The Express Mail Industry

Service
differentiation
among
 courier
firms
is
limited;
therefore,
Airborne
Express
(AE)
tactically
competes
on
the
basis
 of
low
prices.
In
fact,
Airborne’s
mail
delivery
service
for
letters
and
packages
up
to
10
 pounds
is
the
lowest
price
point
compared
to
its
largest
competitors,
United
Parcel
Service
 (UPS)
and
Federal
Express
(FedEx).
The
services
includes
are
second‐day
delivery,
 overnight,
morning
and
afternoon
delivery.
In
relation
to
UPS
and
FedEx,
AE
occupies
a
 small
market
segment;
however,
among
“second
tier”
competitors,
it
maintains
a
healthy
 position.
Key
issues
facing
Airborne
Express
include
rapid
technology
changes,
adoption
of
 said
technologies,
international
expansion,
business‐to‐business
marketing,
distance‐based
 pricing,
and
the
decision
whether
or
not
to
merge
with
Roadway
Package
System
(RPS).
 The
following
report
will
unveil
these
issues
further,
in
addition
to
recommendations
of
 how
to
approach
these
problems.

PEST analysis is an imperative strategy tool used for a company, mainly to oversee and assists in project management. PEST analysis stands for the political, economic, social and technological factors of an organization. This tool is used as an aspect of an organization's competitive strategy to analyze and assess the critical external factors that may positively or negatively impact the organization (Kadlubek, 2016). When a PEST analysis is performed, the external factors are analyzed and monitor the external marketing environment. A company may consist of several external factors that can bolster or impede the development of an organization; therefore, it is beneficial and more productive to subdivide the external analysis into more feasible segments (Frederick, Agnes and John, 2011).

UPS is the largest parcel delivery company in the world with 340,000 employees, 149,000 delivery vehicles, and 500 planes. The company delivered nearly 13 million packages each business day to over 200 countries worldwide. Each year UPS moved around 6% of United States Gross Domestic products (GDP).UPS delivered its parcels through ground or air delivery system. There is also air-express delivery system for the overnight delivery of parcels. In addition to air and ground package delivery, UPS helps its customers with supply chain management, logistics, and financial services. In order to deliver parcels, UPS relies on a carefully designed network of vehicles, shorting facilities, and hubs as well as the support of a sophisticated IT systems.

Rivalry among competitors has also had a violent role in the industry of mailing services. The competitors try to cut the prices in order to maintain their competitive advantages and securing market shares. Furthermore, big giants like Federal Express and United Parcel Service (UPS) have progressed in the market with the efforts of cutting their costs and maintaining their position in the market by giving values to their customers. Innovations have also given the competition in the industry a significant boost. However, Airborne has established its position in the market by offering lowest price for the morning, afternoon, overnight, and next day delivery. The low cost strategy of the company has made it possible for Airborne to compete with

Federal Express was founded in 1971. In 1973, FedEx started operations officially and its hub-spoke distribution pattern enabled it to offer cheaper and faster service than its competitors. By 1981, UPS began to enter into the overnight air market and the United States Postal Service (USPS) cut its overnight letter at half the price of FedEx’s. Despite facing such extreme competition in the industry, FedEx could still excel due to change in the business environment. The success of the firm could be attributed to several factors:

"Moving eight miles a minute for most of the time", while these are lyrics to a song by Bob Seger, these words could describe a package 's experience being shipped by one of today 's leading package delivery companies. How these companies have used technology to improve their services and how they may expand the use of technology to increase productivity and reduce costs is the focus of this paper.

