United Parcel Service

United Parcel Service 

Name

Institution

Introduction

In to modern world competitive business environment planning is critical. However, the traditional forecast-based planning and budget-oriented planning are inadequate to meet the survival needs of a large corporation such as UPS. Therefore, UPS must engage in strategic planning, which properly defines its objectives and examines both its internal and external dynamics to conjure a strategy, implement it, monitor its progress and effect necessary adjustments to stay on course. UPS is now over 100 years old and perfectly understands the package delivery business which has been its domain since its inception (Levy, 2002). Over the 100 years the company has expanded and it currently serve customer In more than 200 countries. Over the course of its existence the company has had to embrace modern technology and change in order to keep abreast with its competitors. For instance the company had to investigate and adopt e-comerce to facilitate online transactions (About UPS, 2012a). I also had to redefine it main business and get new ways to enhance its organization and process this reinventing itself in order to take advantage of new opportunities. No doubt, a strong approach to strategic plan played a crucial role on the reinventions and improvement the firm had conducted from time to time. Strong approach to strategic planning has resulted in a strong corporate strategy and direction.

UPS Strategic Plan

UPS strategic plan is geared toward ensuring that the firm has global dominance in delivering parcels worldwide. This is clearly evident in the organizations performance in the last two decades. In the 1990s the firm, “grew from a $14 billion package delivery company to a $30 billion global enterprise” (Ross, et al, 2002). The services provided by the company services in that include international shipping, financial services, logistics and other related services About UPS., (2012b). The organization strategic plan had been purely facilitating global commerce characterized by movement of capital, information and physical goods. As the world ushered in the 21st century UPS was busy realigning its strategic plan to focus on supply chains and get deeply intertwined into the supply chains o f their customers. Alongside this move is to reduce the amount of the money spend on moving good along the supply chain and also enhance the efficiency of the supply chains.

This strategy further benefited from adoption of information technology. IT has brought about numerous efficiencies to the core competencies of the firm and created new countless opportunities for adjoining lines of business. The adjoining or adjacent businesses are a critical part of the company’s strategic plan. Most of the adjacent businesses are subsidiaries of UPS. This strategy and the organizations corporate organization have helped it to develop numerous small-scale ventures which have also been successful and some have been upgraded to subsidiaries of the firm (Ross, et al, 2002).

This strategic plan can be summarized as exploring opportunities with the major aim being to take advantage of the market size (Levy, 2002). Whenever a market is attractive, adjacent to UPS and complimentary to is corporate strategy, “to facilitate global commerce,” the firm makes the best of it. However, if the market does not meet these criteria it is overlooked.

The company’s strategic plan has also been instrumental in its exploitation of markets outside the US. In its strategic plan, the expansion to markets outside use takes a shift from the organic growth model the business has employed for decades. UPS opts for a partnering and acquisition strategy. This strategy has been executed in many countries in two phases. The first phase involved country-to-country delivery services through regional partners and acquisition of regional delivery companies. The next phase involved purchase of local companies in other countries to facilitate delivery of packages. UPS subsequently came up with multiple channels through which it could reach its customers. As e result, it was easier for the customer to schedule deliveries and pick-ups (Opidee et al. n.d.). IT was the icing on the cake. With the adoption of IT deliveries have been improved and customers are able to track their goods using mobile devices.

UPS Corporate strategy and direction

A corporate strategy entails mastering control of the core competencies or a firm or organization in order to realize predefined highly strategic objectives. The corporate strategy further involves decision-making and analytic procedure concerned with what to offer (such as goods and services), when to offer, (business cycles, timing among others) and the place to offer (such as market niches) as a competitive plan (United Parcel Service of America, 2005). UPS corporate strategy is concerned with the overall direction the organization wants to go, where as its strategic plan constitutes the activities UPS intends to undertake in order to pursue the corporate strategy and direction (Reynolds, 2009). The firm corporate strategy is to facilitate global business.

In America the firm has developed several delivery networks and has 1,748 operating facility. It also has 152,500 delivery vehicles which include vans, cars and tractor-trailers. It also owns 283 aircrafts. It employs 359000 employees.

According to Garvin & Levesque (2006) In delivery of the packages the firm uses a “hub and spoke” system, whereby the company owns region hubs, which work as sorting facilities and exchange points for packages in their regions. The hubs are designed to handle thousands of packages per hour to facilitate redirecting and delivery of the packages to respective operating centers. From operating centers, the package can be delivered to the door of the recipients (Byrne, n.d.). Also an employee can pick package form the door steps of a sender and deliver it to the operational center where it is sent to the hub then redirected to the recipients nearest operating center (Ross, et al, 2002).

Outside America the firm uses subsidiaries and partners to reach is customers. The subsidiaries are designed to operate the way the main firm operates in America in areas where the firm has no subsidiaries or its subsidiaries have a problem accessing packages are given to local partner firms to take them to their final destination.

Growth direction it truly aimed at facilitating global business, its business strategy. Garvin & Levesque (2006) Observed that the firm has enhanced its services through additional service extensions, development of countless channels to enhance accessibility of the customers. Customers can also prearrange pickup and monitor the movement of their packages through UPS call centers (Boulton, 1999). The firm further provides the customers with electronic and web connection to shipping firm for the purposes of tracking the movement of their packages. With these services the customers can monitor the movement of goods on the phones and PDAs. UPS integrations into the customers supply chains is also shaping its corporate strategy (Levy, 2002). It is now forging alliances with software companies like Oracle and SAP develop interfaces for UPS functionality in its emporium systems. UPS has also optimized its operational ground transport networks both on land and air to deliver packages in a cost effective manner. Operations have also been automated in many areas to increases efficiency.

Conclusion

In conclusion strategic plans are important to the realization of the corporate strategy. UPS strategic plan targets expansion to facilitate global business. The strategic plan and corporate goals have been responsible for the expansion of the firm domestically and internationally. The company has a proper physical operational strategy that facilitates actual distribution of goods through “hub and spoke”.

References

About UPS. (2012a). Retrieved from HYPERLINK “http://www.ups.com/content/us/en/about/index.html” http://www.ups.com/content/us/en/about/index.html

About UPS. (2012b)Welcome to UPS Supply Chain Solutions. http://www.ups-scs.com/

Boulton, W. R. (1999).United Parcel Service: Moving at the Speed of Business. Retrieved from http://www.auburn.edu/~boultwr/UPS_Case.PDF

Byrne, J. A. (n.d.). Strategic Planning: After a decade of gritty downsizing, Big Thinkers are back in corporate vogue. Retrieved from

Garvin, D. A., & Levesque, L. C. (2006). Strategic Planning at United Parcel Service. Harvard Business Schoo

Levy, M. (2002). Case Study: United Parcel Service, Inc. (UPS). Retrieved from HYPERLINK “http://www.peachpit.com/articles/article.aspx?p=20881” http://www.peachpit.com/articles/article.aspx?p=20881

Opidee et al. (n.d.).United Parcel Service. Presentation retrieved from http://supernet.isenberg.umass.edu/visuals/ups_final.pdf

Reynolds, G. (2009). Information Technology for Managers. Boston, Mass.: Cengage Course Technology

Ross, et al. (2002). United Parcel Services: Business Transformation through Information Technology. CISR Working Paper No. 331

United Parcel Service of America. (2005) Supply Chain Strategy: The Importance of Aligning Your Strategies. Retrieved from http://www.ups-scs.com/solutions/white_papers/wp_supply_chain.pdf