Exhibit: Five Forces Outline
1. Barriers to Entry—Medium to High for the following reasons: a) Economies of scale—the top three carriers (Federal Express, UPS, and Airborne Express) serve slightly more than 85% of the domestic express mail market. All three carriers deliver a high volume of packages, and thus, are able to spread fixed costs over more units. Also, each carrier has integrated technological systems that improved operational efficiency. In addition, intensive training programs of employees increase service and delivery efficiency. b) Extremely large capital requirements are necessary to enter the market. Hub facilities at airports (e.g. FedEx’s hub near Dallas cost $250 million); capital expenditures for
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However, such avenues of delivery limit the customer’s presentation options (cannot bind business reports / “deliverables”). Also, the customer cannot transport a non-paper package (e.g. a book, a desk) via this delivery system. b) Regular mail only cost 32 cents for letters. The post office is also very convenient. However, in regards to packages, the post office is very poor in quality service and efficiency (cannot track packages efficiently and has an on-time delivery record much worse than commercial carriers) 3. Bargaining Power of Suppliers—Medium for the following reasons: a) Postal materials—numerous suppliers of necessary postal and packaging materials. Switching costs are not high. The postal materials suppliers have low bargaining power. b) Software programs combined with extensive customized programming updates / additions. The software and software customization industries both have numerous suppliers. However, given the complexity and uniqueness of such an information network, there are probably only a limited number of software and customization companies that can provide a carrier with a high quality system that is capable of smoothly integrating all the operation and customer service divisions. Furthermore, the switching costs have the potential to be extremely high because such a transfer could disrupt communication between the divisions, leading to poor quality service. In addition, the company would
The Express mail industry in the United States had a volume of $16-17 billion on expedited shipments in the year 1996. In the years before shipment volumes has risen 15-20% per year. However due to higher competition prices have fallen which resulted in a rise of only 10-15% in total revenues. As an example of this stands the revenue and the operating margin of the biggest player that make up 45% of the market. Federal Express’ revenue has more than quadrupled in the ten years prior 1996, however its operating margin has more than halved. (Exhibit 2) The
Federal Express main products are delivering packages to widespread locations within a short time. In this case study, we would focus our discussion on its most profitable services, i.e. Priority One, Standard Air Service, and Courier Pak (Table 1).
FedEx has not fared as well as UPS in financial performances. FedEx¡¦s total revenue has grown 60% from 1996 to 1999 while their net income has doubled in the same period. FedEx¡¦s acquisition of RPS will challenge UPS for the ground delivery business and affect the sustainability of UPS¡¦s advantage in the ground deliver business. FedEx has been competing well in the higher-end, high-service segment of the package delivery market. Although, digitations of documents and emergence of electronic signatures is threatening the express business which FedEx has the advantage over UPS.
The industry being analyzed is the tobacco industry. The tobacco industry manufacturer cigarettes, snuff, chewing tobacco, etc.
The deliveries must be on time, there should be accuracy by way of deliveries, ownership of not only the land based vehicles but also airplanes are important for success. Key success factors include safe deliveries and an excellent reputation. Recently there are key success factors related to information. Accessing the UPS website gives critical information about the whereabouts of the parcel to any customer at a low cost. Information about the merchandise, customers and goods is critical for success.
United Parcel Services was a 90 year old, private organization with a $1.7 billion net income and excellent financial performance. It is the world’s largest parcel delivery company with more than $25 billion in annual revenues. UPS delivers around 13 million packages each day and also helps its customers with supply chain management, logistics, and financial services. The industry offers two basic products that are air and ground deliveries. Three major competitors, FedEx, UPS and USPS, rule both of the product lines. In this comparison we will only be comparing FedEx and UPS because the companies have a strong brand names and are highly competitive. FedEx on the other hand is a $17 billion global transportation and logistics company, with an operating philosophy to “operate independently and compete collectively. Pg 3
With a supply chain which may not involve any physical products as designs and manufacturing processes can be sent electronically,
* Technology wise, there may be some threat to the Android phone, that Google has developed as there are other brands of phones available that may be cheaper in price, but do not possess the same applications or operating systems that the Android phone does.
