UPS A GLOBALLY OPERATED ORGANIZATION

United Parcel Services: A Globally Operated Organization

Ivette Bajandas

Jorge Gonzales-Lara

Yvonne Sanchez

San Ignacio University

MA50700 – Global Business Strategic Management

Professor: Dr. Jesus Lemus

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TABLE OF CONTENTS
UPS COMPANY HISTORY………………………………………………………….…….….03
MARKETING STRATEGIES IN THE VARIOUS GEOGRAPHIES………………….…..04
Efficient Multimodal Network………………………………………………………………….04
Global Presence………………………………………………………………………………….04
Cutting-Edge Technology……………………………………………………………………….04
Broad Portfolio of Services………………………………………………………………….…..05
Customer Relationship……………………………………………………………………….….05
Brand Equity………………………………………………………………………………….….05
Distinctive Cultural………………………………………………………………………………05
Financial Strength………………………………………………………………………………..05
STRATEGIC ADVANTAGES & DISADVANTAGES OF THE CHOOSEN GEOGRAPHIES..06
The advantages of geographical structures in UPS……………………………………………… ..06
The disadvantages of geographical structures in UPS……………………………………………..07
SWOT ANALYSIS……………………………………………………………………………….07

Strengths……………………………………………………………………………………………08
Weaknesses…………………………………………………………………………………….......10
Opportunities……………………………………………………………………………………….11
Threats………………………………………………………………………………………………12
BENEFITS DERIVED THROUGH GLOBALIZATION………………………………………12
Access to New Cultures…………………………………………………………………….…….…13
Access to New Markets……………………………………………………………………………..13
Access to New Talents………………………………………………………………………….......13
CUSTOMERS PREFERENCES DICTATE TEHE MARKETING STRATEGY……………14
UPS My Choice Services……………………………………………………………………............14
UPS Access Point Network………………………………………………………………………….15
Return Services Portfolio……………………………………………………………………………15
B-to-C and B-to-B Customers……………………………………………………………………….15
Pricing Strategies…………………………………………………………………………………….16
CONCLUSIONS………………………………….…………………………………………………17
BIBLIOGRAPHY AND REFERENCES………………………………………………………….18

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UNITED PARCEL SERVICE (UPS)

COMPANY HISTORY

James E. Casey (March 29, 1888 – June 6, 1983) was an American businessman, known for
being the founder of the American Messenger Company, today known as United Parcel Service.

In 1907, 19-year-old James Casey founded the American Messenger Company in Seattle,
Washington, He served as president, CEO and chairman. Claude Ryan was his partner and his
messengers were his brother George and other teenagers. His motto was "best service and lowest
rates". Deliveries were made on foot, bicycle, or motorcycle.

Casey was born in Pick Handle Gulch near Candelaria, Nevada, the son of Irish immigrants. In
1913, Jim Casey agreed to merge with Evert McCabe's Motorcycle Messengers. Merchants
Parcel Delivery was formed and focused now on packages. Their first delivery car was a
1913 Ford Model T.

In 1919, the company expanded beyond Seattle and changed its name to United Parcel
Service (UPS). He consistently gave credit to his mother, Annie E. Casey, for holding their
family together after Jim's father died. As a youngster delivering packages on the Seattle streets,
Jim Casey was exposed to the excesses of a bustling city in the midst of the Klondike Gold Rush.
He credited the guidance of a strong mother and support of his family with keeping him
grounded.

The successful businessman sought ways to help those who lacked the family life he found to be
so crucial. With his brothers George and Harry and his sister Marguerite, Mr. Casey created
Casey Family Programs in 1966 to help children who were unable to live with their birth parents
—giving them stability and an opportunity to grow to responsible adulthood.

By the time of his death, Mr. Casey left three legacies:

 UPS,

 The Annie E. Casey Foundation, and 

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 Casey Family Programs.

Casey is a member of the U.S. Department of Labor Hall of Fame (since 2002) and the Logistics
Hall of Fame (since 2016). UPS founder Jim Casey established the UPS Foundation in 1951 with
a mission to help build safer, more resilient and inclusive communities around the world. The
UPS Foundation's philanthropic approach focuses on four areas that represent the purpose of its
mission and reflect UPS's values and corporate experience.

