1. 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.
According to study of Hill and Jones (2013), value creation frontier refers to the maximum amount of value that the products of different companies within an industry can provide to customers at any one time using the different business models. To reach the value creation frontier, the company must pursue one or more of the four building blocks of competitive advantage, which are innovation, quality, customer responsiveness and efficiency. The concept provide four basic ways to
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FedEx created overnight delivery service and second-day delivery service in order to satisfy customers’ need in a way that its competitors cannot. Both services guaranteed delivery time to every customer, they willing to pay the premium price. In this case, customers self-select the option based on their preferences, depending on the relative values of prices or their situational needs. If there is an urgent package, the customer can select overnight service. However, a second-day delivery is a cheaper choice for customers if they do not need to send the package right away. However, these services are still not much different from its rival such as UPS or DHL. FedEx has to add capacity control strategy, which allows it to maintain its revenue.
When supply on the market is over demand, it creates excess capacity, which reduce price of product in the industry. According to study of Hill and Jones (2013), Capacity control is non-price competition helps mature industries avoid the cutthroat price cutting that reduces company and industry level of profitability. Excess capacity may causes by a shortfall in demand, as when economic recession lowers the demand for air delivery service. Another factor that cause excess capacity is technology development. Excess capacity occurs because the new technology can produce more than the old one, which creates substitute products.
The role of business in an economy is involved in any type of activity that provides goods, services, or both to consumers in an attempt to earn a profit. Business drives up the standard of living of quality and quantity of goods and services available to a population and contributing to the higher quality of life in which is overall sense of well-being experienced by either an individual or a group. Business also helps raise the standard of living through taxes. However businesses do not only provide the products and services that people acquire, but they as well provide job opportunities that people
Fully explain emotional intelligence, and give two (2) examples of the concept. Next, examine the concept of “emotional quotient” compared to traditional “intelligence quotient.”
In conclusion, the returns of the all ordinaries index are not very good during the study period. Furthermore, it seems unlikely that the variations of the time index will have any impact on the change of the all ordinaries index. Nevertheless, the prediction of the all ordinaries index are almost not influencing by the variation of the time
Compare and contrast an existing organization’s three major functions (i.e., finance, marketing, and operations), and then justify the interdependence that operations have to finance and marketing. Provide examples to support your rationale.
Define value creation and the components that can be used to determine value creation per unit. How is value creation related to competitive advantage?
FedEx has two major customers who consist of businesses and individual customers. These business customers have accounts with FedEx to arrive at their location to pick up packages daily or weekly. Two-thirds of FedEx’s business comes from these customers so FedEx curves their operations to satisfy this clientele. Since FedEx’s competition is trying to acquire some of this clientele they have begun to operate and market to this clientele more effectively. Individual customers are also in FedEx’s internal environment. These customers represent one-third of their business. With increased competition from competitors FedEx has marketed to this market substantially. They have created boxes that are prepaid for shipment as long as the contents fit into the box. This has effectively increased business amongst individual customers for FedEx.
Write a three to six (3-6) page paper in which you provide the following information below.
In the past there was no thing as overnight express delivery for packages or freight. Then the top 3 competitors in the delivery service industry that held 85% of the market were Airborne Express (AE), United Parcel Service (UPS) and Federal Express (FedEx) and, the remaining market share was among six second-tier companies. In the past few years, the express mail businesses had grown extremely fast due to the ability to provide and fulfill overnight shipping accompanied by next-morning delivery services for both individuals and businesses customers. By 1996, this segment of the expedited shipment delivery had grown to a $16-17 billion dollar industry business in the US alone.
By capitalizing on this strategy, FedEx was able to boost its average delivery volume in 1976 to 20,726 packages per day via its three services, Priority-One, Standard Air, and Courier Pack, compared with an average of 10,521 delivered daily the prior year. Clearly the company’s calculated use of strategically-located hubs, nighttime flight routes, and limited package size allowed the company to carve out a niche by reliably delivering packages on an immediate, overnight basis.
The latest trend in the industry, after offering maximum variety and flexible payment options, is competition for same day delivery. Companies like eBay, Walmart, Amazon and Google Express have all started efforts to try and offer same day delivery. The key to offering same day delivery is to have products stored near the potential customer. In the following sections we will explain the supply chains of Amazon and Google Express and analyze the advantages and disadvantages of their respective business model/supply chain.
Package delivery is the core of UPS’s operation, and the firm has mastered a simple service of safe, on-time delivery. UPS possesses a strong domestic presence and is increasing its international market position by delivering 18.3 million pieces of parcel daily, and services every physical address in North America and Europe (UPS Fact Sheet, n.d.). The firm owns one of the largest airline fleets and operates global airport hubs located in Kentucky, Florida, Germany, China, Canada, and Latin America. It is evident, UPS replicates one simple service several million times a day, which is delivering packages. UPS Supply Chain Solutions include a synchronized approach to exceed consumer expectations. Its services include transportation, consulting options, contract logistics, and various other services sure to meet any consumer or industry needs. The firm’s experience in high-tech automation and expertise in freight handling provides accessibility to every industry that requires product relocation. People rely on UPS for quick deliveries and integrated solutions that enhance supply chain opportunities.
Value Creation: - Mainly focuses on the differentiation criteria because their products are of outstanding
Customers/ Services: FedEx has a strong adherence to its People-Service-Profit philosophy; it provides reliable, competitive, global air-ground transportation of goods and documents that require quick delivery. The key position is to influence the customer’s perception of
19. Which of the following is the correct action for a firm to take that wants to reduce demand and has insufficient capacity?
Competitive advantage leads to superior profitability. At the most basic level, a company’s profitability depends on three factors: the value customers place on the company’s products, the price that a company charges for its products, and the costs of creating those products. The value placed on a product by customers reflects the utility they get from a product, or the happiness or satisfaction gained from consuming or owning the product. Value must be distinguished from price. Value is something that customers receive from a product. It is a function of the attributes of the product, such as its performance, design, quality etc.