Running Head: Strategic Management 1

Strategic Management

Case Study

UPS in India

Affiliation

Date

By
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1. Analysis of Existing Business Model

United Parcel Services or UPS is one of the oldest courier companies of the world. This US

based company was founded in 1907 and from then onwards it has been expanding into various

geographical and functional areas. The business model which has been employed currently by

UPS is that of the Total Quality approach. This strategy has been implemented across all parts of

its business. The reason of using this strategy is to make UPS the best in terms of quality. It has

been chosen to increase productivity, quality and efficiency. The main benefit of this model is

that it focuses on constant improvement. This cross functional and management led strategy

works as medium for improvement in customer satisfaction. For its effective implementation

UPS enables its staff to be proactive and involve in the development work. Self-managed teams

work provides the strength to the vision of the company and brings it to life with its real-time

information sharing and flow between departments along the whole supply chain.

a. Clearly Articulate the Business Model of Firm

Unlike many other companies where information sharing is considered as a way to lose

their competitive edge on comparative departments, UPS uses information sharing as a medium

to enforce Total Quality Model as this models require information to flow. Through the use of

the TQM business model UPS ensures that its staff are self-reliant and have the authority to do

their jobs with complete understanding and responsibility. This is enabled by making each job

complete by ensuring that its five dimensions are enabled. These include; autonomy, feedback,

skill variety, task significance, and task identity. This enables the staff to be more self-directed.

b. Explicates the value of the business model that it is designed to capture

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Even though this model has been significantly aligned with the corporate culture of UPS,

there can come times when it may not fit the process of the company. These can be the times

which can cause the employees to feel disoriented and separated. This calls for the management

to address these issues on time and with effective solutions. Making sure that staff is well trained

and is given credit for their work is important. For this, the management needs to clearly

communicate the expectations and deliverables of the job to ensure the staff does not have any

ambiguity about their role.

SWOT Analysis

SWOT Elaboration

Articulation of SWOT Analysis

a. Strengths

UPS is certainly a major company in the package delivery and courier services industry. The

strengths of the company UPS can be identified as; UPS certainly hold a strong Position in

Market. For instance, as of 2016, UPS hold 24% of the International Express market of Europe,

33% of American and 11% of Asia Pacific, and 1.2% of contract logistics market (DP-DHL,

2017, p. 30). It holds a broad Portfolio of Services as well. The Robust Infrastructure helps it

maintain it. The expanding Operating Margin shows the success story of this company which has

through its Integrated Global Network formed a Global Brand Reputation with distinct and

Strong Distribution Network. The Sound Revenue Growth with the help of its Advanced Supply

Chain has enabled it to become Largest Package Delivery Brand.

Weaknesses:
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One of the biggest weaknesses of UPS is its Geographical Concentration. It is operating

in Middle East, Europe, Africa and Asia; however the biggest chunk of its revenue and market is

based in US. The High Debts are also another factor. The various Legal Proceedings are also

troublesome for the company. The Lingering Negotiations of Contracts is another problem which

it faces. The Heavy Union Presence is also needed to be reduced. The Perception of ground

delivery as compared to overnight causes problems for it as well. The Limited Market Share

growth can become a critical problem in future. With Low Employee Productivity, and Heavy

Charges to Clients, UPS needs to have effective solutions (Pahl & Richter, 2009).

Corroborating the OT

Opportunities:

Emerging Markets provide a prospering opportunity for every multinational. But for UPS

it holds more importance as with dependency on US market, it needs Geographical Expansion

for its market growth. The Online Shopping trend and the SMEs establishing their businesses

also provide an untapped area. The Deregulation in Trucking Industry can also benefit the UPS.

By using Strategic Partnerships and Online Agreements with Users, UPS can tap the Emerging

International Middle Class. Established Air Hub Network also provides another opportunity to

increase its air freight. Another opportunity can be if DHL exits from US small package market

(UPS, 2018).

Threats:

Firstly, the New Entrants with Lower operating costs are a major threat for UPS. Other

than this, the Fluctuations in Exchange Rate become another threat for the company. The

Increase in Oil Prices, Economic Slowdown and Financial Problems due to E-commerce and
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Electronic Mail can become threatening for UPS as well. The Competitive Landscape of the

delivery industry is also very intense. The Increasing Costs of Manpower and Government

Regulations can become problem as well. The Lack of Infrastructure in Emerging Markets like

India can become a practical issue. Moreover, UPS can also face some Second Mover Issues as

well (Sarsby, 2016).

Sufficient Analysis of the SWOT Analysis Results

The analysis of the SWOT results shows that following strategies can be utilized;

 By using strong market position, geographical expansion can be achieved

 By using Global brand reputation, strategic partnerships in emerging markets can be

build

 By using advanced supply chain, Online shopping trend can be exploited

 With the help of its integrated global network, middle class can be engaged

 Competitive Strength can be used for safeguarding against new entrants

 Strong market position can be used against economic slowdown

 Advanced supply chain can help aid in the increasing costs of manpower

 Strategic partnerships can help reduce second mover issues

 Geographic concentration can be diluted by moving in emerging markets

 Brand reputation can be utilized for coping with legal proceedings

 Strong supply chain can help aid in reduction of charges to clients

 SMEs can help in increasing of market share growth

 Use of derivatives and hedging can aid in exchange rate fluctuations effect
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 By using strong services, increasing employee productivity and involving them in the

decision making competitive landscape can be used in its own benefit

 Use of consultancy on better online services can help tackle the E-commerce problems

 By investing in infrastructure of emerging markets, better productivity and good will can

be achieved.

