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FedEx Will Keep Delivering to the World on Time Competitive Analysis Project.

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Presentation on theme: "FedEx Will Keep Delivering to the World on Time Competitive Analysis Project."— Presentation transcript:

1 FedEx Will Keep Delivering to the World on Time Competitive Analysis Project

2 A quick overview of our companies FedEx (FDX) Memphis, TN 280,000 employees Fred Smith UPS (UPS) Atlanta, GA 410,000 employees Scott Davis

3 FedEx and UPS make 64% of their industry’s revenue FedExUPS Market Capitalization (Industry Avg: 11.9B) 30 B72 B Closing Price $93.95$73.18 EPS (2010) $3.78$3.56

4 Porter’s Five Forces New Entrants: Low Power High Fixed Costs New Entrants: Low Power High Fixed Costs Industry Rivals: High Power Equal competitive power Industry Rivals: High Power Equal competitive power Suppliers: Low Power Easy to buy from various companies Suppliers: Low Power Easy to buy from various companies Customers: High Power Low cost to switch companies Customers: High Power Low cost to switch companies Substitutes: Low Power High switching costs Commodity Substitutes: Low Power High switching costs Commodity

5 FedEx understands that it’s success lies in its opportunities StrengthsWeaknesses FedEx High P/E Ratio EPS Largest Air Fleet UPS Company Size Highest Profit Margin FedEx High Operating Expenses Undifferentiated Product UPS Lower performing stocks Undifferentiated Product OpportunitiesThreats New markets Sustainability to reduce costs Rising oil prices Lower demand for document sending

6 “A successful shipping company is adaptable, technologically advanced, able to grow financially, market itself well, and reach out to a global customer base”

7 A DAPTABLE T ECHNOLOGICAL F INANCIAL G ROWTH M ARKETABLE G LOBALIZED

8 Current events affect shipping industry Rising Oil Prices 2009 Recession: FedEx suffered more BP Oil Spill Lowers Stock Prices

9 Recession has impacted UPS ROS (%)ATOEMROE (%) x1.47 x4.17 = x1.42 x4.15 = x1.61 x4.70 =44.29

10 ROS for FedEx plummets due to increased expenses ROS (%)ATOEMROE (%) x1.39 x1.80 = x1.45 x1.77 = x1.48 x1.77 =7.70

11 UPS has higher EM than FDX ROS (%)ATOEMROE (%) FEDEX0.27 x1.45 x1.77 =0.70 UPS5.0 x1.42 x4.15 =28.96

12 UPS is more dependent on debt than FDX FedEx EMUPS EM

13 FedExUPSIndustry Average Profit Margin(%) ROE(%) P/E Ratios that are inconsistent with Industry

14 FedEx aims to achieve full customer satisfaction UPS - In-store copy machines FedEx - Purchased Kinkos  FedEx Office - Print Online & Have it Shipped

15 A DAPTABLE T ECHNOLOGICAL F INANCIAL G ROWTH M ARKETABLE G LOBALIZED

16 FedEx leads technologically FedEx Innovative solutions to real world problems SenseAware technology: Medical package tracking More intuitive web experience UPS Large-business oriented “It just works” Quantum View Tracking system Very basic web presence

17 A DAPTABLE T ECHNOLOGICAL F INANCIAL GROWTH M ARKETABLE G LOBALIZED

18 FedEx has greater opportunities to grow FedExUPS P/E Ratio Amount spent on Oil (2010) 3106 M2972 M Electric fleetFedEx has the largest electric fleet in the industry Hybrids only

19 Doing business with the environment in mind Similar objectives – Technology – Fuel efficiency Differing objectives – Carbon neutral option (UPS) – Energy (FedEx)

20 A DAPTABLE T ECHNOLOGICAL F INANCIAL G ROWTH M ARKETABLE G LOBALIZED

21 UPS competes with FedEx to differentiate their similar products UPS focuses on mass marketing FedEx uses Segmentation FedEx offers lower prices than UPS Kinkos/UPS Store FedEx distributes business items more effectively Speed Convenience Reliability ProductPlace PromotionPrice

22 UPS’ We Heart Logistics commercials reach people everywhere UPS “That’s Logistics” ad music Global interaction Use of NCAA famous coaches FedEx Use relatable people in commercials to show how their products meet customers’ needs

23 FedEx uses Market Segmentation to differentiate itself from competitors Goal: Operate independently yet compete collectively. Better serve customer needs Each segment can better concentrate on its own market

24 FedEx provides relatively greater value Rates based on a 5 lb package shipped from MA to CA

25 A DAPTABLE T ECHNOLOGICAL F INANCIAL G ROWTH M ARKETABLE G LOBALIZED

26 Competition arises as companies try to globalize FedEx 23% of revenue from international shipments Dominant carrier in Asia 664 jets, 62 on order UPS 20% of revenue from international shipments Dominant carrier in Europe 311 jets, 22 on order

27 FedEx Will Keep Delivering the World on Time FedEx Increasing internationally Using innovation to grow UPS Holds greater market share


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