Most Suitable Dilemma Case Study Sample

Final Case

Airborne Inc. was an air express Transportation Company dealing in express and second-day delivery of small packages below 70 Ibs and documents within and outside the U.S.
DHL acquired Airborne Inc. in 2003 after struggling for survival in the highly competitive market.
This paper presents a situational analysis of the Airborne Inc. focusing on the competitiveness, SWOT Analysis, SLEPT analysis, and theories of strategic management.

In its international strategy, Airborne faced a dilemma of whether to imitate FedEx and UPS strategy of undertaking massive capital investments to establish international airlift capability or to embrace variable cost strategy by utilizing already existing air cargo or entering into strategic alliance with already established foreign companies

The Company’s Competitiveness

Airborne ranked third in the U.S with 9% of the market for small package deliveries
Airborne established an Advanced Logistics Service Corp. (ALS) subsidiary that increased its third party delivery of the small-package express mail
Airborne established strategic alliance through joint venture operations in Japan, Thailand, Malaysia, and South Africa to that expanded its international presence

SWOT Analysis

SWOT is an acronym for strengths, weaknesses, opportunities, and threats. It offers a tool for evaluating the internal and external environment of an organization. Whereas strengths and weaknesses characterize the internal environment, opportunities and threats characterize the external environment. SWOT Analysis for Airborne Inc. is as follows:

Internal Strengths

Had a flat organization structure that allows free flow of ideas within the managerial hierarchy
Embraced a centralized decision-making process due to the interdependence between the managerial functions
Combined its budgetary controls, pay-for-performance incentive system and corporate culture emphasizing on key values
Laid emphasis on improving service to their clients winning the Brand Keys Customer Loyalty Award and several other awards
Internal Weaknesses
Airborne had limited creativity as it focused in imitation of the market leaders such as FedEx and UPS in their services such as Ground Delivery Service (GDS)

Lacked change in its leadership with its top management serving from the 1960s to 2001

External Opportunities
The rapid globalization of the air express industries created a wide market network
The growth of potential for deferred services and ground-based delivery services created a large market potential
The development of logistic services based on the fast expansion of the air transportation industry
External Threats
Presence of superior competitors such as FedEx and UPS that dominated the U.S market
Escalating fuel prices with an increase from $18 in mid-1995 to $25 a barrel in 2002
Economic slowdown in the U.S
SLEPT Analysis
SLEPT is a tool for analyzing the external environment or industrial conditions where a company operates. It encompasses social, legal, economic, policy, and technological factors. The SLEPT Analysis for the air express industry where Airborne operates is as follows:

Social Factors

Availability of potential employees with the required skills and capabilities for working in the air express industry
Diversity of manpower with some specializing in pilot, freight, control, among others
Large market in the U. S and neighboring countries
Legal Factors
Deregulation of the airline industry paved way for the expansion
Existence of labor laws that seek to protect employees from exploitation
Economic Factors
High price competition due to the entry of many competitors in the industry
Decline in the average revenues per domestic shipment
Increasing fuel prices that made the operation cost expensive
Economic slowdown in the United States
Existence of well-established large local foreign agents with effective surface delivery systems
Policy Factors
Positive view of the private sector organization in the United States
Favorable government policies in Japan, Thailand, Germany, Malaysia, and South Africa allowing the establishment of strategic alliances
Regional stability with territorial protection leading to security
Technological Factors
Availability of Advanced Logistics Services Corp. (ALS) that facilitated third party logistics in small package express mail
Availability of advanced information systems such as LIBRA II, FOCUS Shipment tracking system, and Electronic Data Interchange (EDI) that ensure quick and effective link

Theories from Strategic Management

Airborne Inc. embraced horizontal growth strategy by forming strategic alliances with Mitsui and Tonami
Directional strategy theories manifest in Airborne’s case as the management south to pursue the concentration of its services in the express and second-day delivery of small packages

Airborne embraced pull strategy as it focused on using surmountable resources in advertising to establish awareness among its target customers

Recommendations
Airborne ought not to have rushed into inception by DHL but rather continue in forming strategic alliances that gave it an international presence
Airborne ought to have involved itself in change management strategies that would help in realigning the company goals and activities to the market needs

Airborne could implement product differentiation other than imitation of the market leaders such as FedEx and UPS

Airborne should have exploited its opportunities maximally by concentering in the small package deliveries where it had significant market shares