THE COMPETITIVE STRATEGY ANALYSIS OF EXPRESS

INDUSTRY BASED ON TIME-BASED COMPETITION

Jiuguo Zhao

School of Economics and Management, Beijing Jiaotong University

No.3 Shang yuan Vallage, Haidian District, Beijing, China

Keywords: Express industry, Competition strategy, Time-based competition, VRIO model.

Abstract: This paper introduces a Time-based Competitive Strategy into express industry, which seeks to establish

competitive advantage for express companies. According to analyzing the feasibility of time management

based on VRIO model, it can be considered that time-based competition is an effective strategy to help

express company obtain success. The strategy includes four connotations and two methods. It requires the

express companies to integrate time saving, precision control, quick response and customer-oriented into

competition. Simultaneously, to be a time-based competitor, express delivery enterprises have to pay more

attention to the time management of the whole operational process and the optimizing of customer-oriented

services.

1 INTRODUCTION

What is the core competitiveness of enterprises?

There are different answers in different periods. The

core Competence of enterprises in England in 18th

century is the product number. They focused on how

to make the most products in the shortest possible

time to capture the world markets. In early 19th

century, U.S. companies were more focused on the

scale of their enterprise. They realized the large

companies dominated the market trends. At the same

time, German companies paid close attention to

product quality. They highlighted quality as life, not

in wasting time on mediocre products. After that,

Japanese companies emphasized the production of

seamless and quick response of the market. The core

competitiveness of Chinese enterprises cannot still

stuck in cheap labour or special care by government

policy. What is the core competitiveness of express

delivery enterprises is a significant problem to solve.

As competitive pressures intensify, increasing

numbers of companies are seeking a time-based

advantage. So people focus of considerable interest

on Time-based competition (TBC). This time-based

paradigm was first declared explicitly in the

literature in the late 1980s by Stalk. According to

Stalk (1988) “Managing time has enabled top

Japanese companies not only to reduce their costs,

but also to offer broad product lines, cover more

market segments, and upgrade the technological

sophistication of their products” (Stalk, 1988).

Time-based competition (TBC) encompasses more

than just meeting delivery dates; it involves

recognition and careful management of time as a

limited resource while continuously removing waste

or non-value-added activities. In recent years, TBC

has become the practitioners and academics alike.

The twenty-first century is the era of time

competition. Time will become the next competitive

resource advantages. The business objects and

services in express industry are unique. New

competitive of logistics enterprise is focused on how

to meet different demands of customers in the

shortest possible time (Evans, 1993). In China,

although many express companies consciously

operate time management, as much as possible to

shorten delivery time and improve efficiency, but

there is less express companies to use the idea of

time into competing as their core competitiveness.

The Foreign express companies have advanced from

simple time savings into the second stage - the

comprehensive management of time. It has more

emphasis on the controllability of time, strengthens

the management of designated time, and improves

the express deal with coordination in the whole

process. In express industry, the reform of time-

based competition is coming. We believe time-based

competitive strategy can help express companies

obtain the advantage (Blackburn, 1991).

502

Zhao J..

THE COMPETITIVE STRATEGY ANALYSIS OF EXPRESS INDUSTRY BASED ON TIME-BASED COMPETITION.

DOI: 10.5220/0003580305020506

In Proceedings of the 13th International Conference on Enterprise Information Systems (DMLSC-2011), pages 502-506

ISBN: 978-989-8425-55-3

 2011 SCITEPRESS (Science and Technology Publications, Lda.)

2 THE FEASIBILITY ANALYSIS

OF TIME MANAGEMENT

BASED ON VRIO MODEL

IN EXPRESS INDUSTRY

Time-based competition strategy is to focus on the

changing needs of customers. It defines time as a

competitive resource to adjust its structure,

management, production and services in order to

respond faster and more accurately to the outside

world.

The model of VRIO contains four elements -

value, rarity, inimitability and organization. It first

proposed by Jayne • Barney (Jay B. Barney, 1991).

