Presented May 9, 2011

Jon Michaud Wendy Rowley Kim Waldbillig

Joe Wyson

Recommendations & Chosen Winner

Sustainability of Competitive Advantages

Industry Dynamics Affecting Profitability

Firm Performance

Corporate Strategy Canvas

Business-Level Strategies

Resources and Capabilities

Porters Five Forces Analysis

Key Issues Faced By FedEx & UPS

Introduction

Are UPS and FedEx colluding and violating antitrust law? Do UPS and FedEx meet the market definition of duopoly? Is it ethical that rising fuel costs are passed on to the consumer?

What are the pros and cons of unionized versus non-unionized employees? How to capitalize on trends in trade globalization and make it cost-efficient?

Power of Suppliers Power of Buyers

Threat of Substitutes Threat of New Entrants

Intensity of Competitive

Rivalry

LOW

MODERATE

MODERATE

LOW

LOW

Fuel vs. Alternatives Power of Laborers Maintenance & TCO

Long Term Contracts Small Subsidize Large Few Global Integrators

Capital Intensity International Regulation Brand Name Credibility

Global Network Supply Chain Solutions Reliability & Experience

Porters Five Forces Analysis

} Four business segments Ground, Express, Freight,

Services

} Boeing 777 Aircraft Fastest international

} Partnership with USPS High domestic market share

} Few unionized employees

} Integrated Express & Ground Delivery assets

} IT Infrastructure COMPASS & UPSNet

} Inventory Express Just-in-time

} Mostly unionized employees

Type of Competitive Advantage

Com

petit

ive

Scop

e

COST UNIQUENESS

BR

OA

D T

AR

GE

T

NA

RR

OW

TA

RG

ET

Broad Cost Leadership

Broad Differentiation

Narrow Cost Leadership

Narrow Differentiation

Integrated Cost Leadership/

Differentiation

High

Low

COMPETING FACTORS

Price Speed Reliability Intl Air Corporate Responsibility

Perceived Value of Add-on Services

Reliability Intl Ground Green Technology

1. Industry 2. S&P 3. FedEx

1. UPS 2. S&P 3. Industry

High Pressures for cost savings

Low Pressures for local adaptation High

Global Transnational

Multi-domestic

Matching Capacity to Demand More Types of Shipping in More Markets

Ability to Implement Green Technology

} Find new ways to match capacity to demand

} Reduce costs to improve against industry P/E ratios

} Growth by acquisition and alliance; not all organic

} Blue Ocean Strategy: Increase customers access to capital in emerging markets