FedEx Vs UPS
FedEx vs. UPS Investment Recommendations
Cases: The Battle for Value, 2004: FedEx Corp. vs. United Parcel Service, Inc.
Joshua Kellam
M03856832
Dr. Phelps
1/25/14
Executive Summary:
The following document provides a review of FedEx Corp and United Parcel Service from there founding through 2003. The problem presented is whether to invest in FedEx or United Parcel Service before the expected market growth resulting from an air-transportation agreement established between the United States in China to go in effect in 2004. Both companies’ histories of product and service offerings were reviewed from a non-financial historical perspective first. After a thorough knowledge of both companies was attained a performance evaluation was reviewed. The evaluation addressed many metrics for both the individual companies and the market including but not limited to: earnings per share, market values, Returns, Economic Value Added, and Market Value Added. The primary objective when reviewing these materials was to observe historical company and market trends, especially when these companies entered new markets and/or provided new services. The possible outcomes of this review are to invest in FedEx, invest in United Parcel Service, or to invest in neither.
The following options were assessed:
Invest in FedEx: FedEx is a strong company specializing in express air courier services. They already have a dominating presents in China in relation to direct competitors and have a more fixed cost structure
Invest in UPS: UPS is a strong company specializing in courier efficiency more directly with non-air forms of transportation. UPS has a strong value based financial history and notable success with sustainable international expansion.
It is recommended it invest with UPS as it will yield greater shareholder value though it may not be immediate.
Situational Analysis:
UPS and FedEx are two large companies competing for market share in
Cases: The Battle for Value, 2004: FedEx Corp. vs. United Parcel Service, Inc.
Joshua Kellam
M03856832
Dr. Phelps
1/25/14
Executive Summary:
The following document provides a review of FedEx Corp and United Parcel Service from there founding through 2003. The problem presented is whether to invest in FedEx or United Parcel Service before the expected market growth resulting from an air-transportation agreement established between the United States in China to go in effect in 2004. Both companies’ histories of product and service offerings were reviewed from a non-financial historical perspective first. After a thorough knowledge of both companies was attained a performance evaluation was reviewed. The evaluation addressed many metrics for both the individual companies and the market including but not limited to: earnings per share, market values, Returns, Economic Value Added, and Market Value Added. The primary objective when reviewing these materials was to observe historical company and market trends, especially when these companies entered new markets and/or provided new services. The possible outcomes of this review are to invest in FedEx, invest in United Parcel Service, or to invest in neither.
The following options were assessed:
Invest in FedEx: FedEx is a strong company specializing in express air courier services. They already have a dominating presents in China in relation to direct competitors and have a more fixed cost structure
Invest in UPS: UPS is a strong company specializing in courier efficiency more directly with non-air forms of transportation. UPS has a strong value based financial history and notable success with sustainable international expansion.
It is recommended it invest with UPS as it will yield greater shareholder value though it may not be immediate.
Situational Analysis:
UPS and FedEx are two large companies competing for market share in