Airborne Express
Airborne Express
The two main elements of Porter?s Five Forces Model that Airborne Express should be most concerned with are the level of competition within the industry and the power of the buyers. The competitiveness in the industry is very intense. It is lead by two giants, Federal Express and the United Parcel Service (UPS), which account for 35 and 24 percent of the market share respectively. Airborne Express holds only 9 percent of the market. Competing with these two industrial juggernauts is very difficult due to their large financial advantage and their overall size. Airborne Express also has to deal with the above average bargaining power of their high-volume corporate customers. They chose to focus on this segment of the market in the mid 1980s and, even though this strategy has greatly helped them to succeed, these buyers often have the power to demand substantial discounts that they often receive. There is one area of buying power that could be seen as an advantage for Airborne Express. They control the only privately certified Foreign Trade Zone (FTZ) in the U.S. In an FTZ merchandise is tax free and customs duties are
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