Evolution of the Small Package Express Delivery - Assignment Example

During the 1980s the industry has shown significant growth, which made it attractive for new entrants both domestic and international. Fierce competition in the industry has made many companies focus on low-cost strategies and forced other players to lower their prices (Hill & Jones, 2012). By the middle of the 1990s, the packaging industry had four major players, including the following: UPS, FedEx, the United States Postal Service, and Airborne Express. The competition has become even fiercer, and the companies were competing not only on prices, but also on technology, logistics, and other service offerings. Some companies have not managed to cope in this highly competitive industry and were acquired by other players, on the other hand, we're searching for new opportunities for business development (Hill & Jones, 2012). One of the companies that were continuously competing for its market share was the FedEx Company.

FedEx was established in 1973 as an express delivery company. It was the company that has directed the path of development for the whole industry, as there were initiated such new concepts as the hub-and-spoke model, overnight package segment, 10:30 a.m. priority overnight delivery, and others. Nowadays, FedEx is an international company, which provides comprehensive service in express delivery, global logistics, and supply chain management Hill & Jones, 2012).           

FedEx has been established by Fred Smith who had a clear vision for the company. The company was seeking to transform the whole industry making package delivery more flexible, speedy, and customer-oriented. The company has managed to recognize the needs of different categories of customers and to offer them the service they needed. FedEx recognized the value of urgent delivery to business and clinical enterprises/customers and offered relevant services to them. This has been an especially valuable element when an increasing number of customers switched to Just-In-Time delivery. Thus, reliability, speed, and delivery on time were three core competencies of the company, which added value to the service and differentiated FedEx from its key competitors (Hill & Jones, 2012). Further, the company added value to its service by expanding its logistics and supply chain management systems, offering thus its clients “ready solutions”. International operations of the company also add value to the overall service. Therefore, FedEx’s value-adding network links delivery, speed, quality, and international presence, and relies on information system linkages between a large number of its subsidiaries, local suppliers, and agents to ensure its on-time delivery service (Hill & Jones, 2012; Morden, 2007).

There exist four building blocks of a competitive advantage which the company could take into consideration: efficiency, quality, innovation, and customer responsiveness. Ideally, FedEx should focus on all these building blocks as all they are important elements of the business. However, to be ahead of its competitors the company needs to concentrate on innovation strategy. The case study has shown that the companies operating in the same industries have managed to imitate the strategies of competitors, to achieve the quality of delivery service, and to achieve efficiency. FedEx has to focus on the development of new processes, which will enable the company to reduce costs, increase efficiency and increase customer satisfaction. These innovations should be difficult to imitate for other companies, as otherwise, FedEx will not be able to maintain its competitive advantage (Hill & Jones, 2011).           

This is optional since it is a case study, but you can use this section to state your overall thoughts or assessments and your conclusions about both companies, and the way forward as you see it.