UPS’s main service had been mainly focusing on delivering packages and documents with time-definite around the world. (Sparks) In recent decades, UPS has extended its operation in LCL (less than truck load) and global freight forwarding field.(Sparks) Its operation can be mainly concluded in three segments, U.S domestic package operation, International package operation and supply chain & freight services. (Sparks) UPS has package cars (or vans), trailers, larger and smaller package vehicles and airplanes as its main transportation tools. (Autoblog Green) The major competitors of UPS include United States Postal Service (USPS) and FedEx.
During 2011 significant industrial relation events took place in Australia. One significant event that was widely reported in the media and according to Catanzartiti and Kane (2012) “captured the interest of the mainstream press more than any other case during 2011”, was the Qantas Airways Limited (Qantas) dispute”.
Within the Air Test and Evaluation Squadron One military organization, segments of the squadron come together and perform various tasks to support and fly aircraft to meet the organizational goal of operational test and development. In accomplishing this goal, the squadron incurs joint costs when people from multiple departments travel across the globe to perform mission objectives (Hicks, 2010). The squadron travel budgets are smaller ceiling appropriation allocations of the larger National Defense Authorization Act (NDAA) authorized by Congress and the budget division ensures financial resources are spent wisely during each fiscal year (October 1 through September 30) or operating period (Hicks, 2010). The travel division monitors spending on 23 funding lines totaling $1.17 million where each funding line, referred to as different colors of money, is obligated for a specific travel appropriation or purpose. To manage these costs, the travel division is responsible for arranging travel accommodations, processing travel vouchers and claims, tracking Government Travel Charge Cards (GTCC) charges, and validating allocation of funds. Budget preparations begin by predicting future year requirements such as off-site pilot and flight crew flight-testing, off-site pilot and flight crew training, professional schools, occupational training, conferences, and other official travel (C. Sacksen, personal communication, September 19, 2016). To assist in budget execution,
In the United States, United Parcel Service Inc. (UPS) and FedEx Corporation (FedEx) dominate the package delivery service market at 46% and 32% of the volume respectively, and DHL capturing most of the remaining US market at 18% (Figure 4).
In this report we focus on the two main competitors in the package delivery industry: Federal Express Corporation (FedEx) and United Parcel Service of America, Inc.
By numbers, United Parcel Service, Inc. (UPS) which established in 1907 with starting capital, $100, is considered now as the world 's largest package delivery company, UPS transports some 16 million packages and documents per business day throughout the US and to more than 200 countries and territories. Its delivery operations use a fleet of about 100,000 motor vehicles and about 600 aircraft. In addition to package delivery, the company offers services such as logistics and freight forwarding, through UPS Supply Chain Solutions, and less-than-truckload (LTL) freight transportation, through UPS Ground Freight. (LTL carriers combine freight from multiple shippers into a single truckload.), and it has a huge
Have you ever stopped at a bar or at a traffic light and overheard a conversation between cyclists and thought to yourself… what on earth are they talking about? Well, I am going to tell you a little bit more by talking about Marianne Vos being a visionary and ethical leader within the women’s peloton. I will talk to you about Marianne being a visionary leader because she uses her cognitive flexibility to change her plans when she needs to as the race goes down. She is also an advancer in women’s cycling because she is one of the driving forces behind a new big race. Personally, I would like to be more cognitive flexible than I am now as I experienced it feeling uncomfortable during an airshow. I would also like to be able to step over boundaries as advancers do. As my mentor did when the new enlisted forces structure for the Royal Netherlands Air Force (RNLAF) was still in the development stage. Marianne is also an ethical leader because she uses her knowledge on Emergent Leadership Issues, in particular about equal opportunity using at least one of Toner’s Principles. The three O’s apply to her, as she is the biggest champion in women’s cycling. Personally, I can relate to the equal opportunity issue due to the fact of how my father always warned me. And when I was asked for the enlisted forces structure, I immediately thought I owed it to my fellow Airman. So hereafter, I