He died on June 6, 1983 in a hospital-nursing home in Seattle and his grave is at

the mausoleum of the Holyrood Catholic Cemetery in Shoreline, Washington.

MARKETING STRATEGIES USED IN THE VARIOUS GEOGRAPHIES

United Parcel Services’ marketing strategies by geographies are aligned with the below
competitive strengths.

Efficient Multimodal Network:

UPS provides all types of package services (air, ground, domestic, international, commercial and
residential) through a single pickup and delivery network. Also, UPS have extensive air freight,
ocean freight, ground freight and logistics networks that provide additional capabilities in the
global transportation and logistics market. A sophisticated engineering system allow them to
optimize their network in an efficiency and asset utilization.

Global Presence:

UPS serves more than 220 countries and territories. Globally they represent a significant
presence in all of the world’s major economies.

Cutting-Edge Technology:

UPS is a global leader in developing technology that helps customers enhance their shipping and
logistics business processes to lower costs, improve service and increase efficiency. They offer a
variety of online services options that enable their customers to integrate UPS functionality into
their own businesses to send, manage and track their shipments conveniently. UPS provide the

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infrastructure for an internet presence that extends to tens of thousands of customers who have
integrated UPS tools directly into their own websites.

Broad Portfolio of Services:

UPS portfolio of services helps customers choose the delivery option that is most appropriate for
their requirements. The supply chain services as freight forwarding, truckload brokerage,
customs brokerage, order fulfillment and returns management help improve the efficiency of the
entire supply chain management process.

Customer Relationships:

UPS focus on building and maintaining long-term customer relationships. They serve 1.6 million
shipping customers daily and deliver packages to more than 9.9 million delivery customers daily.
Cross selling small package and supply chain services across our customer base is an important
growth mechanism for UPS.

Brand Equity:

UPS built a trusted brand that stands for quality, reliability and service innovation. The
distinctive appearance of their vehicles and the professional courtesy of their drivers are the
major contributors to their brand equity.

Distinctive Culture:

UPS believe that the dedication of our employees comes in large part from our distinctive
“employee-owner” concept. Our employee stock ownership tradition dates back to 1927, when
our founders, who believed that employee stock ownership was a vital foundation for successful
business, created our first stock ownership program.

Financial Strength:

UPS financial strength allows them to achieve global scale; invest in employee development,
technology, transportation equipment and facilities. The financial strength supports them to
pursue strategic opportunities to service their obligations and to return value to their
shareowners.

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STRATEGIC ADVANTAGES AND DISADVANTAGES OF THE CHOSEN

GEOGRAPHIES
Some businesses organize their activity according to geographical area or location. This is
common in large multinational companies, but it may also suit medium-sized businesses.
Depending on the size of the business, each geographic unit may report to an executive who
oversees several locations. Alternatively, it may report directly to top management located at the
business' headquarters. The reporting This form of structure enables businesses to:

 have a reporting and functional system across multiple locations

 operate separate sites according to local demand but still be directed by business policy.

Geographic organizational structure suits mainly industries like retail and hospitality,
transportation and other businesses that need to be near sources of supply and customers (eg for
deliveries, production or on-site support)

The advantages of a geographical structure in UPS:

UPS have a global network through of the all types of package services (air, ground, domestic,
international, commercial and residential) with a single pickup and delivery service network.
They also have extensive air freight, ocean freight, ground freight and logistics networks that
provide additional capabilities in the global transportation and logistics market. Their
sophisticated engineering systems allow them to optimize their network efficiency and asset
utilization on a daily basis.

Their geographical structure can offer a number of operational and strategic advantages,
including:

 close communication with local customers

 strong collaborative teams at each location
 the ability to better serve local needs and tailor their approach to the local market
 the ability to encourage positive competition between different departments
 It makes sense to divide an organization by region if different cultures, rules, languages
and customer preferences exist in the area where the business operates.

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 Logistics relating to shipping, resources and staff also sometimes make geographical
structure a good choice.

The disadvantages of a geographical structure in UPS:

The main downside of a geographical organizational structure is the potential conflict between
local and central management, as individual divisions often take on a great deal of autonomy.
Other disadvantages include, potential duplication of jobs, resources and functions some
economies of scale may be lost.

