CFMF Case Analysis
JaLisa Hoekstra
September 4, 2014
CF MotorFreight Case Questions
1. What is the central marketing / strategy problem, and what has caused this problem? The central problem of CF MotorFreight in 1992 was that competition in the industry was increasing, making it difficult for CFMF to maintain profitability. This was mostly due to The Motor Carrier Act of 1980 which eased entry into the market. The increased competition consequently decreased the prices and lead to bankruptcy for many motor freight companies. There was an increase in private carriers that took 54% of the industry revenue in 1991.
2. What is the secondary marketing / strategy problem, and what has caused this problem? The secondary problem is that CFMF had purchased Emery Air and essentially went into the “red.” Management has to create a new or tweak the former strategy in order to gain back this lost profit, while maintaining it’s image and attempting to expand it’s customer-base.
3. Identify 3 strategic factors that are relevant to this case? (Assessment of organizational strategy/ alignment/ strengths & weaknesses). One strategic factor that is always important to a company is the strategy of the competition. Yellow Freight, the nation’s largest LTL carrier, was one of CFMF’s main competitors. The distinguishable aspects to Yellow Freight are that they were the only LTL carrier without regional carrier service, and the only LTL carrier that negotiated its labor contract separately with the Teamsters. In addition, Roadway Express focused on price discounts, and because of this was the nation’s third largest LTL carrier company. CFMF had to consider this while making major company strategy decisions, because management had to find ways to gain clientele differently than their competitor. The initial strategy for CFMF in the 1980s was expansion of terminals, consolidation centers, and trucking facilities to most large business cities in the U.S. By 1992 they had expanded immensely and even
September 4, 2014
CF MotorFreight Case Questions
1. What is the central marketing / strategy problem, and what has caused this problem? The central problem of CF MotorFreight in 1992 was that competition in the industry was increasing, making it difficult for CFMF to maintain profitability. This was mostly due to The Motor Carrier Act of 1980 which eased entry into the market. The increased competition consequently decreased the prices and lead to bankruptcy for many motor freight companies. There was an increase in private carriers that took 54% of the industry revenue in 1991.
2. What is the secondary marketing / strategy problem, and what has caused this problem? The secondary problem is that CFMF had purchased Emery Air and essentially went into the “red.” Management has to create a new or tweak the former strategy in order to gain back this lost profit, while maintaining it’s image and attempting to expand it’s customer-base.
3. Identify 3 strategic factors that are relevant to this case? (Assessment of organizational strategy/ alignment/ strengths & weaknesses). One strategic factor that is always important to a company is the strategy of the competition. Yellow Freight, the nation’s largest LTL carrier, was one of CFMF’s main competitors. The distinguishable aspects to Yellow Freight are that they were the only LTL carrier without regional carrier service, and the only LTL carrier that negotiated its labor contract separately with the Teamsters. In addition, Roadway Express focused on price discounts, and because of this was the nation’s third largest LTL carrier company. CFMF had to consider this while making major company strategy decisions, because management had to find ways to gain clientele differently than their competitor. The initial strategy for CFMF in the 1980s was expansion of terminals, consolidation centers, and trucking facilities to most large business cities in the U.S. By 1992 they had expanded immensely and even