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  • Case - Airborne Express

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    Sean Lim
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    Despite being one-ninth the size of its largest rival in an industry with significant economies of scale, Airborne survived for years and prospered. The differences in activities between Airborne and its rivals created a 20% cost advantage for Airborne. The Express Mail Industry in the u.s. Is dominated by FedEx and UPS, who hold 70% market share.

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    Despite being one-ninth the size of its largest rival in an industry with significant economies of scale, Airborne survived for years and prospered. The differences in activities between Airborne and its rivals created a 20% cost advantage for Airborne. The Express Mail Industry in the u.s. Is dominated by FedEx and UPS, who hold 70% market share.

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    2K views4 pages

    Case - Airborne Express

    Uploaded by

    Sean Lim
    Despite being one-ninth the size of its largest rival in an industry with significant economies of scale, Airborne survived for years and prospered. The differences in activities between Airborne and its rivals created a 20% cost advantage for Airborne. The Express Mail Industry in the u.s. Is dominated by FedEx and UPS, who hold 70% market share.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Case Discussion:
    Airborne Express
    Prof. Jan W. Rivkin

    Synopsis

    Despite being one-ninth the size of its largest rival in an industry with significant economies of scale, Airborne survived for years and, at times, prospered.
    It did so by targeting a subset if customers with particular needs and tailoring its every activity to meet those needs uniquely well. The differences in activities between Airborne and its rivals created a 20% cost advantage for Airborne.

    Dynamics of the Express Mail Industry

    The express mail industry in the United States is dominated by FedEx and UPS, who hold 70% market share. Small players have struggled. Emery/Purolator and BAX were pushed to the periphery of the market, and Roadway Global Air exited the business after losing hundreds of millions of dollars. Why is this such a tough market for small players?
    Why are there benefits of being big in this business?

    Dynamics of the Express Mail Industry

    It looks very costly to ship a handful of units. Yet FedEx entered this business at a very small scale (186 packages the first night) and even started to make money at a small scale. How do we make sense of that?
    How would you characterize the competition between FedEX and UPS? Why is the rivalry between these two companies so fierce?

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