Federal Express 's Value Creation Frontier

1667 Words Feb 15th, 2015 7 Pages
Federal Express’s Value Creation Frontier
A successful company has the ability to develop and execute a solid set of business-level strategies resulting in an effective business model. A primary goal of these strategies is for the company to reach the value creation frontier. Hill and Jones (2013) explain that the value creation frontier signifies “the maximum amount of value that the products of different companies within an industry can provide to customers at any one time using the different business models” (p. 167). This is accomplished by using one or more of the four building blocks of competitive advantage. By achieving this frontier, a company is able to gain a competitive advantage over its rivals, and earn above-average profitability. In the small package express delivery industry, Federal Express (FedEx) is an example of a company that has been able to reach the value creation frontier. FedEx has reached this frontier through a combination of the four building blocks of competitive advantage. According to Morris (2009), FedEx is not just noted for its revolutionary idea of overnight delivery, or for its innovation through technology, or for its reputation as a reliable, courteous, and service-oriented alternative to the postal service, but for the mixture of all these elements fused together into a successful business model. Reliability and innovation have played a major part in FedEx’s success and value creation. If it is going to continue to maintain a…
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