FedEx Vs. UPS

443 Words2 Pages
The air-express segment was a $25-billion portion of the US package delivery industry which consists of letter and packages, overnight as well as deferred. While all of the FedEx’s business activity was in air-express segment of the package delivery industry, UPS derives only about 22% of it revenues from this sector. FedEx was the first one in the industry to offer 10:30am delivery for next day air in 1982 which was followed by UPS later on in 1990 to be even more competitive UPS came up with guaranteed 8am overnight delivery in 1995. The strategies by which the two firms are meeting competition can be given as follows- Customer Focus - Both emphasized focus on customer. Price competition - UPS undercut the price of FedEx's overnight letter by half. - By 1990's both settled into predictable pattern of price increases Operational reengineering – Reduction of unit costs became the priority which was achieved by exploiting economies of scale, investment in technology, and business process reengineering. Information technology- FedEx used COSMOS and UPS used DIAD Service expansion- FedEx and UPS both have pecked at each other’s service offerings. Logistics services- It is the integrated logistics services offerings to large corporate clients. Enabling factors- 1. Air transportation agreement between US and China 2. Advancement in technology industry Inhibiting factors- 1. Fierce competition and low price service offering 2. Employees on strike and pay raise Sustainable competitive advantage is distinguishing against other company and staying in that position. It is quiet difficult for any one of FedEx and UPS to stay in one position as whenever one of them goes ahead and sets a competitive advantage almost immediately the other one offsets it. FedEx's stock price outstrip UPS's during the initiation of talks over liberalized air cargo between
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