In the article “from the inside for competitive

advantage” (1995), Barney summarized core idea of

the model: sustainable competitive advantage cannot

easily assess the environmental opportunities and

threats. And companies shouldn’t create it only in

the high opportunity and low-threat environment.

Sustainable competitive advantage also depends on

the unique resources and capabilities which can be

applied to compete in the environment. To find these

resources and capabilities, managers must seek the

valuable and scarce resources with high cost of

imitation from the enterprise and develop these

resources by the operation of their organizations

(Clark, 2003).

Table 1: The analysis of time based VRIO model.

The Management of time as resource

Ability to manipulate time as a unique business capability

value rarity inimitability

e used

organi-

zations

Advantage

and

weakness

Competition

No — —

W weakness

Yes No — A balance

Yes Yes No A

Temporary

advantage

Yes Yes Yes Yes A

Sustainable

advantage

Enterprises tend to intangible resources as a basis

of competitive advantage. We pursue not only time

savings, but a comprehensive time management. It

has greater emphasis on co-operation with the whole

process and is committed to establish the core brand

image in “timeliness”. The main advantage is to

achieve seamless connection to customer

requirements. The analysis of time based VRIO

model is given in Table 1.

2.1 The Value Inspection of New Time

Management of Resources

Express delivery enterprises have particular business

objects. It achieves the transfer of objects in space,

and this transfer is time-based control, so one of the

advantages of competitive resources is how to run

time well. The current operation of express delivery

companies are staying on experience level and

terminal management. If the strategy can properly be

integrated into business activities, it will be able to

gain market share and become the forefront of the

industry.

2.2 The Scarcity Inspection of New

Time Management of Resources

Simple time resources can be obtained by most

enterprises and thus it doesn’t have scarcity. The

new view of time resources and time management

skills in this paper are different. According to giving

new idea, our ability with time integrates technical

innovation, optimization of inner management,

standardization of processes. The time of non-

uniformity theory shows that the low value of time is

readily available, but the high value of time

(optimizing content and scale between resources and

the structure) is very scarce, with a weak alternative.

2.3 The Imitation Inspection of New

Time Management of Resources

The imitation of the soft power is the most difficult.

Management of quality and service have always

been more stringent, especially in time-control. If

express delivery enterprises put time management

and its concepts into the corporate image of the

brand, it can enhance the soft power, but a huge

customer base and vast network layout is the basis.

The express company which applies the strategy of

new time-based competition to highlight its image

and corporate culture cannot be undefeated.

THE COMPETITIVE STRATEGY ANALYSIS OF EXPRESS INDUSTRY BASED ON TIME-BASED COMPETITION

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2.4 The Organization Inspection of

New Time Management of

Resources

With Competitive strategy for time, companies

should establish a sound regulatory framework, not

only the optimization in technology but also the

establishment of evaluation system. In addition, they

pay close attention to end-time control of the

outcome and customer management. The daily

operation with a lot of time managing can also

promote the Coordination and the ability to response

to customers. It is expected that organizations can

take advantage of time resources to achieve the

strategy.

In summary, the new time resources and the

related time management can be used to strengthen

the core Competence. It helps enterprises to obtain

long-term competitive advantage and excess income.

The time Competitive strategy is a wise choice

(Stalk and Hout, 1990).

3 THE CONNOTATION OF

TIME-BASED COMPETITION

IN EXPRESS INDUSTRY

3.1 Time Saving is the Basis

Speed is the soul of express industry. From the

perspective, time is a scarce resource that is non-

renewable. By figure 1, the services in the express

delivery focus on the “below 48 hours” and the

range of “0-50 kg”. Time is a major part of the cost

of express delivery industry. Time savings is a basis

for work to do.

Figure 1: The category of the services in express industry.

