Airborne Express Case Analysis

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Airborne Express The volume for urgent mail deliveries and physical delivery of packages has been rising in the past ten years. We certainly have noticed the major players in this express mail industry, such as the Federal Express (FedEx) and the United Parcel Service (UPS). On the other hand, a usually overlooked company – Airborne Express – has been growing at a very fast pace. We will use the model of five competitive forces to examine how Airborne survived and even prospered in the express mail industry. Rivalry among Existing Competitors In the U.S., FedEx, UPS and Airborne shared the majority of the express mail market, thus, surviving and competing with the two rivals become the most important goal for Airborne. FedEx and UPS are all innovators in the field of overnight/morning deliveries. Both companies have invested a lot of money in their operations, therefore to have far more employees, ground vehicles and aircrafts than Airborne. As well, FedEx and UPS are highly advanced in their software technology, which allowed them to automate the multiple central hubs in different locations within the U.S. These facilities and software systems enabled both companies to reach a 99% arrive-on-time rate in their famous overnight/morning deliveries. However, this became an advantage for Airborne. The top management of Airborne understood clearly that they could not be everything to all the people. As a result, the company has positioned themselves differently from the big two, and to put more attention in its afternoon/second-day deliveries. This strategy has helped Airborne to reduce a large sum of costs because the afternoon/second-day deliveries could be transported using trucks, subsequently to save two-thirds the costs of owning and operating an aircraft capacity. Thus, Airborne has been charging less than its rivals for delivery prices, and has achieved a

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