LYNCH KELLER AND OZMENT Many studies of capabuIties have focused on the manufacturing arena, but logistics may be the new frontier. Wal-Mart Is an excellent example of a firm with several distinctive capabilities that cannot be easily copIed, and it significantly reduces costs via high levels of efficiency Obviously. reduced costs benefit a firm financially Moreover, because wal-Marts system Is difticult if not Impos sible to imitate, the firm maintains a competitive advantage in the marketplace In addition, Wal-Mart yes to be a cost leader as part of its business strategy, and its competitive advantage is enhanced through Its distinctive logIsties capability This combination has produced supenor firm perfor- Levi-Strauss Company also focuses on distinctive logistics capabilities to obtain competi ve advantage It is now offering customers a"Personal Pair of Jeans"directly from retaIl stores. Retailers take exact measurements of customers and send the information via computer to the main plant For an additional charge of only ten dollars, custom jeans are made and sold to individuals Levi ships the orders to retailers or directly to customers via Federal Express This program is unique in the clothing tndustryOlavarrieta and Ellinger believe it allows the company to employ logistical expertise to differentiate its products trom competitors offerings and enhances Levis business performanceReportedly, Levi offers customers 4,000 selections of jeans versus 40, among most of its competit vIs program provides a compelling example of logistics capabilities linked to a differentiation strategy and superior firm performance, especially from the customer service Daugherty and Pittman examined competitive advantage in logistics by interviewing Fortune 500 firms"They believe that time-based capabilities are of cntical importance n logistics along wtth nformation technology and flexibility According to Eckert and Fawcett, the critical capabilities for logistical excellence are people, quality, and time Morash et al, Identified the logistics capabIli ties needed for competitive advantage as delivery reliability, post-sale customer servIce,responsIveness to target market, delivery speed, presale customer servIce, wIdespread distnbution coverage, selective distribution coverage, and low total cost distribution Clinton and Closs found that five factors are closely aligned with logIstics capabilities allIances, Information systems, EDI practIces, Inventory management, and reengIneering The most comprehensive examination of logistIcs capabilties was performed by the Global Logistics Research Team at Michigan State University It involved in-depth interviews and survey research that identified 32 measures of logistics performance capabilities These were employed in this study, and the underlying dimensions(factors)were examined METHODS Our pnmary focus is empircal examination of the relationships among distinctive logistics capa- Porter strategies, and overall firm perform question firms that match their logistics capabilities to an appropriate business strategy perform superior to Irms that do not match logistics capabilities and business strategies" Confirmatory factor analysis Copyright 2001. All rights reserve