2)For FedEx & UPS.Briefly discuss how this rivalry has impacted the following for these two firms.Make sure that you understand what these terms mean before trying to apply them!(If unsure, start with a definition)

a.Cost structures (specifically reliance on fixed costs or variable costs?)

i.Think:are each firm's costs (UPS, FedEx, Airborne) more heavily driven by fixed cost or variable costs.How did the extended rivalry

between FedEx & UPS make this true?

b.Switching costs

c.Learning effects

3)The characteristics defined in #2 above created the opportunity for Airborne's strategy to exist.What is their strategy for survival over the years?

a.Can you diagram a Long-Run Avg. Cost function that represents the cost structure of FedEx / UPS (they are similar) and another for Airborne on the same diagram.They should look different and should cross.Hint:how is Airborne's cost structure different than the other 2? (you may use the spreadsheet I've posted to help if you want) - IMPT to think about SCALE of each company

b.What type of customers does Airborne go after?Why?

c.How does 2(b) allow Airborne to go after these customers?

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