Value Creation Frontier

The value creation frontier "represents the maximum amount of value that the products of different companies inside an industry can give customers at any one time by using different business models" (Hill & Jones, 2008). FedEx focuses on quality and excellence, as well as responsiveness to customer, as the core elements of its business model. Reliability and efficiency are also facets of business on which FedEx focuses. What this means is that FedEx can and should offer higher prices, because its business has higher costs. FedEx is basically offering a premium service within the package delivery business, in the express division. FedEx Ground is more reliability and efficiency, which implies that division should offer a lower price and move more towards cost leadership.

To maintain above-average productivity, FedEx needs to continually innovate. The company has been an innovator in the past, first when it was the...
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