Essay on Week 4 assignment

Submitted By julieb46226
Words: 683
Pages: 3

1. The key success factors for UPS began with them pioneering the concept of consolidated deliveries, which combined packages for a certain area within one delivery truck. This saved time for delivery drivers, and it also saved money by using less resources. UPS also developed the first- ever mechanical sorter and conveyor belt system. In 1980 UPS achieved national coverage and rapidly surpassed USPS due to their volume of parcel deliveries. Since UPS did not initially offer overnight shipping, they were forced to play catch up. As a way to catch up with FedEx in the air, and market share gains by RPS and USPS on the ground, UPS responded with technology upgrades, changes in price, and a change in market strategy. UPS upgraded its infrastructure to track packages precisely, deliver electronic proof of deliver, and manage shipments on-line. The new system included electronic scanners, bar codes on packages, and computerized clipboards for all UPS drivers. The end result was that by 1999, UPS was able to handle six times as many on-line tracking requests as FedEx. UPS also changed their pricing and marketing strategy in response to competitive challenges. UPS transitioned away from standard shipping rates, and began allowing prices to vary across markets and customers based on cost differences. UPS steadily captured market shares in the express arena through the 1990’s, reaching 32% by 1998. In addition to this UPS’s ground business continuing to gradually grow despite cost-cutting and targeted sales efforts by competitors. Lastly UPS expanded the scope of their business in 1993 with the formation of UPS Logistics group, which provided supply chain management solutions and consulting services to UPS’s customer base, which generated $1 billion in incremental revenue by 1999. The risks associated with UPS mostly include the human factor. Packages can be misplaced or damaged, deliveries can be late, and workers can quit or go on strike. Also if UPS expands further to overseas markets, then the company could have problems with political alliances between countries, as well as tariffs or other political barriers to overcome.
2. UPS is currently performing well, and their stock is currently priced at $98.62 per share with a positive change of .52%. This is also up from their closing price of $69.00 December 31, 1999. Their 2013 revenue was $46.5 billion with 4.3 billion packages being delivered. Their new found success seems to be driven by expansion and acquisition of more than 40 companies. These companies include industry leaders in trucking and air freight, retail shipping and business services, customs brokerage, finance and international trade services. In the last four years, UPS has also implemented a system named ORION(On-Road Integrated Optimization and Navigation), which reduces miles driven by optimizing driver routes resulting in significant operational impacts, extensive cost savings, positive environmental effects and raises the bar on efficiency and customer service, but U.S.