Initiated in 1971, the Federal Express company has been transforming and/or evolving and thus at the moment, it is not just an express delivery company but it has widened its scope from that to being a globally recognized logistics and supply chain management company. (Hill & Jones, 2013), noted that the company, since the launching of the internet in 1994 has largely invested in information technology systems, thus integrating their systems in order to provide services throughout its customers’ supply chains. Federal Express has also built a powerful technical architecture, pioneering it into e-commerce with the investment in the system’s infrastructure throughout the years and

Airborne Express is the third largest and fastest growing international air express delivery company in America. It held roughly 16% of the domestic express mail market by 1997. It provides time-sensitive delivery of documents, letters, small packages, and freight in the United States and internationally. The company has several advantages over its rivals, such as it provides delivery services at a lower cost of up to 20% over FedEx and UPS; it operates the nation’s only privately owned foreign trade zone in Wilmington; it is more flexible and provides more customer-tailored services. It charges lower price but still much guarantee delivery dates (not offered by the US Postal Service).

Executive Summary Airborne Express faces a critical time for their company, as the two “900-pound gorillas” are aiming to secure their position atop the delivery industry. As the competitive landscape of the industry begins to shift, Airborne Express has the opportunity to capitalize on making some changes in the way the company positions itself amongst its competitors. As United Parcel Service (UPS) nears the end of their strike and with the Postal Service getting closer to gaining the right to grant volume discounts, this is an opportune time for Airborne to recalibrate

In order for an organization to be more competitive, it’s imperative for them to stay abreast of the latest technology. “The early 1990’s marked the start of another era of change at UPS (United Parcel Service of America inc, 1994).” Technological Change was necessary to accommodate the increased volume of packages. This paper will explore the challenges faced by the business along with the network functionalities and the benefits that the changes in technology contributed.

FedEx able to identify the needs of its customer where many businesses demand a more efficient and reliable delivery services. After knowing the needs, FedEx develop an efficient overnight delivery services. This has shown that FedEx’s strategy is market-orientated where it estimated the market needs and created a value to serve the needs. He is able to identify market opportunities, target its market segment (businessmen) and effectively position their service (highly effective overnight delivery service). FedEx adopted market development strategy where it identifies and develops its new market segment by expanding its operation. It purchases Kinko’s, which operates in 11 countries and help the company to reach new customers and expand in Asia and Europe. It expands its reach further with U.S Postal Service where they can place a drop box in every U.S post offices.

UPS also claims that luck and timing helped a great deal. With the surge in e-tailing as well as B2B e-commerce, UPS was in a unique position to meet the increased demand. They were the bridge between the physical and electronic world, with a well-tested and highly reliable infrastructure to serve both of those worlds. UPS was able to foresee the importance of electronic information to the transportation industry. As early as 1985, they began improving their data networking applications to enhance communications with their customers and increase efficiency. For instance, they built up their IT network and database in order to collect and track over 200 data elements for every single package that they ship. With over 13 million packages being shipped every day, that 's a lot of data! However, their system continues to handle that level of information exchange. Consequently, they were well poised to help the multitude of new B2C online companies who came to rely on UPS for shipping. UPS was able to offer these new companies tracking services as well. It was as easy as setting up a link to the UPS Web site. UPS also offers a set of transportation APIs called the UPS OnLine Tools that allow businesses to integrate tracking, rating, address validation, and a number of other valuable

FedEx encouraged its customers to integrate its systems to their businesses. In return, customers will be able to reduce inventory, save time and warehousing costs. At the same time, innovative customers were demanding for greater integration of FedEx's systems. FedEx was able to design and develop customised software for their customers in order to enhance integration, such as an extranet for Cicso Systems.

The FedEx Corporation, conceived as Federal Express, is an American-based worldwide courier delivery Service Company. It provides strategic and logistical support for a variety of operating divisions, currently known as FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. These companies operate independently, compete collectively and manage collaboratively (Amsler et al., 2010). For the purpose of this report, focus will be on FedEx Express operations. The company is currently the global leader in the express delivery market, and offers delivery to and from individuals and businesses in over 220 countries and territories (FedEx, 2016a).

In this report we focus on the two main competitors in the package delivery industry: Federal Express Corporation (FedEx) and United Parcel Service of America, Inc.