SWOT ANALYSIS

SWOT analysis is a vital strategic planning tool that can be used by UPS managers to do a

situational analysis of the company. It is a handy technique to analyze the present Strengths (S),
Weakness (W), Opportunities (O) & Threats (T) UPS is facing in its current business
environment.

United Parcel Service or UPS is the world’s largest parcel delivery service that was founded in
the year 1907. UPS is also a provider of global supply chain management solutions. Its service
spans 220 countries. In 2019, the global delivery volume 5.5 billion packages and documents. A
daily global delivery volume 21.9 million packages. UPS is in a financially strong position which
is evident from its financial performance over the previous years. The brand’s operations are
divided into three business segments which are:

 US domestic package,
 international package and
 supply chain and freight.

UPS revenue for the twelve months ending December 31, 2019 was $74.94 billion, a 3.11%
increase year-over-year. UPS revenue in 2018 reached $ 71.86 billion. A very large and global
distribution network supports the UPS delivery system. The company employs 495,000
employees in the 2019 fiscal year. The brand has acquired the position of the best in its industry
based on the continuous delivery of reliable services. It has maintained a high level of customer
equity and that has helped UPS grow rapidly. One of the major players in global logistics, United

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Parcel Service, popularly known as UPS, is a multinational courier and parcel service based in
the US. USA In addition to logistics, UPS also offers supply chain management solutions.

Although UPS's core business is logistics, the business operates in several related domains
through its subsidiaries UPS Airlines, which is a cargo airline, cargo trucks at UPS Freight, and
packing and shipping operations at the UPS Store. The parcel service company has operations in
Asia Pacific, Africa, Europe and the Caribbean.

Through a series of subsidiaries, UPS has become capable of handling logistics and supply chain
management from end to end. UPS, the world's largest parcel delivery company, employs about
444,000 people, with about 362,000 in the United States and 84,000 abroad. In 2019, the
company registered an annual turnover of USD $74.94 billion.

Strengths in the SWOT analysis of United Parcel Service

Strengths are defined as what each business does best in its gamut of operations which can give
it an upper hand over its competitors. The following are the strengths of United Parcel Service:

Strengths:
 Brand Equity: – UPS has been able to build very high-level brand equity over time. It is
known all over the world for its reliable services, service innovation and great culture.
The work culture and work ethics of UPS have helped it manage very high level of brand
equity. UPS’ drivers always show high level professional courtesy. The brand follows a
distinct culture and style. High level customer orientation has always resulted in high
level customer loyalty and brand equity. The company has always focused on
maintaining long term relationships with its customers which is the key to building trust.
 Global Presence: – UPS serves customers across more than 220 nations.  UPS is the
largest market served by UPS. However, in all the major economies of the world it has
maintained an extensive and significant presence. It is making global deliveries possible
for its customers with ease.

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 Extensive Distribution Network: – It has one of the most extensive distribution networks
in the world. Its global package delivery system is among the strongest of all. Its global
ground and air network make it possible for UPS to make deliveries in all corners of the
world with ease. Its package delivery system provides all types of deliveries including
domestic, international, air, ground, commercial and residential. It also has a highly
capable logistics network that includes ground, ocean and air freight as well as additional
capabilities that support global transportation. Moreover, the company keeps updating its
network efficiency with the help of its advanced engineering system.
 Broad Services Portfolio: – UPS has a broad services portfolio which caters to the diverse
needs of its various segments of customers. It provides several more business solutions
including its package delivery system. This makes UPS a great supply chain and logistics
partner too for businesses. UPS provides a large range of supply chain solutions. It also
provides industry-wise supply chain solutions like healthcare, high tech, retail,
manufacturing, etc.
 Financial Performance: – UPS has maintained excellent financial record over previous
several years. Its revenue has risen from 55 Billion dollars in 2013 to more than 65
Billion dollars in 2017. Net Income has increased from 4.3 Billion dollars in 2013 to 4.9
Billion dollars in 2017. Total assets increased from 35 Billion to 45 Billion during the
same period.
 Focus on Technology and innovation: – UPS has also maintained heavy focus on
technology and innovation for growth and better customer service. It invests a large sum
every year in technology including information technology, Aircrafts, vehicles and plant
equipment’s. It depends on machine learning, blockchain, robotics, and many other
cutting-edge technologies to keep its network efficient and ahead of the others.
 Network: United Parcel Services has been able to reach out to most corners of the world
through its widespread network and a long list of subsidiaries making it the world’s
largest logistics company. This network and the direct control that UPS has over it makes
it one of the strongest players in this industry.