The largest characteristics of express delivery

Operating is the "fast". Customers have higher

requirement to express service provider. It

emphasizes the timeliness of service. Time saving is

a basis of timeliness. How to save time and promote

timeliness is the main focus on competition. For the

service industry like express delivery, Time

competition is to reduce time in the delivery to gain

a competitive advantage.

3.2 Precision Control is the Goal

Precision control for time is the ultimate goal of

implementation of the strategy. “From another point

of time resources, time is non-uniformity (Rong

Chaohe, 2010). It is necessary to manage time to

spend it on the most suitable place and avoid the

error on the key point of time. The optimal

combination of time resources, human resources,

hardware resources and Management Resources is a

great way to play its biggest economic effect.

Controllable management of time can ensure that

enterprises in economic activities, especially in

extremely time-sensitive industry as express

industry, gain time management initiative. The

ultimate goal of Precision control is to maximize the

reduction of waiting time for express operations and

reduce costs, while improving customer satisfaction.

For example, UPS not only has strong air transport

support, but also develops real-time tracking of

express service and spends a lot of resources in

studying customers. Its goal is to the parcel to the

customer in the most appropriate time.

3.3 Quick Response is the Core

Time-based competition first used in the

manufacturing sector. It uses external market trends

as the criteria of response and adjusts timely types

and numbers of products. Quick response in the

express industry is equally important. In addition, it

fits with the nature of the express industry. Quick

response requires integrating from the internal

resources and enhancing the professional level

(express service capacity. Its connotation is to

respond faster and more accurately for the diversity

of customer external needs and uncertainties in order

to adapt the changing environment. Express delivery

enterprises’ quick response includes the following

parts: ① process orders quickly; ②arrange transport

plan quickly; ③express delivery quickly; ④Capture

the trends of market prices and customer demand

quickly; ⑤ handle unexpected events quickly.

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3.4 Customer Demand is the

Orientation

Express is a service industry, so its purpose is to

satisfy the business needs of customers, while

achieving profit maximization. "Customer demand

Orientation" locates all of the development

strategies, vision planning, managements and

delivery processes in achieving customers’

maximum value. Customers can show their loyalty

after realizing their own value by getting the

satisfaction of needs. The business model of

customer demand orientation needs to establish a

scientific and effective solution, which includes

customer-centric strategic, management consulting,

channel maintenance, relationship development and

other core areas. The philosophy of "Customer

demand-oriented" is a key to take the victory in a

competition in the market in the future.

4 THE METHOD OF BEING

TIME-BASED COMPETITOR

IN EXPRESS INDUSTRY

Being a time-based competitor requires that the

organization must be changed to the time centre

from the cost centre. This is the most obvious and

most important requirement for the manager with the

emergence of TBC. If the company cannot be the

same time faster response to market changes with

competitors, it is difficult to have a competitive

advantage.

To being a time-based Competitor in express

industry, this paper thinks it can be carried out

through the following six steps: ① determine

whether there is a speed problem; ② reduce

unnecessary waste of time; ③ let customers

participate in the evaluation; ④ meet customer

demand; ⑤ provide faster services for the customers

who prefer fast; ⑥ ensure a quick response

[6]

According to summarize the contents of the above,

the implementation of this transformation is

primarily for the optimization of the two points.

4.1 Time Management of the Whole

Operational Process

Customers with the need of express services never

like "surprise". They hope their express can be

delivered at the exact time and exact location.

Therefore, the operation requires a security time

management process. Strategic managers often

emphasize the importance of competition in the

industrial chain. Rationalizing the distribution of

benefits in the industry chain is crucial. The chain

should be maintained to enjoy living in a stable

income among the enterprises. For various specific

aspects of business operations, Mangers should

optimize processes of time constraints, reducing the

time interfaced between the processes. Meanwhile,

time management of the whole process strengthens

the guarantee on time delivery ability of the express

company. The operating target of express delivery

enterprises is the time products. The value of

enterprises can be reflected by guaranteeing the

realization of items upon request within the time and

space dimensions smoothly.

