SWOT Analysis of United Parcel Service
United Parcel Services (UPS) is the company of choice for this recommendation and summary on the SWOT analysis UPS. Please follow the instructions on the attached file for the paper. It gives specific instructions on what must be covered in the recommendation for the SWOT analysis. Please use APA with 7th edition. I need ten (10) references with the paper and they must be in the last 6 years. Please use the references inside each paragraph of the paper. Thanks for your support.
Summary and Recommendation for UPS SWOT Analysis
Recommendations must reflect your industry and organizational analysis. Provide a set of recommendations based on your analysis, especially the SWOT analysis. Your recommendations must address the opportunities, threats, strengths, and weaknesses of your analysis. Prioritize the opportunities, threats, strengths, and weaknesses that you identified. Address them in descending order in this section, addressing the most important first and in the greatest detail. Recommendations should capitalize on opportunities and strengths and minimize threats and weaknesses. Provide a justification for each recommendation. In some cases, you may choose not to take advantage of an industry opportunity. If this is the case, defend your decision.
Be certain your recommendations are reasonable (that the company could implement them) and make fiscal sense. Discuss how your recommendations should be financed. You may want to give a schedule (time frame) for implementation of your recommendations.
You need to provide a summary of SWOT analysis before you give detailed list of the recommendations. Based on the above SWOT analysis, produce reasonable and justifiable recommendations in this section. In your recommendations, comment about the organization’s profit for future competitiveness and success. What does the organization have to do right to succeed (organization’s Critical Success Factors)? What are the expected results in terms of short- and long-term profitability and survival?
Recommendation & Summary for Ups SWOT
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Recommendation & Summary for Ups SWOT
United parcel Service is an international delivery and supply chain Management Company which has it’s in the United States. Apart from package deliveries, the company also deals with trucking operations, cargo airlines and a delivery airline. The company’s headquarters are in Atlanta, Georgia. The essay purposes to provide a summary of UPS SWOT Analysis. Additionally, it will also make recommendations based on the strengths, weaknesses opportunities and threats provided in the SWOT Analysis.
SWOT Analysis
Strengths
As one of the leading parcel delivery companies, the United Parcel Service has numerous strengths that enable it to dominate the market. To add on that, the strengths also help UPS to access new markets. These are: First and foremost, it has a history of successfully acquiring complimentary firms through mergers. The company has successfully merged with technology companies over the past few years with the goal of building a reliable supply chain and streamlining its operations (Fern Fort University, 2020). Secondly, the company is well for its product innovation techniques. Thirdly, United Parcel Service has a reliable network of suppliers of raw materials thus enabling the company to overcome any bottleneck in supply chains. Fourthly, the company has become relatively successful in executing new products. These new products have generated substantial returns on capital expenditure and built new streams of revenue.
Weaknesses
Weaknesses are the various areas UPS can improve upon. These are: To begin with, the company is not good at forecasting product demand thus leading to a lot of missed opportunities when compared to competitors like FedEX. Secondly, the company is not very good at partnering with firms with different work culture. The company may be good at partnering with small firms but larger firms have proven quite a challenge (Fern Fort University, 2020). Thirdly, the company is not able to tackle the challenges posed by the entry of new competitors to the market. UPS has to establish a feedback mechanism from the sales team to confront this challenge. Fourthly, the company has a higher attrition rate when compared to other competitors. UPS spends a lot of money and resources in workforce training and developing its employees.
Opportunities
The United Parcel Service has experienced rapid growth in the past decade. This is attributed to the following opportunities: Firstly, market development will ultimately reduce competitor advantage thus enabling UPS to increase its level of competitiveness when compared to other companies in the industry. Secondly, the government’s green drive will also open a procurement opportunity for UPS products by state and federal contractors. Thirdly, new technology provides the company with an opportunity to establish different pricing strategies in the market (Fern Fort University, 2020). It also enables the company to maintain loyalty in customers and to attract other customers through different propositions. Fourthly, a stable income flow provides UPS with an opportunity to make investments in different product segments. With more cash in the company bank accounts the company can afford to innovate.
Threats
Although the industry provides UPS with ample opportunities to make good returns, it also poses a number of challenges. These are: To begin with, the company can face different law suits in its various markets. This is because of the different laws and the ever-changing product standards in the markets. The second threat is the change in buyer taste. Buyer taste refers to the products customers choose over others. The third threat is the adoption of the new government regulations affecting the industry (Fern Fort University, 2020). Regulations such as random vehicle inspections, often affect delivery companies. For instance, a company may be using vehicles that are roadworthy to transport packages and when this is exposed the vehicles may be impounded thus interfering with the delivery process. Fourthly, rising salaries such as $ 15 an hour can negatively impact company profits.
Recommendations
Strengths
Based on the company strengths showcased in the SWOT Analysis, the UPS can take advantage of the company strengths in the following ways: First and foremost, mergers and acquisitions are a good way for a company to grow without waiting for the sales and marketing strategy to pay off. UPS often experiences difficulties in making deliveries within the required window during peak season. UPS would be making a smart move by involving itself in other mergers and acquisitions. For instance, in 2015 UPS merged with Coyote Logistics at $ 1.8 billion. This accounted for 3.1% of UPS profits of 2014. By merging with new companies, UPS integrates new ideas and technology into the company operations (COYOTE, 2020). UPS could take 3% of its company profits and acquire Arrival Ltd which specializes in production of electric vehicles in order to invest in the future technology. Arrival Ltd will guarantee UPS more profitability in a year as an acquisition than as a partner
Secondly, UPS is known for its innovation. UPS should keep providing technological solutions for its customers. The company invests $ 1 Billion on a yearly basis on technological solutions. Technology has not only enabled the company to increase consumer demand but also to improve the quality of customer service. One of the proprietary tools developed by UPS is the Chabot (UPS Pressroom, 2020). The AI-enabled tool mimics human voices and responds to questions from customers such as, ‘where is the nearest UPS delivery location.’ If UPS invested $ 2 billion in technological solutions, the company would increase its profit margin within a year. The company will also guarantee long term profitability due to the increasing use of electronic automobiles. If this recommendation is implemented, fluctuating fuel prices will no longer impact company profits.
Thirdly, United Parcel Service has a reliable network of suppliers of raw materials thus enabling the company to overcome any bottleneck in supply. The company can keep partnering with different suppliers in order to buy suppliers at a cheaper price. Within a year, the spending margins of the company will have drastically reduced. Last but not least, the company has become relatively successful in executing new products. These new products have generated substantial returns on capital expenditure and built new streams of revenue. In 2019, the company launched UPS my choice. The service has enabled customers to control, monitor and supervise outbound shipping (GlobeNewswire News Room, 2020). UPS should invest in a new delivery option for third party sellers. Third party sellers are people who use UPS to sell their products but do not store their commodities at the company’s warehouse. The investment for this venture can come from its Capital Cargo Finance department profits (Upscapital.com, 2020). A sum of $ 2 Billion can make returns within a year. However, the start-up capital will continue ensuring company profitability over the years and can make FedEX obsolete.
Weaknesses
UPS can improve on the weaknesses stated in the SWOT Analysis by implementing the following strategies. Firstly, forecasting demand goes a long way in aiding the company in exploiting the rise in demand during peak season. UPS lacks the resources to guarantee deliveries are made on time during peak season. The company can utilize the wholly owned subsi...