 Target segment: Quite unlike its competitors who do not have a clear target segment,
UPS primarily targets business customers. In fact, the company has a lot of tie-ups with

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business and acts as their logistics partner. This helps them own a more sustainable
business model and focus on the limited set of customers while getting more business
value.
 Technology: UPS is one of the biggest spenders on technology and the company invests
around USD 1 billion on technology annually, with around 4700 employees. The key
technology areas include supply chain management, customer relationship management,
and order tracking a delivery.
 Streamlining of processes: UPS has always focused on streamlining processes that are
focused on the customer. The processes are re-engineered continuously in accordance with
changing customer behavior patterns, technology trends, and logistics. Some of the
processes where the company has been focusing on include order tracking, customs
clearance, customer engagement and invoicing. The processes are checked thoroughly
from end to end and re-engineered on a regular basis.
 High customer engagement: UPS provides facilities for customers to avail all the services
that they offer electronically. Their online platform helps the customer track the order,
interact with a customer service executive round the clock through a toll-free number or
understand order status through an integrated voice response.
 Smart Logistics: UPS has to its credit the International Shipment Processing System
which uses techniques like smart scanning, real-time delivery tracking, order management,
logistics planning etc.
 Focus on supply chain and freight: UPS acquired Coyote recently which in turn has
helped the company to ramp up their operations in supply chain domain and improve
their freight management strategies.

Weaknesses in the SWOT analysis of United Parcel Service

Weaknesses are used to refer to areas where the business or the brand needs improvement.  

Some of the key weaknesses of UPS are:

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Weaknesses:
 Overdependence on US Markets: - US is the largest market of United Parcel Service and
accounts for the largest part of its revenue. However, that leaves the brand too dependent
on US for revenue and growth.
 Rising Operating Expenses: - The operating expenses of UPS have continued to grow
over the years. Apart from the maintenance of plant equipment and aircrafts, the brand’s
expenditure on labor has also grown. Compensation and benefits are a very large part of
its operating expenses. In 2017, its total operating expenses reached 58 Billion dollars
when its revenue was 65 Billion dollars.

 Poor revenue management: With more and more customers choosing to spend on online
shopping, the revenues of United Parcel Services have dipped. The capital spending had to
be increased and the investment in infrastructure had to be improved. This poor revenue
management has been the major weakness of United Parcel Services.
 Management of traffic: United Parcel Services has been facing a lot of challenges in
managing traffic. As the company expanded, they faced new challenges in tracking as well
as invoicing of orders. The margins from logistics were reduced significantly because of
the spending on traffic management.
 FedEx: The biggest competition for United Parcel Services has always been FedEx.
Currently, FedEx has around 49 % market share of the express market and UPS has only
36 % of the express market. UPS has always been trying to compete with their nearest
competitor and to secure a higher market share which in turn is diverting their interest
from other areas.

Opportunities in the SWOT analysis of United Parcel Service

Opportunities refer to those avenues in the environment surrounding the business where it can
capitalize to increase its returns. Some of the opportunities include:

Opportunities:

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 Digital marketing opportunities. Digital technology has provided excellent new

opportunities for companies around the world. Marketing, customer engagement, supply
chain, and in several other areas digital technology has provided great opportunities for
companies. UPS spends a lot on artificial intelligence IT infrastructure. It can use it for
better customer relationship management as well as for promotions.
 Employee engagement: digital technology, artificial intelligence, etc. present new
opportunities to engage employees. While the brand invests heavily in employees, it is
important to engage them using digital methods.
 Diversification: Diversification into new and related business areas can also help the
brand grow faster. While the brand has greatly expanded its service portfolio, it can
diversify into new areas for faster business expansion and revenue growth.
 New and emerging ideas: Logistics is a very innovative market and there are several
emerging trends, such as logistics outsourcing, crowdsourcing, RFID and 3D printing.
Each of these emerging areas may be creating scope for new markets.

