Fedex vs Ups

554 Words3 Pages
1. What happened to FedEx and UPS’s stock price in early 2004? Why did they rise? Why did one outpace the other? In an efficient market how are we to interpret FedEx’s 14% increase in market value? a. In 2004 the stock price of both companies rose. FedEx’s stock price rose 13.9% during this this time, whereas UPS only saw a 3.1% increase. The stock prices rose because the air transportation agreement between United States and China and the market opportunities of this deal in China for FedEx and UPS. b. FedEx stock prices outpaced UPS because FedEx had a larger presence in China with its Chinese volumes nearly doubling from 2003 to 2004. FedEx having 11 flights weekly and serving 220 cities in china with direct flights to important cities. c. FedEx’s increase in market value is because of the efficient market. All investors have access to information, and due to its current market share and operations in China. 2. Why didn’t Ups create overnight delivery? How did FedEx get away with successfully entering this market? a. Ups didn’t create overnight delivery because of high cost to build an air fleet. b. FedEx was able to create a fleet because invested a lot of capital in purchasing their own planes at the beginning before entering the market. 3. What is going on in the industry? How are the two firms competing? What are the competitive prospects for the foreseeable future a. It’s a very competitive industry. b. Every company feeds off the other, each trying to beat the other’s service and promotions. c. Their competitive prospects are very strong, with the agreement that was reached between China and U.S. 4. How have UPS and FedEx performed financially? How do you measure financial performance? What do the financial statements and ratios show? What does the stock price performance tell you? How is EVA calculated? What does it reveal?
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