Management section
Company overview
United Parcel Service (UPS) is the largest and most renowned package delivery company in the world. Its headquarters are based in Atlanta, Georgia. It was formed early in 1907 by two teenagers namely; Claude Ryan and Jim Casey. They named their company as the American Messenger Company. Fortunately, this company was able to join the commercial space in 1913 after they merged with Evert McCabe’s company (Prince, 2016). This merger played a major role in transforming the American Messenger Company from delivering messages to picking deliveries from grocery stores. They were able to provide complex delivery systems to homes. This changed their name to Merchants Parcel Delivery. In 1919, the company was able to expand to Oakland, California from Seattle. Due to a verity of shipments which the company delivered, the company changed its name again to United Parcel Service (UPS). In the early 30s and 40s, UPS was able to convince department stores around the United States towards their delivery services (Niemann, 2007). This was a great opportunity for expansion. In 1950, the company faced direct competition from US Postal Service as it incorporated carrier operations. UPS was able to acquire its aircraft by 1980. This made it easier to expand their operations. Acquisitions have enabled UPS to grow beyond its expectations and dominate the global market. The company has acquired Italian’s Alimondo, Mail Boxes, Kiala SA, i-Parcel, among many other related firms (Clinton, 2008). Its main competitors include FedEx Corporation, Air Couriers, Motor Couriers, Freight Forwarders, among many others.
Philosophy/vision/mission statement
UPS management philosophy has distinguished the company and contributed to its immense success. Jim Casey’s philosophy on management and leadership was to make employees feel that they are part of the company. This management philosophy has transformed the company to a great extent. The company’s vision was to become “the largest package delivery company” in the world (Pressroom, 2017). UPS was able to grow towards that goal by expanding its services and acquiring various packaging companies around the world. However, they were not satisfied with this particular vision. In 1999, the vision statement of the company changed to “enablers of global e-commerce” (Pressroom, 2017). This vision was able to transform and expand UPS’s mission. The company’s mission strived to serve the evolving logistics needs of customers, developing a strong company with wide employee ownership and lead as a sustainable company.
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Organizational culture
UPS has a unique organizational culture which has the best interests of its employees, customers, shareholders and stakeholders at heart. The culture of partnership and loyalty is evident in this company. The management philosophy treats all employees as part of the organization instead of regular employees. Stock ownership is also a present culture at this firm where all employees can have a share of the UPS profitability (Gibson, 2017). This is important as it enables employees to feel valued thus enhancing their productivity and performance. It also develops an environment driven by honesty, truth, loyalty and respect. Compensation and award programs have been practised for ages in this company to drive innovative performance (UPS, 2017). Diversity also sits at the heart of UPS working environment. UPS has been recognized as one of the top organizations for multicultural business opportunities.
Organizational structure
The organizational structure at United Parcel Services is very typical of many companies around the world. UPS is headed by the chairman and chief of staff known as David Abney (Aldrich, 2016). He also acts as the company’s CEO. The second most important position in this company is the president of UPS international. Jim Barber, the president, heads all international operations by United Parcel Services (UPS, 2017). Senior Vice President of the General Counsel and Corporate Secretary is the most revered positions among VPs. The company has other seven vice presidents of different sections which they lead and oversee (Prince, 2016). Finally, the company has 12 boards of directors who are led by the chairman of the company. The boards play a big role in ensuring that the organization is driven in the right direction.
Company leadership style
The leadership style at UPS is the top-down management. This is a typical style where information and authority trickle down from the top management to subordinates. However, UPS has been able to edge out all express companies because it has embraced the partnership management philosophy which was initiated by one of the founders; Jim Casey (Dicosta, 2017). Even though orders and information are passed from the top, the management takes time to listen and understand employees. This makes this leadership style to become successful even though its nature is authoritative. Employees are made to feel like they are part of the company and not the management alone (Aldrich, 2016). Therefore, every employee at United Parcel Services plays a big role in influencing the decisions made.
