fedex will keep delivering to the world on time competitive analysis project
TRANSCRIPT
![Page 1: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/1.jpg)
FedEx Will Keep Delivering to the World on Time
Competitive Analysis Project
![Page 2: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/2.jpg)
A quick overview of our companiesFedEx (FDX)• Memphis, TN• 280,000 employees• Fred Smith
UPS (UPS)• Atlanta, GA• 410,000 employees• Scott Davis
![Page 3: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/3.jpg)
FedEx and UPS make 64% of their industry’s revenue
FedEx UPS
Market Capitalization(Industry Avg: 11.9B)
30 B 72 B
Closing Price $93.95 $73.18
EPS (2010) $3.78 $3.56
UPS 37%
FedEx 27%
USPS - 19%
CH Robinson
7%
EIW 4%U T Worldwide 3% Others 3%
Market Share by Revenue Air Freight Industry 2010
![Page 4: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/4.jpg)
Porter’s Five Forces
New Entrants:Low Power
• High Fixed Costs
Industry Rivals:High Power
• Equal competitive power
Suppliers:Low Power• Easy to buy
from various companies
Customers:High Power• Low cost to
switch companies
Substitutes:Low Power
• High switching costs• Commodity
![Page 5: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/5.jpg)
FedEx understands that it’s success lies in its opportunities
Strengths Weaknesses
FedEx• High P/E Ratio• EPS • Largest Air Fleet
UPS• Company Size• Highest Profit
Margin
FedEx• High Operating
Expenses • Undifferentiated
Product
UPS• Lower
performing stocks
• Undifferentiated Product
Opportunities Threats
• New markets• Sustainability to reduce costs
• Rising oil prices• Lower demand for document sending
![Page 6: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/6.jpg)
“A successful shipping company is adaptable, technologically advanced, able to grow financially, market itself well, and reach out to a global customer
base”
![Page 7: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/7.jpg)
ADAPTABLETECHNOLOGICALFINANCIAL GROWTHMARKETABLEGLOBALIZED
![Page 8: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/8.jpg)
Current events affect shipping industry
Rising Oil Prices
2009 Recession:FedEx suffered more
BP Oil Spill Lowers Stock Prices
![Page 9: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/9.jpg)
Recession has impacted UPS
ROS (%) ATO EM ROE (%)
2010 7.0 x
1.47 x
4.17 =
42.09
2009 5.0 x
1.42 x
4.15 =
28.96
2008 5.8 x
1.61 x
4.70 =
44.29
![Page 10: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/10.jpg)
ROS for FedEx plummets due to increased expenses
ROS (%) ATO EM ROE (%)
2010 3.41 x
1.39 x
1.80 =
8.57
2009 0.27 x
1.45 x
1.77 =
0.70
2008 3.00 x
1.48 x
1.77 =
7.70
![Page 11: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/11.jpg)
UPS has higher EM than FDX
ROS (%) ATO EM ROE (%)
FEDEX 0.27 x
1.45 x
1.77 =
0.70
UPS 5.0 x
1.42 x
4.15 =
28.96
![Page 12: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/12.jpg)
UPS is more dependent on debt than FDX
FedEx EM
UPS EM
2010 1.80 4.17
2009 1.77 4.15
2008 1.77 4.70
UPS consistently has a higher EM then FDX
![Page 13: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/13.jpg)
FedEx UPS Industry Average
Profit Margin(%)
2.39 8.34 3.45
ROE(%) 8.57 42.09 12.89
P/E 24.67 20.42 24.5
Ratios that are inconsistent with Industry
![Page 14: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/14.jpg)
FedEx aims to achieve full customer satisfaction
UPS - In-store copy machines
FedEx- Purchased Kinkos FedEx Office- Print Online & Have it Shipped
![Page 15: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/15.jpg)
ADAPTABLETECHNOLOGICALFINANCIAL GROWTHMARKETABLE GLOBALIZED
![Page 16: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/16.jpg)
FedEx leads technologicallyFedEx • Innovative solutions to
real world problems• SenseAware
technology: Medical package tracking
• More intuitive web experience
UPS• Large-business
oriented• “It just works”• Quantum View
Tracking system• Very basic web
presence
![Page 17: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/17.jpg)
ADAPTABLETECHNOLOGICALFINANCIAL GROWTHMARKETABLEGLOBALIZED
![Page 18: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/18.jpg)
FedEx has greater opportunities to grow
FedEx UPSP/E Ratio 24.67 20.42
Amount spent on Oil (2010)
3106 M 2972 M
Electric fleet FedEx has the largest electric fleet in the industry
Hybrids only
![Page 19: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/19.jpg)
Doing business with the environment in mind
• Similar objectives– Technology– Fuel efficiency
• Differing objectives– Carbon neutral option (UPS)– Energy (FedEx)
![Page 20: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/20.jpg)
ADAPTABLETECHNOLOGICALFINANCIAL GROWTHMARKETABLEGLOBALIZED
![Page 21: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/21.jpg)
UPS competes with FedEx to differentiate their similar products
• Speed• Convenience• Reliability
• Kinkos/UPS Store• FedEx distributes
business items more effectively
• UPS focuses on mass marketing
• FedEx uses Segmentation
• FedEx offers lower prices than UPS
Product Place
PromotionPrice
![Page 22: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/22.jpg)
UPS’ We Heart Logistics commercials reach people everywhere
UPS• “That’s Logistics” ad music• Global interaction• Use of NCAA famous coachesFedEx• Use relatable people in commercials to
show how their products meet customers’ needs
![Page 23: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/23.jpg)
FedEx uses Market Segmentation to differentiate itself from competitors
• Goal: Operate independently yet compete collectively.
• Better serve customer needs
• Each segment can better concentrate on its own market
![Page 24: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/24.jpg)
FedEx provides relatively greater value
Rates based on a 5 lb package shipped from MA to CA
Time 1 day 2 days 4 days 5 days 6 days8:00 AM 120.49$ 8:30 AM 108.06$
10:30 AM 86.08$ 3:00 PM 70.00$
77.00$ 62.60$ 45.95$ 33.30$ 16.21$ 38.79$ 30.36$ 12.10$
FedEx UPS
Shipping Rates and Delivery Times
End of Day
![Page 25: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/25.jpg)
ADAPTABLETECHNOLOGICALFINANCIAL GROWTHMARKETABLEGLOBALIZED
![Page 26: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/26.jpg)
Competition arises as companies try to globalize
FedEx• 23% of revenue from
international shipments
• Dominant carrier in Asia
• 664 jets, 62 on order
UPS• 20% of revenue from
international shipments
• Dominant carrier in Europe
• 311 jets, 22 on order
![Page 27: FedEx Will Keep Delivering to the World on Time Competitive Analysis Project](https://reader035.vdocument.in/reader035/viewer/2022062620/551a9c86550346b52d8b6398/html5/thumbnails/27.jpg)
FedEx Will Keep Delivering the World on Time
FedEx• Increasing
internationally• Using innovation to
grow
UPS • Holds greater
market share