U.P.S. and FedEx were just swallowing up competitors. So Airborne decided the best way to compete was to be the low-cost provider of air express service. Robert Cline, CEO of Airborne explains their strategy "When you are up against UPS and Federal Express, those guys are so big and so well capitalized that you have to have a tool to fight with them. It wasn't going to be size; it wasn't going to be how well-known we were. So, we decided to be the low-cost operator."(Washington CEO P 33). However, to become the low cost operator Airborne had to make many structural changes. One of those structural changes was that Airborne centralized its organization as much as possible. After all, why pay middle management high salaries when upper management can make all the decisions. Furthermore, what CEO would trust middle management to make decisions during the unstable period of the company's history? .
Another major change Airborne underwent in the eighties, was to differentiate its service. Unlike its two major competitors, FedEx and UPS, Airborne changed its strategy to concentrate on providing services for large corporations (Airborne Express's 10-K form p5). This strategic change not only gave Airborne product differentiation and market specialization, but also benefited by taking away the need for advertising. Therefore, it could save the $35 to $40 million it was spending a year on advertising, and use it to help become the low-cost operator (Washington CEO p 36). .
Airborne made important structural and strategic changes in the eighties, which contributed to its success. However, in the nineties, Airborne is reluctant to change with the environment. As mentioned earlier, many firms are moving towards a more decentralized structure. Airborne seems to be using the same structure that got it through the eighties. Consequently, its decision making is still coming from top management, and no responsibility is being delegated to lower management.
