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Was it a good idea for Fed to follow UPS into the “trucking business? ” live it was because UPS was offering competition to Fed because they were guaranteeing on time delivery service three days after and order or money back guarantee. When Fed decided to offer ground delivery, shippers and customers using Fed Home Delivery and Fed Ground (business to business) would be able to call up the same website that Feeder’s air express customers used to track packages (Gain, Haley, 2009).
Fed believes that this is their strength. 3. What impact will the Internet have on the shipping business? The Internet became an essential tool for delivery service because it allows for customers o track and see the whereabouts of their packages. Margins should rise, as Internet would boost the flow of boxes to apartments and suburbs. According to UPS, business delivers in the late morning and residential in the afternoon (Gain, Haley, 2009).
Density scale were a big part of this. 4. If you were an investor would you invest in Fed or LIPS? Why? In my best judgment, I will choose Fed because they offer whatever it takes to give what a company demands. According to the article, Cisco wanted precisely timed delivery service and choosing between UPS and Fed, UPS id not give the amount of enthusiasm as Fed. The problem for Cisco was that a big client might order 100 routers at a time.
Cisco wanted for their customers to receive their orders on time (Gain, Haley, 2009). Fed could easily coordinate shipments when Coco’s factories were running smoothly. Fed spent 100 million on a project to avoid Cisco to spend money on inventory kept in warehouses and if successful, it meant system changes and ripping up the physical plant and changing how drivers did things and take away the need for warehouses.