The United
Parcel Service (UPS) has with stood the test of time. The company started as a $100 dream and has
grown to a global industry with brand recognition throughout the world (Garvin
& Levesque, 2006). All companies
have a goal of doing just this, evolving with technology and paving the way for
future firms in your industry. However,
the tale of UPS can do more than just aid those in the same industry, the
strategy and strengths of UPS are those to be analyzed and made applicable to
any industry today.
Strategy has
never been taken lightly for UPS.
Monthly meetings of teams specifically formed to envision the future and
assess decisions have always played a large role in UPS’s approach to low cost
management and differentiation through quality customer service (Garvin &
Levesque, 2006). The combination of
these approaches creates a generic business-level strategy emphasizing quality
as reliability. By identifying their
position on the value creation frontier, the objectives of a company can become
more clearly defined (Hill & Jones, 2010).
It is through such identification that has led UPS to change their
mission statement, further identifying goals and purposes at the organization
in their industry and market segments (Garvin & Levesque, 2006).
As a company
that focuses on low cost and quality, it is important for UPS to take critical
action towards each of these approaches to differentiation. These actions have transpired into tangible
and non-tangible potential outcomes for the company (Garvin & Levesque,
2006). The company has created their own
sets of terms and norms by allowing their company to adapt to customer needs
while staying within the same parameters outlined by the company. UPS is able to stay ahead of the competition
by constantly looking into the future.
By knowing where they want to be in the future, the managers are able to
see if each investment, functional-level strategy, business-level strategy, or technological
advancement will help or hurt the company (Garvin & Levesque, 2006). UPS tries to take advantage of all potential
technological advancements, staying true to the heritage of the company (Associated
Press, 2010).
UPS stays
prominent in their market by focusing on three major areas of need. The
business operates as: a United States domestic package service, an
international package delivering service, and a supply chain and freight service
(Associated Press, 2010). UPS takes what
many companies would consider to be extremes in order to cut costs and become
more efficient. UPS trucks do not take
left hand turns, for one. It has
reportedly saved them 20.4 million miles by having an expert map out their
routes before the delivery occurs. This
simple approach has also had a more environmentally friendly effect, reducing
their carbon footprint 20,000 metric tons (Shontell, 2010). Senior Vice President Ben Stoffel also
informed the public on CNN Money in 2010 that it is safer and quicker to make a
right handed turn (Shontell, 2010). An
employee of UPS told my management 310 class that when he worked for UPS there
were expectations on how drivers would enter and exit the trucks. By having a specific foot you would step into
the truck with it saved time and gave UPS another advantage in the field of low
cost strategy.
UPS has
dedicated their decision process and strategy to low cost and quality through
efficiency and reliability of service (Garvin & Levesque, 2006). They do so by focusing on the importance of
pricing options, differentiation, finding the market demand, having a very
specific cost structure, and focusing on their particular industry and market
competitive structure, which are all important in a successful position at the
business level (Hill & Jones, 2010). By identifying their strategy and staying
fully committed to it, UPS’s actions and strategy is one of great value. This value is exponential due to the fact
that UPS is in a very competitive market.
The services offered by UPS are comparable to those of FedEx and DHL.
UPS has become a
pioneer in the industry by staying ahead of the game technologically. The company needs to continue to find ways to
ship products efficiently and cost effectively.
It is important for UPS to find new segments in the market in order to
keep making a profit. UPS also needs to
continue to understand the importance of international business and their role
in this growing industry. Many
businesses are spread across the world and rely on services from UPS and their
competitors to do business in a timely, cost effective manner. The future plans and strategy of UPS are
important, but so is the past. UPS
focuses a tremendous amount of time and effort into the future. Learning from mistakes and short-comings are
also very advantageous. UPS is ahead in
their industry, but they do need to keep a close eye on mistakes of competition
as well as the successes those companies have had.
UPS had the
largest initial public offering (Garvin & Levesque, 2006). The company still boasts a high stock
price. According to Yahoo! Finance the
stock for UPS closed at $65:57. The
company has had stock prices over $70 this year, and its low as remained about
$60. The company is optimistic in this
trying economy. UPS predicts that this
fiscal year that their returns will be $4.15 to $4.40 per stock. This is up three cents from the original
predictions by the company. Their focus
on efficiency and low-cost looks as though it may really pay off in the future
for their investors even as oil prices stay high (Bomkamp, 2011).
Works Cited
Associated Press. (2010, May 26). United
parcel service inc. ups:nyse, industrials/air freight & courier services. Retrieved from http://topics.nytimes.com/top/news/business/companies/united_parcel_service_inc/index.html
Bomkamp, Samantha (2011, April 26). Ups raises outlook while eyeing economic
risk. Retrieved from
http://finance.yahoo.com/news/UPS-raises-outlook-while-apf-885984253.html?x=0
Garvin, David A., Levesque, Lynne C. (2006, June 19). Strategic planning at united parcel service Retrieved
from
Hill, Charles W.L., Jones, Gareth R. (2008). Strategic management: an integrated
approach. Mason, OH: South-Western Cengage Learning
Shontell, Alyson. (2010, March 24). Why ups is so efficient “our trucks never
turn left.” Retrieved from
http://www.businessinsider.com/ups-efficiency-secret-our-trucks-never-turn-left-2011-3
Yahoo!Finance (2011, October 31). HTC Corp..
No comments:
Post a Comment