Executive summary
Airborne Express was one of the major players in express mail business, which managed to compete in line with the “900-pound gorillas” through its low cost strategy. The company was formed with intent of serving selective customers that were not being tapped by its competitors. Its day to day activities were in many ways differentiated from the existing players in the field.
The low cost strategy followed by Airborne suggests that their current position in the industry is quite strong. But one of the major factors influencing Airborne is intensifying competition from giants like Fedex & UPS that are shifting their operations from saturated core market to the market targeted by Airborne.
In 1997, UPS faced retaliation from labor union in the form of 16 days strike that paralyzed the company causing disruption to the economy. This event had major implications on Airborne’s performance and experienced terrific financial gains. By this point of time, even U.S postal service, which was not doing well earlier, came out with admirable results. It was trying to strategically place itself by advertising aggressively and by filing a petition for the right to grant volume discounts.
In this scenario, Airborne is faced with the question of competing not only with the existing players but also emerging competitors like U.S postal services.
There are certain issues mentioned further in the report that needs to be addressed. To sustain its competitive advantage and to expand globally by exploring new operations, we have recommended certain measures.
Introduction
The Express mail industry in the United States consisted of three major firms- Federal Express, United Parcel Services & Airborne Express servin ...