Fed Ex vs UPS Case Analysis

Executive Summery

The parcel service industry is made up of four main competitors. These competitors are UPS, FedEx, Airborne Express, and the U.S. Postal Service. Since 2000, American consumers have spent more than $50 billion to ship parcels, packages, and overnight letters. New parcel distribution patterns developed due to the way U.S. manufacturing companies are operating. The Internet has expanded the reach of direct marketing, particularly with retail transactions requiring home delivery. Globalization has also created the need for parcel carriers to expand worldwide.

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. UPS has continued its strong marketing efforts in overnight and deferred air services. Both of these carriers have introduced information systems, which include user-friendly Internet interfaces. The carriers have also expanded logistical services and improved integration with customer supply chains.

State of the Environment

State of the General Environment

More and more people are using computers and the Internet. Dual income families have increased spending; therefore more people are ordering products over the internet at a high rate. The Internet offers customers a one stop source for global shipping. Due to this, there has been an increase in using information technology and the Internet for businesses. This has created an increase in trade and investment along with global shipping logistics and supply chain solutions. With the increase in globalization, companies have had to adapt to the diverse work force and the culture of the countries in which they are conducting business. The parcel service industry is controlled by strict regulations and federal law. For example, September 11 brought stricter laws and regulations in the parcel service industry. Operations must maintain federal approval to operate in the United States.

State of the Industry Environment

The parcel service industry is dominated by four carriers that make up 95 percent of the industries domestic revenue. Over the years, the industry has had an increase growth rate over time and an increased role in the economy. This is due to the way manufacturing companies are now operating. With the growth of the parcel service ...

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...hich means that a business can get paid quicker, lower its capital requirements, minimize management headaches, manage change and gain competitive advantage. UPS focus is to help their customers consistently achieve these results. The core of UPS is the distribution of goods and the information that accompanies them. UPS has branched out to focus on services. The company’s expertise in shipping and tracking positioned it to become an enabler of global commerce and also a facilitator of commerce, which includes goods, information, and capital. To fulfill the vision of offering new services, UPS strategically acquired existing companies and created new kinds of companies that did not previously exist.

Through these acquisitions and creations, UPS serves its customers by providing unique supply-chain solutions. UPS allowed its customers to better serve their own customers, and focus on core competencies. UPS has a Logistics Group to provide global supply chain management solutions and consulting services based on customers´ individual needs. UPS has a mission to provide a list of options of integrated financial products and services that enable companies to grow their business.