The Express Mail Industry evolved from being business centered into a dynamic business environment. The total shipment in the industry by the year 1996 grew from $16 billion to $17 billion. As the industry was expanding, a service called the quick-on-time delivery took over from the order-and-wait model which was common before. Under this service, companies in the industry were able to shorten the duration between order placement and delivery of different cargos to clients across the globe. As the field of technological growth was becoming more viable for businesses, the industry was overtaken by technological inventions in the management of different aspects of cargo delivery. For instance, rooting and online tracking of goods on transit became a common practice in the industry. Companies such as Airborne, United Parcel Market, and Federal Express adopted systems such as COSMOS, Freight Online Control, and Update System to improve the efficiency of their operations. These companies were able to proactively track every shipment as a new service to guarantee maximum customer satisfaction.
The general customer service environment improved tremendously as competitive and effective cargo handling services were embraced in the industry. These changes occurred as demand for quicker, confidential, and quality cargo services increased among customers within the industry. These changes made small competitors such as Airborne to expand their operations since they made it easy for the small companies to penetrate the previously oligopolistic industry. In the end, these companies were able to increase their market share as business shifted from quantity to quality services and concentrated market segmentation.
How Airborne has survived and prospered in the industry
The Airborne Company has survived and prospered in the industry through use of different strategies. The first strategy is specific customer segmentation in the expansive industry by only targeting business clients who have large urgent cargo consignments to ship within the metropolitan regions. Besides, as opposed to many competitors that spend a lot of money on mass media advertisement, the Airborne Company’s promotion strategies involved the use of larger shipping businesses to self-advertise its services. Besides, the Airborne Company gave its sales team primary mandate of negotiating for volume discounts with clients through flexible pricing arrangements to suit different classes of customers. As a result, Airborne was able to deliver high-quality services that are reliable and discounted prices. In the end, the company was positioned in the market as the only low price entity with similar quality assurance as that of its competitors. The company managed to acquire a privately owned warehouse and an airport in Ohio, which doubled up as the central business hub for its logistical activities. As a result, the company was able to bring down the cost of business operations by almost 20%. Besides, the low cost of operations was passed down to customers through series of discounts to repeat associates.
Quantifying Airborne’s advantages
The company has a large fleet of more than 13, 300 vans and nearly 200 aircrafts. As a result, the company was able to deliver up to 900,000 items in a day. The company has more than 12,000 permanent employees and 8,000 temporary employees to ensure that services are delivered within the shortest time possible. The company has its own airport which doubles up as the business hub in Ohio, thus the cost of delivery does not include landing fees and other logistical fees. Since the company has private warehouse in Wilmington, the cost of running the entire business was brought down by almost 18%. The company has concentrated market to metropolitan regions. Thus, the highly stratified market enabled Airborne to penetrate and cut its own niche in the expansive market.
Since the company used selective technology through its Freight online control and Update systems, it was very easy to offer effective cargo tracking service to its customers. In the end, the stable technological systems increased the company’s ability to reliably and speedily make deliveries. In addition, the personal selling through a team of 500 sales persons was effective in reaching the clients of the company without having to allocate a large budget for the same. The Airborne Company was able to offer very flexible cargo delivery services to its customer as a result of having a very large fleet.
Options for the CEO in order to strengthen the company’s position
Despite having performed so well over the period of analysis, the company competitive advantage is not sustainable. To begin with, the current overreliance on the single airport as the central hub is not efficient since the business is expanding each year. Besides, technological growth is changing every day. This means that the current technological systems that are in use by the company may soon become obsolete. If the company does not change the technology in line with the new inventions, it may not sustain the current logistical and cargo tracking support network in the long run.
Apparently, the CEO must come up with strategic initiatives to strengthen the company’s position in the local and international business environments to guarantee competitive advantage sustainability. To begin with, the CEO may advice the board of directors at the Airborne to start a merger negotiation plan with the DHL in order to strategically increase the current operations and marketing options at the international level. This option will widen the scope of the company at the global level since DHL has a strong international presence.
