Airborne Express Harvard Case Solution & Analysis

Airborne Express Case Solution


Airborne Express was founded in response to merger of two specialist airfreight carriers. One of the two companies was Airborne Flower Traffic Association of California, which was established in 1946 to ship fresh flowers from Hawaii to mainland United States. Moreover, in 1949, second company was established, which was Pacific Air Freight. Pacific Air Freight served the delivery of perishable items to and from Alaska.

airborne express case solution

airborne express case solution

The merger resulted in foundation of Airborne Express. Airborne Express was established as general airfreight forwarder in 1968. It has fundamentally targeted the segment of customers who want to ship urgent shipment packages. Its usual customer thus, was based on customers like Xerox; it had to deliver parts to repair by technicians throughout United States. Later on, it started the residential deliveries and infrequent shipment.

Airborne previously served customers like IBM and Xerox to freight heavy parts of their machinery. However, after 1995, Ray Berry, Vice president of Airborne Field Services Administration announced that their services will accomodate customers with residential delivery. Furthermore, Airborne also acquired a Strategic Command Base in Wilmington in 1980 in order to initiate an airport facility for its shipment. Currently, it is serving with 12,700 full-time and 8,000 part time employees with a fleet of 175 aircrafts and 13,300 vans that deliver approximately 900,000 packages per day.

Analysis of Competitive Advantage

In order to analyze competitive advantage of Airborne express an analysis of Porter’s five forces is done below.

Porter’s Five Forces of Express Mail Industry in United States of America

Bargaining Power of Buyers

Bargaining power of buyers plays significant role in small and large enterprises in the mailing industry. The business customers are targeted in this industry in order to provide services of freight for the machinery and other relevant parts. Thus, business customers are the major customers of the industry. Similarly, Airborne has developed relationship with the business customers like Xerox. Xerox is a special customers of Airborne and Airborne has developed a relationship with Xerox by providing the company prompt services. The delivery of the Xerox freight takes place as early as 8 am. It provides equal importance to the business customers and residential deliveries. Moreover, the bargaining power of buyers is medium.

Bargaining Power of Suppliers

Bargaining power of suppliers is expected to be strong in mailing industry. The reason behind this strength is that the suppliers like aircraft providers, airport facilities, and other maintenance providing services with heavy costs. However, Airborne owns its own airport that has reduced the cost, which would have been spent on the maintenance and gaining particular facilities for its freight. Furthermore, a huge expense of landing fees has also been minimized due to worthy investment of Airborne.

Rivalry among Competitors

Rivalry among competitors has also had a violent role in the industry of mailing services. The competitors try to cut the prices in order to maintain their competitive advantages and securing market shares. Furthermore, big giants like Federal Express and United Parcel Service (UPS) have progressed in the market with the efforts of cutting their costs and maintaining their position in the market by giving values to their customers. Innovations have also given the competition in the industry a significant boost. However, Airborne has established its position in the market by offering lowest price for the morning, afternoon, overnight, and next day delivery. The low cost strategy of the company has made it possible for Airborne to compete with big giants in the market.....................

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