Winning in emerging markets. A road map for strategy and execution

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MIM F2Group - FAirborne express

Amel AtiePulkit GanjooVictor HonrubiaMaeva Mandard Sebastiano PeroniMaximilian Tempel

IntroductionAIRBORNE EXPRESS in the 1990SIndustryExpress mail delivery Private airport hub in Wilmington, OhioFastest growing company in the past 5 years Customer targetB2B with large volume of urgent recurrent mail itemsChallengeCatch up with the largest competitors, FedEx and UPSFounded in 1946 3rd largest industry player

express mail industry analysis

25% market share12m parcels529 planesThe Big three

45% market share2,8m parcels608 planes

16% market share0,9m parcels175 planes

POLITICAL FACTORSECONOMICAL FACTORSSOCIAL FACTORSTECHNOLOGICAL FACTORS

Government regulationsIncreasing pressure from labor unions$16-17 billion spent on expedited shipments in USAIncreasing disposable incomeGovernment subsidiesDecreased customer loyaltyStressed, fast-paced lifestyleGlobalizationNew tracking and CRM systemsCustomers demand for improved online service

Pest Analysis

Porters 5 forces analysisHigh Supplier PowerDependence on hub facilities, warehouses, cargo planes, fuelHigh risk of strikes by employeesHigh Buyer PowerHigh-volume customers expect high discountsPrice sensitiveUse more than one supplierRequire customized serviceHigh Threat of SubstitutionFacsimile and electronic mail are faster and cheaperLow product differentiationLow customer loyaltySimilar price & quality of serviceLow Threat of New EntrantsLow attractiveness - decreasing volumes, pricesHigh capital requirementsEconomies of scaleRegulatory constraintsHigh Industry RivalryThe Big Three - 85% market shareCompetitors copy improvementsDeclining profit margins

What do customer want?

Reliability & speedLow priceTracking packagesCustomized services

How do firms survive competition?

Strong financial resourcesScaleCompetitive pricingLong term contractsKnow-howKey success factors

High quality & reliabilityCost efficiencyOperational efficiency

Key success Factors

Airbornes swot analysis

Strategic group mapsexpress deliveryAIRBORNES STARTEGY: TO FOCUS IN COST LEADERSHIPLowHighMarket ShareLowHighService Differentiation

LowHighPriceLowHighQuality

ProcurementHigh volume & recurrent

Firm InfrastructureAirport hub & warehouse facility175 airplanes

TechnologyFOCUS platformCall Center Automation

Human Resource 20,700 employees50% unionizedInflexible environment

Marketing & SalesNo mass media marketing Large sales force

Inbound LogisticsCustomers send out packagesDriven/flown into airport Contractors handle 60-65% volume

Outbound Logistics3rd party delivery by subcontractorsNext morning delivery

Operations900,000 packages/dayReliance on hub/airport

Service

On time deliveryLower cost, same price regardless distanceCustomers are able to track packagesImproved Customer serviceTailored service

Value chain analysis

Competitors show higher marginsUPS & FedEx are larger

UPS & FedEx have higher growth

Financial Performance

Strategic Challenges

Merge or get acquired by a bigger competitor

Recommendation

Thank you