Model of Logistics in Kuehne+Nagel - Case Study Example

Market structure-the aerospace logistics industry is rapidly changing day in day out. As such, all the aerospace logistics companies, Kuehne+Nagel included, have to morph constantly with respect to the varying trends to survive. Specifically, the market structure affects the business model of a company that has to be compatible with the prevailing market conditions. Kuehne+Nagel is precisely struggling to manage cost positioning that is just a part of the whole issue of market structure. The problem is partly contributed to by the customers who use cost as their tool for choosing an aerospace logistics company, and partly by the presence of several companies who have to scramble for the few clients (Francois, 2012 p. 1). With its traditional business model which did not pay much attention to cost positioning issues, Kuehne+Nagel found itself in a financial mess when it had to lower its prices in order to come into equilibrium with that of the market.

However, reducing the costs acted as a double-edged sword, drawing clients in but stretching the operations of the company. The only solution was to devise such cost-friendly solutions like shared warehousing among others.