1. 2012
Marketing Management
Case Study:
vs.
Group Members:
Mohammad Mahdi Mesbahi GM04701
Mina Ali Ab Bar GM04665
Wong Cing Yee GM04616
Atousa Jafarian GM04704
Azhan Bin Mohd Husain GM04423
Somayeh Rezaei GM04675
3. • 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.
4. • 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)
5. • 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 “
7. • 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
8. • 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.
9. •Bought a trucking company and named it FedEx
Ground.
•Created a new operation called FedEx Home
Delivery.
10. •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
18. Strengths Opportunities
Direct delivery capability Global business growth
Can serve from existing site (e-commerce) Online consumer services
Spare manufacturing capabilities Increase demand in logistics
Details customers list Alliance with USPS
Ongoing product innovation Expanding China market
Brand image
Pizzazz marketing
Large scale operation
International Overnight air fleet
Weaknesses Threats
Limited budget due to low operating income Foreign competition entry into home
(declining operating efficiency) Economic standing
Lack of ground transportation forces Online competitive advantages of rivals
Delivery staff need training Gain in competition service costs
Judgment for late delivery Market demand very seasonal
Costly technology innovation
Discrimination issues
FedEx
19. Strengths Opportunities
Higher sustainability Increase economic scale by improving B-2-B
Ongoing expanding network services
Great financial strength (Grade AAA credit Increase market by producing high quality
rating) product
High operating margin Increase business by increase logistic
High dividend value solution
Well-known brand Adding new facilities to accommodate rapid
Better on-time-performance (ground growth in healthcare
delivery) Increase profit margin by having more price
control
Weaknesses Threats
Limited flexibility Rising fuel prices
Unionized labor force (result in high labor Weather conditions
cost) Intense competition
Less innovative Government regulation
Brand Lag (people may don’t know its full
capability)
UPS
21. • 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)
22. • 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
23. • 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
24. • 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”
26. • 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
27. • 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
28. FedEx is better than UPS?
different people
different perception