Tuesday, February 16, 2010
FedEx- Cost Leadership or Differentiation
All corporation are constantly thinking about the different types of business-level strategy to help their business gain competitive advantage. FedEx has more of a differentiation strategy than a cost leadership. Cost leadership strategy is a set of actions taken to produce goods or services with features that are acceptable to customers at the lowest cost, relative to that of competitors. UPS is generally cheaper than FedEx. In this industry customers are very price sensitive. They are willing to go to the producer who will provide at the cheapest cost. FedEx is much more differentiated from its competitors on a global aspect. They stand at the top as far a global express delivery is concerned. FedEx offers the most support, money back guarantee, and the capability to pick up packages from the customers home. The also have differentiation in quality. They have spent a large amount of capital on their logistic and operations for its transportation system. This assures smooth coordination and deliveries which results in high levels of quality service.