Airborne Express
Executive Summary
Airborne Express is an air-express transportation company that provides delivery of small packages and documents throughout the United States and to and from many foreign countries.
Statement of Purpose
To identify the issues and problems that the company is facing and how the company incorporates into its business strategy the major trends that concerns air delivery business.
To give alternative courses of action and to recommend the best alternative to improve the company’s operations.
Statement of Problem
Airborne Express ranked third place in the 2002 U.S. air express industry with nine percent (9%) of the market and it has difficulties catching up with its larger rivals, FedEx and UPS which has 26% and 53% of the market respectively.
Alternative Courses of Action
1. Focus and continue developing the deferred and ground delivery services as there is a shift towards these kinds of services from overnight package services.
2. Continue to have strategic partnership and alliances with foreign agents to serve the international market.
3. Corporate accounts should still be the main target.
4. Lease out a portion of their airport facilities.
Analytical Tools
1. Porter’s Five Forces Model of Attractiveness
2. SWOT Analysis
Recommendation
A switch from premium overnight services to lower – margin deferred services and ground delivery services is an advantage to Airborne Express. With existing assets including trucks, tracking systems, regional hubs and sorting facilities, they only need minor initial investments to develop fully these kinds of services. They should use these assets wisely and effectively.
Conclusion
Airborne should strengthen and continually improve its services domestically, since it gives larger revenues, then strengthen its alliances internationally, so as to serve the demands of the international market. To add on its profitability, Airborne should lease out a portion of the airport facilities to other airlines, so that it could have other source of income to compensate the maintenance costs of the airport.
Methods of Analysis
1. Porter’s Five Forces Model of Attractiveness
a. The threat of new entrants into the industry
- Operating an air - express transportation industry requires large capital investments, and therefore it can impede the entry of new firms into the industry. For one, Airborne has already its own set of aircrafts and even operate its own airport, and it would be hard for a new firm to compete with this.
- The company does not spend much on advertising; its brand
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Montealgre, Ramiro, H. J. Nelson, Carin I. Knoop, and Lynda M. Applegate. BAE Automated Systems (A): Denver International Airport Baggage Handling System. Rep. no. 9-396-311. Boston, MA: Harvard Business School, 1996. Print.
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