Michael_A._Hitt,_R._Duane_Ireland,_Robert_E._Hosk

166 Part 2: Strategic Actions: Strategy Formulation

KEY TERMS

competitors 144

competitive rivalry 144

competitive behavior 144

competitive dynamics 144

competitive action 152

competitive response 152

first mover 153

fast-cycle markets 161

late mover 155

multimarket competition 144

market commonality 148

quality 156

resource similarity 148

strategic action 152

strategic response 152

second mover 154

slow-cycle markets 159

standard-cycle markets 162

tactical action 152

tactical response 152

REVIEW QUESTIONS

1. Who are competitors? How are competitive rivalry, competitive
   behavior, and competitive dynamics defined in the chapter?


2. What is market commonality? What is resource similarity? In
   what way are these concepts the building blocks for a compet-
   itor analysis?


3. How do awareness, motivation, and ability affect the firm’s
   competitive behavior?


4. What factors affect the likelihood a firm will take a competitive
   action?


5. What factors affect the likelihood a firm will initiate a competi-
   tive response to a competitor’s action(s)?


6. What competitive dynamics can be expected among firms
   competing in slow-cycle markets? In fast-cycle markets? In
   standard-cycle markets?

FedEx and United Parcel Service (UPS): Maintaining

Success while Competing Aggressively

Identified recently as one of the 50 greatest or most
intense competitive rivalries of all time, FedEx and UPS
are similar in many ways, including their resources, the
markets they serve, and the competitive dimensions that
they emphasize to implement similar strategies. These
similarities mean that the firms are direct competi-
tors and that they are keenly aware of each other and
have the motivation and ability to respond to the com-
petitive actions they take against each other. The two
firms are the largest global courier delivery companies in
what is a highly competitive industry on a global basis.
FedEx and UPS compete in many of the same
product markets, including next day delivery, cheaper
ground delivery, time-guaranteed delivery (both
domestically and internationally), and freight services.
However, the firms concentrate on different segments

in attempting to create superior stakeholder value and

to avoid direct, head-to-head competition in a host of

product segments and markets. In this regard, FedEx

“intends to leverage and extend the FedEx brand and

to provide customers with seamless access to its entire

portfolio of integrated transportation services,” while

UPS “seeks to position itself as the primary coordinator

of the flow of goods, information, and funds throughout

the entire supply chain (the movement from the raw

materials and parts stage through final consumption of

the finished product).”

Thus, while these firms are similar, they also seek to

differentiate themselves in ways that enhance the pos-

sibility of being able to gain strategic competitiveness

and earn above-average returns. In broad-stroke terms,

FedEx concentrates more on transportation services and

Mini-Case