United Parcel Service Case

United Parcel Service, Inc. (UPS) and FedEx Corporation (FedEx) are the two largest package delivery and parcel carrier companies in the world. Both organizations dominate both the ground and air freight delivery industries. These two organizations continuously compete for market dominance, including market share. In 2004, the United States (U.S.) and China entered into an air-transportation agreement that significantly increased the number of commercial cargo flights between the U.S. and China. This agreement also allowed for the establishment of air-cargo hubs and the ability to land for commercial airlines at any available airport in China. The establishment of this agreement created an opportunity for both UPS and FedEx to significantly gain market share and organizational financial performance (Bruner, Eades & Schill, 2014).

The purpose of this paper is to provide an analysis as to which company was best prepared to compete in the newly opened, Chinese market. This paper will include an assessment of the strategic approaches of both UPS and FedEx. It will also include an evaluation of the financial performance of both companies. Lastly, this paper will provide an overall assessment of the best organization to compete in the Chinese market.

Strategic Approaches for UPS and FedEx

While UPS and FedEx are similar organizations in that they are package-delivery companies that provide supply chain, transportation, logistics, and information services, their strategic approach to business dramatically differed during the time frame for this case. UPS’ strategy was based on its mission to offer excellence and value in all they do. UPS focused on improving efficiency and reducing costs in order to enhance value for its key stakeholders. Historically, UPS took a financially conservative approach in regards to investing in technological innovations and employees. UPS’ inflexible approach allowed for heavy unionization, which negatively impacted the organization’s ability to perform within the industry. However, due to its desire to compete with FedEx, UPS made significant strides towards becoming more innovative and employee centric through investments into information technology, acquisitions and strategies to enhance employee participation. These changes allowed UPS to significantly improve financial outcomes (UPS, 2014).

FedEx’s business strategy, on the other hand, focused on delivering high quality services to its customers through its innovative and entrepreneurial approach to operations. FedEx’s mission is focused on people first, then service and ultimately, profit. The leadership at FedEx adopted the philosophy that through the positive treatment of employees and investment in innovations, FedEx would achieve its desired outcomes. FedEx’s business strategy did not change significantly over the course of this case. FedEx’s strategy allowed FedEx to remain non-unionized