Value Creation Frontier of the Federal Express - Essay Example

Section/# The Case of FedEx Analyze Federal Express’s value creation frontier, and determine which of the four building blocks of competitive advantage the company needs in order to continue to maintain above-average profitability. Provide a rationale to support the response.  With a global network that represents the sheer size of FedEx, it is quite obvious that of the four building blocks of competitive bandage, the company must continue to promote efficiency if it is to continue to maintain above average profitability. The underlying reason for selecting this particular building block has to do with the fact that the firm operates a micro-business strategy in a macro sense. Essentially, this complex statement is rather simple to understand; due to the fact that FedEx is responsible for delivering packages to individuals, corporations, or entities around the globe. As such, the actual process that this delivery takes is the most important complement in building block of whether or not the firm will continue to maintain success and profitability. For instance, the past several years have indicated situations in which different competitors have either succeeded or failed based upon the degree and extent to which efficiency could be evoked within their supply chain. An indication of this can of course be seen with respect to DHL and the means by which it engaged with the American market. Upon purchasing an American subsidiary as a means of gaining inference, DHL then spend a further $1.5 billion as a means of seeking peace streamline the efficiency of existing networks and improve upon this in order to gain further profitability and success within the market. Realizing that it had to compete with the likes of FedEx and the extraordinarily successful UPS, DHL determined that the most effective means that it could spend its hard earned money was in terms of seeking to improve upon the efficiency of delivery and the processes underpinning this fundamental business activity. Naturally, such a statement should not be understood to indicate that FedEx, or any other package delivery industry, places quality, innovation, or customer responsiveness at a lower priority (Zhao, 2014). Instead, efficiency has been widely determined by a litany of different market experts and analysts as the most important factor with regard to whether or not such a package delivery service can ultimately be successful and continue to compete/engage profitability within the given market. Determine the main aspect of product differentiation and capacity control that Federal Express could use in order to maintain an edge over its rivals. Justify the response.  In terms of utilizing product differentiation as a means of encouraging the further profitability, it must be recognized that FedEx should continue to market and promote itself in terms of the industry leaders. This particular approach has worked especially well for the firm over the past several decades; as consumers invariably you FedEx as the more trusted alternative to many other of the small package delivery services (Stijn & Steven De, 2010). However, it must also be recognized that the main aspect of this marketing differentiation campaign should not rely on old data. At the speed at which consumer markets change in the rate to which consumers elicit new needs and new agendas, it is also necessary for FedEx to be uniquely and intimately aware of these dynamics. As such, continued strategy and development taste upon industry trends must be effected so that this differentiation strategy does not become stale and risk irrelevance. Assess the efficiency of Federal Express’s current business model, and recommend one (1) new business-level strategy that gives the company a competitive advantage over its rivals. Provide a rationale for the recommendation.  The difficulty in competing within a saturated market is invariably the difficulty of differentiating one’s product or service from those other product or service providers that already exist within the market and already have loyal consumers. However, such a reality must not discourage a firm from seeking to utilize product differentiation and capacity control as a means of accruing further success and maintaining an edge over the rivalry. In terms of FedEx, it is the understanding of this particular author that the firm must utilize technology as a fundamental focus point for how the firm continues services to. Although it is, it is an essential complement with respect to logistics and seeking to maintain an age over a market that is ultimately defined based upon (Onghena et al., 2014). Example of this can of course be seen with respect to utilizing technology is of needs fulfillment and the way in which customers place. Whereas FedEx, UPS, and a variety of others already have this in a web enabled format, technology is not restricted to the realm of Internet. For instance, the new line of Boeing 777 aircraft represents a unique wing design that reduces fuel consumption by nearly 20% (Farhoomand et al., 2013). As such, a firm that seeks to utilize technology as a means of differentiating themselves from the competition would realize that redefining FedEx air fleet to represent a more technologically mindful approach could save hundreds of millions of dollars in fuel costs of the next few years. Additionally, this particular approach could have a potential additional benefit due to the fact that consumers have come to be mindful of way in which companies recognize the need to the environment and seek to reduce their overall carbon emissions. Examine the manner in which overall global competition may impact the new business strategy that you recommended in Question 3. Next, suggest one (1) significant way that Federal Express may confront its global competition.  As has been indicated throughout this particular analysis, global competition impacts upon existing and new business strategy in ways that cannot always be anticipated. In terms of the strategy and approach that was recommended in question three, it must be understood that FedEx is not alone in seeking to maximize efficiency and reduce waste within its supply chain. Likewise, firms such as UPS, DHL, and a litany of others are considering the very same topics and approaches to technology that FedEx will be engaging in the coming years. However, what can help to promote FedEx to a level of success that the other firms might not realize is the overall time, energy, and investment that the firm places towards research and development. Up until this point, many of the package delivery services have focused upon improving their supply chain; without necessarily focusing upon existing and developing research that could potentially assist them in accomplishing this core task. Essentially, the rate of technological change creates a situation in which a firm must be continually relevant and aware of the changes in technology that are taking place as a means of seeking to potentially apply some of these to the business process and create competitive bandage through such a process (Bowen, 2012). Within this manner of understanding, the reader can adequately note that FedEx will face a situation in which it continually strives to remain one step ahead of the competition even as the competition is seeking to accomplish the very same goals that they are focusing upon. Once again, the ultimate success or failure of FedEx will be predicated upon the degree and extent to which it can integrate technology as a means of maximizing efficiency and the overall amount of time, energy, money, and personnel that they placed towards developing new technologies in seeking to implement them accordingly. In order for FedEx to maintain one step ahead of the competition, it will be vital for the firm to continually innovate how to apply new technology to its value chain; while all the time promoting the best interests of the consumer. References Bowen, J. T. (2012). A spatial analysis of FedEx and UPS: hubs, spokes, and network structure. Journal Of Transport Geography,24419-431. doi:10.1016/j.jtrangeo.2012.04.017 Farhoomand, A. F., Ng, P. P., & Conley, W. L. (2013). BUILDING A SUCCESSFUL E - BUSINESS: The FedEx Story. Communications Of The ACM, 46(4), 84-89. Onghena, E., Meersman, H., & Van de Voorde, E. (2014). A translog cost function of the integrated air freight business: The case of FedEx and UPS. Transportation Research Part A: Policy & Practice, 6281-97. doi:10.1016/j.tra.2014.02.002 Stijn, V., & Steven De, H. (2010). Enterprise-wide business-IT engagement in an empowered business environment: the case of FedEx Express EMEA. Journal Of Information Technology (Palgrave Macmillan), 25(3), 323-332. Zhao, L. (2014). Developing New Technology for FedEx. Alterative Energy Bulletin, 2014(1), 3-4. doi:10.1016/S1464-2859(14)70006-9 Read More