Table of Contents

1.0 Company Overview:..............................................................................................................................2

2.0 Internal Environment.............................................................................................................................3
2.1Corporate Culture...............................................................................................................................3
2.2 Corporate Structure...........................................................................................................................5
2.4 Business Model..................................................................................................................................7
2.5 Strengths and Weakness...................................................................................................................9
2.5.1 Strengths....................................................................................................................................9
2.5.2 Weakness..................................................................................................................................11
3.0 Question 2...........................................................................................................................................14
3.1 Business and Corporate Strategy of UPS.........................................................................................14
3.1.1 How successful is their business strategy and what are their short comings...........................15
3.1.2 Performance Review of UPS.....................................................................................................15
3.2 Portfolio Analysis.............................................................................................................................16
4.0 Opportunities and Weaknesses...........................................................................................................18
4.1 Opportunities......................................................................................................................................18
4.1.1 Geographical Expansion............................................................................................................18
4.1.2 Expanding Chinese Market.......................................................................................................19
4.1.3 Online Shopping........................................................................................................................19
4.2Threats..............................................................................................................................................20
4.2.1 Overall Threat Assessments......................................................................................................20
5.0 TOW Matrix.........................................................................................................................................22
REFERENCE:...............................................................................................................................................23

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1.0 Company Overview:
United Parcel Service (UPS) is one of the oldest and most successful courier companies in the
world. It was founded in the year 1907 and started as a messenger company in the United
States of America. Sine their humble beginnings UPS has grown from strength to strength to a
$36 billion dollar corporation. UPS is a multi national company and is one of the worlds most
recognized and admired brands around the globe. They are also one of the largest package
delivery companies in the world and a major competitor of FedEx and DHL in supply chain
management operations. Every day, they manage the flow of goods, funds, and information in
more than 200 countries and territories worldwide. (Webmaster [b], 2006)

UPS, as the world's largest package delivery company and global leader in supply chain services,
understands that optimizing their businesses efficiency is essential for their company to cope
with increasing management pressures. This reflects UPS's global strategy to offer its customers
a convenient way to streamline their supply chain and improve business performance 

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2.0 Internal Environment

2.1Corporate Culture
The corporate culture of UPS revolves around its rich history. This is because the company had
spent decades trying and testing their methods to perfect their system on which their built to
provide their customers with quality and satisfaction. The corporate culture of UPS is always
adapting with the flow of time in order to make sure their business models and methods do not
become obsolete and ineffective. This was due to a lesson they learnt very early on in their
history.

There was a time when UPS was known to be as reliable a Santa Claus sleigh because during the
Christmas season when their business was at its peak they were always reliable and on time
with their deliveries unlike their major competitor at the time the U.S. Postal Services. The
trademark brown trucks of UPS was seen as remarkable and the epitome of workmanship. Then
as time passed by UPS observed that their business was dropping and they were loosing their
customers to new competitors emerging in the market. After conducting an analysis of their
operations they realized that their methods and strategies had become obsolete and smaller
companies and old competitors had developed new strategies as times had changed. This lead
to UPS conducting surveys on what their customers wanted and cashing in on the intellectual
capital of their firm to revamp their operation and come with new cutting edge strategies to
capture a large part of the market share once again. (Day, 1995)

In UPS the corporate believes that organizational development is a long term effort to
introduce changes which increases the efficiency throughout an organization and is a tool that
enables managers to adapt their strategies to cope up with the changing demands of the
environment. They believe that organizational development should pave the way for improving
quality, increasing innovation and more customer oriented service.

After more than 50 years of success UPS found themselves in a situation where new companies
were stealing their market share. This made UPS realize that efficiency doesn’t always go hand

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in hand with success. This is because UPS previously was an operations oriented company.
Therefore after analyzing their environment and monitoring the changes UPS realized that it
was high time to reinvent itself by employing an adoptable corporate culture. This enabled
them to change their company operations by refocusing their values from efficiency to quality,
increasing innovation by investing heavily on technology and by investing into other business
opportunities in the form of passenger charters.

