Parcel Shipping Industry Analysis
Angela Copeland, Pierre Crozet, Jayne Park, Sarah Todnem
Introduction
• Industry: Parcel Shipping Industry
• Main Players: FedEx, UPS, DHL, USPS
• Cumulated Revenues: $152 Billion
Background
• Porter’s Five Forces
Supplier Power
Intensity of Rivalry
Sustainable
Industry
Profitability
Buyer Power
Potential Entrants
Threat of Substitutes
Threat of New Entry
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Important Economies of Scale
Hard to Differentiate
High Capital Requirements to Start New Biz
Leaders Control Distribution Channels
Leaders Have Highly Recognized Brands
• Threat: Moderate/Low
Buyer Power
• Size Does Matter (individuals v. corporations)
• No Serious Threat of Backward Integration
• Threat: Low
Supplier Power
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Unions (all except FedEx)
Foreign Government Licenses
Facilities and Vehicles Suppliers
Oil Industry
• Threat: High
Intensity of Rivalry
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Handful of High Powered Rivals
US Economy
High Fixed Costs
Homogeneous Industry
High Exit Barriers
• Threat: High
Threat of Substitutes
• Growing Store Partnerships
• Growing Online Signatures
• Threat: Low
Conclusions
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Threat of New Entry: Moderate Low
Buyer Power: Low
Supplier Power: High
Intensity of Rivalry: High
Threat of Substitutes: Low
Trends
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Increase in Stability
Product Differentiation
Continued Integration of Subsidiaries
Technology in the Driver’s Seat
Questions
• Questions?
References
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BAYE, MICHAEL (2003) Managerial Economics and Business Strategy, Economies
of scale, p183: Mc Graw Hill, Retrieved November 27, 2004
DHL International Ltd., Retrieved November 26, 2004 from DHL web site
http://www.dhl.com
Federal Express, Retrieved November 27, 2004 from FedEx web site
http://www.fedex.com
Isidore, Chris, CNN/Money Senior Writer, CNN Online, “SHOWDOWN: FEDEX VS
UPS” from CNN web site, Retrieved November 27, 2004
http://money.cnn.com/pf/features/fedex_ups/
Park, Kristi, Mail Boxes Etc., Inc. (November 2004), Retrieved November 26, 2004
from Hoover’s Online US
http://www.hoovers.com/mail-boxes-etc./--ID__14014--/free-co-factsheet.xhtml
Porter, Michael E. (1979), How competitive forces shape strategy, Harvard Business
Review, Retrieved November 27, 2004
United Postal Service, Retrieved November 27, 2004 from UPS web site
http://www.ups.com
United States Postal Service, Retrieved November 27, 2004 from USPS web site
http://www.usps.com