Section - B Case Study Questions 1) How acquisition of Mail Boxes Etc helped United Parcel Service in the business market? (05 marks) 2) Which macro-environmental factor(s) influenced Staples, Inc to upgrade its services? (05 marks) Example: FedEx Kinko's versus The UPS Stores! In 2001. United Parcel Service (UPS) bought the company Mail Boxes Etc. This gave UPS much greater presence in urban areas, neighborhoods, and shopping districts. While much of the business UPS acquired was retail (consumers), visibility and services were also extended to small busi- nesses. Offered services went beyond shipping the former Mail Boxes Etc. stores also gave small businesses mail drop locations and suite" business addresses, which lent credibility to their images. The big increase in value came from offering shipping locations closer to the locations of many more small businesses since the old UPS locations were typically in industrial or commercial areas. Mail Boxes Etc. was a franchise operation with over 4,000 franchised locations. In the acquisition. UPS became the owner of the central Mail Boxes franchisor operation. Shortly after the acquisition, UPS worked with a small number of franchisees to test some operational changes and new alternatives for rebranding the stores. The results favored renaming the chain as The UPS Store. In 2003, the Mail Boxes Etc. franchisees were offered the chance to sign new franchise contracts that adopted the new name and some changed operating policies, which included new pricing 20 percent below the existing Mail Boxes price schedule. The franchisees who participated in the test became advocates for the changes because they had seen the financial impacts to their own operations in some cases almost double the sales, with an increase in profitability. Over 90 percent of the franchisees switched over. Those who held out will operate under the old Mail Boxes Etc, name until their franchise agreements expire. A lawsuit was filed by some of the franchisees. These franchisees principally have locations in high cost areas and they do not believe the new pricing will allow them to remain profitable. This suit is still pending. Three years after the UPS acquisition of Mail Boxes Etc., FedEx responded to this competitive move by acquiring Kinko's, Inc., Unlike UPS, FedEx acquired all 1.200 stores outright, thus FedEx had more control of the stores and their operations (this also cost FedEx a great deal more-FedEx paid $2.2 billion, while UPS paid only $190 million for Mail Boxes Etc.). FedEx also tested new names for the Kinko's stores. They settled on the new name FedEx Kinko's. The FedEx Kinko's stores are targeted toward small businesses that need office and graphics services combined with shipping. This move was considered by analysts to be a "leapfrog" competitive move, offering more service and value than UPS's earlier move with Mail Boxes Etc. Initially, UPS Stores had da sizable advantage simply in the number of locations they offered. However, even with fewer stores, FedEx Kinko's tends to offer more in the way of copying, printing, and graphics--UPS Stores have added similar services, but FedEx Kinko's has more capability on-site. Plus, these services were Kinko's bread-and-butter. FedEx saw Kinko's as an attractive purchase target in part because Kinko's was good at what it did! By the fall of 2004. FedEx Kinko's, through FedEx's partnership with Microsoft, launched a new service that gave it even more of a service edge. FedEx Kinko's launched its File. Print FedEx Kinko's (FPFK) service, in which a customer can send FedEx Kinko's a document via the Internet. FedEx Kinko's will print it, copy it, bind it, and do whatever else to it the client requests. The client can then pick up the order at any specified FedEx Kinko's location or have it shipped elsewhere. Both companies are offering convenience to small businesses. But they offer different kinds of convenience. Both will have to innovate to stay in the race. And the competition is not just between the two of them-Staples, Inc., upgraded its in-store copying/printing services. Staples, Inc., of course, offers office supplies, so this represents a third value bundle now in the competitive mix, and DHL acquired the ground stations of Airborne Express to get a nationwide access points