Book: Strategic Management from Charles W.L Hill Analyzing a Case Study: Case St

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Book: Strategic Management from Charles W.L Hill Analyzing a Case Study: Case Study 6 - The air Express Industry: 40 years of Expansion.

Question 4: A SWOT analyze about the case below. (Need at least 1 page long)

Case 6 The Air Express Industry: 40 Years of Expansion Charles W. L. Hill, The University of Washington via air. During the first half of the 1990s, the small pack INTRODUCTION age express industry continued to grow at a he The small package express delivery industry is that seg ment of the broader postal and cargo industries that spe- rate, with shipments expanding by slightly more than ustry was 16% per annum." Despite this growth, the indu zes in rapid (normally 1-3 days) delivery of small hit by repeated rounds of price cutting packages (small packages are defined as those weighing pnvate cializes in rapid (normally 1-3 days) delivery of small firms battled to capture major accounts. In addi- igor- ously on the basis of technology, service offerings, and late 1990s tion to price cutting, the big three also competed the global reach of their operations. By the discipline being maintained, despite the fact that less than 150 lbs or having less than 165 inches in com- bined length and girth). The modern express delivery in the United States began with Fred Smith's ision for Federal Express Company, which started and early 2000s the intensity of price co operations in 1973. Federal Express transformed the t the industry had moderated, with a degree of pricing structure of the existing air cargo industry and paved the way for rapid growth in the overnight package seg- grw th rate for the industry slowed down. Between 1995 and 2000, the industry grew at 9.8% per year. In 2001 ment of that industry. A further impetus to the indus- try's development was the 1977 deregulation of the U.S. air cargo industry. This deregulation allowed Federal the volume of express parcels shipped by air fell by 5.9%, partly due to an economic slowdown, and (and its emerging competitors) to buy large jets partly due to the aftereffects of the September attack on the United States.3 Growth picked up again in 2002. Estimates suggest that the global market should continue to terrorist for the first time. The story of the industry during the 1980s was one of rapid growth and new entry. Between 1982 and 1989, small package express cargo shipments by air in the United States grew at an annual average rate of 31%. In contrast, shipments of air freight and air mail for small package express delivery grow by a little over 6% per annum between 2005 and 2025. Most of that growth, however, is forecasted to take ket. Within the United States, the annual growth rate is In North America, the biggest change to take place grew at an annual rate of only 2.7%.1 This rapid id growth place outside of the now mature North American mar attracted new entrants such as United Parcel Service (UPS) and Airborne Freight (which operated under the name Airborne Express). The entry of UPS triggered se- vere price cutting, which ultimately drove some of the er competitors out of the market and touched off a predicted to match the growth in United States GDP in the 2000s was the 2003 entry of DHL with the ac quisition of Airborne Express for $1 billion. DHL is it self owned by Deutsche Post World Net, formally the wave of consolidation in the industry By the mid 1990s, the industry structure had stabi- German post office, which since privatization has been lized with four organizations -Federal Express, UPS, rapidly transforming itself into a global express mai Airborne Express, and the United States Postal Service- and logistics operation. Prior to 2003, DHL lacked accounting for the vast majority U.S. express shipments strong presence in the all-important United States mar ket. The acquisition of Airborne gave DHL a foothold im the United States. DHL subsequently spent $1.5 bill Copyright O Charles W.L. Hill. All rights reserved. C-92

Explanation / Answer

SWOT analysis for the specific case is as follows.

Strength.

Which companies have very wide availability of operational networks as well as implementation of such a specific strategy make them to increase the revenue by keeping overall cost flow. Strong demand and continuous demand over international as well as national market has also increased this Industries overall influence. All of the companies in this specific market segment are operating at a very high profit as well as they have full capabilities of global expansion while having technological advancement implemented making them more efficient. Incremental number of airplanes in the cargo delivery system has also influence the overall cost involved in the operation.

Opportunities

According to the case Global Business growth is the most important opportunity that could be focused by diesel specific company. Ups and FedEx can easily increase the overall level of business. Expansion of online customer service as well as increase in demand in logistic can also increase the level of business done by these organisations in their respective environment. This type of approach would extensively support the overall development of the company as well as it would also influence the company to create a better impact on overall business opportunities.

Weaknesses

This field has a great problem of racial discrimination as well as it has extremely lacking ground transportation services which affects the overall business capabilities in different operative marketing environment. Judgement for late delivery and continuous increment in adepts is also affecting these specific organisations operating in the specific environment.

Threats

Keep shipping companies as well as availability of low fare options from new shipping companies are using a direct thread on this is specific organisations. Which type of approach is reducing the impact of these organisation as an availability of option for smaller firms are increasing. As online influence of these organisations are relatively less as compared to new organisations for running continuous offers.
Expansion to the Asian countries is also a troublesome approach as availability of Asian Carriers at the capabilities of reducing the price to a very low level is also influencing the overall business and causing a strong fret over UPS, fedEx and similar organisations in discussed case.

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