Fedex vs Ups Case Study

The Battle for Value, 2004: FedEx Corp. vs. United Parcel Service, Inc.

I. Executive Summary

This report will analyze the fierce on-going competition between the two companies that have dominated the package delivery service, FedEx Corporation and United Parcel Service, Incorporated. The situational analysis will explain the back and forth battle between in both popularity and profitability as these two companies try to gain market dominance. This part will also analyze the agreement between the United States and China regarding the new air-transportation agreement. Financial analysis will also be used to show that UPS, at the time the case was written, is financially superior to FedEx.

After analyzing the factors above, the following recommendations will be made:

* FedEx: Slow the growth of the company so that profitability is not being sacrificed.

* UPS: Account for variables that may affect the drivers and delivery time such as weather, traffic conditions, and package volume. This will lead to employees not worrying about being reprimanded is factors they cannot control cause them to be behind schedule.

II. Situational Analysis

UPS was founded in 1907 by Jim Casey was the largest package-delivery company in the world. At its inception, UPS focused on department-store deliveries. In 1929 UPS started an air-delivery service by putting packaged on commercial airline flights. By 1975, UPS delivered to every address in the continental United States and began to expand into Canada. The following year, UPS began to service West Germany. UPS was founded on the concept of efficiency, which caused problems with the heavily unionized labor force within the company. UPS’s schedule for shipments does not account for variables that delivery truck drivers may run into such as: weather, traffic conditions, and package volume. If any of these variable caused the slightest delay in delivery, the driver would be...