Marketing case fedex ups

Marketing ManagementCase Study:

2012

vs.

Group Members:Mohammad Mahdi Mesbahi

Mina Ali Ab Bar

Wong Cing Yee

Atousa Jafarian

Azhan Bin Mohd Husain

Somayeh Rezaei

GM04701

GM04665

GM04616

GM04704

GM04423

GM04675

INTRODUCTION

• 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.

FedEx:

UPS:• 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)

Current Situation

• 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 “

SCENARIO

UPS

• 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

• 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.

UPS

•Bought a trucking company and named it FedEx

Ground.

•Created a new operation called FedEx Home

Delivery.

FedEx

•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

FedEx

LOGICALQUESTIONS

Industry Environment

Porter’s Five Forces

SWOT analysis

Marketing Strategy

Question categories

INDUSTRYENVIRONMENT

classified as being in the mature stage

of the industry life cycle

few competitors in this industry

this industry is very dynamic

PORTER’SFIVE FACTORS

Existing Rivals

Potential Competitors

Buyers’ Power

Substitute Products

Supplier’s PowerExisting Rivals

Low

HighLow

Low

SWOTANALYSIS

FedExStrengths

Direct delivery capability Can serve from existing site (e-commerce) Spare manufacturing capabilities Details customers list Ongoing product innovation Brand image Pizzazz marketing Large scale operation International Overnight air fleet

Opportunities

Global business growth Online consumer services Increase demand in logistics Alliance with USPS Expanding China market

Weaknesses

Limited budget due to low operating income (declining operating efficiency)

Lack of ground transportation forces Delivery staff need training Judgment for late delivery Costly technology innovation Discrimination issues

Threats

Foreign competition entry into home Economic standing Online competitive advantages of rivals Gain in competition service costs Market demand very seasonal

FedEx

UPSStrengths

Higher sustainability Ongoing expanding network Great financial strength (Grade AAA credit

rating) High operating margin High dividend value Well-known brand Better on-time-performance (ground

delivery)

Opportunities

Increase economic scale by improving B-2-B services

Increase market by producing high quality product

Increase business by increase logistic solution Adding new facilities to accommodate rapid

growth in healthcare Increase profit margin by having more price

control

Weaknesses

Limited flexibility Unionized labor force (result in high labor

cost) Less innovative Brand Lag (people may don’t know its full

capability)

Threats

Rising fuel prices Weather conditions Intense competition Government regulation

UPS

RECOMMENDATION

• 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)

Market Penetration:

• 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

Market Development:

• 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

Others:

• 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”

Others:

CONCLUSION

• 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

Generally:

• 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

In details:

FedEx is better than UPS?

different people

different perception

Lastly:

Thanks for your attention

left to right or right to left ?

Thank You

Present like Professionals

Created by:

Mahdi Mesbahimahdi.mesbahi@gmail.com