United Parcel Service “We run the tightest ship in the shipping business” Laura Andonov Mission Statement “To guide the company’s efforts to provide responsible, ethical business behavior and manage business conduct to achieve and maintain compliance with all applicable regulations and policies for all aspects of UPS business worldwide, including all wholly owned subsidiaries. ” UPS is a global package delivery business that specializes in not only managing the movement of goods, but the information and funds that moves with those goods in more than 200 countries and territories worldwide.UPS’s target market is primarily U.
S. companies that ship business to business via ground delivery and whose delivery time is not urgent. Major customers are manufacturers that ship directly to retailers and online businesses that ship goods to private households. UPS is a large C corporation, a legal business entity that is separate from its owners and managers. It’s unbounded in terms of shareholders and dividend income is taxed at corporate and personal shareholder levels.The benefit of UPS taking on this form of organization is that the company has limited liability, transferable ownership, will have continuous existence, and has easier access to resources. The disadvantage to this type of organization is that it is expensive to set up, they are usually closely regulated, and taxation is doubled therefore extensive record keeping is essential. In 1907, Jim E.
Casey borrowed $100 from a friend and started this Seattle based private messenger and delivery services company.From there his motivation and innovation turned into one of the largest package delivery companies in the world that delivers more than 15. 1 million packages daily to 7. 9 million customers in more than 200 countries and territories all over the globe.
UPS has had 103 years to perfect their business plan. There are numerous strategies and values that have pulled UPS through the years and allowed the company to maintain that competitive edge. UPS is a household name and oftentimes a business’s primary choice in delivery needs due to its extensive U.S.
and European ground network operations which makes it easy for their delivery trucks to access every address in the U. S. and Europe from one of hundreds strategically positioned hub locations. The hub design and locations were the end result of a known issue of not having the proper coverage to efficiently reach businesses and households in remote locations in a timely manner.
UPS has a definite stability strategy that aims to continue doing what they have been doing, but to continue to expand its number of markets in new developing markets.American businesses are importing more goods due to the lower cost to obtain the finished product/materials and UPS has applied one of their strategies from not only going global, but recently focusing on penetrating Latin America. Latin America’s market volume expanded by 50% early this year and a major problem for them was that their market was growing so rapidly that their delivery companies could no longer keep up with their booming business.
Look who jumped in to save the day, why UPS! Not only does UPS have to continually expand, but they also have to be updated with what their competitors are doing.The transportation industry is highly competitive and UPS’s three top competitors are Deutsche Post AG (DHL), United States Postal Service (USPS), and FedEx. All three companies offer similar, if not the exact same services, but pricing and availability depend on regions. I believe the competitive advantage UPS has over these three companies is that they listen to what their customers want and then they deliver exactly that. The initial competitive advantage that credited UPS’s early and continual success is that they always focus on courtesy to their customers, maintain low rates, and their round the clock service.
UPS has probably at one point or perhaps frequently performed determined the five competitive forces that establish the industry attractiveness and profitability. The threat of new entrants is very unlikely for UPS. This would be an intimidating market to attempt to infiltrate with UPS and its trailing competitors. Whereas the lack of new entrants is a key advantage, the threat of substitutes in place of other industries products is very high.
As mentioned before, UPS has three major competitors that offer similar products at a similar price. This is an area that management has to constantly evaluate.UPS evaluates what they have to offer the customer verses their other delivery needs counterparts and the customers have a no bargaining power whatsoever. If the customer is unhappy with the service or the pricing, UPS acknowledges that DHL and the FedEx will be waiting with open arms to assist them and attempt to win their loyalty. The bargaining power of the suppliers is also very low due to cut throat competition. If low prices are what the customer wants and they can easily take their business elsewhere, UPS must try to maintain reasonable fees to keep the customers happy as well as be profitable.
With examining four out of five forces, we can assume that the rivalry among current industry competitors is intense and management must be aware of what each competitor has up its sleeve at any given time. UPS has successfully managed to defray a lot of their costs by having such a successful website. Customers can do a number of things on the website from their home without having to call and physically come into one of their stores or hub locations and tie up their agents at the counter.One unique thing that you can do on UPS’s website is that you can enter in the senders address, your address, the weight of the item, how fast the package needs to get its destination, and you can print a shipping label from home. The free tracking feature UPS provides has also been a successful product of the website with over 18. 5 million hits daily! The website also allows an anonymous forum for customer suggestions and complaints, thus allowing the company to see what areas they need to make improvements on.By offering this type of open forum it demonstrates that management operates with an omnipotent view. By asking for, listening to, and acting upon customer feedback, managers can anticipate change, develop opportunities, correct poor performance, and continue to lead their organizations.
UPS offers incentives for managers to keep up the good work by offering bonuses and stock options when profits are up. In the event if profits are down, someone is pinpointed and held responsible for the loss and is required to do something to correct it.UPS has a strong organizational culture embedded into its daily operations. Employees that work with the public all wear uniforms and ask any one of the 400,000 employees world-wide and each one of them will be able to tell you who the founder was and the early history of the company. At meetings, they still use the same policy manual that they have been using for 90 years. They all know how to treat their customers, their fellow employees, drivers know how to carry their keys, and move away from left-hand turns. It’s the same in China as it is in Turkey.Managers spread the culture around at each location more than any other company out there.
Managers at UPS have also managed to attract and retain employees better than any other company as well as integrate a high level of ethics into their operations which is seen as a competitive advantage by its customers. This is achieved by having each employee review the code-of-ethics manual through annual workshops and daily communications, which is updated regularly and provides examples of detailed situations and ethical responses that employees may face.They make it known that there is a hotline to discuss anonymously about ethical issues, which then will be investigated and will be mentioned at the next managers meeting, so they can come up with a way to avoid any further issues of that type.
In the 70’s and 80’s UPS was doing so well that they could have stayed domestic and would have still been successful, but founder Jim Casey was in Germany and witnessed how poorly the national post office operated and decided to act upon this incredible opportunity.Casey sent over four of his best executives to access the situation, to see if they did, in fact, need a more efficient delivery service and how they should respond. Casey and his executives did not consider the cultural differences and had an ethnocentric attitude about expanding in the Germany market. They decided to replicate everything from the trucks down to the uniforms and hoped that everything would work out. It did not.First cultural mistake was that in 1976 the unemployment rate in Germany was 3%, so nobody really needed jobs and another cultural difference that they were unaware of is that a truck driver in considered one of the least desirable jobs in Germany, so it was extremely difficult to even get applicants. They sent over American managers and implemented the same brown American uniforms and that was a disaster as well.
The American managers weren’t adapting well with the German’s customary operations and the employees and customers were getting upset at the brown uniforms and trucks saying that they reminded them of the brown Nazi uniforms.Casey recognized early on in the game that they took a huge risk and that if they were going to make operations in Germany work they needed to step back and reevaluate everything before proceeding further. From that point on UPS in Germany was build from the ground up by acquiring a small group of driving companies and their already present employees.
Another example of cultural differences occurred with employees in Singapore were not compliant when it came to wearing uniforms due to the hot, humid weather and their work ethic is quite different from ours.