Discussion Questions:1. Using the Value Chain Analysis, identify the primary & support activities of AirborneExpress.
First I’m going to tell something about the primary activities of Airborne Express. The primary activities exist of inbound logistics, operations, outbound logistics, marketing and sales, and as last after-sales service.
Inbound logistics: They use road and air. After the pick up, it goes to the major hub in Wilmington.
Operations: The operations are the delivery of approximately 900000 packages.
Outbound logistics: The delivery of the packages from the hub to the delivery destination.
Marketing and sales: Targeting logistics managers of major shippers.
After-sales service: The use of their internet site to track their shipment and the call center automation.
Second, The support Activities, they include human resources, accounting and finance operations, technology, and procurement.
Human resources: “ strait-laced, frugal and conservative“Firm infrastructure: Their fleet has 13 300 vans, 175 aircrafts and their own airport.
Technology: Airborne uses its Freight on-line control and Update System (FOCUS) but in general they wait with investments until shows clear benefit for the customer.
Procurement: The usage of their aircraft fleet2. What are Airborne Express’ most important capabilities? What is its core competence?Airborne Express targeted the business that focused on the shipping of large volume of urgent items, primarily to other business locations. Their most important capabilities are that, Airborne Express is the only one who has an airport and therefore didn’t have to pay for landing fees, nor did it face any obstacles to tailoring the facility to its needs. Airborne has build a warehouse space who created the ability to receive orders as late as 2 am and have goods delivered the same day.
Airborne has a patent on his cargo containers who fitted through a passenger door of an air craft and therefore did not needed a cargo door. Airborne could fill his aircraft roughly 80% full and not 65%-70% as his competitors. An other advantage of Airborne is that they could use the trucks more often than their competitors for the long-haul portion of a delivery and this was estimated to have costs who were 1/3 of the costs of owning and operating a similar amount of aircraft capacity. Airborne did things to offer a low price and was known for that. Airborne created a code for one of his biggest clients Xerox so that those packages would be delivered first (8 am.)Airborne core competence is to offer a good and fast service at a low price and they can do that because they are able to cut in their costs.
3. How and why has the express mail industry structure evolved in recent years? How have the changes affected small competitors?Evolutions:-Other kind of deliveries and more focus on speed and price.
-Higher volumes and decreases of price-A larger public uses this industry-The calculations of the optimal route with information systems for speed and low price-Track shipment-The customers became more difficult and started to ask more from the companies and wanted to have as much information as possible at all time.
Small competitors have a rough time because they have to compete with the larger and better organist companies. Big companies have advantages like economies of scale, bargain power,…. The big companies don’t use all their full capacity all the time and they come the small companies in. They can buy capacity from the big ones. So the big companies can reduce their costs and the small companies can play in the express mail industry game.
4. How has Airborne survived, and recently prospered, in its industry? What must Robert Brazier, Airborne’s President and COO, do in order to strengthen the company’s position?Airborne is the third largest player in the express mail industry and even with recent strikes at rival UPS, he isn’t able to gain more market share from FedEx and UPS. To strengthen the company’s position, Airborne has to:-Airborne has an advantage with the usage of his trucks because the most of his volume are in the afternoon or second day deliveries. Airborne has to enlarge and develop his ground transport and the services that he there offers.
-Has to find a partner or an other airline to share the facility expenses of the airport.
-Airborne has to create strong and long term alliances (Roadway Package was a good start) to compete with FedEx and UPS-Upgrade and invest in his services (customers, transport, delivery on time,…) as much as possible-Keep on focusing on the large accounts of corporation (like Xerox)Bibliography: – Strategic Management: Concepts, Second Edition (2008), by Mason A. Carpenter and Wm.
Gerard Sanders, Pearson Prentice Hall. ISBN-10: 0132341409; ISBN-13: 9780132341400- Harvard online, buy case study Airborn Express