Parcel Shipping Industry AnalysisAngela 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

Sustainable Industry

Profitability

Supplier Power

Buyer Power

Intensity of Rivalry

Potential Entrants

Threat of Substitutes

Threat of New Entry

• 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

• Unions (all except FedEx)

• Foreign Government Licenses

• Facilities and Vehicles Suppliers

• Oil Industry

• Threat: High

Intensity of Rivalry

• 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

• Threat of New Entry: Moderate Low

• Buyer Power: Low

• Supplier Power: High

• Intensity of Rivalry: High

• Threat of Substitutes: Low

Trends

• Increase in Stability

• Product Differentiation

• Continued Integration of Subsidiaries

• Technology in the Driver’s Seat

Questions

• Questions?

References• 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, 2004http://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 sitehttp://www.ups.com

• United States Postal Service, Retrieved November 27, 2004 from USPS web sitehttp://www.usps.com