Evolution of Express Delivery and its Impact on Small Competitors
Express delivery is a rapidly growing market for services to carry mail or parcels virtually anywhere in the world. The general acceleration of the pace of business and the existence of perishable goods have contributed to an increase in the volume of express deliveries made by each customer. Therefore, this industry is now hugely popular and is constantly changing and improving to meet consumer expectations. There are three reasons for this: the high speed of delivery, reliability, and responsibility of the company for the cargo, and the level of comfort that this service creates. Global shipping giants have reached their heyday on this wave. Among the largest companies are Federal Express, UPS, and Airborne Express (Rivkin, 2007). They differ in the degree of automation of the sorting process, but all are rapidly developing and increasing the turnover of resources. They have an extensive infrastructure designed for quality and speedy customer service and information management. Express delivery is also characterized by a high level of automation. The software allows consumers to prepare shipping documents, simplify billing, and, in turn, companies can monitor the quality of deliveries.
At the same time, such resources and changes by global giants have greatly affected smaller businesses. They are forced to increase the differentiation of their products to become more attractive to niche markets in the express mail industry (Rivkin, 2007). They are also trying to use information technology and improve service quality, but the investment required is too high. It is difficult for these businesses to compete and find ways to distinguish their services from those of the global giants. The express delivery market is difficult to access, capital requirements are high, and profit margins are relatively low. All these factors hinder the development of the service, and well-known companies suppress small competitors.
After the merger of the two companies, the business had more opportunities to compete in the market. At the same time, Airborne changed its customer service strategy. Thus, the delivery service began to focus on specific customers. It became an advantage because of the narrowing of the service profile provided of high-quality services. An important component of Airborne Express’s success was owning an airport, where warehouses were also built. Accordingly, the company was offer high-speed delivery, which was popular among customers. The next factor that influenced the prosperity of the business was the focus on employees. They were granted a decent wage and social security controlled by the unions (Rivkin, 2007). At the same time, Airborne Express purchased used aircraft and repaired them, so it was cheaper than their competitors. The advantage in the post-market was that Airborne transferred cargo on time, usually before noonday.
The firm managed to achieve such effects by working with contractors with whom it concluded agreements. They maintained retail service, which increased the company’s profits. Regarding investment in technology, the firm has chosen a strategy to monitor how competitors use technology and whether it is cost-effective. That is, Airborne Express carried out only innovations that guaranteed benefits to the company and customers. At the same time, support service and a truck tracking application were launched, which allowed the client to save on service agents. Furthermore, advertising performed a significant role in the prosperity of the business. The Airborne Express did not use promotion in the traditional sense but created certain advantages for main customers in order to they could receive delivery first (Rivkin, 2007). Thus, information about the company’s efficiency was disseminated quickly and with practical evidence. Therefore, the merger of the two groups and new strategic decisions admitted Airborne to achieve domination in the delivery. The company’s performances have gained through such sources of competitive advantage as mergers, the purchase of strategic facilities, focus on employees and customers, and the application of proven technologies.
Rivkin, J. W. (2007). Airborne express. Harvard Business School No 9-798-070.