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commitment to innovation and technology. Matt Boyle stated in Fortune, “FedEx has successfully transcended its image as simply an air express carrier…to become a one-stop shop for any shipping need…FedEx’s stock [is] up almost 30% for the year…while UPS’s stock is up just 19%...FedEx [has] won the hearts and the minds of the broad business audience this year… ” (Fombrun, C.J. and Van Riel, C.B.M., 2003). The FedEx brand has gained worldwide reputation such that whenever a company or individual wants to send a package in a timely manner, they would say “FedEx it”. A lower percentage of customers would choose UPS or DHL as their priority choice. Innovation is the very fabric of FedEx throughout history and FedEx sees it as a sustainable business strategy for the future. FedEx has a core competency of high technology applications in all its applications. The organization embraces not only new technologies but also innovates technologies, best tailored for the competitive advantage of the nature of the business service. Customers have the convenience of tracking their parcel delivery process via the internet, which saves a lot of time going through a telephone automated service. Besides, this service gives customers a sense of security when they are assured that their packages have been delivered and the delivery information can be easily accessible. FedEx is dedicated to provide the best delivery service and to sustain a competitive edge by sharpening its technology upgrades, evidenced by its partnership with the University of Memphis to set up the FedEx technology institute, with an objective to develop the newest technologies (http://about.fedex.designcdt.com/our_company/fedex_innovation). In addition, FedEx has provided customer value when it extended the drop-off times to cater to customers’ needs. On top of value-added services, FedEx guarantees money back to customers for late deliveries, hence, building client-relationship trust. Compared to its competitors, Fred Smith of FedEx made bold moves to acquire extensive fleet of aircraft. One of which, is the acquisition of Flying Tigers in 1989, giving him a clear advantage in the Asian Air Express market (http://www.latinamericanlogistics.org/articles/ups-fedex-dhl-tnt---who-will-dominate-theworld-of-logistics.htm). Its extensive hub and spoke network extended its global reach to more than two hundred countries in the world. FedEx has spent over $1.5 billion in 2003 alone to create a worldwide network of hubs, airplanes and trucks. This was costly for its competitors to imitate. Given that FedEx owns a large market share, the threat of it cutting prices would heighten barriers of entry for new entrants. FedEx and UPS are very close rivals and are tracking each other’s movements in the market fanatically. Both are comparable in terms of market research and having centralized organizations with annual business planning processes decided by their headquarters. Both organizations leveraged on investment in organization and employee development, rooted in strategic planning culture. However, FedEx has a unique 360 degree HR management system which is rare to its competitors (http://www.latinamericanlogistics.org/articles/ups-fedex-dhltnt---who-will-dominate-the-world-of-logistics.htm).
In fact. Having similarities of a strong revenue base. to gain a bigger foothold of market share and become the market leader.htm) A quick analysis of the FedEx activities in the value chain: • • • FedEx has world marketing talent. Its active procurement optimization initiative has saved millions of dollars. Except for its 360 degree HR management system. critical in the operations of the value chain as well. FedEx’s constant huge investments in infrastructure would prevent it from lowering its prices to gain a bigger market share. • Alike its competitor UPS. The leverage of its global IT network allows it to service corporate accounts on a global basis.themanager. FedEx’s weakness stems from the fact that it is unable to differentiate from its rival. its competitors do possess the similar resources. capabilities and competencies. being run by its founder who has takes swift and bold strategies. right down to the bottom line. Applying the VRIO framework proposed by Barney (2002) to FedEx.(Source: http://www. FedEx services do provide customer value and competitive advantage. but only for a period of time. FedEx has also been able to maintain its independence and adopt a centralized command and control structure from the beginning. Its rare 360 degree management system encourages best HR management for employees and also organizational stability. Its extensive fleet of aircraft is costly for its competitors to . long term strategic plans and several acquisitions. UPS.org/models/valuechain.
htm .latinamericanlogistics.htm).fedex. Centralization is not beneficial in itself but it facilitates strategic planning.org/articles/ups-fedex-dhl-tnt---who-will-dominate-theworld-of-logistics.org/models/valuechain. Bibliography Fombrun. 2nd Ed. http://about.J. Prentice Hall Publisher. Barney. Fame & fortune: how successful companies build winning reputations. which allows economies of scales. C. Besides. 2002.M. Financial Times Prentice Hall Publisher.. To an extent. J.htm http://www.com/our_company/fedex_innovation http://www.B.designcdt.latinamericanlogistics.imitate which sustains its competitive advantage in the industry. the firm is highly organized under the command and control structure to exploit resources..B. This would enhance benefits to every component of the value chain (http://www. Gaining and Sustaining Competitive Advantage.themanager. I would say that FedEx has a competitive advantage above its competitors but it might not sustain as a market leader without strategic planning.org/articles/ups-fedex-dhl-tnt---who-will-dominate-theworld-of-logistics. and Van Riel. C. 2003.