Airborne Case
1. Airborne Express is an air express transportation company that is engaged in delivering small sized packages and documents around the United State of America and to and from many different foreign destinations.
The purpose of this paper is to analyze and identify the problems and issues Airborne encounters on a daily basis using Porter’s five forces framework. Porter identified five competitive forces that help shape every industry and market place in the global economy. These competitive forces play a pivotal role in analyzing everything from the profitability and attractiveness of an industry to the intensity of the competition in a particular industry. Figure one below shows the relationship between the different competitive forces according to Porter.
Figure 1: Porter's five competitive forces
Porter’s Five Forces Model of Attractiveness
a. The threat of new entrants into the industry
- In order to operate a successful air –express transportation industry requires the injection of large capital investments. This requirement can impede the entry of new firms into the industry. Airborne at this stage has its own sets of aircrafts and operates its own airport, making it more difficult for a new firm to compete with these realities.
Another point to note is that Airborne does not spend a lot of money on advertising, as it depends on its brand name among its customers. Its brand identity among customers will be its disadvantage as well, as consumers may find another alternative which they are familiar with through advertisement on television and other mediums, which new entrants into the business can embark on. They can enter into a new industry with a lot of advertising and promotion.
b. Bargaining power of buyers Airborne has been focusing on corporate accounts as its main targets since its inception. It is important to note that the bargaining powers of corporate entities are much higher when compared to infrequent users who demand
The purpose of this paper is to analyze and identify the problems and issues Airborne encounters on a daily basis using Porter’s five forces framework. Porter identified five competitive forces that help shape every industry and market place in the global economy. These competitive forces play a pivotal role in analyzing everything from the profitability and attractiveness of an industry to the intensity of the competition in a particular industry. Figure one below shows the relationship between the different competitive forces according to Porter.
Figure 1: Porter's five competitive forces
Porter’s Five Forces Model of Attractiveness
a. The threat of new entrants into the industry
- In order to operate a successful air –express transportation industry requires the injection of large capital investments. This requirement can impede the entry of new firms into the industry. Airborne at this stage has its own sets of aircrafts and operates its own airport, making it more difficult for a new firm to compete with these realities.
Another point to note is that Airborne does not spend a lot of money on advertising, as it depends on its brand name among its customers. Its brand identity among customers will be its disadvantage as well, as consumers may find another alternative which they are familiar with through advertisement on television and other mediums, which new entrants into the business can embark on. They can enter into a new industry with a lot of advertising and promotion.
b. Bargaining power of buyers Airborne has been focusing on corporate accounts as its main targets since its inception. It is important to note that the bargaining powers of corporate entities are much higher when compared to infrequent users who demand