Feasibility Study - College Courier Inc. Essay

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

•Affordable: the above mentioned competitive advantages offer high value benefits and our target market can afford the prices.

The company has been marketed through direct sales, telephone, internet listings and mail-outs. Through a program of telephone follow-up to ensure customers’ ongoing satisfaction with the business, Fast Track Couriers has an admirable 87% retention rate for existing customers.

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.

Delivery to a customer is a key component to retail business, whether online or in a store. Measuring delivery cost efficiency, the total cost of delivery from the stock(s) to the customers’ homes or to the desired store for pick-up is evaluated. The delivery cost is the key measurement for this metric. The

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.

By 1976, at a volume of 1,300 packages per day, FedEx’s Courier Pack service was only fulfilling one tenth of a percent of the “emergency rush” market, which totaled 870,000 packages delivered per day. By comparison, at 13,400 deliveries per day, the company’s Priority One “emergency rush” service accounted for one percent of the total market. Clearly both services have potential to gain more share of the rush delivery market, but the Courier Pack’s untapped potential is nearly limitless. Surely, the remaining 98 percent or so of customers using competing services for emergency rush delivery, including Emery Air Freight and USPS Express Service, are not familiar with Fed Ex’s less expensive, and more consistent Courier Pack service, and would switch brands with heightened awareness gained through careful marketing.

Following considerable investment in new warehouse and carrier management systems the number and quality of delivery options had increased. Now delivery options include: same day, next day or standard delivery options that normally takes around 2-3 days. Also customers can set delivery date by themselves and if wanted can be notified via email or text alerts of delivery status. In addition 85% if orders are tractable

Airborne Express has long differentiated itself in the market by structuring itself as a big business only carrier. They have specialized in large unit deliveries through metropolitan areas. Everything they do is aimed to optimize the delivery process and slash cost where ever possible. However, Airborne is now faced with a huge decision. They must decide whether to step away from their differentiation strategy to match the new pricing tactics of the market UPS and FedEx or to continue the old norm of delivery pricing. The new distance-based pricing strategy threatens Airborne’s consistent strategy to cut prices. Clients will seek to ship packages at the lowest cost. The short distance deliveries will be ruled by UPS and FedEx since they are the once who are

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.”

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.

2. Unique business model – expanding on the self-service trend with a unique twist and custom pricing options will be appealing to all consumers.

E-mailing could possibly have a small effect on this industry, but this is not an option for most deliverable items, as well as legal documents. Depending on the urgency of a package being delivered, regular mailing systems propose a small threat on this industry. It obviously costs less, but it doesn’t compare at all to the convenience of express delivery services.

* Low, Remote, time of delivery will be significantly longer and food may be cold.

In the Indian scenario, with relatively less importance given to efficient logistics, the market leaders in beverage industry like Coca Cola, PepsiCo and Parlé Agro have their own well established strong logistics network. The other small scale industries producing both carbonated and non-carbonated soft drinks in glass/ PET bottles or in Tetra Pak cartons have a comparatively well established third-party logistics system. They have the help of local providers in providing vehicles for small transfers which help them in overcoming problems such as demands for bribes by retailers, security and other logistics