Current Market Conditions

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Market structure:
The market structure of Fedex's industry, ie, carrier or logistics service industry, can be describe as oligopoly with few players dominate the market. Infact, it is more appropriate to term it as virtual duopoly in United States as two major companies, ie, Fedex and UPS dominate the marketplace. The industry also comprises of the Federal government owned USPS, which is a competitor to these two major private players. Apart from this, there are several smaller carrier service providers that operate in the United States, but have limited geographical presence. DHL was also a major player in this industry in USA, but discountinued its operations in USA recently, leaving Fedex and UPS as the major private players in the country.

Impact of new companies entering the market:
The carrier service in industry is countries such as USA is virtually duopoly or atleast, oligopoly, where few powerful players dominate the marketplace. It is difficult for a new company to create a major impact in the marketplace as they are unable to match the size and scale of large players such as Fedex and UPS. Hence, Fedex do not have to worry about competition from newer companies in the marketplace. The smaller players operating in regional areas have limited geographical scope in terms of delivery points and thus, not a major threat to these players.

However, if a major overseas player such as DHL, which has ceased operations in the United States, plans to return back to US market, it can cause threat to existing players such as Fedex and UPS.

Prices/ Price elasticity of demand (I am combining these two sections are these are related)

Pricing is a major strategy to watch for in this industry due to extreme competition among the few players. Consumers are highly price sensitive and thus, pricing strategy has to be pursued in the light of competitor's movements in this industry. Consumers will move to another carrier if price cuts are not matched by Fedex.

Reference for more information:

http://www.lorien1973.com/ups-and-fedex-2009-rate-increases/
http://www.logisticsmgmt.com/article/CA6626680.html

Technology:
UPS and FedEx have been two of the leaders in the development of ground and cockpit systems, such as Automatic Dependent Surveillance - Broadcast (ADS-B), GPS Local Area Augmentation System (LAAS), cockpit Moving Map and other cutting edge technologies. Many pilot programs have been sponsored by the FAA since UPS and FedEx, as virtually solitary operators during the night, are perfect real-world testbed for technology development.

UPS has been at the forefront of cargo carriers making use of a GPS-based surveillance and navigation aid known as Automatic Dependent Surveillance-Broadcast (ADS-B). ADS-B is a device which plots on an electronic dashboard map all aircraft (and even ground vehicles) in the surrounding region which are also equipped with ADS-B.

Reference: http://ardent.mit.edu/airports/ASP_exercises/ASP%20matl%20for%20posting%202007/UPS%20and%20FedEx%20Hub%20Operations%20Cosmas%20Martini.pdf

Productivity (consider the law of diminishing marginal productivity)
/ Cost Structure/Fixed and variable costs:

The ongoing recession is ...