Global Business Environment

Topics: Strategic management, Marketing, Customer Pages: 5 (1497 words) Published: February 8, 2014

Executing Strategies in a Global Environment: Examining the Case of Federal Express

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Executing Strategies in a Global Environment: Examining the Case of Federal Express In a global environment, the strategies that managers pursue have a significant effect on a business performance as compared to the competitors. Hill and Jones define strategy as a set of actions that a company’s managers put in place in order to increase performance of the company (2013). When the strategies lead to a superior performance of a company relative to its competitors, then the company is said to be at a competitive advantage. This is a case study of Federal Express, in the small package express delivery industry. It analyzes the company’s value creation frontier and the necessary building blocks of competitive advantage are necessary for the company to maintain above average profitability. This paper determines main aspect of product differentiation and capacity control that Federal Express could use in order to maintain an edge over its rivals. The efficiency of the current business model of the company is analyzed and a new business level strategy is recommended. This paper also analyzes how the global competition will influence the new business strategy and suggests a way of confronting global competition. In the Small Package Express Delivery Industry, several companies exist including FGX, Federal Express and DHL. Of these companies, Federal express has managed to stand out as the one with most successful business model based on its value creation frontier. Since the company was founded, it has based its strategic competitiveness on careful nurturing of reliability and delivery speed. These competencies have proven to be essential in pursuing the business opportunities of the company. The company has always believed that value could be added to business operations if they received what they needed urgently on an overnight basis. The company’s business model has always been based on responsiveness to customers, innovation and reliability of their delivery system (Hill & Jones, 2013). According to Hill & Jones, the competitive advantage of a company is based on company-specific strengths that enable a company to differentiate its products from those offered by other competitors and achieve lower costs than the competitors (2013). The four building blocks of competitive advantage that every company needs are innovation, customer responsiveness, quality and efficiency. Since federal express’s business model is based on customer needs, the company will need innovation in order to maintain above-average profitability. In the small package express delivery industry, companies are constantly devising new ways of ensuring faster and more reliable systems of delivery services to their customers. Innovation is always smart as the company that pioneers new products, services or strategies often earn enormous profits. The rival companies in the small package express delivery industry have been relying on Federal Express’s speed to plan their need and so innovation can help the company earn enormous profits from pioneered strategies (Pantaleo & Pal, 2008). Product differentiation is the process by which a company designs products in order to satisfy customer’s needs. A company would therefore obtain a competitive advantage by creating and making products would satisfy customer needs better than its competitors. Product differentiation allows rival companies to offer products with different features hence allowing competition for the market share. In the small package express delivery industry, Federal express can offer a product with superior qualities creating a brand name that the company could use to maintain an edge over its rivals. In addition, differentiation will enable Federal Express create a distinct product and charge a premium price for the product (Pantaleo & Pal, 2008)....

References: Hill, C. & Jones, G. (2013). Strategic Management: An integrated Approach.(10th Ed.). Mason,
Ohio: Cengage Learning.
Mulcaster, W. (2009). Three Strategic Frameworks. Business Strategy Series. Vol 10. No. 1.
Pantaleo, D. & Pal, N (2008). From Strategy to Execution Turning Accelerated Global Change
into Opportunity. Berlin London: Springer.
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