Ups vs Fedex

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

During the 1980s, the air express industry was a medium to attractive industry to already be a major player in, but not a very attractive industry to try and break into. The industry can be characterized by high rivalry from competitors who compete on the same services with very little differentiation, medium power from suppliers who supply the resources necessary to run the business, high buyer power because customers can basically find an equal service from any firm in the industry, low substitution threat from other means of shipping transportation, and low threat of new entrants due to the high initial capital outlay and need of management

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 main factors inhibiting both companies are each other, both companies have attained a market dominance that is hard to overcome by any of them. In FedEx case, their financials have been their weakest spot. FedEx poor financial performance has been a big problem for the company, proof of this is the downgrade FedEx bonds have had in past years. In UPS, I would say one of their inhibiting factors is their lack of innovation. UPS has not been able to innovate and work with the technological improvements. Part of this is due of being first in the market, UPS was founded in 1907, FedEx in 1971, FedEx has gained a reputation of the leader in innovation and modernization, UPS as the follower. Also, UPS workers union have represented a huge problem for them, workers union strikes have had a huge hit in the company finances.

Studying FedEx, UPS and their competitive relationship in the decade from mid - 80's to mid - 90's 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 overnight air market while UPS is looking for "earning reasonable profit" and its core business is the two-day ground delivery. However, by 1981, the two companies started to have a strong sense

The US express mail industry is highly consolidated. 85% of the market is served by 3 service providers. There are six second tier players who serve the remaining 15%. FedEx and UPS lead the industry in services and innovation. The following trends have been observed in this Industry.

The threat of new entrants is very unlikely for UPS. This would be an intimidating market to attempt to infiltrate with UPS and its trailing competitors. Whereas the lack of new entrants is a key advantage, the threat of substitutes in place of other industries products is very high. As mentioned before, UPS has three major competitors that offer similar products at a similar price. This is an area that management has to constantly evaluate. UPS evaluates what they have to offer the customer verses their other delivery needs counterparts and the customers have a no bargaining power whatsoever. If the customer is unhappy with the service or the pricing, UPS acknowledges that DHL and the FedEx will be waiting with open arms to assist them and attempt to win their loyalty. The bargaining power of the suppliers is also very low due to cut throat competition. If low prices are what the customer wants and they can easily take their business elsewhere, UPS must try to maintain reasonable fees to keep the customers happy as well as be profitable. With examining four out of five forces, we can assume that the rivalry among current industry competitors is intense and management must be aware of what each competitor has up its sleeve at any given time. UPS has successfully managed to defray a lot of their costs by having such a successful website. Customers can do a number of things on the website from their home without having to call and

Another interesting note is that accounts receivable is showing a downward trend for FedEx while showing a flat or consistent trend across UPS. Next, UPS appears to be based more in short-term assets and FedEx weighted more heavily in long-term assets. UPS also relies more heavily on long-term liabilities, whereas FedEx relies more heavily on short-term liabilities. It appears that FedEx is using accounts payable for debt financing while UPS is using long-term debt. Lastly, FedEx is making up for it's under utilization of debt financing with equity financing. Overall, FedEx is showing a trend toward increasing current assets, primarily through cash, decreasing liabilities and increasing equity.

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

DHL 31%, USPS 8%, FedEx 27%, and Amazon 3%. From these numbers Amazon is a very small player in the shipping department. Every competitor, expect DHL, are currently shipping the excess freight that Amazon cannot maintain. With Amazon 's move to acquire more of the market, these competitors need to be on the lookout because portions of their market share can be taken away. These major shipping firms only provide shipping services not offering household products like Amazon. With Amazon starting by semi-supplementing their shipping avenues, Amazon has the potential to grow even larger. The market cap numbers are not a good basis to judge market share on since FedEx and UPS have the majority of the market in the shipping industry. FedEx and UPS are the major competitors against Amazon and its new shipping department. FedEx and UPS had the most recent annual net income of $50.3 billion and $58.3 billion respectively. They represent the majority of packages delivery from individuals, businesses, and online retailers.

UPS and FedEx are the leading parcel carriers in the U.S. FedEx has significantly expanded their capability to compete with UPS’s dominant ground delivery service.

If we use FexEx¡¦s multiples as benchmarks we get an average UPS market capitalization of $17,520 million. Using FedEx¡¦s trailing price to earnings ratio, we come up with UPS¡¦s market capitalization of $13,911 million. Using FedEx¡¦s market to book

The return on Assets is 8.52% whereas the industry figure is 11.10%. Two of FedEx strategies that have worked are its tie up with the US postal system and its first mover advantage in introducing the tracking system for packages. My assessment of the sustainability of UPS's current performance does not change.

United Parcel Service (UPS) founded in 1907 is the largest transportation company and the largest air freight carrier in the world. In 1987 due to rapidly changing external environment UPS faced serious challenges to its long-established policies of on-the-job training and promotion from within. With the increase in competition UPS realized that it is lagging in computerization and it thought of seeking technical expertise which it could not get from within. The concerns they had are how to hire new talent, how to assimilate, and to what extent new people would conform to UPS culture.

Logistics services in the supply chain can be considered as a service offering, with numerous logistics companies competing to offer comparable services to many of the same consumers. As consumers hunt for potential providers in this extremely competitive marketplace, logistics service suppliers should discover approaches to distinguish themselves and their service offerings so as to help them compete. One established method for companies to differentiate themselves is by building strong brands. For instance, FedEx has evidently distinguished itself through successful brand management. The brand value to consumers is usually signify as consumer-based equity which happens when consumers possess a high level of familiarity and awareness with the brand and retains some strong, constructive and inimitable brand associations in memory (Davis, 2003). Brand awareness is referred as the consumers’ capability to recognize diverse brand elements – brand