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Airborne Express Case Essay

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1. From the point of view of the industry incumbents, is the express mail industry attractive? How has Airborne survived, and recently prospered, in its industry? Is its success attributable to its capabilities, its position, or industry attractiveness?

The express mail industry can easily be considered an inherently tough industry to operate within given the myriad of factors that come into play, such as unions, government regulations, cost of technological advancement, and international borders to name a few. Despite this, the industry could be seen as offering opportunities, which could be seized by attracting customers based on the quality of the service being offered. Consequently, this also encouraged mimicking between
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Conversely, they could be shipped to hubs (which passengers did not do like today) where they would be sorted during the night and then sent onwards to their final destination from there thus offering overnight services.
Fred also benefitted from being a first mover in the express mail industry. UPS that had been offering delivery services since the beginning of the 20th century. However, they had only relied on their ground network and did not establish their own fleet of aircraft until the early 80’s, after RPS had shook their existence and after seeing how fast Fedex’s business was growing. Being a first mover enabled Fred to start small and grow the business in line with demand. Fedex did not have to catch up to an industry incumbent since he was the one inventing the express mail airfreight business. If not, it would have called for a much greater investment and made it more difficult for him to penetrate an existing market. UPS on the other hand was able to enter the market since they were an established company with means to invest heavily in this new service. It is also likely that by being an early entrant, it also made it somewhat easier for UPS to start their own fleet than it would be for anybody to make that same attempt today, not omitting the fact that they had great experience in delivery services at that point as well.

3. Quantify Airborne's sources of competitive advantage.

a) First, explain in detail the cost position
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