As a result of these transformations UPS has evolved into a market driven company with an
emphasis on customer satisfaction. UPS’s adoptable corporate culture was put into practice
since they realized that a company’s corporate culture should always be adoptable to change in
order for the company to thrive in a changing landscape.

It is very important to understand that a corporate culture is a system of shared values and
beliefs which has an impact on the people, system and structure of a particular company. It is a
belief system that gives shape to the way things are done, a sense of how to behave and where
to place priorities in achieving a goal. (Harvey & Brown, 1996)

Therefore in UPS these stories and historical events serves to enforce the need for an adoptable
culture due to which managers and workers strain to be innovative and be able to apply
different strategies which enables them to be innovative and meet their goals.

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2.2 Corporate Structure
The co-corporate structure employed by UPS is illustrated in Fig.1. Upon observation of the
image it can be said that UPS’s corporate works on a functional structure.

Figure 1: Operational Structure

An organization which conducts its day to day activities based on a functional structure consists
of many functional departments that specialize in unique fields. Each department will have a
functional head in the form of managers or directors depending on whether the particular
department is represented at board level.

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6|Page
The image depicted by Fig.1. Shows that UPS consists of 11 departments upon which the whole
organization is constructed upon. They are:

 CFO
 UPS Airlines
 Compliance and Legal
 CIO
 Communication and Brand group management
 Engineering, Strategy and Support
 Transportation service and Labor relations
 Human Resource
 UPS International
 US Operations
 Sales and Marketing

Functional structure strategy is one of the most commonly used systems in many companies.
One of the main reasons behind the selection of this structure is that it enables UPS to have
high specialization and high control in order to achieve maximum efficiency.

Since most of the departments in the function are controlled by a member who is in the top
management, authority in the organization is centralized and as a result the decision making
process is much faster which would lead to the recourses of the company being utilized
efficiently.

UPS makes sure that the heads of each department are highly skilled and experts in their field
which allows them to conduct operations with a very high level of efficiency. The other benefit
from this structure is that operations in each department are transparent to the top
management and it makes it easier for individuals to have career advancements. Unlike their
competitors FedEx and DHL who have a multi divisional structure UPS have significantly low
operating expenses and shorter decision making time which gives them a crucial advantage
over their rivals.

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That being said there are some limitations UPS face due to employing this strategy. This is
because there could be occasions where there is no communication between any departments
since they are all specialized in their respective fields and some times there might be scenarios
where decision making might take long time. This could be due to the top level of management
having delays in solving a problem, implementing changes or not responding quickly enough to
demands that may arise.

2.4 Business Model

The current business strategy being employed by UPS is the Total Quality approach. They apply
this strategy across all parts of their business. The reason behind the selection of this approach
which was implemented in 1994 according to their previous CEO was because they wanted to
make the quality of UPS the best in the world. The application of this form of business strategy
was done in order to improve their productivity, efficiency and quality.

One of the key benefits of implementing this strategy is that it emphasizes on continuous
improvement. It works as a cross functional, management led philosophy which results in
improving customer satisfaction. The reason that UPS is very affective with this business model
is because they have all the basics for the implementation of this philosophy. Their top
management actively supports this model and makes sure every department in their
organization implements it. The other reason is due to the fact that this model goes hand in
hand with UPS’s corporate culture. UPS believes in being highly adaptable in order to improve
their services and TQM focuses on continuous improvement. (Duffy and Tom, 1996)

From putting this model into practice UPS makes sure their staff member from the various
departments are pro active and involved in order to make the development work. They also
have many work teams who are self managed and due to this model they are more involved
because they understand the vision of the organization and apply strategies and ideas which
brings the vision to life.