The CEO may start growing an e-commerce platform for the company to guarantee a shortened cycle of service delivery development at local and international levels. When successfully implemented, the Airborne Company will be in a position to double its current capacity to serve the current shortfall in express delivery services. In addition, the CEO may introduce the aspect of value addition as a service within the current departments of inventory control and supply chain to increase the profitability margin of the company. In addition, the CEO of the Airborne Company may implement a new strategy that aims at targeting a fresh market niche that is currently ignored by Federal Express and United Parcel Market.
Business strategy for the Airborne to compete with UPS and FedEx
Current business needs to ensure operational sustainability
Efficiency of the soft skills
The key part of success puzzle for operations management strategy at the Airborne should operate on efficiency of the soft skills involving timeless vision of organizational principles, defining value of the business, determining requirements, clarifying the vision, building teams, mitigating task, resolving issues, and providing direction (Easton, Wild, Halsey, & Lea, 2015). Currently, the technological aspect of business performance at the company is not sustainable since any changes would make the current system obsolete. Moreover, the company’s strategies for balancing act between optimal performance at minimal operation and overhead costs should be modified to be part of the efficiency of the organizational operation.
Efficiency in the value maintenance
Reflectively, relating information on the success of operations is dependent on operations strategy for value maintenance. In the process of balancing the act, a quality operations management system should be capable of applying the scientific skills in an artistic manner through informed and perfectly framed use of soft skills to address technical aspects of production management (Easton, Wild, Halsey, & Lea, 2015). Generally, the quality operations management system at the Airborne does not satisfy requirements within the business environment in terms of disintegrating initial goal projections through the current partnership with the DHL.
Balance between the short-term and long-term goals
Generally, corporate strategies of the Airborne are not steady in ensuring long-term and sustainable operations. The current system does not consider the role played by planning for resources in technology and continued innovations the freight services. For instance, the long-term expansion and further market penetration has not been integrated through a series of beneficial partnerships, performance evaluation, and proactive innovation in the services to meet the demands of its diverse customers (Easton, Wild, Halsey, & Lea, 2015).
Adopting the Flexible Monitoring System (FMS)
Business efficiency is critical in the product management line since it is characterized by optimal utilization of allocated factors of production within the least possible cost. From the above refection, it is apparent that the Airborne will gain in the long run if it adopts the Flexible Monitoring System (FMS) (Easton, Wild, Halsey, & Lea, 2015). Despite lower returns on investment below the projection, the overall effect of adopting this proposal will have benefits that will outweigh its limitations. For instance, when the FMS is fully adopted as proposed, the reduction in cost of factors of operations such as labor and reduced actual operation costs will result in accumulated gains as a result of controlled costs that are recurring. Due to increased output, the market will eventually expand and the company will get more revenues. At the current location, the quality system is certain. Thus, when the system is quality-oriented, the entire chain coordinating these segments would result in optimal operations at the company.
Adopting the Six-Sigma
The company should also adopt the six-sigma approach in quality control and assurance in the customer care and operations department. The proposed Six-Sigma is aimed to reduce wastage of resources that can be experienced in long customer queues and ineffective task outputs, such as the current slow customer order processing system. Six-Sigma will also integrate employees to provide the highest quality services through self-assessment and a proactive approach to skills tests. Six-sigma is done to prepare, synchronize and manage the multifarious activities of the company through the efficiency module (Easton, Wild, Halsey, & Lea, 2015).
Modification of the performance measurement variables
In order to achieve quality operations management, Airborne’s existing forms of system monitoring should be periodically upgraded to introduce multiple operating system models such as ratio analysis in operation management (Easton, Wild, Halsey, & Lea, 2015). Despite having this efficient operations management system, the company has not fully established a mechanism of monitoring progress at micro level and depends on macro auditing in decision making and still has to deal with the risk of internal redundancy.
Easton, P., Wild, J., Halsey, R., & Lea, M. (2015). Financial accounting for MBA (6th ed.). New York, NY: Wiley and Sons.