Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5)
This is a Darden case study.In July 1995, J.C. Penney announced the award to United Parcel Service (UPS) of a billion-dollar, five-year contract for delivery services. This was the largest distribution contract ever awarded and represented a dramatic concentration of Penney's business with one carrier. Invites students to assess the financial performance of Federal Express and UPS. The two firms have competed intensely for dominance of the overnight express package industry. Requires no numerical computations of the students; rather, their tasks include interpretation of the results and reflection on the result's implications.
Swot Analysis of "Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5)" written by Robert F. Bruner, Derick Bulkley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Express Parcel facing as an external strategic factors. Some of the topics covered in Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) case study are - Strategic Management Strategies, Financial analysis and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) casestudy better are - – increasing energy prices, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, increasing commodity prices, etc
Introduction to SWOT Analysis of Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Express Parcel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Express Parcel operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) can be done for the following purposes –
1. Strategic planning using facts provided in Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) case study
2. Improving business portfolio management of Express Parcel
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Express Parcel
Strengths Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Express Parcel in Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) Harvard Business Review case study are -
Strong track record of project management
– Express Parcel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Express Parcel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Express Parcel has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Express Parcel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Express Parcel has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Express Parcel is one of the most innovative firm in sector. Manager in Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Express Parcel has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Superior customer experience
– The customer experience strategy of Express Parcel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Express Parcel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Express Parcel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Express Parcel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Express Parcel is present in almost all the verticals within the industry. This has provided firm in Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Express Parcel in the sector have low bargaining power. Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Express Parcel to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Express Parcel is one of the leading recruiters in the industry. Managers in the Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5), in the dynamic environment Express Parcel has struggled to respond to the nimble upstart competition. Express Parcel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5), is just above the industry average. Express Parcel needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Express Parcel has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Express Parcel has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Express Parcel even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Express Parcel needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Express Parcel products
– To increase the profitability and margins on the products, Express Parcel needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Express Parcel 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Express Parcel supply chain. Even after few cautionary changes mentioned in the HBR case study - Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Express Parcel vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Express Parcel has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5), it seems that the employees of Express Parcel don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) HBR case study mentions - Express Parcel takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) are -
Learning at scale
– Online learning technologies has now opened space for Express Parcel to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Express Parcel is facing challenges because of the dominance of functional experts in the organization. Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Express Parcel can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Express Parcel has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Express Parcel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Express Parcel to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Express Parcel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Express Parcel in the consumer business. Now Express Parcel can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Express Parcel can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Using analytics as competitive advantage
– Express Parcel has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Express Parcel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Express Parcel can use these opportunities to build new business models that can help the communities that Express Parcel operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Express Parcel can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Express Parcel in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Threats Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) are -
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Express Parcel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Express Parcel high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Express Parcel will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Express Parcel can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Regulatory challenges
– Express Parcel needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Express Parcel in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Express Parcel demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Express Parcel.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5), Express Parcel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Technology acceleration in Forth Industrial Revolution
– Express Parcel has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Express Parcel needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Express Parcel needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Express Parcel business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Express Parcel needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Battle for Value: Federal Express Corp. vs. United Parcel Service of America, Inc. (Abridged) (v. 2.5)
