- Length: 1137 words (3.2 double-spaced pages)
- Rating: Excellent
Airborne Express is an air-express transportation company that provides delivery of small packages and documents throughout the United States and to and from many foreign countries.
Statement of Purpose
To identify the issues and problems that the company is facing and how the company incorporates into its business strategy the major trends that concerns air delivery business.
To give alternative courses of action and to recommend the best alternative to improve the company’s operations.
Statement of Problem
Airborne Express ranked third place in the 2002 U.S. air express industry with nine percent (9%) of the market and it has difficulties catching up with its larger rivals, FedEx and UPS which has 26% and 53% of the market respectively.
Alternative Courses of Action
1. Focus and continue developing the deferred and ground delivery services as there is a shift towards these kinds of services from overnight package services.
2. Continue to have strategic partnership and alliances with foreign agents to serve the international market.
3. Corporate accounts should still be the main target.
4. Lease out a portion of their airport facilities.
1. Porter’s Five Forces Model of Attractiveness
2. SWOT Analysis
A switch from premium overnight services to lower – margin deferred services and ground delivery services is an advantage to Airborne Express. With existing assets including trucks, tracking systems, regional hubs and sorting facilities, they only need minor initial investments to develop fully these kinds of services. They should use these assets wisely and effectively.
Airborne should strengthen and continually improve its services domestically, since it gives larger revenues, then strengthen its alliances internationally, so as to serve the demands of the international market. To add on its profitability, Airborne should lease out a portion of the airport facilities to other airlines, so that it could have other source of income to compensate the maintenance costs of the airport.
Methods of Analysis
1. Porter’s Five Forces Model of Attractiveness
a. The threat of new entrants into the industry
- Operating an air - express transportation industry requires large capital investments, and therefore it can impede the entry of new firms into the industry. For one, Airborne has already its own set of aircrafts and even operate its own airport, and it would be hard for a new firm to compete with this.
- The company does not spend much on advertising; its brand
How to Cite this Page
| Essay on Comparison: Airborne Event and The Liberation of Aunt Jemima - The artist Fred Tomaselli arranged an assortment of objects “Airborne Event” in 2003, and the talented Bettye Saar, “The Liberation of Aunt Jemima” in 1972. I will be comparing these two pieces. This essay will consist of the explanation of each piece of artwork, and the comparison of each piece in my own opinion. The American artist Fred Tomaselli arranges pills, leaves, insects and cutouts of animals and body parts to create his pieces of art. His incorporation of items are arranged to suggest a level of perception along with a heightened visual experience.... [tags: Literary Response]|
:: 7 Works Cited
| Pros and Cons of Funding the Construction of the Express Rail Link in Hong Kong - In January of 2010, the Legislative Council have eventually approved the funding for the construction of Guandzhou-Shenzhen-Hong Kong Express Rail Link (XRL), which costs $66.9 billion. This astronomical cost raised a lot of discussions that whether the railway worthed it or not. The whole alignment of the XRL railway is about 140 kilometres with its intermediate stations in Humen, Longhua and Futian. Some have argued that the new railway could contribute to Hong Kong's short-term and long-term development.... [tags: express rail link, railway, controversy]|
:: 3 Works Cited
|Essay on Pony Express - Pony Express On April 3rd, 1860, the Pony Express started. The first rider named Henry Wallace left St. Joseph, Missouri. On April 13th the last rider reached Sacramento, California. To become a rider you had to be a brave young man, and an orphan, because it was a dangerous job. They had to be very good riders, and able to shoot good. And they must not fear Indian attacks. Every rider had to ride sixty miles at very high speed. He had to travel the 60 miles with six different ponies and in six hours.... [tags: US History Pony Express Essays]||1199 words|
|The Express Essay - The biography I chose was The Express: The Ernie Davis Story. Its about an inspirational and heroic African American Football player. Robert C. Gallagher wrote this book. Ernie Davis passed away when he was only 23 years old from leukemia. (Gallagher, 151). Even though his life was short he treated others with dignity grace and compassion. The life he led made him a hero. He was considered by professionals in his field to be one of the best running backs ever. He was most famous for being the first African American to win the Heisman trophy (Gallagher, 1).... [tags: Biography, Ernie Davis]||1051 words|
| To Express or Not to Express Yourself - That is the Question! Essay - Do you like having the ability to choose your clothes. To express who you are through your outfit. Dress codes don’t allow you to do this. Young teenage girl and mother were attending football game was stopped and got in trouble for her warm head dress. Dress codes are bad because individuality is lost, kids can’t express themselves, which leads to poor self-esteem. Or not having the ability to dress the way your religion tells you to dress. Hen this leads to religion or schooling. If god wanted you the same as the person next to you, he would have made you that way.... [tags: fashion, religion, clothing]|
