Airborne Express and Husky Injection Essay

1950 Words Mar 6th, 2013 8 Pages
Airborne Express and Husky Injection Molding Systems
Airborne Express
1. Perform a five-forces analysis of Airborne Express’ industry. Forces | Items | Power | Rivalry | * Big competitors are FedEx and UPS; * Smaller competitors like BAX Global, DHL, Worldwide Express, Emery Worldwide, RPS, TNT Express, Worldwide, and US Post Service | Keen competition with big competitors as they account for the lion’s share of the market | Entry barriers | * Economy of scale * CAPEX on IT, facilities, aircrafts and airports, trucks, * Brand loyalty, licensing, customer networks | High entry barrier to the industry because of large economy of scale, high CAPEX, and dominating market shares of big players | Substitutes | * Emails
…show more content…
Unlike FedEx and UPS, Airborne owned the airport that served as its major hub, so it did not pay landing fees nor face any obstacles to tailoring facilities to its needs. It also built a warehouse in the airport and leased it to business customers, so as to increase delivery speed. Moreover, the airport’s status as a Community Reinvestment Act one led to reduced property taxes.
Airborne relied less on automation and more on humans, in particular part-timers that were paid relatively low. Its fleet also consisted primarily of used aircraft to reduce CAPEX. It managed to maximize its payload, which was roughly 80% full, around 10% to 15% more higher than its competitors.
Airborne’s customers were concentrated in major metropolitan areas. 80% to 85% of its volume was shipped among the top 50 metropolitan areas, while it was below 60% for FedEx and UPS. It could also use trucks (one-third of transportation cost of aircraft) more often than its competitors as a greater portion of Airborne’s volume consisted of afternoon and second-day deliveries.
In terms of pickup and delivery, Airborne did not maintain retail service centres. It hired contractors to handle 60% to 65% of its volume, so it could save cost by owning a lesser portion of delivery trucks. Its courier generally picked up and delivered more parcels per stop than FedEx, reducing labour costs per unit by 20% and 10% for pickup and delivery respectively.
b. How much

More about Airborne Express and Husky Injection Essay

Open Document