Analyze Federal Express's value creation frontier and determine which of the four building blocks of competitive advantage the company needs to continue to maintain above-average profitability. Provide a rationale to support the answer. For decades, FedEx has maintained profits through good strategic decisions and timely acquisitions. The express parcel delivery industry, which includes global logistics and air freight, is highly fragmented. In this type of market, specialization is often a better choice than competing solely with low-cost and differentiation strategies. New entrants create excess capacity and companies are forced to lower prices. The result is a price war, a decline in industry profits, or both (Hill & Jones, 2011). FedEx has experienced this in the past when it competed directly with UPS. A company's value chain can be created in different ways. Tangible and intangible resources, including knowledge, capabilities, skilled human resources, information systems, and business infrastructure, can each constitute a distinct competency. However, the multifaceted business environment and industry dynamics can effectively erase a company's advantage over time. This is especially true with tangible resources. It's easy for competitors to imitate each other. For example, everyone in the package shipping industry has invested heavily in tracking technology, shipping labels, and scanners. When UPS decided to enter the retail business and acquired Mail Box Etc. in 2001, FedEx followed suit and acquired Kinko's in 2004 (Hill & Jones, 2011). Marketing strategies linked to prices and promotions are also highly coveted. FedEx must focus on higher efficiency and better customer response. Quality strategy you recommend in question 3. Next, suggest This is an important way for Federal Express to meet its global competition. FedEx currently operates in more than 220 countries, offering international economy and priority delivery services (FedEx, 2013). FedEx has the infrastructure, capital, information technology and networks necessary for greater expansion. With the suggested targeted differentiating business model, FedEx can effectively target large international corporations, institutions and governments. To reduce global competition with popular regional carriers, FedEx should market strategic acquisitions of small and medium-sized delivery companies with extensive networks in areas they wish to target. Then advertise aggressively, upgrade and integrate systems, and rebrand quickly. This will give them an immediate national presence and a strong workforce.