Strategic Essay

1710 Words Mar 7th, 2016 7 Pages
The Battle for Value, 2004
FedEx Corp. vs. UPS, Inc.

FedEx was form in economic class by Fred Smith in Yale University. In 1971, Smith invested 4 million dollars of his own capital and raises an addition of 91 million dollars to launch the firm. His key innovation was a hub and spoke distribution pattern. By 2003, FedEx owned 50,000 ground vehicles, 625 aircraft, 216500 employees and shipped more than 5.4 million packages daily. The company had $15.4 billion in assets, $830 million net income, and generated $22.5 billion revenues.
UPS was founded in 1907 by Jim Casey. He started a bicycle messenger called American Messenger Company and changed its name to United Parcel Service of America in 1929. The success key of UPS was efficiency.
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| THREATS:Sudden changes in fuel price and currency exchange rates, global competition. Changes in domestic or international regulation. |

UPS’s SWOT Analysis: STRENGTHS:Strong financial position, known for the largest package delivery in the world, brand recognition. | WEAKNESSES:Conservative financial strategy resulted in slow financial and operational progress, UPS’s stock was owned solely by UPS’s managers/ charitable foundations owned by UPS until 1999. | OPPORTUNITIES:Reinvest to enhance operation, improve service, add products, and expand business’s geographic presence. | THREATS:Labor unions and works councils, Other competitors’ innovation, price competition, changes in fuel price. |

Significant Dimensions: Dimensions: | FedEx | UPS | Customer Focus | Offer 10:30 a.m. delivery, FedEx home delivery network, Customer demands dictate operation model. | Minimizing impact on environment, improved customer service through supply chain, help customer dispose unwanted electronics through “Asset Recovery and Recycling Management service” | Price Competition | Higher price than other competitors | Low cost provider, Charges flat rate. | Operational Reengineering | Cost reduction through economic of scale and IT | Efficiency, Reduction in energy use and fuel consumption | Information Technology | The first to offer online shipping and tracking, Installed handheld barcode scanner. |

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