EXPEDITED COMPETITION: THE EXPRESS DELIVERY SERVICES INDUSTRY UPS, FEDEX, DHL, TNT - DIFFERENTIATED OPTIONS
Pauline Assenza & Alan B. Eisner, Pace University
Case Objectives and Use
This business policy and strategy case provides opportunity for discussion of both business and
corporate level strategy in several firms, and for industry-level analysis, including issues of
global competition. Although rich enough for advanced and graduate students, it also is
accessible for undergraduate students because of the familiar setting. Questions such as “what
are the industry segments, who are the customers, what characterizes the industry and what
does that mean for the various players?” accomplish the objective of encouraging students to
think outside the box of how they perceive UPS’s industry and realize that there are larger
complex external environmental forces at work here, changing the entire landscape, for
everyone.
Case Synopsis
The small package delivery industry, typified by UPS’s brown truck, had changed. Global
competition, just-in-time inventory control, mass customization manufacturing, increasing
technology and information needs, expanded trade opportunities, and increased customer
expectations had all exerted pressure on organizations such as UPS, FedEx and DHL to make
significant adjustments to their business and corporate strategies, so much so that it was
difficult to categorize the industry. Other players such as TNT, CNF and Exel were emerging
all over the world from previously separate niches to compete in the arena of “transportation
services”, which included not only the “expedited delivery” of mail-type documents and small
parcels, but air and ground medium and large package freight, less-than-full truckload (LTL)
consolidation, freight forwarding and customs brokerage services, logistics and supply chain
management, warehousing and distribution and even contracted repair services. Small nichefocused companies like Ensenda were emerging to handle specialized customer needs such as
“last mile” delivery solutions. In order to compete, major players had to consider many factors
before making strategic decisions. Firms that had been successful seemed to have considered
the opportunities available outside their traditional strategic groups. In an increasingly
accelerated consolidation and acquisition environment, innovation along the value chain
appeared to be critical. Where would the industry end up, and who would survive and prosper?
In 2005, UPS CEO Mike Eskew pondered these issues as he underscored the need to transform
to compete in an increasingly heated global economy.
______________________________
The authors developed the case for class discussion rather than to illustrate either effective or ineffective handling
of the situation. The case, instructor’s manual, and synopsis were anonymously peer reviewed and accepted by the
North American Case Research Association (NACRA) for its annual meeting, October 27-29, 2005, North
Falmouth, MA. All rights are reserved to the authors and NACRA. © 2005 by Pauline Assenza and Alan B.
Eisner. Contact person: Alan B. Eisner, Lubin School of Business, Pace University, Graduate Center, 1 Martine
Ave., White Plains, NY 10606, 914-422-4194; Fax 914-989-8576, aeisner@pace.edu