Airborne Express case study Essay Example for Free

blood lineborne register case study Essay courseborne Express, an air emit transportation company has succeeded to compete with a few big competitors such as national Express and United Parcel Service (UPS) even it does not set out funding as a good deal as its competitors. In 1996, it held third position in the industry with 9 percent of the market. Even mobile is smaller size company compared to its main competitors, it still bath survive with the competitory advantage through and through its resources and capabilities. With some unique resources and core competences, a company may have private-enterprise(a) advantage oer its competitors, and this is the way small capital company equal to(p) to compete with its competitors. Airborne Express is the first and solo air express transportation company that owns an aerodrome. Because of the limited control, Airborne has buyd an airline at Wilmington in 1980. Since then, the airport became the hub of the company, and all the operations of the company were conducted here. It is likewise the biggest privately owned airport in United States. With the ownership of the airport, Airborne is able to control the operations more easily. Besides that, Airborne does not need to gestate for any landing or run fees to the airlines company like its competitors. Comparably, federal Express and UPS own the planes just now still need to lease the airport from former(a) party. It helps Airborne to save a lot of costs. isolated from that, Wilmington airport is one of the strategic airports in United States. It means that the place is having a well prevail record. For express air transportation industry, weather is a big grammatical constituent that can affect the day-to-day business operation. If the weather is bad, the shipments will not be sent to the final destination at the promised time. succession is the promise to the customers and it does affect the confidence of a companys customers.Besides airline s, Airborne also has a complete dodging of ground transportation. With the establishment of trucking hubs in some places, Airborne able to deliver the shipment that rough to the hub using the ground transport. Almost 25 percent of the companys domestic volume is dealt with ground transport. However, the cost of service by ground transport is not transparent to the customers who assume that the boxs are flown. Thus, the charge is same with the air-transported goods. equalise to air transport, ground transportation costs five times lower. From here, the profit marginhas been increased. In the other way, the company also can offer lower price for ground transportation packages. Instead of devising more profit, the company can utilize the low cost benefit to compete with its competitors.In 1996, Airborne Express owned a fleet of 105 aircraft. To keep the capital expenditure down, Airborne has purchased all used planes. The planes will be modified to suit its specification for air express transportation. The cost of purchase and modification is $30million lower than purchasing a new plane. Compare to other companies, a big count of money is being rescue by Airborne. Further more, Airbornes DC-9 and YS-11 aircraft require further two person cockpit clump compared to normal three person crews required in Federal Express and UPS. Labour cost has been saved again. Airborne also have its own maintenance facility in Wilmington. It is the only all-cargo carrier to do so. It can handle most if the maintenance works except major engine repairs. It was estimate that the working class costs of $16 per hour is $49 lesser than the subcontracted labour cost. It was a major source of one-year cost savings.Instead of serving all kinds of customers, Airborne decided to focus on serving the necessitate of high volume corporate accounts. It is because the bare competition and the cost of serving small customers. The company is able to establish scheduled pickup routes a nd use it as ground capacity more efficiently. Due to this factor, the unit of measurement cost structure has been reduced. According to the Airborne executives, their unit cost is $3 lower than its main competitor, Federal Express. Besides that, because of the different consumer behaviors between different groups, the focusing of the service is one of the ways to win a part of market in severe competition. By matching the needs of the groups, the company will have a better chance to win the customers than its competitors.Another aspects that Airborne go far competitive advantage is the humankind of the only privately certified Foreign Trade Zone (FTZ) in United States at its Wilmington hub. In a FTZ, merchandise is tax-free and no customs duty is paid until it leaves. It is a big haulage to the foreign companies. The companies can keep their inventories in Wilmington hub, and the inventorieswill be delivered to the destination by Airborne when needed. The topical anaesthetic c ompanies that implement Just-In-Time policy will prefer the service very much. It is because the inventories cost will bear by the suppliers that keep inventories in Airborne hub. For foreign companies, not only can satisfy the needs of local anesthetic customers, but also can save the cost of tax and duty paid. The FTZ is a good factor that will help Airborne to set foot into the international market. However, because of the capital constraint, Airborne still unable to compete with Federal Express and UPS in the international market.Normally, large sizes A-containers are used in the air cargo business. Around $1million per plane is required to install cargo doors to take A-containers. To solve the problem, Airborne has certain C-containers that are six times smaller, and can fit through the passenger doors of the aircraft. The equipment to load the C-containers also active 80 percent less expensive than the equipment needed for A-containers. The shape of C-containers also design ed to allow supreme utilisation of the plane space. To prevent other competitors copy the design, Airborne has taken out the patent on the C-containers. Therefore, C-containers seem to be the speciality of Airborne Express. It helps the company to save a lot of costs. It is a commodious term cost savings because it involves in daily operation. Therefore, it also a long term competitive advantage everywhere the other competitors.Apart from that, through its subsidiary company, Advanced Logistics Services Corp., Airborne is promoting a range of third-party logistics service. It provides customers with the ability to maintain inventories in a 1 million square foot line of reasoning exchange facility located in Wilmington hub. The customers can choose to manage the inventories themselves or subcontract to Airborne. In ancestry exchange service, third party will involve in the instruction for movement of the inventories.It easier the abut of the movement of inventories, and also he lp the customers to minimise inventory holding costs. Airborne is the first and only air express transportation company that provide this unique service. It actually involves a complex frame. Therefore, knowledge or human resource is very important in order to develop the system. Since it is the only company, customers who interestedwith the stock exchange service will come to Airborne. The unique competence gives Airborne a competitive advantage. comprehension and technology is developing rapidly in the world. Information system becomes more and more important in the business world. The more developed system a company has, the more competitive advantage it gets. Airborne uses three information systems to help in its daily operation. LIBRA II system is a metering stratagem and computer software that easier the transaction between Airborne and customers. It also lowers Airbornes operating costs. FOCUS is the main system provided by Airborne and it benefits customers the most.It is a worldwide tracking system that help the customers to track the location their package through Internet link. It increases the companys reliability and service quality. With the trust on the company, customers will be more sure-footed to give the job. The third system is the Customer Linkage electronic entropy interchange program. It eliminates repetitive data entry and paperwork by the customers. It also a system that created purposely to benefit its customers. The company also benefits from big(p) the costs by eliminating manual data entry.From all the resources and capabilities mentioned above, we could realise that most of the competitive advantages Airborne has over its competitors is through costs reduction. According to Porters Generic Strategies Model, Airborne is actually implemented a cost-focus strategy to get the competitive advantage. Because of the lesser capital, Airborne is unable to compete with the giant of the industry, such as Federal Express and UPS. If Airbo rne can be the cost leader in the industry, it can give a severe competition to the competitors. Besides that, the unique resources such as C-containers and Foreign Trade Zone are also giving core competences to the company.In conclusion, facing the competition from competitors that have powerful funding, Airborne not only can survive, but also get a strong position in the air express transportation industry. A correct and suitable strategy adopted by a company can change the company position. A company, which can fully and smartly utilise its resources and capabilities, it can havecompetitive advantage over the other competitors and it really benefits the company a lot.