The Battle for Value: FedEx vs. UPS
When two industry giants go head to head, a great deal of strategy is involved mixed with pure brute force. When two package delivery giants go head to head such as FedEx and UPS, they must draw upon their strengths and improve their weaknesses if they hope to win the battle. Adopting innovative technology options and precise operations are just a few crucial strategies that can help a company emerge as a leader. 2004 marked a monumental year in package delivery history when the United States and China came to terms signed an air transportation agreement. These new shipping outlets would be key for any package-delivery company to gobble up and became top priorities for FedEx and UPS. Opening up over 110 weekly all-cargo flights to China, FedEx began to step out and lead the race with their innovative style and entrepreneurial leader. UPS saw this as an opportunity to improve their reputation which was often viewed as “big, bureaucratic and an industry follower.” FedEx possessed a sharper edge and jumped on the China opportunity immediately. In this intense battle for dominance, FedEx was finding ways to cut their costs and get the most out of their opportunities. They purchased their own cargo planes instead of stowing away shipments on commercial flights, which maximized cargo space. FedEx also shifted their focus to a just-in-time mentality and was known for their precise tracking and efficient delivery. The combination of their hub and spoke delivery pattern, owning their own planes and precise delivery style was boosting FedEx towards the leader spot. Leading up to the USA/China agreement, UPS was trying hard to revamp their image to improve their reputation. They were, however already the world’s leading delivery company. But the new opportunities presented with the agreement would be a true test for UPS and how they would handle the pressure from FedEx. UPS changed their logo, heavily invested in new...
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