Airborne Case Study Airborne Questions Q1. Express mail industry has evolved over the years since individuals and businesses have increased their expenditures from $16- $17 of shipments within the United States. Moreover, the company has shifted to overnight shipping in the distribution of products and services delivery. These changes within express mail industries has increased their structural delivery to major parts of the world since many customers view them as reliable with overnight delivery of products to different destinations around the world(Rivkin, 1998,p. 1). On the contrary, the changes have affected small competitors because of increased shipment volumes from 15-20% annually, and prices fell while total revenue of other competitors grew by only 10-15% annually.
Moreover, competitors have the challenge to cope with other industries because changes in their total revenues generate differences in the total revenue annually. Q2 The company’s SWOT and PORTER’S analysis work in conjunction to assist in its development. The SWOT analysis divides as follows Strengths The company does aggressive marketing strategies since 1970s. Moreover, it nationally advertises mottoes especially when it has to provide services overnight. Weakness Physical distribution and networking of the company poses an extensive infrastructure that denies customer service and information to the management posing as the major weakness of the company Opportunities Many business and individuals use an express company to deliver services and ship their parcels and documents around the world.
Hence, it creates more opportunity for the company to develop worldwide in the delivering it is services against competitors. Threats The Company faces threats of high competition in the market that may, in turn, reduce its customer base and profitability. The Porter’s Five analysis of the company is as follows Threat of new entrants in the market The company has threats in the new market such as Federal Express that entail 45% of the domestic express mail market and became leading in the industry. Bargaining power of suppliers Suppliers of the company bargain in terms of transportation and container charges of the packages.
The bargaining power of suppliers increases the rivalry intensity within the company. Bargaining power of customers Its customers bargain as they compare charges of service delivery with other competitors. It develops and generates pressure on the quality of service delivery since the companies’ fears to lose customers. Threats of substitute products The substitute performance of other companies had various challenges in the cost of their changes.
Low cost for changing of products for substitutes gives an opportunity of a threat to other products. The Degree of competitive rivalry The degree of competitive rivalry was high since UPS company generated intense competition by allocating 15% pre-tax profits in the buying of their stock that attracted many customers to UPS Company. Q3 Airborne has survived through establishing five regional air hubs that distributed around different nations (Rivkin, 1998, p.
5). Moreover, it shared facilities with it is competitors such as UPS traditional ground network, that enabled the company to cope with it is competitors around the world. It has recently prospered in the industry since it has built several warehouse space on it is Wilmington property and further leasing the property to customers. Q4. According to Rivkin (1998), the quantification of airborne advantages begins with the companies’ ability to have large warehouse across the world. Moreover, it is the leading preferred express mail company with over one billion customers across the globe.
Additionally, the company has 336, 000 employees, 160,000 trucks and roughly 500 aircrafts that deliver 12 million parcels each day generating more than $22 billion per day, and the profits margins keep going up. Q5. The Chief Executive Officer has to develop ways of competing and coping with new developers in the mailing industry for the company to remain relevant in the market industry. Besides, the CEO has to consult with technology experts to reduce competition with UPS, by investing heavily in technology especially in the federal express information technology competency. Q6. The best business strategy of the airborne company in competing with UPS and FedEx include the development of a chart that deals with the following aspects interconnectivity.
The main focus of the business strategy includes a focus on technology and operations, customers and markets, projects and competition, management and organization and finally people and culture. The linking and considerations of these aspects develops performance and growth of the airborne company. Q7 DHL acquisition has risen over the years, through the increase of customer services within the company as shown in the diagram below From the diagram above, DHL acquisition has increased in us millions over the years from 2008 to 2012 in annual revenue growth References Rivkin, J.
W. (1998, February). "Airborne Express. " Harvard Business School Case 798-070. (Revised May 2007).