I. Executive Summary

In this report we focus on the two main competitors in the package delivery industry: Federal Express Corporation (FedEx) and United Parcel Service of America, Inc.

Studying FedEx, UPS and their competitive relationship in the decade from mid - 80's to mid - 90's gives a good insight for the companies' and industry's future. The two companies have different strategic goals and are operating in the same industry but in different main markets: FedEx is working on "producing outstanding financial returns" and focuses on the overnight air market while UPS is looking for "earning reasonable profit" and its core business is the two-day ground delivery. However, by 1981, the two companies started to have a strong sense of …show more content…

This is emphasized by the industry follower attitude adopted and the careful selection of services and solutions upon observing competitors.

Enabling Factors supporting the statement where clear as UPS conducted heavy restructuring in order to cut cost and improve quality. In addition to that, UPS invested in IT solutions as well as presented new services only after been proven successful in the industry. This enabled UPS to cut the cost and minimize the risks of being the pioneer.

Inhibiting Factors were heavy unionized work environment which always functioned as a barrier in-front of progress and quality of service. Moreover, acting always as an industry follower has a negative impact on the company's image and could ultimately cause loss of market.

Sustainable competitive advantage

Attaining a competitive advantage in package delivery business seems to be a tough duty. The main reason is that it is an easy-to-copy business both for the competitors and the new entrants. This is obvious in FedEx's case: the company always distinguished itself through technologically advanced services, expanding in many places and new products yet other competitors, especially UPS, always caught-up and sometimes in a better shape. UPS was the main choice when it came for low prices though being a market follower could negatively