Download - Airborne Express HBS case 798-070
Winning in emerging markets. A road map for strategy and execution
Video
MIM F2Group - FAirborne express
Amel AtiePulkit GanjooVictor HonrubiaMaeva Mandard Sebastiano PeroniMaximilian Tempel
IntroductionAIRBORNE EXPRESS in the 1990SIndustryExpress mail delivery Private airport hub in Wilmington, OhioFastest growing company in the past 5 years Customer targetB2B with large volume of urgent recurrent mail itemsChallengeCatch up with the largest competitors, FedEx and UPSFounded in 1946 3rd largest industry player
express mail industry analysis
25% market share12m parcels529 planesThe Big three
45% market share2,8m parcels608 planes
16% market share0,9m parcels175 planes
POLITICAL FACTORSECONOMICAL FACTORSSOCIAL FACTORSTECHNOLOGICAL FACTORS
Government regulationsIncreasing pressure from labor unions$16-17 billion spent on expedited shipments in USAIncreasing disposable incomeGovernment subsidiesDecreased customer loyaltyStressed, fast-paced lifestyleGlobalizationNew tracking and CRM systemsCustomers demand for improved online service
Pest Analysis
Porters 5 forces analysisHigh Supplier PowerDependence on hub facilities, warehouses, cargo planes, fuelHigh risk of strikes by employeesHigh Buyer PowerHigh-volume customers expect high discountsPrice sensitiveUse more than one supplierRequire customized serviceHigh Threat of SubstitutionFacsimile and electronic mail are faster and cheaperLow product differentiationLow customer loyaltySimilar price & quality of serviceLow Threat of New EntrantsLow attractiveness - decreasing volumes, pricesHigh capital requirementsEconomies of scaleRegulatory constraintsHigh Industry RivalryThe Big Three - 85% market shareCompetitors copy improvementsDeclining profit margins
What do customer want?
Reliability & speedLow priceTracking packagesCustomized services
How do firms survive competition?
Strong financial resourcesScaleCompetitive pricingLong term contractsKnow-howKey success factors
High quality & reliabilityCost efficiencyOperational efficiency
Key success Factors
Airbornes swot analysis
Strategic group mapsexpress deliveryAIRBORNES STARTEGY: TO FOCUS IN COST LEADERSHIPLowHighMarket ShareLowHighService Differentiation
LowHighPriceLowHighQuality
ProcurementHigh volume & recurrent
Firm InfrastructureAirport hub & warehouse facility175 airplanes
TechnologyFOCUS platformCall Center Automation
Human Resource 20,700 employees50% unionizedInflexible environment
Marketing & SalesNo mass media marketing Large sales force
Inbound LogisticsCustomers send out packagesDriven/flown into airport Contractors handle 60-65% volume
Outbound Logistics3rd party delivery by subcontractorsNext morning delivery
Operations900,000 packages/dayReliance on hub/airport
Service
On time deliveryLower cost, same price regardless distanceCustomers are able to track packagesImproved Customer serviceTailored service
Value chain analysis
Competitors show higher marginsUPS & FedEx are larger
UPS & FedEx have higher growth
Financial Performance
Strategic Challenges
Merge or get acquired by a bigger competitor
Recommendation
Thank you