of $42,680 million during the financial year ended May 2012 (FY2012), an increase of 8.6% over FY2011. The operating profit of the company was $3,186 million in FY2012, an increase of 34% over FY2011. Its net profit was $2,032 million in FY2012, an increase of 39.9% over FY2011. KEY FACTS Head Office FedEx...
Words: 2706 - Pages: 11
...[pic] Introduction FedEx Corporation (FedEx) is a US based company mainly engaged in offering logistics solutions. The company, through its subsidiaries, provides transportation, e-commerce and business services under the FedEx brand. The major benefit of using the company is its ability to provide “day-certain” service to every business address in the US and Canada, as well as provide “time-certain” delivery to those areas within one to three business days. The company was founded in 1973 by Frederick W. Smith, whose vision was to provide overnight delivery services for his clients. The company is divided into eight major divisions: [pic] The mission of FedEx is to provide superior financial returns for shareowners by providing high value-added supply chain, transportation, business and related information services through focused operating companies. Customer needs will be met in the highest quality manner appropriate to each market segment served. FedEx strives to develop gratifying relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations and all activities will be conducted to the highest ethical and professional standards (FedEx Corporation – Financial and Strategic Analysis Review, 2011). FedEx’s vision is a world where goods and information move quickly and seamlessly. The company’s goal is to connect the world in such a way that consumers will view them as a provider of convenient...
Words: 5118 - Pages: 21
...The corporate strategy of fedex corporation Executive Summary This analysis of the corporate strategy of FedEx Corporation relates to three specific issues in the corporate strategy case. The first issue is a critical analysis of the global express transportation and logistics industry. The second issue discusses about the mergers and acquisitions in transportation and logistics industry. The final issue is a critical review of the performance of FedEx in the events leading to the January 2000 reorganisation. In the first section, the global express transportation and logistics industry is an attractive sector based on the fundamentals of the sector given in the five forces analysis using Porter's framework. There are large barriers to entry, there are minimal substitutes that exist, industry is relatively disciplined, and the power of buyers and suppliers are mixed. FedEx is well placed in the sector given its core competencies and dynamic capabilities relating to its management and the functional areas of marketing, human resources and information technology and systems. In the second section, gives a brief knowledge about the benefits and limitations of merger and acquisition strategies in this industry. This also describes how effective was the 1998 Caliber System acquisition and where did it led the company do in its further years. In the final section, it is noted that FedEx performed poorly within its sector and given its capabilities, the firm was expected to have...
Words: 5014 - Pages: 21
...Company Analysis: FedEx is systematically apperceived as a standout among the most recognized brands in the world. FedEx located and oversaw in Memphis, Tennessee and formally start operations on seventeen April, 1973. Federal Express started by Frederick W. Smith. FedEx has designed a set of new and interesting solutions to facilities buyers of more than 220 states. FedEx Company offers strategic and logistical backing for an assortment of operational divisions, formerly referred as FedEx Services, FedEx Freight, FedEx Ground, and FedEx Express. These bodies compete all together under FedEx name, however work relatively independent. FedEx select for best corporation at ranking number 64 in Fortune 500 (Fortune, 2014). FedEx express frequently...
Words: 1872 - Pages: 8
...------------------------------------------------- Fedex SWOT analysis July 14th, 2010 webmaster Leave a comment Go to comments Federal Express Corporation (Fedex) was established in 1973. Since then, Fedex had become a global logistics and supply chain management. The company had invested heavily in information technology systems. It had a powerful technical architecture that had the potential to pioneer in Internet commerce. However, there are some difficulties, the company’s logistic and supply chain operations have trouble to keep up the company’s image, The transportation volume growth was slowing down because the competitive industry was too intense. In early 2000 The company announced major reorganization within the entire Fedex family. Each five subsidiary companies was to function independently but to compete collectively. In order to analyze the situation carefully an external and internal analysis of the company and industry must be done so a complete picture of the industry could be understood. External analysis: Determinants of threat of new competitors: The global express transportation and logistic industry has a very high barrier to entry because it requires enormous capital resources, economies of scale and brand identity. Large firms have a cost and performance advantage in the industry. All of the established firms had a very strong foothold in the global market as they have established brand identities. There are economies of scale in the industry:...
Words: 1400 - Pages: 6
...CONTENTS I. Introduction……………………………………………………………………………….2 II. Company Overview……………………………………………………………………..3 Company Background……………………………………………………………...3 Services Offered……………………………………………………………………..4 SWOT Analysis……………………………………………………………………...5 III. Environmental Analysis………………………………………………………...……13 PESTEL Analysis…………………………………………………………………..13 Competition Analysis………………………………………………………………16 IV. Marketing Plan…………………………………………………………………………16 Marketing Goals…………………………………………………………………….16 Marketing Strategies……………………………………………………………….17 Marketing Mix……………………………………………………………………….20 Marketing Budget…………………………………………………………………..22 V. Recommendation………………………………………………………………….…..23 INTRODUCTION The competition in the business arena has been very stiff and complex. In this regard, the organization must be able to utilize a strategy and management system that will enhance the performance of the business so as to outgrow its rivals (2000; 2003). There are certain ways or techniques that can be considered in order to emerge and continue to be competitive within the market place. The marketing concept has been defined as ‘the key to achieving organizational goals’ and the marketing concept rests on ‘market focus, customer orientation, coordinated marketing and profitability’. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit. Traditionally, marketing...
