CASE STUDY FEDEX VS UPS

The $45billion US domestic delivery market could be categorized into 2 segments. These consisted of letters weighing 0 to 2

As the world’s largest package delivery company and a leading global provider of specialized transportation and logistics services, UPS, continues to develop the frontiers of logistics, supply chain management and e-commerce combing the flow of goods, information and funds. This past October UPS Logistics Solutions was voted #1 logistics provider by Logistics Solutions. When conducting an industry analysis, it is important to explain the competitive forces model (CFM) of UPS. The first component of competitive forces model are the customers. Their customers consist of business organizations, and the general public. The second CFM component is competition. UPS have a lot of competition in its field, but the most competitive company is FedEx. Since FedEx provides the same services as UPS; both are neck to neck in competition, but UPS has an established history, and because of that, they have more loyal customers, and they are worldly known. They have established them-selves as the elite, with their commercial on television. Showing how they can deliver from one place to another with same day delivery and

The network consists hardware and software components and other components to keep the company safe. A common network that Jay’s company will need are routers, switches, firewalls, load balancers, SANs, and Domain Name System (DNS). The router and switches will allow the systems to communicate. Jay needs to ensure that the routers have spare capacity after the deployment to cope with projected growth and usage. The switches will connect to the system within the network. Both running at capacity tend to induce escalating bottlenecks. This will affect how long it takes for the clients to submit messages to the servers on different networks, Jay needs to make sure he is up to date with the router and switch because it can cost greatly if he does not.

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.

The evolution of the express mail industry had become a quick on-time shipping and delivery of packages. The service had become effective, reliable, and prompt, which most of the top companies could deliver on these guaranteed promises 96-99% of the time. But, delivery services were only a portion of the services being offered to their customers. Carriers had mastered information management that they shared with their customers. Customers were now able to fill out labels, track the route of their package, and assisted in billing using both via carrier provided software or the Internet.

United Parcel Service (UPS), is the world’s largest express package delivery firm that handled more than 4.7 billion packages and documents in 2015. This global transportation and logistics service provider operates in more than 220 countries, and offers an array of supply chain management solutions (UPS Fact Sheet, n.d.). The firm has diversified its products and/or services to include freight forwarding and logistics services via air, ground, rail, and sea. U.S. Domestic Package operations, International Package operations, and Supply Chain and Freight operations are the three operating segments UPS. Through technology advancements UPS delivers online package tracking, e-commerce services, and specialized

FedEx’s new product Courier Pak makes sense because of its’ high profit margin and potential to generate new volume. Out of the 3 services that Fed Ex provides, CP yields the highest profit margin at 66% while Priority-One is at 55% and SAS is only at 27%. In addition to this, the company believes that it will be able to boost up sale of CP from 1300 to 6000 packages per day. This shows that CP is the most profitable and huge potential for growth.

FedEx is a logistical service company specialized in transportation, e-commerce and business services. The success of FedEx lies on an efficient information system. The business process is as follows:

FedEx was first established in 1973 as a logistic company with the name Federal Express that be created by founder and first CEO Frederick W Smith. The Headquarters is in Memphis, Tennessee in the US. The company became well known for its fast and reliable delivery service around the world. On its first night of operation FedEx delivered 186 bundles to 25 urban locations in the US with only 389 employees and a 15 Dassault Falcon aircraft. In 1980 FedEx purchased a system for live updates on the packages. In this system, FedEx drivers share the current locations from the trucks to provide updates of the packages to the customers. This information was sent to a central computer of FedEx then the company improved the update system by introducing FedEx.com webpage. This webpage allowed the tracking data to be easily accessible. However, recently, FedEx uses Savvy bundle for packing and tracking the products across couriers. (Baldwin, 2016)

Trends and opportunities of the parcel service industry include globalization, e-commerce, and supply-chain management. Internet logistics was FedEx and UPS’s fastest growing business. The internet enabled customers to link directly to retailers and their manufacturers. In 2001, parcel carriers served almost all of the online market. They were able to provide information on packages to customers through tracking systems on the web. This allowed customers to plan ahead and decrease delays in deliveries. It also allowed for faster transactions and lower communication costs. Parcel companies created partnerships with large Internet retailers. These partnerships allowed parcel service companies to expand its overall delivery volume. Parcel companies improved tracking by implementing several technological innovations. These included “laser scanners and bar codes, state of the art software programs, satellite and cell phone communication equipment, electronic information interchanges, and the Internet.”

When UPS redefined its core business, the description included the transportation of goods, but also funds. They wanted a way to leverage their expertise and infrastructure to transfer funds entities. UPS has always dealt with COD payments, credit assessment, billing , and cash flow. With the advent of electronic signatures, it 's easier to move such services online, and provide that as another service to their B2B customers. UPS has even started UPS Capital, which provides working capital to small businesses. UPS Capital has also applied the Internet to its business, developing online COD receivables-management products and cutting customers ' COD receivables wait from two weeks to two days. With some different service and is a Global brand name in many different markets; therefore it is important for UPS to have different marketing approaches to help UPS to enter each market and develop the services better. UPS worked on the market targeted to understand the customer behavior in to following criteria: shipping decision makers; front office decision makers; small business decision makers; senior level decision makers. They are the different segments of the market where mostly the consumer is using the services from UPS. In 2004 they used four segments of the target market to identify business opportunities. It was important to create consumer brand building so that message could be tailored to all the market potentially available

The deliveries must be on time, there should be accuracy by way of deliveries, ownership of not only the land based vehicles but also airplanes are important for success. Key success factors include safe deliveries and an excellent reputation. Recently there are key success factors related to information. Accessing the UPS website gives critical information about the whereabouts of the parcel to any customer at a low cost. Information about the merchandise, customers and goods is critical for success.

"Consensus building" and was focused on efficiency and execution, emphasis on customer service. It believed in continuous improvement of company. UPS has fostered strategic focus around operational excellence. It is renowned for its efficient delivery service.

When it comes to strategy, FedEx has done a great job of staying on top in the market place after all these years. FedEx has built a very powerful empire over the last decade, insuring customers with different global delivery services. Different companies have different strategies that work with their company to reach a specific goal, at FedEx the main strategy for success would be customer service. Customer service would have to be the number one strategy FedEx is mostly concerned with and constantly researching new ways to make it easier and more convenient for customers to deliver packages across the world. To help accommodate customers, FedEx has established online databases to ensure customers of package delivery; customers are able to track packages from the convenience of their homes or offices. Something else that FedEx has established are flights, and freights for those international customers, they have also improved services to and from all over Europe as well as Asia, in

UPS is a global leader in logistics, offering a broad range of supply chain solutions including transporting packages and freight, facilitating international trade, and deploying advanced technology to more efficiently