Ups Analysis Opportunities & Threats: Business & Marketing Essay

UPS Analysis Opportunities & Threats
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Ups Analysis Opportunities & Threats
United parcel Service is an international delivery and supply chain Management Company that has headquarters in the United States. Apart from package deliveries, the company also deals with cargo airlines, trucking operations and a delivery airline. The company has headquarters in Atlanta, Georgia. This Essay purposes to reflect on the strengths and weaknesses for UPS.
Strengths
Adequate financial resources
A company’s worth is measured by its market capitalization or its current stock price multiplied by its number of shares. A survey done on 4th November 2020 showed the company’s net worth at $ 137.75 billion. The company’s strength in terms of resources can be seen in the following. First and foremost, the company has various customer service groups that are solely focused on researching customer needs and serving additional customer groups. The customer solutions make a huge difference between UPS and her competitors. The group helps customers make decisions on origin of shipment, patterns of distribution, locations of different warehouses, technology and investment techniques. The decisions basically help customers utilize their supply chains. To add on that, customers usually want companies that is innovative. The company heavily invests in technology in order to connect with consumers on a different level. By doing this, the company has greatly benefitted from the explosion of e-commerce activities. It is important to note that, this boost has also positively impacted shipping and courier services. Holiday seasons such as Christmas usually mean large sales as the number of packages increases. Thirdly, the company owns 125,000 delivery vehicles and 22,085 daily flight segments which move packages to approximately 40,000 access points. This transportation network enables efficient distribution of packages.
A Good Reputation
The UPS customer service is usually praised for upholding integrity. This is done by treating customers of all ages, gender and race with utmost respect and being accountable for goods that are delivered late. Moreover, company employees work as a team in assisting customers. This kind of interdepartmental unity has attracted more and more customers over the years. Thirdly, UPS was honored with three awards in 2018 (UPS Pressroom, 2020). These are: DOW Jones Sustainability World Index, 100 Best Corporate Citizens and Civic 50. The company won the awards stated above due to: caring for the well-being of workers, bearing social responsibility, environmental impact and ethical code. These values along with its unique corporate culture seem to give United Parcel Service a competitive advantage over its competitors.
Being the recognized market leader
UPS has a market share of 27.30%. Compared to its main competitor FedEX which has a share of 12.97%, UPS seems to be dominating the market. Being a market leader has the following advantages: First and foremost UPS is able to set trends and control the prices of services (Corporate Finance Institute, 2020). A large customer base not only enables UPS to use large scale economies to reduce cost of product per unit but also to set price trends which aid in gaining control over the market. Secondly, UPS tends to be aware of purchasing decisions due to its large customer base. Last but not least, UPS is able to minimize the cost of production by getting discounts on large orders from suppliers.
Economies of Scale
Companies with large economies of scale like UPS have a number of advantages over their main competitors. Large economies of scale enable UPS to engage in strategic pricing thus increasing its customer base (Portfolio et al., 2020). It creates a success loop which rivals are unable to deal with. Companies competing with large rivals are often disadvantaged win price and efficiency and usually sacrifice profitability so as to stay in the market or try to change the nature of the market to circumvent this problem.
Proprietary technology
By incorporating technology so as to increase the efficiency of its operations, UPS has guaranteed customer satisfaction and increased profitability. 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.’ Other technological solutions are ORION and Edge. Orion manages UPS fleet system whereas EDGE manages delivery routes.
Product innovation and development skills
Continuous research and the use of E-commerce have greatly contributed to the growth of United Parcel Service. The company heavily invests in technology in order to connect with consumers on a different level. By doing this, the company has greatly benefitted from the explosion of e-commerce activities (UPS Pressroom, 2020). The use of smartphones has enabled United Parcel service to upgrade its services from the traditional methods of ordering and delivering. Online sales from sites such as Amazon have caused a rapid increase in yearly sales. The market is also expected to keep growing while the popularity of the internet increases. It is important to note that, this boost has also positively impacted shipping and courier services.
Proven management
The company’s strong management has positively impacted its growth. Certain guidelines spell out how UPS man...