Presente d by, Nikhila Sutrishn a Khizer

By, Nikhila Sutrishn 5/3/12 a

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What kind of Industry?

Logisticsis the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. is a channel of thesupply chain which adds the value of time and place utility.
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Logistics

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FEDEX and UPS ARE MARKET LEADERS IN THE LOGISTICS SERVICES INDUSTRY.

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Why China?

5th largest in air-cargo and express market valued at $400 million in 1998 which was projected to grow by 20%.

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Competitors to FEDEX and UPS..

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Summary
The entry and expansion strategies of the two US-based logistics companies - FedEx and UPS in the Chinese market. Examines the contrasting strategies adopted by FedEx and UPS in their efforts to establish presence in China. FedEx followed an aggressive, high risk, more investments approach to expand its services network in China which enabled the company to capture higher market share. UPS followed a conservative, low risk, low investment approach to establish its presence in China, then developed a more aggressive 5/3/12

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Entry into China-Fedex And UPS

FED UP EX S -Invested heavily in -More conservative procuring air and cautious routes, aggressive. approach, limited investments. -Own aircrafts within and outside -Joint ventures with China. local companies within and outside -Its own distributionChina. network. -Used partnerships -Used global distribution 5/3/12 advertising network.

Developing Service Strategies..

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Developing service strategies FEDEX:

High invesment. Used HUB and SPOKES system. Initially, as per Chinese law, partnered with Tiger Airlines and Evergreen airlines. Later, Invested in own infrastructure. Own distributing network. Acquisition increased and number of HUBS and SPOKES increased, therefore efficiency ,reliability increased. Very aggressive competitor. First company gave the money back offer if not delivered on time. Online tracking system. Huge network of orange and purple trucks. Quick customs clearance and pick-up and delivery services. 5/3/12 UPS:

Contd Fedex tackled competion head on and UPS believed in

partnering with them, Had acquired spaces in the airport or close proximity to reduce cost and save time. Both had same strategy in terms of expansion, but have different styles in executing it. UPS focused on local customers and FEDEX focused on their existing multinational customers. Later FEDEX after incurring losses had to focus on the customers. FEDEX adpoted western-style marketing or advertising and UPS adopted the local company image.
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Invested just a fraction of what FedEx had put into Asia. creating an image not American, but more worldwide.

Like FedEx, UPS can build around its multinational customer base with Chinese operations.

Sought to build relationships discreetly, Lacked its own air service onChina, making them in Chinese terms. less logistically versatile than FedEx. UPS does not have many of its own trucks and

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UPS can pass on cheap cargo to target the more Olucrative document and package market, Tsmall they do not need to since Like FedEx, shipping fill an aircraft. companies already well established in China pose a threat. While UPS contends it will add its own airplanes in 5/3/12

Aggressive advertising campaign Highly controlled distribution system with constant information about the status of shipments. Lack of personal air FedEx has its own relationship building service in and out of within China China. In order to fill their aircraft, FedEx is forced to take on many cheaper

Multinational corporations with Chinese operations that already use FedEx elsewhere.

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Customers who Oparticularly value or require constant Tinformation regarding shipment status. Shipping companies already well
established in China. Very large investment in China based infrastructure including acquisition of Flying Tiger Line Inc. to establish its own air routes in Asia. 5/3/12

Advertising & Promotion

Heavily Advertise services

Less emphasis Advertisement

on

Publicizing its offering in China

Preferred to project itself as local Chinese company Sponsor Chinese New Year celebration and Olympic games

Hired popular media company to create brand awareness

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Advertising and Promotion

UPS offered a phone card having three visuals of Sydney Olympics. Different advertisements. Rivalry or counter attacks, through ads like pepsi and coke.
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FEDEX: No personalisation with customers. Standard logistics services for customers. Focused on efficiency and providing solutions. Explained customs clearance procedures. Focused on Innovative and Value added services FEDEX had captured 13% market and UPS captured 5%. UPS: Focused on localisation with customers. 5/3/12 Built personalistaion with

Targeting Customers

Investment made

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Competion Builds.

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Questions ..?

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Thank you!
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