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The Sandwich Strategy – MBA Learnings | A Learning a Day

Federal Express or FedEx was created to compete an overnight delivery with the United States Postal Service or USPS. Responding to FedEx’s entry and early success, USPS created a product called Express Mail priced at $8.95 as compared to FedEx’s $12.

FedEx, had it been like most companies, would have reduced price and gone to war with the USPS. But, price is not just a number. It is a way of signaling value and FedEx understood that. So, they responded by redefining their market.

FedEx’s existing Overnight Delivery” did not specify what time the delivery would arrive. So, FedEx introduced precision not only in terms of the delivery day, but also in terms of the delivery time. They then included two deliveries – one in the morning and the other in the afternoon. They then labeled the service as “Priority” and “Standard”.

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The Sandwich Strategy – MBA Learnings.

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