《FedEx and UPS 1》.ppt

FedEx and UPS in China Case Overview This case examines two very different strategies employed by shipping giants FedEx and UPS in their respective attempts to expand their business into China in the 1990’s. The FedEx Approach SWOT Analysis – FedEx Strengths: Aggressive advertising campaign Highly controlled distribution system with constant information about the status of shipments. FedEx has its own air service in and out of China. SWOT Analysis – FedEx Weaknesses: Lack of personal relationship building within China In order to fill their aircraft, FedEx is forced to take on many cheaper packages with very low profit margins. SWOT Analysis – FedEx Opportunities: Multinational corporations with Chinese operations that already use FedEx elsewhere. Customers who particularly value or require constant information regarding shipment status. SWOT Analysis – FedEx Threats: Shipping companies already well established in China. (DHL International Ltd. holds more than 30% of Chinese shipping market) Very large investment in China based infrastructure including $880 million acquisition of Flying Tiger Line Inc. to establish its own air routes in Asia. Recommendations - FedEx Continue to focus on multinational corporations already using FedEx. Outline benefits of using FedEx for intra-business shipping. Call on other Chinese businesses to build relationships. Expanding to these businesses is essential to support the large investment in China. Sponsor local and national events such as the Chinese New Year and the Olympics. Send representatives to China to build personal relationships Action Plan - FedEx Year 1 – Continue to call on multinational customers in China. Year 2 – Expand advertising focus to large China-based businesses in order grab some of this business from UPS and other local companies. Send representative to China to talk to these companies. Year 3 – Evaluate possible need for more air service to the Chinese region. Year 4- Sponsor th