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#Started in 1907 by 19 year-old Jim Casey then called American Messenger Company.

#Became United Parcel Service of America in 1929 and began shipping packages on commercial

airliners.

#By 2003:

  • 88,000 Ground Trucks
  • 583 Planes
  • 360,000 Employees
  • $2.9 Billion in profits on $33.4 Billion

SWOT Analysis

  • 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)
  • Limited flexibility
  • Unionized labor force (result in high labor cost)
  • Less innovative
  • Brand Lag (people may don’t

know its full capability)

FedEx will produce superior financial returns for shareowners by providing high value-added supply chain, transportation, business, and related information services through focused operating companies competing collectively, and managed collaboratively, under the respected FedEx brand.

-FedEx Mission Statement Excerpt

  • Rising fuel prices
  • Weather conditions
  • Intense competition
  • Government regulation

  • 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

We serve the evolving distribution, logistics, and commerce needs of our customer worldwide, offering excellence and value in all we do. We sustain a financially strong company, with broad employee ownership, that provides a long-term competitive return to our shareowners.

-UPS Mission Statement

Battle For Value

History

  • 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

  • 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

#Business model conceived by Fred Smith in an undergraduate term paper.

#Invests $4 million of his own capital and raises and addition $91 million.

#Launches in 1971

#By 2003 :

  • 5000 Delivery Trucks
  • 625 Cargo Planes
  • 217,000 Employees
  • Handles 2 billion packages
  • $22.5 Billion with 37% margins
  • Foreign competition entry into home
  • Economic standing
  • Online competitive advantages of rivals
  • Gain in competition service costs
  • Market demand very seasonal

  • Global business growth
  • Online consumer services
  • Increase demand in logistics
  • Alliance with USPS
  • Expanding China market

How does wireless technology play such a key role in the competition between FedEx and UPS?

- This is the age of advancement. People want services to be faster and more efficient. Since wireless can provide a portable network facility (bluetooth, Gps, Scanner etc.), the whole process of delivering service right from picking up the package becomes manageable.

How will wireless technologies help UPS and FedEx in the future?

- It will help both the companies by bringing more advanced features hence improvising them in making customer benefit better.

RECOMMENDATIONS

Wireless Technology Adaptations...

Market Penetration:

At Last...

  • 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 Development:

  • Uses handheld systems like Delivery Information Acquisition Device (DIAD)
  • Has more and advanced Ring Scanners.
  • Relatively slower in demonstrating improved efficiencies.
  • 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

  • FedEx is best for International overnight delivery as well as technology innovation leader.
  • UPS is best for Ground transportation within US and the expanding operation margin.
  • FedEx’s strategy are out of core skills and technology.
  • UPS’s strategy are more focusing on services provided.
  • FedEx is more people-oriented; UPS is more business focused.

  • Introduced revolutionary softwares like COSMOS, and PowerShip Programme to track handling of packages.
  • Introduced Bar code labelling.
  • Uses PowerPad, a handheld device to scan packages for pickup and delivery information.
  • Uses Fewer Ring Scanners for sorting.
  • Deploys new technologies as soon as it can justify the cost.

Others:

  • 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.
  • Improve its image by involving in charity and social works.
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