Strategic Plan Analysis - Ups

Strategic Plan Analysis - UPS

History of UPS

UPS is the world's largest package delivery company and is headquartered in Atlanta, Georgia. The company was started in 1907 by James (Jim) Casey at the age of nineteen. Jim Casey borrowed $100 from a friend and started the American Messenger Company in Seattle, Washington. Despite stiff competition, the company did well because of Jim's strict policies: customer courtesy, reliability, round-the-clock service, and low rates. He used the slogan: "Best Service and Lowest Rates." (www.ups.com).

In 1913, the company began to focus on package delivery for retail stores. The company merged with a competitor to form Merchants Parcel Delivery. The 1920s and 1930s saw growth, creativity and change. The company expanded to California and by 1930, service was provided to all major West Coast cities. In addition, a consolidated delivery service was established in New York city. Many innovations were adopted, including the first mechanical system for sorting packages and a 180 foot conveyor belt was installed in Los Angeles. The company changed its name to United Parcel Service and all the UPS vehicles were now painted the familiar Pullman brown color, chosen for its dignified, professional look and its ability to keep clean.

World War II forced UPS to redefine itself. Retail stores encouraged customers to carry their packages home rather than have them delivered. The trend continued with the creation of suburban shopping centers or malls. UPS began looking for new "common carrier" rights to deliver packages between all addresses, including private or commercial. This put it into direct competition with the U.S. Postal Service. UPS was restricted from operating in many parts of the country. Federal authority was required for each state border crossed and each state had to grant permission for the movement of packages within its borders. It took UPS almost twenty-five years, until 1975, to obtain authority to move packages in the 48 mainland states.

UPS began offering two-day air service to major cities on the East and West coasts in 1953. Packages were flown in the holds of scheduled airlines. Called Blue Label Air, it was available in every state by 1978. As the demand increased into the 1980s, UPS began to assemble its own air cargo fleet and by 1985 was offering overnight air service. The airline is now one of the ten largest airlines in the United States (www.ups.com). UPS entered the international business in the 1980s and now offers service to and from over 200 countries.

Although UPS has experienced tremendous growth over the past 98 years, increased competition has forced a shakeup in the company's strategy. After losing business to such competitors as Federal Express and Roadway Package Service, UPS began re-making the way the company does business. Gone is the "we know what's best for you" or "one size fits all" mentality that was the strategy for decades.

The UPS Charter

The UPS Charter provides the principles that guide the decisions made and the solutions developed every day at UPS. It is a statement of the strategy, mission, purpose, and values. The strategy (what we must do) is how UPS will realize the mission (what we seek to achieve) which in turn reflects the purpose (why we're in business) which is based on the values (our enduring beliefs). The strategy is to create a future of one company, one vision, one brand, with the motto of "Synchronizing Global Commerce." (www.upsers.com).

1. We will continue to expand our distribution and supply chain solutions to synchronize the world of commerce - the flow of goods, information, and funds.

2. We will expand our position as a trusted broker between buyers and sellers worldwide.

3. We will harness the appropriate technology to create new services and to strengthen our operations and networks.

4. We will attract and develop the most talented people whose initiative, good judgement, and loyalty will help realize our company's mission.

5. We will continually study customer's behavior, anticipate their needs, and design our products and services to exceed their expectations.

6. We will create a practice of innovation that leads to sustainable growth.

7. We maintain an environment that enables us to treat every customer as if they are our only one.

8. We will leverage the UPS brand to maximize brand loyalty among all constituencies.

In anticipation of the centennial anniversary in 2007, UPS has established a set of goals and capabilities required to sustain its competitive advantage into the future. They are divided into four categories: Winning Team, Value-Added Solutions, Customer Focus, and Enterprise Excellence. In addition, several years ago, UPS began to measure the results and progress of its strategies with the Balanced Scorecard method. Divided into four groups, Customer, Employee, Operations, and Financial, it consists of objectives, goals, and initiatives to further the strategic plan. The Balanced Scorecard cuts across all departments of the company and is a part of each individual employee evaluation.

SWOT Analysis

Strengths

For quite some time, UPS has been a very forward-looking company regarding technological advances. UPS was the first package delivery company to have all delivery transactions online as well as provide tracking on their website. These advances allowed UPS to capture a large part of the ground delivery market in the U.S. as well as expand their business worldwide. One of the most important aspects of UPS technology development is the use of specialized wireless devices for the past 12 years. Also the UPS Store has allowed UPS to supplement the technology with a large network of pickup and delivery centers.

As one of the world's top employers, UPS currently employs approximately 360,000 people worldwide. Full-time and part-time employees, including drivers, unionized workers with excellent benefit packages. UPS has a strong commitment to thorough training and understanding among its employees, which allows for increased efficiency across all levels of the company. UPS utilizes a single operational