Qn. #1 FedEx and UPS Differences and Market Differentiation
The logistics industry has emerged as a competitive ground for its players following similarities of shared resources, market served, and competitive dimensions. However, FedEx and UPS have developed differences in their market approach strategies to create their market niche and edge. The companies differ because UPS positions itself as the primary coordinator in the whole supply chain (Hitt et al., 2016). This notion implies that the firm controls the flow of goods, funds, and information through the final consumption. On the other hand, FedEx concentrates more on international markets and transportation services such as passengers’ aviation (Hitt et al., 2016). This scenario differs from its counterpart and focuses on the entire logistic value chain while trading domestically.
These firms differentiate themselves by the markets they serve to create stakeholders’ value. FedEx has an integrated transportation service that offers access to its brand seamless (Hitt et al., 2016). This strategy differentiates it from UPS, thus giving it’s a cutting edge in the market. Besides, UPS concentrates on the value of the distribution channel, making it the most prominent packing and delivery firm (Hitt et al., 2016). This way, the firm is different from FedEx, an international corporation, and less domestic, making it the largest overseas air shipping company.
Qn. #2 UPS and FedEx Strategic Actions and Implications
FedEx has taken different strategies to counter UPS and other rivals in the logistics industry. For instance, the firm opted to restructure operations to increase efficiency by creating synergy between its independent air, ground, and express resources (Hitt et al., 2016). This way, the firm has supported its strength and leveraged all its logistic resources comprehensively. Besides, the strategy has been successful following its contract renewal from US mail postal service, which UPS lost during the bedding session in 2013 (Hitt et al., 2016). This scenario indicated the effectiveness of the firm’s strategies and performed in the transportation of domestic orders.
On the other hand, UPS embarked on forming mergers and acquisitions to form a synergistic coalition between all its resources. For instance, the firm acquired Cemelog Zrt, a Hungary-based firm that served in pharmaceutical logistics, to strengthen its business in Europe (Hitt et al., 2016). This way, the firm could access the growing central and Eastern Europe. Additionally, UPS has focused on trans-border services for Europe as a transformation engine for future growth (Hitt et al., 2016). Such strategies contribute to it being the most prominent packaging, and delivery firm in domestic markets come, international competitors.
Qn. #3 Success Predictions
The success of any logistic firm depends on how it responds to diverse competition waves in the market, which is becoming intense. There exist different success factors that firms exhibit to remain meaningful in the supply chain. UPS concentrates more on value relations along the entire supply chain, which is one of the success factors in logistics (Hitt et al., 2016). Value addition is crucial in transport and warehousing, where firms offer packaging services during transit. This scenario has done UPS the largest packaging delivery service. Besides, future competition is intense; therefore, mergers and acquisitions will minimize competition and increase the bargaining power of merging firms (Hitt et al., 2016). This strategy is evident from the Hungary deal, which saw UPS acquire the health firm.
The main issue behind the mergers is the consolidation of funds and other resources to serve one big market. UPS will gain colossal bargaining power in the Central and Eastern European markets to cope with the growing competition. Many firms merge on the verge of collapse, but UPS has taken this strategy to remain productive overseas, which is its future target.
Reference
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and Cases: Competitiveness and globalization. Cengage AU. https://bawar.net/data0/books/5ea6b715e53cf/pdf/strategic.pdf
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