IFE

All strengths and weaknesses are used for evaluation by utilizing weighted scores of the

internal factors. The matrix is attached in appendix.

EFE

All opportunities and threats are evaluated and weighted to form the EFE matric. The

matrix is attached in appendix.

SWOT Bivariate

As based on the SWOT analysis, the bivariate strategies are constructed. The results are

shown in appendix.

BCG

By using the divisional revenues, the market share of UPS against DHL has been

evaluated to show the products categories.

SBU

The divisional performance as rated through its IFE and EFE scores is shown in the

Appendix.
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References:

DP-DHL. (2017). DHL 10K 2017. Retrieved August 3, 2018, from DP-DHL:

https://annualreport2017.dpdhl.com/downloads-

ext/en/documents/DPDHL_2017_Annual_Report.pdf

Pahl, N., & Richter, A. (2009). Swot Analysis - Idea, Methodology and a Practical Approach.

GRIN Verlag.

Sarsby, A. (2016). SWOT Analysis. Lulu.com.

UPS. (2018). UPS 10K 2018. Retrieved August 3, 2018, from Last10K.com:

https://www.last10k.com/sec-filings/ups#fullReport
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Appendices:

IFE Matrix

Strengths Weight Rating Weighted Score

1 Strong Position in Market 0.05 4 0.20
2 Broad Portfolio of Services 0.05 4 0.20
3 Robust Infrastructure 0.05 4 0.20
4 Expanding Operating Margin 0.05 4 0.20
5 Integrated Global Network 0.05 3 0.15
6 Global Brand Reputation 0.05 3 0.15
7 Strong Distribution Network 0.05 3 0.15
8 Sound Revenue Growth 0.05 3 0.15
9 Advanced Supply Chain 0.05 4 0.20
10 Largest Package Delivery Brand 0.05 3 0.15

Weaknesses Weight Rating Weighted Score

1 Geographical Concentration 0.05 1 0.05
2 High Debts 0.05 1 0.05
3 Substantial Debt 0.05 1 0.05
4 Legal Proceedings 0.05 1 0.05
5 Lingering Negotiations of Contracts 0.05 1 0.05
6 Heavy Union Presence 0.05 2 0.10
7 Perception of ground delivery as compared to overnight 0.05 2 0.10
8 Limited Market Share growth 0.05 2 0.10
9 Low Employee Productivity 0.05 2 0.10
10 Heavy Charges to Clients 0.05 2 0.10
Total IFE Score 1.00 2.50

EFE Matrix

Opportunities Weight Rating Weighted Score

1 Emerging Markets 0.05 3 0.15
2 Geographical Expansion 0.05 2 0.1
3 Online Shopping 0.05 2 0.1
4 SMEs 0.05 1 0.05
5 Deregulation in Trucking Industry 0.05 1 0.05
6 Strategic Partnerships 0.05 2 0.1
7 Online Agreements with Users 0.05 1 0.05
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8 Emergence of International Middle Class 0.05 2 0.1

9 Established Air Hub Network 0.05 2 0.1
10 Exit of DHL from US small package market 0.05 2 0.1

Threats Weight Rating Weighted Score

1 New Entrants with Lower operating costs 0.05 2 0.10
2 Fluctuations in Exchange Rate 0.05 3 0.15
3 Increase in Oil Prices 0.05 2 0.10
4 Economic Slowdown 0.05 3 0.15
5 Financial Problems due to E-commerce and Electronic Mail 0.05 2 0.10
6 Competitive Landscape 0.05 2 0.10
7 Increasing Costs of Manpower 0.05 3 0.15
8 Government Regulations 0.05 3 0.15
9 Lack of Infrastructure in Emerging Markets 0.05 1 0.05
10 Second Mover Issues 0.05 2 0.10
Total EFE Score 1.00 2.05

SWOT Bivariate Strategy Matrix

SO Strategies
By using strong market position, geographical expansion can be
1 achieved
By using Global brand reputation, strategic partnerships in
2 emerging markets can be build
By using advanced supply chain, Online shopping trend can be
3 exploited
With the help of its integrated global network, middle class can
4 be engaged

ST Strategies
Competitive Strength can be used for safeguarding against new
1 entrants
2 Strong market position can be used against economic slowdown
Advanced supply chain can help aid in the increasing costs of
3 manpower
4 Strategic partnerships can help reduce second mover issues

WO Strategies
1 Geographic concentration can be diluted by moving in emerging
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markets
Brand reputation can be utilized for coping with legal
2 proceedings
Strong supply chain can help aid in reduction of charges to
3 clients
4 SMEs can help in increasing of market share growth

WT Strategies
Use of derivatives and hedging can aid in exchange rate
1 fluctuations effect
By using strong services, increasing employee productivity and
involving them in the decision making competitive landscape can
2 be used in its own benefit
Use of consultancy on better online services can help tackle the
3 E-commerce problems
By investing in infrastructure of emerging markets, better
4 productivity and good will can be achieved.

BCG Matrix

Relative Market Share Position

High 1.0 Low 0.0
Stars Question Marks
High 0.20
Industry Sales Growth Rate

International
Supply
Package/ Chain &
DHL
Freight/ DHL
Global
Supply Chain

Low -0.20
Cash Cows Dogs
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Developing a through matrix by SBU and analysis

THE IFE TOTAL WEIGHTED SCORES

Strong Weak
4.0 1.0

High
THE EFE WEIGHTED SCORES 4.0

US Domestic
Package/ DHL
Parcel

UPS

Supply
International
Chain &
Low Package/
Freight/ DHL
DHL
1.0 Supply
Global
Chain