The Battle for Fedex and UPS

Among the enabling factors for the company is that UPS is the largest and gains major benefits from economies of scale. This company has the first mover advantage and is listed, which means they have access to capital markets, something that is essential in the overnight package delivery industry. UPS’s business model achieves a competitive advantage through their efficiency. An inhibiting factor for UPS is that by making efficiency their number one goal, the company could suffer long term cost of employees. A major enabling factor for Fedex was being the first to purchase planes for package delivery. Fedex also has an integrated regional trucking system, emulation of JIT, and is responsible for many technological innovations in the industry. Fedex uses what is called hub and spoke strategy and has received service awards.

As stated in the previous question, UPS has made efficiency their number one goal in the past. In assessing the industry and re-evaluating their goals for the future, UPS has perceived a need to shift their main focus onto the needs of their customers. This ability to recognize and implement change within the company and market gives UPS an advantage for long term existence in the marketplace. However, Fedex has a history of superior customer service, evident from their earned service awards, while UPS has only recently begun to focus on customer needs. At each turn, Fedex has been in the lead with technological innovation and customer friendly, cheap service. Given their results so far, Fedex should be able to attain a sustainable competitive advantage.