:: 4 Works Cited
| Essay on Japan SIGINT Airborne Collection Plattforms - Introduction Technical intelligence collection technology since the end of World War II expanded to meet national policy makers’ needs in a growing, more diverse geopolitical environment. Airborne Signals intelligence (SIGINT) collection is a growing means to close intelligence gaps that fulfill policymaker’s needs. Since the 1960s, the United States (US) and Britain were the primary governments with such capability (Streetly 2010). Today many nations in Asia maintain an airborne SIGINT collection capability.... [tags: technical intelligenc collection technology]|
:: 12 Works Cited
| Energy: Airborne-Wind-Turbine Essay - In this modern era man search for clean energy is a very sought after necessity. Current technologies include solar farms, damns, and windmills which are all sheep sources of energy but have low output yields. The need now is to find viable methods to produce more energy using the fundamental energies of wind, water and solar power and make it cheap. Steps have been made to better harness the power of water using wave and current turbines. Other methods have used the sun in focusing its rays to produce steam energy.... [tags: wind, water and solar power]|
:: 1 Works Cited
| American Express Essay example - American Express began as a freight forwarding company in the 1850s, then repositioned as a travel agency, a financial and consulting services company. By recognizing that technology has changed the way people communicate and transact with one another, American Express understands the scope and role of internet technology on the travel market. The corporation turned itself into the booming sector of online services and became an interactive business player in a wide array of services. Today, American Express, known as Amex, is a multi-billion dollar corporation that has reshaped its services and operates more than 1700 travel service locations in over 130 countries across the globe.... [tags: Business Analysis]|
:: 10 Works Cited
|Happiness Express Essays - Happiness Express, a toy company, was started in 1989 by Joseph Sutton and Isaac Sutton. The company took off quickly and was able to gain a share of the very competitive toy manufacturing market. In the first year of operation they earned a few thousand dollars in sales, but by their fifth year they had total revenues of more than $40 million. The business model for the company was designed to identify the latest children’s characters that would be most marketable in the United States. They accomplished this by relying on market research that would identify children’s areas of interest in new media.... [tags: History, Growth, Revenue]||1881 words|
|Essay on Pony Express - Pony Express Before 1860 it was virtually impossible to get a letter or other form of correspondence from St. Joseph Missouri to Sacramento California in less than 20 days. 20 days seemed entirely too long for the west coast merchants and bankers to wait for documents from the east. So three men, William Russell, Alexander Majors and William Waddell created the Pony Express. The Pony Express ensured fast and safe delivery of the mail. To ensure the fast pace delivery of the mail, the Pony Express purchased 600 broncos, mostly thorough breads, mustangs, and morgans.... [tags: essays research papers]||476 words|
identity among customers would be their disadvantage and consumers might find other firms which they are more familiar with, through the ads they see on television or other forms of advertising which new entrants can do, enter into a new industry with much advertising and promotion.
b. Bargaining power of buyers
- Since Airborne’s main target are the corporate accounts, then their bargaining power are much higher compared to infrequent users, demanding substantial discounts. Because of this, the industry’s profitability is lower.
c. Bargaining power of suppliers
- Since Airborne provides services which might be crucial to some, like those who need to send packages and other documents to any part of the world, then its bargaining power is likely to be high. Examples are those infrequent users. Airborne can charge higher prices to them compared to what they can charge to corporate customers.
d. Nature of rivalry within the Industry
- At first, there maybe an intense competition between air-express transportation companies, but over time, Airborne cannot keep up with its larger rivals, FedEx and UPS. Clearly, these two companies are the industry leaders with large percentages of the market. Though, there are numerous competitors, others such as DHL Airways, and Consolidated Freightways are just small players in the industry.
e. Threat of substitutes
- The emergence of e-mails posts a threat to air-express transportation companies. Since e-mails are way cheaper than delivering your packages to Airborne or any other similar company, it could lower the profitability in this industry.
2. SWOT Analysis
• It operates it owns airport and has it own aircrafts. It also handles almost all of its fleet repairs reducing maintenance costs.
• Developed C- containers which are smaller and less expensive.
• Information systems such as LIBRA II, FOCUS and EDI improving customer service.
• High- volume of corporate accounts which allows the company to reduce costs.
