Market Entry Strategies Case Study

United Parcel Service: Expanding in China

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Abstract:
United Parcel Service (UPS), an American based express delivery service provider, was one of the worlds largest. It planned to expand aggressively into China particularly after the latter’s entry into the World Trade Organization (WTO) in the year 2001. UPS increased its flights to and from Chinese cities, built more infrastructure and established stronger brand presence in the country. It also opened UPS Express centers in several Chinese cities to strengthen its package drop-off and pickup services. UPS had started its operations in China in 1988. However, FedEx had entered China in 1984 and DHL had commenced business in China even earlier in 1980. Both these companies had a significant lead over UPS. Among global integrators, UPS had a market share of only 11% in China as against DHL’s 51% and FedEx’s 28%. Nonetheless, UPS decided to invest heavily in China, in view of the potential that it offered. The Chinese economy was growing at a rapid pace and there was also phenomenal increase in the country’s international trade, thereby providing huge business opportunity for a logistics company. In spite of stiff competition from FedEx and DHL, UPS aimed to strengthen its hold on the logistics market there. At the same time, UPS was losing market share in its home base in the US. Can the business growth in China make up for the decline faced in the home market?

Pedagogical Objectives:

• To discuss about the courier industry in China
• To understand the competition in the Chinese courier and parcel industry
• To discuss about the entry and expansion of UPS in China.

Keywords : Courier industry; Competition; United Parcel Service; Courier Service; Express Parcel Service; Geographic Expansion; Expansion into China; Market Entry Strategies Case Study; Fedex in China; DHL in China; Courier Business in China; Multinational courier companies in China; UPS in China; UPS Express Stores

Contents : 
About United Parcel Service
UPS in China
UPS in post-WTO China
Steps by UPS
The China 2005 Survey
UPS Express Stores
Competition in China
Future Outlook
UPS’ Milestones in China
Asia-Pacific Facts of UPS in 2005