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Swot Analysis Of Fedex

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The Federal Express (FedEx) was born as an idea for a college paper by Fredrick Smith in 1971. In the paper, he suggested using air transportation to deliver urgent packages overnight since airports tend to be not congested during that time of day, would make the transportation much faster and economical. After acquiring a share in Arkansas Aviation Sales, Fred started his package delivery business, which turned profitable by 1975 and saw a rapid growth to own 43% of the market by the early 1990s. [1] United Parcel Service (UPS) started as a collaboration between the American Messenger Company and Merchants Parcel Delivery in 1919. The American Messenger Company founded by James Casey and Claude Ryan in 1907 was mainly in the business to …show more content…

By doing so, the company is not obligated to provide them health benefits and other allowances (which is mandated for employees only), thereby the company had a good control on labor costs (limited employee growth) and had significant savings. The ISP model was challenged in courts and eventually had to resort to negotiating with multiple contractors nationwide to deliver packages in a timely manner with the new trade rules and regulations.
FedEx follows the ‘The Purple Promise’ in which the company focusses on customer satisfaction and accepts the shipment details as is from the customer without any sort of verification. This could lead to shipment delays if there are mistakes in the destination address by the customer which would lead to customer dissatisfaction. [3]
UPS also has segmented its business into three segments: US domestic package, International package and Supply chain and Freight services. According to the 2015 revenue report, US domestic package was highest revenue segment with a share of 62% followed by International package (21%) and Supply chain and Freight services (17%). [4]
Unlike FedEx, UPS directly hires its employees and provides health benefits, allowances and opportunities for employee growth within the company (unionized). This helps the company to maintain control of the schedules of its employees. Since UPS must

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