Airborne Express Harvard Case Solution & Analysis

Airborne Express Case Solution

Problem Background

The case is regarding the current performance of Express mail industry and its intense competition among 3 selected competitors, which are FedEx, UPS and Air Borne. However,the case clearly shows the importance of FedEx and Airborne along with the difference between their financial performance as well as the competitive cost structure.

airborne express case solution

airborne express case solution

 It provides numerous services to the customers and tries to deliver the services on time. The ratio of delivery across nation is 99% effective, which shows the quality services and time management of FedEx. However, the problem is the cost activities implemented by the company as its cost is the biggest threat to allow each rivals to beat the competitive position of FedEx.

On the other hand, Airborne is the third largest logistic and express mail industry,which provides similarservices as compared to FedEx. However,it has the advantage of its own hub (Airport Land) in Ohio,whichallows to reduce the extra costing activities related to the Airport landing expense. Now the difference is only the efficient delivery time as many analysts noted that its delivery time was 97%,which reflects poor quality services as compared to FedEx. However, the cost structure is more reliable than its counterpart.

In order to review the current operational cost efficiency of both the companies, the cost structure of FedEx (Given in the case) will be compared to the cost activities associated with Airborne (Estimated).

The final results will show that whether the cost of Airborne is more efficient as compared to FedEx or not. Furthermore, the analysis also indicates that if the cost is less as compared to the cost of competitor, then it will show cost efficiency and the company’s willingness to produce more profit margins than others.

Cost Analysis of Air Borne

The analysis from the given figures in the case determines the total discounted cost of shipping the letter overnight of both FedEx and Airborne. The results show different figures of overnight morning as well as overnight evening.

Form the given data, it is concluded that the price difference between FedEx and Airborne is moderate asthe same services areoffered by both the companies. However, it shows that the total price of Airborne is $10.95 and is 27% less than the original figure of FedEx.

The overnight afternoon cost of Air Borne is 30% less as compared to FedEx and is considered is the smallest figure in the data.Thispercentage also reflects the discount rate of overnight shipping cost. Nevertheless, the discounted figure of FedEx in overnight morning cost is more than Air Borne,whichshows more reliability in urgent delivery.

For further cost assessment, it is, therefore, concluded that the total discounted cost of FedEx is the same in case of overnight morning and evening, however the cost varies under the situation of Airborne sinceit generates $8.04 per letter shipping cost in overnight morning and $6.46 in overnight evening.

The largestcost in this case is the cost of flight and trucking expense as well as the cost of labour. The difference of these costs isless as compared to the net cost. Moreover, Airborne generates $2.18 per flight and truck expense for overnight morning delivery and is 12% less than the expense of FedEx.

The difference in overnight evening delivery is quite high and is 39% less as compared to FedEx. The same rates have been applied for the case of overnight evening. The overall analysis shows that Airborne is not good in the case of overnight morning delivery as compared to FedEx. However, it shows more discounts in the overnight evening charges....................

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