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Fedex vs Ups competitive advantage

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Fedex vs Ups competitive advantage

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  • March 19, 2010
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Competitive Advantage � PAGE * MERGEFORMAT �7�



Competitive Advantage Paper

In this report we focus on the two main competitors in the package delivery industry: Federal Express Corporation (FedEx) and United Parcel Service of America, Inc. (UPS).

Studying FedEx, UPS and their competitive relationship gives a good insight for the companies' and industry's future. The two companies have different strategic goals and are operating in the same industry but in different main markets: FedEx is working on "producing outstanding financial returns" and focuses on the profitability of overnight air market whereas UPS is looking for "earning reasonable profit" and its core business that is the ground delivery.

Sustainable competitive advantage

Attaining a competitive advantage in package delivery business appears to be a challenging task. The main reason is that it is an easy-to- duplicate business both for the competitors and any new entrants. This is obvious in FedEx's case: the company always has distinguished itself through technologically advanced services, expanding in many places and new products over other competitors, especially UPS. UPS was the main choice for low-priced ground delivery services however being a market follower in the air delivery sector could negatively affect its reputation and cause loss of market in the long term.

Taking the above into consideration the combination of high-service quality, convenience and low rates can give a company a sustainable competitive advantage.



Federal Express

"We will produce outstanding financial returns by providing totally reliable, competitively superior global-air ground transportation of high priority goods and documents that require rapid, time-certain delivery." (FedEx).

Enabling Factors supporting this statement were clear in FedEx heavy investments in IT solutions as it presented COSMOS and Powership 3 for better package control resulting in an improved quality. In...