Presented May 9, 2011

Jon Michaud Wendy Rowley Kim Waldbillig

Joe Wyson

Recommendations & Chosen “Winner”

Sustainability of Competitive Advantages

Industry Dynamics Affecting Profitability

Firm Performance

Corporate Strategy Canvas

Business-Level Strategies

Resources and Capabilities

Porter’s Five Forces Analysis

Key Issues Faced By FedEx & UPS

Introduction

•  Are UPS and FedEx colluding and violating antitrust law? •  Do UPS and FedEx meet the market definition of duopoly? •  Is it ethical that rising fuel costs are passed on to the consumer?

•  What are the pros and cons of unionized versus non-unionized employees? •  How to capitalize on trends in trade globalization and make it cost-efficient?

Power of Suppliers Power of Buyers

Threat of Substitutes Threat of New Entrants

Intensity of Competitive

Rivalry

LOW

MODERATE

MODERATE

LOW

LOW

•  Fuel vs. Alternatives •  Power of Laborers •  Maintenance & TCO

•  Long Term Contracts •  Small Subsidize Large •  Few Global Integrators

•  Capital Intensity •  International Regulation •  Brand Name Credibility

•  Global Network •  Supply Chain Solutions •  Reliability & Experience

Porter’s Five Forces Analysis

}  Four business segments ◦  Ground, Express, Freight,

Services

}  Boeing 777 Aircraft ◦  Fastest international

}  Partnership with USPS ◦  High domestic market share

}  Few unionized employees

}  Integrated Express & Ground Delivery assets

}  IT Infrastructure ◦  COMPASS & UPSNet

}  Inventory Express ◦  Just-in-time

}  Mostly unionized employees

Type of Competitive Advantage

Com

petit

ive

Scop

e

COST UNIQUENESS

BR

OA

D T

AR

GE

T

NA

RR

OW

TA

RG

ET

Broad Cost Leadership

Broad Differentiation

Narrow Cost Leadership

Narrow Differentiation

Integrated Cost Leadership/

Differentiation

High

Low

COMPETING FACTORS

Price Speed Reliability Int’l Air Corporate

Responsibility

Perceived Value of Add-on Services

Reliability Int’l Ground “Green”

Technology

1.  Industry 2.  S&P 3.  FedEx

1.  UPS 2.  S&P 3.  Industry

High Pressures for cost savings

Low Pressures for local adaptation High

Global Transnational

Multi-domestic

Matching Capacity to Demand More Types of Shipping in More Markets

Ability to Implement Green Technology

}  Find new ways to match capacity to demand

}  Reduce costs to improve against industry P/E ratios

}  Growth by acquisition and alliance; not all organic

}  Blue Ocean Strategy: ◦  Increase customer’s access to capital in emerging markets