“ Case Synopsis

Threat
of
New Entrants
LOW
High barrier to entry
- Complex operations system (know-how)
- High capital requirement
- High fixed cost low margin
- Government authorization
MODERATE
-airports Internal HIGH
(landing fees) Power Competition Power - Similar products/services
of ㅁ of - Low switching costs
-airplane Airborne Express - Price sensitive
Suppliers Buyers
-truck customers
-fuel providers FedEx UPS - Specific demands
- Multiple suppliers

HIGH
- three major firms Threat
-six second-tier players of MODERATE
-bloody “parcel war” Substitues - Alternative products: Fax/E-mail
-similar prices and products - Documents - possible over fax/email (↑)
- Packages - not possible over fax/email (↓)