Threats in the SWOT analysis of United Parcel Service

Threats are those factors in the environment which can be detrimental to the growth of the
business. Some of the threats include:

Threats:
 Competitive threat: - Competition has grown from both small and big brands. DHL and
FEDEX are two major competitors of UPS. There are several other brands too that are
competing with UPS and which are competing for market share with UPS. Higher
competition has led to higher expenditure on marketing and other things.
 Regulatory threats: Regulatory environment all over the world has grown stiffer. This has
led to higher pressure on international businesses. UPS operates in more than 200
countries. Compliance costs have grown as the legal and regulatory pressures have
grown.
 Economic fluctuations in the international markets: - UPS operates in the international
markets which subjects it to economic pressures. Currency fluctuations as well as

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changing economic situation in various markets can create pressures related to revenue
and income.

 Competition The main competitors of United Parcel Services are FedEx,  Gati, United
States Postal Services, DHL, and Canada Post.

BENEFITS DERIVED BY THE ORGANIZATION THROUGH

GLOBALIZATION

Globalization refers to an open flow of information, technology, and goods among countries and
consumers. This openness occurs through various relationships, from business, geopolitics, and
technology to travel, culture, and media.

Because the world is already so connected, most people don’t notice globalization at work every
single day. But the world is getting smaller, and companies need to understand what this means
for the future of doing business.

Globalization impacts companies in many different ways. But those who decide to undertake
international expansion find several benefits, and UPS has achieved, including:

Access to new cultures:

Globalization makes it easier than ever to access foreign culture. This free flow of people, goods,
art, and information is the reason for your business. UPS’s customers are able to leverage their
broad portfolio of logistics capabilities comprised of their balanced global presence in North
America, Europe, Middle East, Africa, Asia Pacific and Latin America.

Access to new markets:

Businesses get a lot out of globalization, including new customers and diverse sources of
income. UPS interested in those benefits are looking for flexible and innovative ways to grow
their business abroad. This means that, for UPS, it is no longer necessary to establish a foreign
entity to expand abroad, with their staff hence the explanation of its branch network.

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Access to new talents:

In addition to new markets, globalization enables companies to find new specialized talents that
are not available in their current market. UPS have strategic investments are primarily focused in
areas we believe will drive growth and lasting profit potential:

 Services and solutions for small and medium-sized businesses.

 International growth markets.
 Global Business to Consumer (“B2C”) and Business to Business (“B2B”) e-commerce.
 Healthcare and life-sciences logistics.
 Operational advancements and efficiencies through our technology-enabled network.

CUSTOMER PREFERENCES DICTATE THE MARKETING STRATEGY

UPS being the world’s largest package delivery company serves customers in both retail as well
as business to business segments which includes small companies, MNCs and Government
organizations. It has served 1.6 million shipping customers daily and deliver packages to more
than 9.9 million delivery customers daily.

The UPS growth story starts with customers. Customer and revenue base are diverse across
industries and geographies. In addition to their sales team, they have a Global Customer
Solutions organization of more than 1,000 supply chain professionals who focus on retooling
their customers’ global supply chains.

The Customer Solutions organization is a key differentiator for UPS and a critical component of
their strategy. UPS help customers with critical decision-making on optimal shipment origin,
distribution patterns, warehouse locations, technology and investment and the list go on.

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In fact, UPS knows that small- and medium-sized businesses, after partnering with UPS,
generate more total UPS revenue because they expand their use of supply chain solutions and
create broader connections.

UPS My Choice services:

These services address this growing need of shoppers that prefer to shop online rather than going
to a store and those consumers that wants to reroute packages to somewhere other than their
home. UPS My Choice offers more services, tighter delivery windows, less costly premium
service upgrades and links to four times the number of alternate delivery locations than the
competition’s offering.

UPS Access Point network:

UPS has more than 33 million registered users in 15 countries who value visibility that is the
ability to control when their package arrives and when to pick it up at an alternate delivery
location. They have more than 26,000 Access Point locations in 18 countries where consumers
can pick up their packages. With Access Point, UPS demonstrates to their customers the
efficiencies and cost benefits due to higher-density deliveries. But also, the potential for revenue
gains. Sixty percent of consumers surveyed recently said their ability to pick up packages at an
Access Point location allows them to order more online.