Unlike many other companies where information sharing between different departments is a
bureaucratic night mare in UPS information is shared openly between departments. This is
because TQM needs information to keep flowing in order for continued improvement.
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It has to be understood that TQM encourages teams to be self reliant and feel more
empowered due to this the staffs jobs are broken down to five dimensions. They are:

 Feed Back
 Autonomy
 Task Significance
 Task Identity
 Skill Variety

UPS makes sure all the dimensions listed above are addressed by their staff and as a result their
staffs are more self-directed. UPS knows that to successfully employ this strategy their staff
should have incentives which would make them strive for the betterment of the company.
Therefore they provide their staff with a network for support and incentives in the form of
career development. (Isidore and Chris, 1996)

UPS realized that even though TQM is a business model which compliments their culture that
there are times it might not work. Therefore in order to make sure it works all the time they
monitor their operations to see if the model is failing or not being implemented affectively.

Since UPS has many self managed teams managers are always monitoring their employee’s
moral. At the same time some employees might feel that they do not fit into the company
process. Therefore managers have to address these concerns in order for TQM to be effective.
UPS makes sure all their staff member are highly trained and given merit for their work due to
which they will have enough information on their role therefore they are in a situation where
they are able to execute their tasks efficiently.

The main reason that the TQM business model is being implemented by UPS very effectively is
because their top management believes that they should keep improving in every façade of
their organization in order to provide the best quality possible in the industry. Therefore they
focus on making sure that their staffs are energized by their quality of their work.

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This business model is a guide that UPS follows but they understand that it is not a quick fix but
a way of life that the company should adopt. The reason this business model has been met with
a lot of success in UPS is because they wanted to be the best in their industry and maintain
their position. In order to monitor the success gained by employing this model UPS conducts a
special management session of DOF (Delivering Our Future - Taking a Leadership Role in Total
Quality) in order to create an awareness of the competitive reasons for Total Quality and the
role all management at UPS would play in the process. (Ferguson, 1995)

2.5 Strengths and Weakness

2.5.1 Strengths
UPS is one of the major companies in the courier industry due to three key strengths. These
strengths are:

 Strong market position

 Broad portfolio of services
 Robust Infrastructure

The following part of the report will highlight why the three factors mentioned above are the
key strengths of UPS.

2.5.1.1 Strong Market Position

When taking into consideration the volume and revenue earned by a company in the courier
industry UPS stands out as one of the largest package delivery companies in the world. UPS
spans across 200 countries and have more than 1.8 million customers. It delivers more than 15
million parcels a day on average to both local and international destinations. UPS conducts a
very intensive and extensive integrated global ground and air network which consists of more
than 140,000 international and domestic access points. There ground fleet consists of a
staggering amount of more than 100,000 vehicles which spans from custom built delivery cars
to large trailers and tractors. Their air fleet consists of more than 500 airplanes. The success of
the company is such that they handle the supply chains for many large and small enterprises in

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more than 150 countries in various countries around the globe. UPS is also one of the leading
providers of less-than truckload transportation services. (UPS Prospectus)

They also enjoy a strong presence in the North and South American continent and are known as
one of the largest logistics and air cargo provider in the region. Upon observation of the share
price of UPS in the US Stock Market Dow Jones it can be seen that UPS has enjoyed seven years
of consistent growth. Its strong market position is also highlighted by many financial magazines.

Fortunes 500 listed UPS as the 43rd most successful company in terms of revenue earned.
Newsweek magazine ranked UPS as the 85th Greenest Company in America. Black enterprise
magazine listed UPS among the 40 best companies in the world and according to Hispanic
Business Magazine it was among the Top 50 companies for staff diversity. UPS biggest badge
came from Inter-Brand when they were listed among the Top 100 of the Best Global Brands. It
was also included in the America’s Top Corporations for Women’s Business Enterprises every
year since 1999. (UPS Prospectus)

The strong market position UPS enjoys enable them to serve a broad range of customers across
various parts of the globe and be a major player in many international markets. It also enjoys a
very strong brand image due to its strong market position and as a result enjoys the benefit of
economies of scale.

