Case Assignment 1 - Fedex vs. UPS Answer the following questions with substantial responses that...

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Case Assignment 1 - Fedex vs. UPS

Answer the following questions with substantial responses that utilize data from the case to support your points. Your submission should be two to three pages in length, excluding exhibits. Submit through the Turnitin Link in the Assignments section of the course.

Describe the competition in the overnight package-delivery industry, and the strategies by which those two firms are meeting the competition. Discuss at least one enabling and inhibiting factor facing the two firms as they pursue their goals? Do you think that either firm can attain a sustainable competitive advantage in this business?(Refer to specific data from the case to support your points.)

How are FedEx and UPS performing financially? Which firm is doing better? Discuss the insights you derived from the two firms’ financial statements, financial ratios, economic profit, and stock-price performance. Complete the table below and refer to the information in your discussion.

	2011	2011	2015	2015
	UPS	FedEx	UPS	FedEx
Revenue	53,105	39,304	58,363	47,453
Operating income (EBIT)	6,080	2,378	7,668	1,867
Interest expense	348	86	341	235
Net income	3,804	1,452	4,844	1,050
Capital expenditures	2,005	3,434	2,379	4,347

Cash and marketable securities	4,275	2,328	4,726	3,763
Accounts receivable	6,246	4,581	7,134	5,719
Total current assets	12,284	8,285	13,208	10,941
Net prop., plant, and equip.	17,621	15,543	18,352	20,875
Total assets	34,077	27,385	38,311	37,069

Current liabilities	6,514	4,882	10,696	5,957
Total debt	11,128	1,685	14,334	7,268
Total stockholders’ equity	7,108	15,220	2,491	14,993

	UPS	FedEx	UPS	FedEx
Growth
Revenue growth
Total asset growth
Operating income growth
Net income growth

Asset Efficiency Ratios
Working capital turnover
PPE turnover
Capital expenditure %
Total asset turnover

Liquidity and Leverage Ratios
Current ratio
Cash ratio
Total debt/equity ratio
Times interest earned

If you had to identify one of those companies as excellent, which company would you choose? On what basis did you make your decision? (Refer to at least threespecific data points from the table above to support your choice.)Discuss long term vs. recent performance as well as stock price performance.

What do you estimate the revenue growth rate and Net Profit Margin to be for each firm over the next year? What is your estimation based on?

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Prince · Accepted Answer

Q1
	As mentioned in the industry overview, the package-delivery industry is a highly profitable industry that is estimated to be worth $90 billion. UPS and FedEx are major competitors in the United States and the international market. They face an intense rivalry against each other. Both companies are customer focused, technology driven, and price competitive. They are both in a strong financial position and aim to provide high returns to their shareholders. 
FedEx and UPS have different strategic approaches, as further analyzed in the company overview section. FedEx emphasizes their innovative, entrepreneurial, and operational leadership as key to providing pristine service to their customers. UPS, on the other hand, focuses on efficiency and cost reduction. 
The enabling and inhibiting factors the two firms face can be seen in the SWOT analysis, with the strengths and opportunities being there enabling factors and the weaknesses and threats being their inhibiting factors. Due to the similarities between the companies’ strategies and factors in the industry, it is unlikely that one firm will attain a sustainable competitive advantage in the business. Even if one company comes out with a new advancement and strategy, there other one is consistently there to follow in its tracks or do something else.
Q2
		2011	2011	2015	2015
		UPS	FedEx	UPS	FedEx		The total assets turnover ratio determines the amount of sales that are generated from each dollar of assets. The average of this ratio for the period 2011-2015 for FedEx is 1.34 and UPS is 1.54, indicating that UPS is more capable of utilizing its assets to generate sales.

Case Assignment 1 - Fedex vs. UPS Answer the following questions with substantial responses that utilize data from the case to support your points. Your submission should be two to three pages in...

Case Assignment 1 - Fedex vs. UPS

Answer To: Case Assignment 1 - Fedex vs. UPS Answer the following questions with substantial responses that...

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