marketing case fedex ups
DESCRIPTION
TRANSCRIPT
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 ?