2.5.1.2 Broad Portfolio of Services

UPS enjoys many benefits due to the very diverse end markets that it serves. It offers a number
of services across its three different business spectrums. When taking into consideration the
USA UPS domestic contingent consists of both air and ground delivery of small packages and
letters to and from all the states in the US. The main reason UPS is preferred over all their
competitors is because UPS provides guaranteed, on time delivery of their packages. UPS
delivers to more businesses and zip codes in the US, and worldwide from the US, than its
competitors.

The international package segment of UPS also provides air and ground delivery of small
packages like it domestic segment counterpart to over 200 countries and territories around the

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world. The freight and supply chain segment of UPS forwards freights, trouble shoots
management issues and provides international trade services. They also specialize in trouble
shooting various transportation issues air, ground, ocean freight and customs brokerage trade
and materials management.

They are unique from all their other competitors because they provide a diverse range of
financial services. They provide short term and long term financing, working capital, secured
lending, letters of credit, credit cards and equipment leasing. They also help companies to
balance revenues in the face of a slowdown in a particular segment.

2.5.1.3 Robust Infrastructure

Unlike other companies in the industry UPS has a very strong transportation infrastructure UPS
has a strong transportation infrastructure. It operates a ground fleet of approximately 101,900
vehicles, which reaches all business and residential zip codes in the contiguous US. It also
operates an air fleet of 510 aircraft, and is one of the largest airlines in the world.

The customer pool of UPS enjoys convenient collections because UPS has more than 141,000
domestic and international access points. These access points consist of more then 35,000
branded drop boxes, 1,100 customer centers 4,800 independently owned and operated The
UPS Store and Mail Boxes Etc. locations worldwide, 2,700 alliance partner locations, 12,000
authorized shipping outlets and commercial counters, and 81,900 UPS drivers who can accept
packages given to them. On top of that UPS owns more than 20 principal US package principal
operating facilities. A strong infrastructure provides the company the advantages of reputation,
service quality and economies of scale that differentiate it from its competitors. (UPS
Prospectus)

2.5.2 Weakness
Even though ups enjoys substantial amount of growth they have two major weaknesses. They
are:

 Geographical Concentration
 High Debts

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2.5.2.1 Geographical Concentration
One of the biggest business factors that UPS needs take into consideration is their exposure.
Even though they have operation in Africa, Asia, Europe and the Middle East they concentrate
primarily on their domestic market based in the USA. Even though they enjoyed high revenues
for the FY09 75% of it was generated from their domestic market. When this is compared to
their competitors like DHL, FedEx and TNT they have operations in various European and Asian
countries such as The Netherlands, Germany, Italy, China, India, Brazil, Australia, among others.

They rely too much on one region in which they operate domestically. This exposes the
company to a lot of negative influence. For example the recession in the US had a major impact
on UPS. This is because they are overly exposed to the risk of downturns in the country's
macroeconomic conditions and increases its business risk. (UPS Prospectus)

2.5.2.2 High Debt

UPS is experiencing a worrying trend in the form of rising trends. This can be seen from the
increasing debts they accumulated of three continuous financial years from FY08 to FY11.

This has provided UPS with a dilemma where they should generate a constant cash flow in the
form of cash to service in order to reduce their rising gearing. When taking into consideration
their debt equity which is 1.1% to their competitors who debt equities are:

 Atlas Air Worldwide Holdings (0.64)

 UTi Worldwide (0.4)
 Pacer International (0.29)
 Forward Air (0.23)

It can be seen that UPS has to solve this issue because it will play a negative role on their
growth.

