Case 4: The Battle For Value, 2004: Fed Ex Corp v.

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Case 4: The Battle for Value, 2004: Fed Ex Corp v. United Parcel Service, Inc. Adam Broadus Executive Summary In the midst of an intensely competitive and segmented market an interesting game of chess is being played between the two powerhouses that dominate the industry. FedEx and UPS spend as much time watching each other as they do planning out their next move. To call it strategic would be a far cry short of what is actually happening here. Their moves are more that of modern warring states, and given their size and employee count their moves can definitely be seen as militaristic. The competition for the US package delivery market has recently been focused on the air-express segment. The two key players in this melodrama are UPS and FedEx; they control the package delivery market in the US and arguably the world. While UPS has dominated the ground area, the air-express has often been FedEx’s playground. UPS’s grand entrance to the market was by being willing to compete on price and by cutting FedEx’s list price in half. Each firm has done everything they can to one-up each other and the competition has been fierce. The results are mixed and performance is dependent on how you measure it. Questions: I. Prepare to describe in class the competition in the overnight package delivery industry, and the strategies by which those two firms are meeting the competition. What are the enabling and inhibiting factors facing the two firms as they pursue their goals? Do you think that either firm can attain a sustainable competitive advantage in this business? The enabling and inhibiting factors for each firm are numerous. Both companies chose to focus on customer satisfaction over anything else and to provide solutions to meet the needs of the consumer instead of forcing the consumers need to fit their solution. UPS was willing to compete on price, and

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