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Airborne Express

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Airborne Express

In the 1990’s, express mail was a profitable business, where individuals were spending almost $17 billion to ship items. Shipment volumes had increased 15-20% every year over the last ten years too. The three main shipping companies at this time were Federal Express, UPS, and Airborne Express. Airborne Express was the third largest shipping company during this time. Compared to UPS and Federal Express, Airbone needed to focus on the importance of service and speedy delivery to grow. Because the express shipping industry began to attract more business, UPS and Federal Express began a pricing war, resulting in Airborne’s ability to gain margins. Airborne Express was able to produce profits during this time by using its own sources of competitive advantage: 1. Continue to service companies who needed to ship large volumes of urgent item materials. 2. Less automation and more employees for sorting, allowing the company to hire more part time employees instead of full time. 3. Shipping was mainly in metropolitan areas, which allowed them to concentrate on afternoon deliveries or second day deliveries. 4. Allowed other companies to release new technology for the field and then would order the devices for Airborne, rather than paying for R&D up front. 5. Reduced operating costs by: owning its own airport to ship the items for customers, as well as utilizing older aircraft for shipping, no retail centers to maintain, and had outsourced to private couriers to deliver packages.
Because of their competitive advantage areas, Airborne Express was a rapidly growing company during the 90’s but had very low margins because they kept their prices low. In order to maintain growth during this time and strengthen the company’s position, the company has to shift focus from their conservative strategy and focusing on metropolitan...

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