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Internal Factors Weight Rating Weighted Score Comments
Strengths
Strong market position 0.25 4.5 1.125 Business strategy
which differentiated
UPS from competitors.
Broad Portfolio of Services 0.25 4 1 UPS is executing this
better than
competitors.
Robust Infrastructure 0.10 4 0.4 UPS has the least
inventory turnover
days in the industry.
Weaknesses
Dependency domestic 0.25 4.5 1.125 UPS will be overly
market in the USA exposed to negative
down turns in the
countries macro
environment
High Debt 0.15 3.5 0.525 Since UPS follows
direct sales model,
dell lacks relationship
with retailers.
Total Scores Total Scores =4.18
=1.00

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3.0 Question 2

3.1 Business and Corporate Strategy of UPS

The reason UPS has a very effective business strategy is because they know how exactly they
want to compete with their competitors. They make use of a supply chain strategy which works
in tandem with their business goals. UPS aims to be a low cost service provider therefore their
supply chain compliments this.

Their supply chains focuses on their customer pool and this has always been the main focus of
UPS. It has to be understood that the success of a strategy is only as good as the business and
how well they execute their goals. UPS links a great supply chain strategy with excellent
operational coordination that provides not only the company but their partners and customers
with excellence.

The corporate strategy that UPS implement is the backward vertical method. They have their
own private air fleet and ground vehicles which they use to deliver and compliment their
operation. Strategic accusation of their competitors and assets has made them grow from a
back water beginning to a global power horse in the courier industry.

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3.1.1 How successful is their business strategy and what are their short comings.
UPS operates in a very complex industry where time is of the essence. Therefore a competent
supply chain strategy is very vital for UPS to provide timely, accurate and competitive prices.
Their main shortcoming with their business model was technology as their competitors took
over them, this lead to UPS investing heavily on technology to improve their failing supply
chain. Since then UPS has a well developed computer system which provides their customers
with convenience at the same time the ability to provide low cost access to customer’s
information about the location and contents of packages is an important success factor.

All that taken into consideration it is therefore very important to equate the human part of the
formula. UPS depends mainly on their workers and this brings an element of unpredictability
due to human short comings. UPS may sometimes face a risk that the delivery may be late,
wrongly delivered, damaged packages, lost packages, or even strikes when workers refuses to
work. At the same time UPS’s strategy of expansion to other countries may be threaded by
changes in political alliances between the countries involved in the shipping process
(sending/receiving). Tariffs and other political barriers may be created as retaliation or
protectionism to the national industry in the country of interest.

3.1.2 Performance Review of UPS

Even though UPS relies too much on their domestic operations in the states and is having
increasing debts, UPS is showing a lot of improvement in their performance. They currently
have more than 300,000 employees and their assets keep increasing. The company currently
delivers more than 13million parcels a day and their annual revenue yearly is more than
$25billion dollars. They operate in over 200 countries around the globe and they are currently
investing a lot of money in technology which will surely increase their market share since they
have been till date driven forward by excellence in the fields of pricing and quality. (Webmaster
[b], 2006)

They are also implementing TQM which will improve their management programs and have
better trained staff that will be more empowered. One of the reason UPS could be spending a
lot of time and effort on their staff could be to lift the moral of their employees who went
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through a severe recession. UPS has experienced an exponential rate of growth however it is
most likely that this growth will slow down in the coming months because their growth rate is
faster than the world market.

3.2 Portfolio Analysis

To conduct an appropriate analysis of UPS the BCG Growth Share Matrix will be utilized.

BCG Growth-Share Matrix

Stars Question Marks

Financing Book Keeping

Business Growth Rate
Cash Cows Dogs

Package Deliveries Local Posts

Market Share

From the above matrix it can be seen that the real star of UPS is a new service they are
providing to the market in the form of financing. Due to the current landscape where the US
economy is coming from a recession, many analysts predict the US market to start growing.
Due to this many people would like to apply for loans and UPS using its strong brand name
could attract customers and make them steer away from the banks. This would be easy for UPS
since many of the general public in the US blame the bank for the severe backlash they faced in
the recession.
Therefore providing short term and long term financing, working capital, secured lending,
letters of credit, credit cards and equipment leasing could be the next big star for UPS, since
many of their competitors haven’t even explored this option.