• Strategic alliances with foreign agent to serve international market.
• Incentive pay system of the sales force to boost performance.
• Organizational structure is as flat as possible allowing free flow of ideas within the hierarchy.
• Advertising is inadequate resulting to lack of brand name recognition.
• Dependent on other carriers for international delivery since it does not fly its own aircraft overseas.
• Wide-bodied aircrafts like the Boeing 767 – 200 were purchased for larger capacity that would lead to greater operating efficiencies.
• Ground Delivery Services and Deferred services are the major trends nowadays.
• Demand in the international market.
• Airborne Express still can’t compete with the 10:30 am guaranteed delivery time by its competitors.
• Electronic - mail (e-mail) being a faster way of sending documents.
• Fluctuating fuel prices which is very important in this type of business.
Current Year’s data (2001) – Base Year’s data (1997) x 100
Base Year’s data (1997)
Airborne Express Income Statement, 1997-2001 (in $millions)
Total revenues – Increase/ (Decrease)
= 3,211,089 - 2,912,409 x 100 = 10.25%
A large portion of its revenues comes from domestic delivery. It is important that the company should strengthen first and develop its domestic delivery before it can go international.
Income – Increase / (Decrease)
= 19,458 -120,072 x 100 = (116%)
= 3,223,420 – 2,687,154 x 100 = 19.96%
A large portion of the operating expenses in 2001 are attributed to station and ground operations and the least is attributed to sales and marketing which is one of their weaknesses. Due to inadequate advertising, there is a lack of brand recognition in the part of the consumers which is very significant.
Airborne entered into joint ventures in Japan, Thailand, Malaysia, and South Africa. This would be a good strategy for Airborne Express to help them penetrate into the international markets.
The Advantages of forming a Joint Venture
Provide companies with the opportunity to gain new capacity and expertise
Allow companies to enter related businesses or new geographic markets or gain new technological knowledge
access to greater resources, including specialized staff and technology
sharing of risks with a venture partner
The Disadvantages of Joint Ventures
It takes time and effort to build the right relationship and partnering with another business can be challenging. Problems are likely to arise if:
The objectives of the venture are not 100 per cent clear and communicated to everyone involved.
There is an imbalance in levels of expertise, investment or assets brought into the venture by the different partners.
Different cultures and management styles result in poor integration and co-operation.
The partners don't provide enough leadership and support in the early stages.
Success in a joint venture depends on thorough research and analysis of the objectives.
Airborne Express Case Study
Airborne Express, an air express transportation company has succeeded to compete with a few big competitors such as Federal Express and United Parcel Service (UPS) even it does not have funding as much as its competitors. In 1996, it held third position in the industry with 9 percent of the market. Even Airborne is smaller size company compared to its main competitors, it still can survive with the competitive advantage through its resources and capabilities. With some unique resources and core competences, a company may have competitive advantage over its competitors, and this is the way small capital company able to compete with its competitors.
Airborne Express is the first and only air express transportation company that owns an airport. Because of the limited control, Airborne has purchased an airline at Wilmington in 1980. Since then, the airport became the hub of the company, and all the operations of the company were conducted here. It is also the biggest privately owned airport in United States. With the ownership of the airport, Airborne is able to control the operations more easily. Besides that, Airborne does not need to pay for any landing or service fees to the airlines company like its competitors. Comparably, Federal Express and UPS own the planes but still need to lease the airport from other party. It helps Airborne to save a lot of costs. Apart from that, Wilmington airport is one of the strategic airports in United States. It means that the place is having a well weather record. For express air transportation industry, weather is a big factor that can affect the daily business operation. If the weather is bad, the shipments will not be sent to the final destination at the promised time. Time is the promise to the customers and it does affect the confidence of a company's customers.
Besides airlines, Airborne also has a complete system of ground transportation. With the establishment of trucking hubs in some places, Airborne able to deliver the shipment that near to the hub using the ground transport. Almost 25 percent of the company's domestic volume is dealt with ground transport. However, the cost of service by ground transport is not transparent to the customers who assume that the packages are flown. Thus, the charge is same with the air-transported goods. Compare to air transport, ground transportation costs five times lower. From here, the profit margin has been increased. In the other way, the company also can offer lower price for ground transportation packages. Instead of making more profit, the company can utilize the low cost benefit to compete with its competitors.
In 1996, Airborne Express owned a fleet of 105 aircraft. To keep the capital expenditure down, Airborne has purchased...
Loading: Checking Spelling0%