airborne express
... mail industry, in order to compete with FedEx and UPS and thus maintain competitive advantage, Airborne Express should be continuous focused on cost cutting and improving service quality. ... In this case study, we try to analyze Airborne Express・s position in the firm・s environment. Although Airborne is not a major player in the market, it has focused its efforts where it can better compete against other players. Airborne has found a niche on customers that regularly ship a large volume of urgent items, primarily to other business locations. Let・s look how the five forces affect Airborne and how Airborne reacts to them. ... Bargaining power of buyers Most of Airborne・s customers are corporate: they are not loyal when a contract comes up, and they try to negotiate prices with the carriers, oftentimes, the discount can amount to 50% of the list prices. Airborne・s customers are well informed about the dynamics of the industry. Since Airborne is mainly dealing with delivery of packages, it is not greatly affected by substitute products such as facsimile, and electronic mails. Airborne has a competitive price advantage, because it is not unionized (it subcontracts pick-up and delivery), and it has its own airport (it doesn・t have to pay landing fees, hub fees, and can also offer storage space at a lower cost). ... Threat of new entry Despite the fact that Airborne ships lower volumes of packages than its major competitors, it still enjoys benefits from the economy of scale with 900,000 packages daily. This allows Airborne to spread its overhead through this large number of packages. ... Meanwhile Airborne manages to run its aircraft roughly 80% full, compared to the 65-70% industry average. ... Airborne could improve its distribution network by merging with RPS that has a more efficient ground delivery system than UPS. ... Intensity of rivalry Airborne is...