Fedex Case Study

Porter diamond theory

Porter’s diamond theory (1990) suggests that there are several reasons that why companies are more competitive than others on a global scale based on four specific factors which are Factor endowment, Demand condition, Firm Strategy, Structure, and Rivalry and Related and Supporting Industries.

Factor Endowment

DHL express company possessing several of factors of production. These are successful strategy management, logistics know-how, and physical infrastructure. Logistics is one of the main advanced factors which DHL developed for their supply chain. In addition, Physical infrastructure that DHL used includes air services, ocean services and also road and rail services. So based these factors, it led to DHL maintain competitive advantage in the world express market.

Demand condition

Demand condition is the one of the main factor to push DHL to constantly upgrade its service. John Pearson point out that is seeing continuously increase in demand for express services, As customers continually desire their shipments delivery faster and cheaper, DHL must improve their services and customer responsiveness. Also, due to the competition in existing market was very intense, DHL Company try to set apart from their competitors by developing new system and products for customers that make it easier to use DHL services, the action would help to build customers loyalty and also increase their competitive advantage.

Firm strategy,Structure and Rivalry

As mentioned in last section, the shipping service currently faces a rigorous rivalry for market share. Therefore, Existed companies need to consider about the continuous improvement in quality, lower price and also innovation. Because shipping service was very low switching cost for consumers,