The contrasting strategies
Analyst felt that FedEx and UPS established themselves in China till the late 1990s following different corporate styles. While FedEx believed tackling foreign competition head-on, UPS believed in partnering with them. UPS, was happy to enter into lease agreements with other companies already having its presence in China. While FedEx’s main thrust was on capturing the accounts of its multinational customers operating in China, UPS tried to build an image of a local company.
Advertising and promotion
However, during the late 1990’s, as the competition in the logistics business in china intensified, both FedEx and UPS started emphasizing on promotion to ...view middle of the document...
FedEx targeted those customers who valued a highly controlled distribution system and wanted constant information about the status of shipments . The company focused on providing solutions to all logistics related problems of its customers. FedEx realized that it could cash in on this opportunity to market its pre-clearance service to the Chinese exporters. The company conducted seminars in 2 Chinese cities - Shanghai and Hong Kong explaining to the customers, the customs clearance procedure in the US and how FedEx’s services could solve their problems. This induced tremendous response and increase in the shipments from China to the US. In September 2000, FedEx pioneered the launch of 2 new services for Chinese customers - the Asia one and the north American next day delivery. As, a result FedEx became the only company to offer such services in China.
On the contrary, UPS targeted local Chinese customers following a personalized approach. The company attempted to adapt its services according to the customs and traditions of Chinese customers. The company noticed that Chinese customers attached a-lot of importance to inter-personal relationships. Accordingly UPS sales personnel cordially approached them and showed them the services they offered and only then struck deals. This approach enabled the company develop a very good rapport with the Chinese customers and encouraged those who patronized with other companies to shift to UPS.
FedEx faced a major setback due to South East Asian currency crisis during 1997-98. Due to the significant currency devaluations in the Southeast Asian countries, it reported its first quarterly loss...