FedEx vs UPS - Competing with Contrasting Strategies in China

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Case Details:

Case Code : MKTG069
Case Length : 15 Pages
Period : 2002-2003
Pub Date : 2003
Teaching Note : Available
Organization : Federal Express Corporation, United Parcel Service
Industry : Logistics Solutions Company
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

UPS had opened two representative offices in the Chinese cities - Shenzhen and Qingdao in early September 2002.

UPS had also announced its plans to open four more offices in Xiamen, Dongguan, Hangzhou and Tianjin by early 2003.

For a long time, FedEx and UPS had been archrivals in China competing each other for more market share in the Chinese logistics market (Refer Exhibit I).

According to the analysts, FedEx had adopted an aggressive approach to increase its market share in China.

The company invested heavily in procuring air routes and in deploying its own aircrafts within and outside China for shipping goods. FedEx had also developed a vast distribution network with pickup outlets across China.

Till 2001, the company used global advertising campaigns to advertise in China. On the other hand, UPS followed a more conservative and cautious approach while making inroads into the Chinese market.

The company made efforts to position itself as a local company, rather than building an image of a global player. Instead of investing on building its own logistics infrastructure, the company decided to depend on leased facilities.

Despite acquiring rights to fly its own plane in 2000, UPS was mostly dependent on its joint venture relationships to ship goods within and outside China...

Excerpts >>


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