Airborne
EXECUIVE SUMMARY Summary Analysis:
Airborne express has been making good profits for few years now and has 16% of express mail market share. The company follows the “best cost provider” strategy, meaning provides best price to the customer compared to rivals by maintaining good product attributes. Another key strategy of the company is focus on niche markets. The company ensures to have a sustainable competitive edge in the market by providing the lowest cost. However, the competition from rivals and the changing market conditions make it important to have an evolving strategy.
Key elements that need to continue (See Exhibit 2.):
Remain the best cost provider.
Fast follower.
Sales force to continue working with the major clients to strengthen the relationship.
Maintaining aircrafts fleet.
Maintaining low union workforce, less cost part time workers and independent contractors.
Early delivery to important customers.
Key elements that need focus:
Distance based pricing.
International markets.
Technology.
Investment in more aircrafts.
Consider residential deliveries.
Alliance and partnerships.
Brand
Low Margins
Recommendations:
1. Airborne express has to implement distance based pricing which is followed by the key rivals. If it is not implemented, the company might lose clients who target low distance mail deliveries. The company would then end up with majority of high distance deliveries that would incur more cost.
2. Airborne is a fast follower and should start further exploring the international markets. The company should partner with strong second tier players such as DHL or TNT (preferably DHL). DHL has a great international focus and tie ups, and this will help the company expand globally.
3. Airborne express should continue to partner with RPS due to its strong hold in ground transportation. Since RPS also encroached UPS’s traditional customer Airborne could use this relationship to become a key rival to UPS and Federal Express.
Airborne express has been making good profits for few years now and has 16% of express mail market share. The company follows the “best cost provider” strategy, meaning provides best price to the customer compared to rivals by maintaining good product attributes. Another key strategy of the company is focus on niche markets. The company ensures to have a sustainable competitive edge in the market by providing the lowest cost. However, the competition from rivals and the changing market conditions make it important to have an evolving strategy.
Key elements that need to continue (See Exhibit 2.):
Remain the best cost provider.
Fast follower.
Sales force to continue working with the major clients to strengthen the relationship.
Maintaining aircrafts fleet.
Maintaining low union workforce, less cost part time workers and independent contractors.
Early delivery to important customers.
Key elements that need focus:
Distance based pricing.
International markets.
Technology.
Investment in more aircrafts.
Consider residential deliveries.
Alliance and partnerships.
Brand
Low Margins
Recommendations:
1. Airborne express has to implement distance based pricing which is followed by the key rivals. If it is not implemented, the company might lose clients who target low distance mail deliveries. The company would then end up with majority of high distance deliveries that would incur more cost.
2. Airborne is a fast follower and should start further exploring the international markets. The company should partner with strong second tier players such as DHL or TNT (preferably DHL). DHL has a great international focus and tie ups, and this will help the company expand globally.
3. Airborne express should continue to partner with RPS due to its strong hold in ground transportation. Since RPS also encroached UPS’s traditional customer Airborne could use this relationship to become a key rival to UPS and Federal Express.