Words: 6757 - Pages: 28
...2011 Analysis of FedEx and United Parcel Service The domestic United States market for package-delivery is a $45-billion dollar market. The air express market is a $25-billion dollar segment of this market. The package delivery industry is very large and highly competitive. Two of the top competitors, FedEx Corporation and United Parcel Service have been racing to gain a larger portion of this multi-billion dollar market for years. Recently with a landmark air-transportation agreement being reached in China, the market for international delivery has boomed. Analysts expect China to become the world’s largest economy within the next few decades. The air-cargo market in China has been growing at a rate of 30 percent per year and is expected to increase for at least 5 years at this rate. With such an important growing market opening to international companies, the opportunity is great. Many risks may also be present with this new venture, but the reward may be great for the company that can take hold of this market share first. Through this analysis I will analyze the goals of each firm, how each firm has achieved or strived to achieve these goals, and how each company has dealt with threats from competitors. FedEx has stated in their mission statement that they have the goal of “[producing] superior returns for shareowners by providing high value-added supply chain, transportation, business, and related information services through focused operating companies competing...
Words: 2290 - Pages: 10
...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 had problems in its global operations...
Words: 13666 - Pages: 55
...Centennial College School Of Business Assignment # 3 FedEx Corporation MGMT 704 (Sec 101) Management and Leadership FedEx Corporation FedEx Corporation is a global courier service provider company based in Memphis, Tennessee. FedEx offers its businesses and customers operating globally with a wide prospective of transportation services, logistics and supply-chain solutions and e-commerce. FedEx mission statement states that they will strive to gain huge returns for their shareholders by offering exceptional transportation services and other business solutions. They endeavor to develop and maintain a mutually gratifying relationship with their employees, suppliers and customers. FedEx is consistently ranked among the top companies of the world and have a strong foothold in transportation industry. FedEx Corporation is committed to constant improvement to match the predefined standards and regulations in terms of consistency and accuracy of thoughts and analysis. FedEx focuses on creating a prototype organization which is similar to the quality management. They have created a management system under which every employee is tasked with innovation and new challenges at their day-to-day activity. But one team exclusively works on experimenting and developing future game-changing prospects. FedEx have setup their own institute of technology where they take on a detailed research on science, business and transportation industry at University of Memphis. This facility...
Words: 1300 - Pages: 6
...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...
Words: 1551 - Pages: 7
...Federal Express Corporation (Fedex) was established in 1973. Since then, Fedex had become a global logistics and supply chain management. The company had invested heavily in information technology systems. It had a powerful technical architecture that had the potential to pioneer in Internet commerce. However, there are some difficulties, the company’s logistic and supply chain operations have trouble to keep up the company’s image, The transportation volume growth was slowing down because the competitive industry was too intense. In early 2000 The company announced major reorganization within the entire Fedex family. Each five subsidiary companies was to function independently but to compete collectively. In order to analyze the situation carefully an external and internal analysis of the company and industry must be done so a complete picture of the industry could be understood. External analysis: Determinants of threat of new competitors: The global express transportation and logistic industry has a very high barrier to entry because it requires enormous capital resources, economies of scale and brand identity. We can write a Custom Research Paper on Fedex for you! Large firms have a cost and performance advantage in the industry. All of the established firms had a very strong foothold in the global market as they have established brand identities. There are economies of scale in the industry: firms have to be big enough to provide services in many countries...
Words: 1396 - Pages: 6
...Abstract A leading company in the transportation agency, FedEx is known all around the world for its fast and on time delivery. Its slogan, “when it absolutely, positively has to be there overnight” says it all for the company. When one needs to get a package or parcel anywhere FedEx is one of the top choices. The company’s primary competitive advantage is its IT infrastructure. FedEx was the first to introduce a real corporate website where customers could print their unique barcode and have it picked up, track their packages and verify pricing and other helpful information. In this analysis different functions of the company are reviewed, such as different factors affecting the company, the key challenges and the recommendations to the company. FedEx: When it Absolutely, Positively has to be there Overnight About FedEx Headquartered in Memphis, Tennessee FedEx is the world’s express delivery. FedEx offers a variety of international packages and document delivery services to 214 countries, as well as freight services. On February 2004 FedEx acquired Kinko’s Inc. Now together the company provides document solutions and business services including copying, scanning, printing services, graphics, video conferencing, wireless and wired internet. FedEx is best known for its motto “when it absolutely, positively has to get there”. Fred Smith founded FedEx in 1971 and incorporated management philosophy that made FedEx a rapidly shining business in the industry. The principles...
Words: 4427 - Pages: 18
...Between 1973 and 2000, FedEx developed and implemented a strategy that integrated the various business units and processes. Such strategy may be best explained by examining it based on the three levels that De Wit and Meyer (2003) suggested, these being the business, corporate, and network levels of strategy. However, two important elements stand out in Federal Express’ strategy. One of these was evident in all levels and this was the use of technology, particularly the advances in information technology to restructure and reorganize the company, its subsidiaries, its units, and it business functions (Conley et al, 2000, Rigsby & Greco, 2002). Secondly, capital investment was a major part of the strategy. FedEx Strategy at the Business Level Federal Express’ clients ranged from large scale business to individual customers that required a wide range of services. As such, Federal Express needed to find a way to meet the needs of the various groups of customers that it provided services to. By streamlining its operations and by integrating its various systems, the company was able to develop a customer logistics management segment of its business to cater especially to its large-scale business clients that required such service (Conley et al, 2000). This included providing warehousing and distribution services that cut the costs for its business customers. Such strategy demonstrates the company’s way of dealing with the paradox of market adaptation and resource leveraging. Having...
Words: 1048 - Pages: 5
...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...
Words: 4617 - Pages: 19