Return Services Portfolio:

During UPS return’s peak week, holiday shoppers used UPS to return nearly 5.8 million
packages in one week. So, there is a critical need for a comprehensive reverse-logistics solution.
UPS continues to enhance their best-in-class returns portfolio. UPS returns portfolio volume
grew 12 percent in 2016. The Mobile Returns service is an innovative new solution that further

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differentiates their complete returns service. UPS Mobile Returns allows retailers to send a PIN
tied to a return to the consumers’ mobile device – email or text. The consumer simply stops by
one of the more than 4,500 UPS Stores for a few moments to complete the return without ever
printing a label. And while the retail industry will clearly benefit from UPS Mobile Returns, the
process is applicable to many industries with warranty repairs and returns for field-service
technicians.

B-to-C and B- to B customers:

UPS is very focused on the commercial shipments that tie to B-to-C. They have many omni-
channel solutions helping to solve for needs like inventory movement between stores and Ship to
Store, as two examples.
They continue to be focused on B-to-B consider they have been the market leader in B-to-B for
many years. In fact, the immense majority of their revenue across the enterprise in 2016 came
from B-to-B customers.
One of their key B-to-B verticals: healthcare. UPS is a strong player in healthcare with an 8
percent share of a growing $70 billion market for healthcare logistics. The growth opportunities
in both medical devices and pharmaceuticals are being driven by several factors, including:

 The aging populations in many developed countries

 The growing middle class in emerging markets
 Universal pressure to make quality healthcare more affordable
 The pervasive increase in chronic diseases
 Medical innovations giving rise to a new breed of custom or personalized medications

Globally, healthcare is expected to grow 7 percent annually through 2021, and UPS are perfectly
positioned to take more than their fair share of that growth. UPS is investing and growing their
cold-chain solutions with their express freight and UPS Temperature True transportation
services. Also, UPS is investing in their healthcare-compliant facilities to help customers in both
developing and developed markets with specimen logistics, clinical trials and other temperature-
controlled services.

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In 2016, UPS expanded their capabilities with the acquisition of Marken. Marken provides
patient-centric supply chain solutions, transporting 50,000 complex drug and biological
shipments every month to more than 150 countries. The Marken addition also makes them the
leading player in the $1.5 billion clinical trials market – and makes UPS the world's largest
integrated inbound clinical trials carrier. By leveraging Marken’s strong position in developed
markets and its growing presence in emerging markets, UPS will further differentiate our
innovative healthcare solutions.

Pricing Strategies:
UPS will enhance their pricing strategy going forward to ensure that they align price with cost
regardless of service level or package size. The changing characteristics of their packages require
them to match cost-to-serve with targeted price increases. UPS have created a new DIM weight
divisor for U.S. packages greater than 1 cubic foot. Also, they have increased the handling fees
for packages where they incur more cost, and also raised the maximum surcharge for all large
and unusual-sized packages.

CONCLUSION

UPS is the largest parcel delivery service of the world. Its services now span 220 countries. The
brand is financially fit and in a healthy condition for growth. However, it depends on the US
market heavily for revenue. US accounts for more than 70% of its revenue.

Competitive pressure in the industry has also grown which has led to higher operational
expenses. To grow faster UPS must stay focused on innovation and customer service.
Customer’s trust is its most important strength that has helped the brand acquire leadership
position. 

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In future the role of technology will be bigger. UPS has brought diverse solutions for businesses
which has made it a partner of choice for supply chain issues. It must invest more in employee
engagement for higher productivity and performance.

BIBLIOGRAPHY AND REFERENCES

1. Patrap, Abhijeet. UPS SWOT Analysis. https://notesmatic.com/2018/09/ups-swot-

analysis/.
March 6, 2019.
2. Bhasin, Hitesh. SWOT analysis of United Parcel Service.
https://www.marketing91.com/swot-analysis-of-united-parcel-service/ . April 24,
2019.

3. UPS. (2017). A Solutions Approach to Customer Value. Retrieved April 10, 2020, from
https://www.pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType
=Speeches&id=1487961201475-136
4. UPS. (2020). 2019 Annual Report. Retrieved from http://www.investors.ups.com/static-

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files/fd0804e7-9499-499e-ba3f-526a10c1b2bf

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