Competitive Advantage

Competitive Advantage

        To gain a competitive advantage, firm needs to take advantage of capabilities to convert resources into core advantage. The first competitive advantage FedEx has established is huge entry barrier. FedEx has a high fixed cost structure and purchases large amounts of trucks and planes and establishes various distribution center. In order to enter into the shipping industry and establish a company in the delivery service industry that can match up to the scale and size of FedEx, firms that want to compete with FedEx would require a lot of capital investment. Even during later stages, companies require huge capital investment to grow continually (FedEx). This huge entry barrier built the absolute advantage in the industry so that other small companies in the industry cannot compete with it.

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        Moreover, FedEx also has its speed advantage. The chart above shows the comparison between lanes of UPS and lanes of FedEx. It is easy to find that only 3.1 percent UPS lanes are faster than FedEx’s, lanes left of FedEx are either equal or faster than UPS lanes. Apparent speed advantage could help FedEx earn more satisfaction from customer and meanwhile, FedEx could gain more market share through speed advantage. Compared with FedEx’s main competitor UPS, FedEx has no doubt gain more advantage in terms of speed.

        What’s more, FedEx has established brand value. FedEx has successfully established a very strong brand value in the marketplace among its customers. The company is trusted for its reliability and timely package delivery service.  This brand name has helped the company grow rapidly into a billion-dollar company (FedEx).

        Last, FedEx has a strong and large global network. FedEx has been in the marketplace for more than 40 years. It has established a huge network spread across more than 220 countries and territories worldwide. FedEx still continues to grow its network in ground services with various acquisitions (FedEx). This strong network is difficult to replicate for any other companies.