Relative Cost Analysis Assignment: Quantify Airborne’s sources of advantage. Reference the reading on
“Creating Competitive Advantage”. This note explains that it is often useful to analyze a company’s cost
position relative to its rivals and to examine the willingness of customers to pay for the company’s products
relative to competitors’. The case allows you to analyze the relative costs of Airborne Express in details.
Specifically, compare the costs of an overnight letter shipped by Airborne Express to one shipped by Federal
Express (see Exhibit 3). Using information in the case and your understanding of what influences each cost item,
estimate each of the items for Airborne Express. The case does not allow you to compare willingness to pay across
companies more than qualitatively, but it does permit you to examine relative prices.