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The cash cow according to the matrix is the delivery of packages that UPS conducts. This is
because it has been the companies’ main staple in the balance sheet in terms of revenue
earned. Their markets are growing internationally and locally and especially in the US UPS has a
very strong market presence since more than 70% of their revenues come from domestic
operations.
The real question mark for UPS is book keeping. This is because many companies could easily
hire an accountant for book keeping and they would be considerably cheaper than UPS and
therefore it is not very clear whether this service will pick up or fall into dogs.
The final part of the matrix (dogs) consists of local posts. This is because with the use of e-mail
many people in the US are using e-mails to communicate with each other instead of letters.
Therefore delivery of letters among states is decreasing. Do not be mistaken that UPS is loosing
business in their domestic home front. What they lack in letters they make up for it in parcel
especially during holiday seasons when loved ones send parcel and gifts to each other.

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4.0 Opportunities and Weaknesses

4.1 Opportunities
Due to globalization and the exponential rate at which the global market, many business
opportunities open up that UPS could capitalize on. The most significant opportunities that are
available to UPS are:

 Geographical Expansion
 Expanding Chinese Market
 Online Shopping

4.1.1 Geographical Expansion

One of the biggest weakness UPS has is their over reliance on the US market therefore to
insulate the company form the negative affects that could impact the macro environment of
the states UPS should seriously consider expanding to regions around the globe.

UPS first showed intention of reaching across borders when they acquired a unit of Intereuropa
Globalni Logisticni Servis which is a firm that has been delivering small packages within Slovenia
since 1991. (Yahoo, 2009) This business move showed a lot of promise since UPS will now be
able to invest in its global brand, transportation network, technology and workforce to serve its
growing customer in a more effective and efficient manner. One should also consider that once
UPS has consolidated its hold on the market share of Slovenia they would be able to focus on
expanding across the borders into break away counties of the former USSR.

Also with the growing strength of FedEx and DHL in the Middle East region and Asia it is very
heartening to see a new global player enter the scene in the form of UPS as they strive to
garner a large portion of the market share in the region. This intention was highlighted by UPS
when they announced a new joint venture which is headquartered in the United Arab Emirates.
(Webmaster [a], 2009)

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Also with new entrants entering the Mexican courier industry UPS to ensure that they do not
loose their market share to the new entrants came up with a new service in the form of UPS
Standard which gives their existing customers concessions.

All this information shows that UPS has to seriously consider to aggressively garnering more of
the market share globally since they have the recourses and the capital to do so.

4.1.2 Expanding Chinese Market

The Chinese economy is currently the world’s fastest growing industry and attempts made by
DHL and FedEx to secure a foot hold in China has been rebuffed by the Chinese Government.
This provides a unique scenario to UPS who could learn from the mistakes committed by their
biggest competitors and severely hamper them by trying to arrange favorable terms with the
Chinese government to conduct operations in China. They could promise the government to
hire only Chinese workers and provide them a high caliber of training and in order to sweeten
the pie they could agree to a 5-10 year profit sharing venture with the government. This may at
first seem like UPS is making a loss but in a region which is soon becoming the financial hub in
the world and with close proximities to Honk Kong and Singapore it can be said with a certain
amount of confidence that UPS stands to benefit more than they will loose.

4.1.3 Online Shopping

The online shopping industry has grown explosively in the last five years with an unprecedented
rate of growth that this is a field that UPS should definitely consider expanding into before one
of their competitors do. Total sales generated by e-commerce have grown explosively over the
last five years. Though economy took a massive beating from the backlash of the recession
online retail still shows more signs of the consumerism during recession than consumer retail as
a whole. A majority of US online consumers changed their mindsets from 'cutting back' to
'spending cautiously' and shifted more of their shopping habits online.

Therefore this is a golden opportunity for a company like UPS to use its supply chain which is
one the best in the world and pool its capital and recourses to open an online market.