Figure 2: The time analysis of the whole operation process.

THE COMPETITIVE STRATEGY ANALYSIS OF EXPRESS INDUSTRY BASED ON TIME-BASED COMPETITION

505

The business success in express industry results

from superior processes. Excellent process

performance is based on effective design and

management. As the market has undergone profound

changes in the competitive environment, time-based

competitive strategy and supply chain management

triggered a new round of reengineering. In this new

round of process reengineering, time will be an

important indicator measured the efficiency of

supply chain operations (Qunli Shen, 2007).

The main steps of the process are ①customers

determine their needs of express; ②order services;

③ picking up the express; ④ transfer orders and

transportation; ⑤sorting and transhipment; ⑥arrival

of expresses and delivery. After classification and

integration, we divide the process of express

operation into six major parts: ordering process,

picking process, sending process, transferring

process, arriving process and delivery process.

Optimizing every process can fundamentally

strengthen the operational capacity and enhance the

overall competitiveness of express delivery

enterprises.

Starting from process optimization face to time,

it points out goals and meaning of the competition

for time by analysing the time value of processes.

Shown in Figure 2, the time analysis of the whole

existing operational processes can obtain two main

bottleneck of time: sorting process and

transportation process. When we develop a strategy,

the time bottleneck should be considered. Breaking

two time bottleneck will improve efficiency and the

level of quick response to the outside.

4.2 Optimizing Customer-centric

Services

In 1993, George • Stoke published an article which

reviewed their own 89-theory in the "Harvard

Business Review". He proposed Japanese companies

had been to the dark side because of the blind

pursuit of time with time-based competition. It leads

to the increase in cost and the lack of market

reaction, especially the inadequate response to

customer demand. Therefore, optimizing customer-

centric services is the second aspect to the time-

based competition. Customers are the basis for the

development, so that the express company must

provide customers with convenience, and maximize

the value of customers.

In time-based competitive environment, with the

rapid changes in customer demand diversification,

customer loyalty and brand no longer exists. The

customer will tend to the competitors who can be

faster to meet customer needs and maximize the

value of them. Therefore, express delivery

enterprises should be based on customer-oriented in

order to quickly and accurately understand their real

needs and potential needs. At the same time, but also

as far as possible to provide added value to

customers so that their needs can gain the greatest

satisfaction.

5 CONCLUSIONS

Time reveals new opportunities for express

companies to gain competitive advantages. After

analysing the feasibility of time source based on

VRIO, this paper confirms time-based competition

can be a strategic weapon to gain success in express

industry. The findings allow us to conclude that

express delivery enterprises can be a time-based

competitor by developing strategy with four

connotations (time saving, precision control, quick

response and customer-oriented) and two steps (time

management of the whole operational process and

the optimizing of customer-centric services). The

main value added of this study is the development of

time-based competition in express industry.

Nevertheless, a more research is needed to develop

this strategy tool. Future developments currently

underway are aimed at investigating whether our

conclusions can be extended, and an in-depth case-

study is necessary.

REFERENCES

Stalk, G. Jr, “Time – the next source of competitive

advantage”, Harvard Business Review, July-August

1988, pp. 41-51.

Evans, J. R. (1993), Applied Production and Operation

Management, 4th ed., West Publishing Company, New

York, NY.

Blackburn, J. D. (Ed.), Time-based Competition: The Next

Battleground in American Manufacturing, Business

One Irwin, Homewood, IL, 1991.

Clark, P., Organizational Innovations [M]. SAGE

Publications, 2003.

Stalk, G. Jr and Hout, T. M., Competing against Time:

How Time-based Competition Is Reshaping Global

Markets, Free Press, New York, NY, 1990.

Wang Yao-ping, Yang Yong-fang. Analysis of the

Competition of the Express Market in China [J].

Social Science of Beijing, 2009 (2).

Qunli Shen. Research on market conditions of private

express delivery companies [J]. Price: Theory &

Practice, 2007 (10).

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