Airborne Express 9

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EXECUTIVE SUMMARY
Statement of Purpose

The purpose of this case study is to help Airborne Express with its strategy formulation and implementation.

Statement of the Problem and Objective

Problem: Decline in the market share of Airborne Express in the volume of overnight deliveries.

Objective: To become one of the top three companies in the express carriers industry.

Alternative Courses of Action

● Not compete with established competitors like FedEx and UPS, and stress the reliability of its delivery schedules. ● Expand Airborne Express' business globally and establish an international service that is comparable to the company's domestic service. ● Focus on high-level corporate accounts.

● Develop a new market niche. Come up or develop SDS (second day service). ● Continue buying second-hand planes and updating its parts as well. ● Lease a part of its airport.
● Promote younger management or employees.

Analytical Tools Employed

● SWOT (Strength, Weaknesses, Opportunities, and Threats) Analysis ● PEST (Political, Economic, Social, Technological) Analysis

Recommendation

After the analysis, it is best for Airborne Express to lease a portion of its airport to competitors. The revenue that would arise from the lease of its airport would help in a way. Airborne should start promoting younger management, so that new ideas and direction would flow in the company. Airborne should also continue focusing on high-level corporate accounts.

Implementation

Create a new runaway in Airborne's airport, and lease a portion of it. And start promoting younger management.

Conclusion

Leasing a part of Airborne's airport, promoting younger management, and continuing to focus on high-level corporate accounts is best for Airborne Express. METHODS OF ANALYSIS

SWOT Analysis

SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.

Strengths:

● Airborne Express had 305 ground stations as of 2002 within the United States. The stations are importantly the ends of the spokes in Airborne's hub-and-spoke system.

● Design of the C-containers, which are patented, to allow maximum utilization of the plane's interior loading space.

● Utilization of Libra II, FOCUS (Freight, On-line Control and Update System), and Customer Linkage that aids in the productivity and improve customer service.

● Airborne owns its own airport, Wilmington - the largest privately owned airport in the country. And it also has the advantage of a good weather.

● Establishment of a joint venture among Airborne Express, Mitsui (which owns Panther Express, one of the top three express carriers in Japan), and Tonami Transportation Co.

● Focus on high-level corporate accounts.

Weaknesses:

● Establishing a corporate culture that focuses on older management only.

● Having an advertising campaign was expensive for Airborne. The same caught the attention of the people, but brought little penetration.

● Airborne would not air their own planes abroad, their international operations would depend on other carriers.

Opportunities:

● Purchase of new aircrafts, twelve used Boeing 767-200 between 1997 and 2000 and ten to fifteen used 767-200s between 2000 and 2004.

● Establishment of a joint venture among Airborne Express, Mitsui (which owns Panther Express, one of the top three express carriers in Japan), and Tonami Transportation Co., causing to have an international market and collect new revenues as well.

Threats:

● Weak volume growth, high fuel cost, a switch from premium overnight service to lower-margin deferred services struck Airborne Express during 2002.

● The Company lacked the global scale and...
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