Ryder System Incorporation Harvard Case Solution & Analysis

  1. A.    General Environment

The general environment of transportation and logistics industry will be explained through PEST analysis. The PEST analysis will give the general overview of the industry.

PEST Analysis

Political

In the United States, logistic companies play an important role in the efficiency and growth of the United States economy. With the United States geographical location positioned in a way that it is actually near to European countries makes it effective and fast delivery of logistic services throughout the country. Despite the 2008 financial crisis which is resulted in global economic slowdown, the industry has progressed with a standard pace of growth.

Economical

Logistic companies have basically outperformed the sector in terms of the overall turnover growth. The demand for logistic services have been derived from businesses in the manufacturing and services industries. Therefore, the economic performance of the industry has strongly affected the success of the logistic industry. Advances in technology and the increasing use of e-commerce, combined with the logistic and express sector's commitment to investing in IT have cushioned the industry from the worst effects of the recent global slowdown.

The company, Ryder System Inc. has therefore been able to retain key customers within the company for a long time. The logistic service sector has been benefitted from the recent growth with the demand increasing within companies to use the service of transportation to accommodate and move goods from one place to another. The demand of transportation has been increasing within the industry with companies looking to opt for such services quite regularly. This is because it has been able to offer added-value services and retain key customers at the top end of the courier and logistics market. The courier services sector has been benefiting from the recent growth in demand for home deliveries generated from Internet retail sales. Rising demand for air courier services to developing economies has also boosted the sector in recent years.

Social 

Increased security measures for transportation sector in United States have increased excessive cost. The airplane services in logistic through value added services have been the most expensive freight transportation mode. However, a move forward of government measures to overcome environmental pollution and congestion has increased costs for the largely road-based, express logistics sector.

Technological

The industry is on growth prospect with the number of options increasing in logistic company. For instance, initially there was only one mode of transportation but now things have changed to positive. With the advent of technologies, the industry has become quite competent for the industry players which have helped industry customers to have better options to forward products.

  1. B.     Industry

Transportation is one of the largest industries in the world. The industry ranges from trucks, to trains, ships, airplanes, courier services, warehouses and finally the logistic services. According to Plunkett Research estimates, the United States produces revenues of more than $950.6 billion per year, while overall the industry accounts for approximately $4.5 trillion. The transportation and logistics industry in the United States of America is highly competitive. Companies investing in this sector have created a good and reputable market position for themselves in one of the largest consumer goods market. Domestic and international companies in this sector benefit from the highly skilled workforce who is available at low costs and regulatory burdens. Expenditures in the United States logistics and transportation industry are around $1.33 trillion as per the research in 2013 and represent an overall percentage of 8.5% of the total annual gross domestic product (GDP). As per the analysts, the industry is set to correlate with the United States economy. A highly competitive supply chain network in the United Sates basically links consumers and reduces through various modes of transportation which include: truck, rail airplanes and ships. To serve customers effectively and efficiently, domestic as well as multinational companies provide customized transportation and logistics solutions that guarantee coordination among goods movement from origin to end user through each supply chain network segment.

Industry Life Cycle

Industry life cycle is a model that identifies the state of the industry in general. It is quite similar to the individual’s life cycle which starts with birth, growth, maturity and eventually decline to death; same is the scenario or the situation for industries and their product lines. The stages are standard for every industry which exists in all industries. Companies decide the strategic plan of their products through the industry life cycle; in fact they are dependent on it. Some companies or even industries find new uses for declining products, thus extending their life cycle.

In the current scenario for Ryder System Inc. the company is in the mature industry. The reason behind this industry being considered as a mature market is that there are a number of competitors in the industry worldwide. Specifically speaking about the United States market, the industry in this part of the world is also at the maturity stage. Although modes of transportation has been increasing with advent of number of different options such as initially the industry had rail as mode of transportation for goods, but it has advanced ..................................

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