Strategic Management of UPS (United Parcel Services)

UPS (United Parcel Service) is one of the largest package delivery company of the world that delivers over 15 million packages a day to in 200 countries to approximately 6.1 million customers around the world. UPS primarily operates in the United States headquartered in Atlanta, Georgia with about 428,000 employees. The slogan of UPS “What can Brown do for you” emphasize the ability of the company to provide services at almost any address of the world (UPS, 2018).

Mission Statement

“Grow our global business by serving the logistics needs of customers, offering excellence and value in all that we do (UPS Pressroom, 2018).

Maintain a financially strong company-with broad employee ownership-that provides a long-term competitive return to our shareowners (UPS Pressroom, 2018).

Inspire our people and business partners to do their best, offering opportunities for personal development and success (UPS Pressroom, 2018).

Lead by example as a responsible, caring, and sustainable company making a difference in the communities we serve” (UPS Pressroom, 2018).

Strategic Management

SWOT Analysis of UPS (United Parcel Services)

Strategic Issues of UPS (United Parcel Services)

There are some strategic issues that UPS need to be concerned about such as e-commerce growth is challenge as well as opportunity for UPS and it is not clear if management of UPS is on right track to address this challenge. UPS is experiencing ongoing volume growth, however e-commerce growth is creating challenges to the margins of UPS. Furthermore, online sales surging during the peak delivery hours like cyber weekend, Easter, and Christmas etc. puts a stress on network of UPS that can affect its profitability as transportation is required on short notice so that adequate service could be provided (Samaha, 2018).

Domestic package segment margin of UPS has fallen in the US in recent years. In response to this earning and network pressure, capital expenditures of UPS have been ramping by the company in recent years that has, somewhat, negative effect on free cash flow. Peak surcharges and control tower issues are the operational matters, but still UPS has experienced good increase in the sales volume even with increase in price per package. The strategy of UPS of expanding and modernizing the network rather than aggressive price increase to improve its volume mix may be the right one. However, this strategy could take some years to be proven correct unless margin starts to improve (Samaha, 2018).

Differentiation Strategy of UPS (United Parcel Services)

For UPS, differentiation strategy has never taken lightly. Monthly meetings are formed specifically to assess decisions and envision the future. These meetings have been playing a major role in approach of UPS to differentiation and low cost management via quality customer services. A differentiation strategy used by UPS is that the company is creating something about its service and product that is apparently unique in an industry. The services of UPS are perceived as unique by its customers as compare to the competitors of company. UPS is aware about the fact that its customers are relatively price insensitive so the company is quite concerned about adding uniqueness to its products and services. The differentiation strategy of UPS includes warranties, technology, dealer network, brand image, service, features, and quality and value.

Target Market of UPS (United Parcel Services)

A diversified group of customer segments is being served by UPS such as individuals and businesses. Hence target market of UPS is different based on their services’ potential consumption. Target market of UPS includes companies and businesses seek to ship export packages countrywide and anyone around the globe seeking to ship a package or envelope.

Competitive Advantage/Sustainability of UPS (United Parcel Services)

In the package delivery services, UPS is a leader. A competitive advantage has gained by the company in up to date information access as immediately and quickly as possible. Information and communication sharing is very critical as well as necessary at UPS from the size of package to its delivery place. Information system integration with people is essential for management of information, goods, and funds that certifies the revenues maximization. UPS has been very successful in sustaining as well as developing its competitive advantage while differentiating itself from company competitors in efficient information technology use for its operating services quality improvement. UPS, along with shipment delivery, is providing services in logistics (include supplier, supply chain, and vendor management), e-commerce, financial services, decision green, international green, and credit card services (Badar, 2011)

The management of UPS takes help from this information system while making decisions that sustains the competitive advantage of the company. UPS, because of technology and information system, is providing services as well as operating at its best level and reaping the opportunities and benefits efficiently for earning and maximizing the company profit. Customers of UPS are of the view that IS and IT system of UPS are the company’s assets that are significantly adding value to the UPS services. If UPS had not IT and IS system then it was not possible for the company to fulfil its promise of best services (Badar, 2011).

Major Competitors of UPS (United Parcel Services)

Major competitors of UPS are: the United States Postal Service, DHL International, FedEx (Federal Express), Canada Post, and Deutsche Post.

Conclusion of UPS (United Parcel Services)

In a nutshell, the slogan of UPS “What can Brown do for you” emphasize the ability of the company to provide services at almost any address of the world. Being top Fortunate 500 Company and a brand name is strength, brand is often dependent at touch points on delivery boys is weakness, online distribution and shopping is opportunity, and continuous increase in oil prices is threat to UPS. E-commerce growth is challenge as well as opportunity for UPS and it is not clear if management of UPS is on right track to address this challenge. Peak surcharges and control tower issues are the operational matters, but still UPS has experienced good increase in the sales volume even with increase in price per package.

A differentiation strategy used by UPS is that the company is creating something about its service and product that is apparently unique in an industry. Target market of UPS is different based on their services’ potential consumption. A competitive advantage has gained by the company in up to date information access as immediately and quickly as possible. Last but not least, customers of UPS are of the view that IS and IT system of UPS are the company’s assets that are significantly adding value to the UPS services.