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4.2Threats
The main threats that UPS faces are:

 Compliance with Government Regulations

 Strikes and work stoppage
 Intense Competition

4.2.1 Overall Threat Assessments

Government regulation affects the business of UPS since they are subject to numerous other
laws and regulations in connection with its non-package businesses, including customs
regulations, Food and Drug Administration regulation of the transportation of pharmaceuticals,
and state and federal lending regulations. These laws and regulations affect the company's
operations on its customer sites and in some instances, impose added costs on the company's
business. A violation of these laws and regulations could result in imposition of fines and
penalties or the termination of the company's contracts. Such regulations could put pressures
on the company and affect its cost structure. (Cleland and Carmel, 1996)

In terms of work stoppage the company may lose its customers permanently, if it is unable to
provide uninterrupted service and this could adversely affect the company’s business, financial
position and results of operations. The terms of future collective bargaining agreements also
may affect UPS’ competitive position and results of operations. Labor problems could disrupt
the company's operations, resulting in lower revenues and loss of credibility. (Cleland and
Carmel, 1996)

Last but not the least is the intense competition in the transportation industry continues to
consolidate and competition remains strong. As a result of consolidation, the company’s
competitors may increase their market share and improve their financial capacity, and may
strengthen their competitive positions. Business combinations could also result in competitors
providing a wider variety of services and products at competitive prices, which could adversely
affect UPS’ financial performance.

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External Factors Weight Rating Weighted Score Comments
Opportunities
Geographical Expansion 0.25 4.5 1.125 UPS is now
concentrating on
expanding since it is
overly reliant on its
domestic market
Expanding Chinese 0.25 4.5 1.125 UPS will be able to
Market hamper there rivals
severely if they
secure a foot hold in
china
Online Shopping 0.10 4.5 0.45 This is a rapidly
evolving industry
which the company
should capitalize on.
UPS should try and
become first
movers.
Threats
Compliance with 0.15 1.5 .225 Is a very important
government regulation and key issue since
UPS stands to loose
their license if they
violate any
regulations
Strikes and work 0.10 1.6 0.16 Should make sure
stoppage their work forces
morals high since
any disruption in
service would make
the customers loose
confidence
Intense Competition 0.15 1.5 0.225 Business
combinations could
also result in
competitors
providing a wider
variety of services
and products at
competitive prices,
which could
adversely affect
UPS’ financial
performance.

Total Scores Total Scores =3.31

=1.00

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5.0 TOW Matrix

STRENGTHS WEAKNESSES

INTERNAL FACTORS 1. Strong Market 1. Geographical

Position Concentration
(IFAS )
2. Broad portfolio of 2. High Debts
Services
3. Robust
Infrastructure

EXTERNAL FACTORS

(EFAS)

OPPURTUNITIES SO Strategies WO Strategies

1. Geographic Expansion UPS can make use of a By expanding their business

2. Expanding Chinese strong brand name to around the globe UPS can
Market expand its business in new insulate itself from the US
3. Online Shopping emerging markets. market since it is overly
reliant on it. They should start
Through diversification, investing more on R&D to
and increasing their create new services and new
portfolios UPS can products and become first
efficiently use internet as a movers in the industry. This is
one stop shopping ability something DHL and FedEx
for its customers. always did before UPS

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THREATS ST Strategies WT Strategies

1. Government Regulation UPS can use its strong
2. Strikes and work stoppage brand name and
3. Intense Competition sophisticated supply chain
to act as a deterrent when a
new company enters the
market.
Through broadening their
portfolios UPS can incur more
revenue through which they
can reduce their gearing which
is increasing for three years in
a row.

It can also have a separate UPS can reduce competitor

department which liaises rivalry by targeting on wide
with the workers union in range of geographic location
the UPS to ensure there and thereby have a broader
moral is high. portfolio.

REFERENCE:

1. Blackmon, Douglas A. "UPS, Feeling Boxed In, Stages Its Own Coming Out." The Wall
Street Journal, 17 September 1996, sec. B, p. 4.
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