DHL Corporation and Subsidiaries - Page 106

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          intermediate entity could grant DHL and DHL Airways the right to            
          use the DHL trademark in the United States, it could not grant              
          the right to use the DHL trademark to any other person or entity            
          anywhere in the world.                                                      
               In July 1990, there was an agreement in place between DHL              
          and DHLI providing that, if the transaction with the foreign                
          investors were terminated, DHLI could not use the DHL name                  
          outside the United States for 5 years.                                      
          V.  Financial Condition of DHL                                              
               During the 1980’s DHL’s principal competitors included                 
          Federal Express, United Parcel Service (UPS), and Airborne                  
          Express (Airborne), all of which were larger, had better                    
          economies of scale, and were in better financial condition than             
          DHL.  In the early 1980’s, Federal Express had an 80-percent                
          share of the U.S. domestic overnight delivery market, and it did            
          not regard DHL as a significant competitor.                                 
               In the early 1980’s, however, DHL had 30-40 percent of                 
          the U.S. international outbound market.  Federal Express, which             
          did not have or offer its own international line of business at             
          that time, decided to expand into the European market.  Federal             
          Express did regard the DHL network as the significant competitor            
          in the European market because of DHL’s existing network and                
          ability to clear customs.  Federal Express failed to build a                
          successful European delivery network and lost several hundred               
          million dollars but continued to offer U.S. outbound service.               

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