Saturday, November 1, 2008

When it absolutely, positively, has to be there overnight

Ad found via Futurelab

New York Magazine recently listed this as one of Madison Avenue's most memorable ads.

The ad is outstanding....but the thinking and strategy that underpinned their advertising is better still.

When they launched in 1971, FedEx's original strategy was to be 'better and cheaper' than its competitors, focusing on heavy packages. But they couldn't compete against Emery Air Freight, a larger competitor. So they shifted their strategy to fight not on price, convenience or package size.

Instead they shifted the battlefield terrain and competed on speed.

This came to life, executed flawlessly with their "When it absolutely, positively, has to be there overnight". In addition, they focused on business men, instead of mailroom clerks. And they followed one of the most important rules in strategy - they decided where not to compete. They dropped their other '3-day delivery' service, as it didn't fit with their strategy.

Speed as a strategy worked beautifully for a long time. But then the environment changed. Most packages that needed to be delivered overnight were actually office documents - and everybody now had email.

FedEx had to move their battlefield terrain again. Speed alone was no longer a point of differentiation. I believe they started to compete on value-added services like package-tracking and high security delivery.

If you're interested in competitive strategy, check out these two great books here and here.

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