Marketing section
Analysis of the marketing mix
The 4Ps marketing mix has become more prominent among service-oriented organizations. United Parcel Services employs this marketing mix which comprises of the 4Ps. They include product, price, place and promotion. UPS is the global leading courier company who aims to serve various market segments such as industrial and manufacturing firms, consumer services, retail organizations, among many others. There are two main products at UPS known as Global Small Package delivery services and Supply Chain & Freight services. The global Small Package delivery service has two sub-segments which include domestic package delivery and international package delivery (UPS, 2017). Domestic services are within the United States and are usually time-bound. This service also has money-back guarantee option. The internal package delivery delivers packages around the world using various options which depend on the urgency and weight of the package. They include Express Critical, Express Plus, Express and Express Saver (UPS, 2017). Secondly, the freight services offered by UPS include freight, air freight and less-than-truckload services. Other services offered by the company include door to door services, online packaging, and pick-up, among many others.
The presence of competition in the market has prompted UPS to incorporate a strong pricing strategy. This strategy is influenced by factors such as the weight of the product, time of delivery, transportation distance, and product’s value, among others (Niemann, 2007). The freight services also offer unique pricing based on security fee, handling charges, customs duty, and other clearance options.
UPS operates on a large coverage due to its widespread presence around the world. The company has more than 900 stock locations in 120 countries where packages are handled and prepared for shipping (UPS, 2017). Its logistics are well developed with huge warehouses of up to 35 million square feet. Domestic delivery services are aided by package cars which offer door to door services. However, the main mode of transportation is cargo airlines which deliver packages around the world. This company possesses more than 200 aircrafts for its global operations (Dicosta, 2017). In addition, UPS has a well-developed website and mobile applications which enhances the accessibility of their services to consumers.
Finally, UPS does most of its promotions online through advertisements. Being driven towards e-commerce, the company has strived to increase its awareness by posting advertisements on websites. Print media has also been used for enhancing brand recall among consumers (Gibson, 2017). These advertisements have showcased various discounts and subscriptions which benefit consumers. In the digital age, the company has tried to increase its presence online for promotional purposes.
Current global markets
United Parcel Services operates in more than 220 countries worldwide. The company has been able to become leading courier services by expanding into new global markets. The company is well established in Canada, Japan, Israel, Belgium, Germany and China (Dicosta, 2017). These developed nations offer huge benefits as the company is exposed to lots of potential consumers. In addition, the demand for health products has been increasing significantly over the years in Asia and South America. Therefore, the company is planning to venture into these new markets to expand its operations.
Overall marketing strategy
UPS uses a unique marketing plan to execute its operations. The increased demand for shipping services has had enabled UPS to diversify its marketing options. The company has been able to market its services and initiative through media such as their website, television, online advertisement, print advertisements, among many others (Clinton, 2008). Hence, the company uses paid advertisements online to reach out to a huge audience. These platforms have been crucial to UPS’s performance because of its widespread presence around the world. Therefore, it easy to reach their audience using modern media compared to traditional approaches. The main aim of the diversified marketing plan at United Parcel Services is to increase sales, attract more customers and meet the demands of the customers (Gerald, 2014). The use of diversified marketing is crucial as it serves the needs of the varying consumer segments. The company has a different type of customers such as retail companies, health organizations, industrial and manufacturing companies as well as regular consumers. These customers have varying expectations and thus have to be attracted in unique ways. This type of marketing has resulted in the success of UPS as a leading courier company in the world.
Conclusion & Recommendation
In conclusion, United Parcel Services has effective leadership, management and marketing techniques which have contributed to its global success. Jim Casey, the founder of UPS, played an outstanding role in instilling the partnership management philosophy into the company’s culture. This has enabled the company to have low employee turnover while enjoying high productivity and performance. Employees can feel at home rather than mere workers benefiting the top management. Stock ownership for employees has also been a successful attribute by UPS in ensuring that employees are able to enjoy a share of the company’s profit. Also, UPS has employed diversified marketing plan which has been crucial in targeting various market segments. However, it has mainly focused on increasing its online presence which has become the new market hub for modern businesses. To beat the competition, the company has acquired various express and courier companies around the world to strengthen its presence.
However, the company has been negatively influenced by increased operating expenses. This is because the company has been investing a lot in a bid to cater for its e-commerce needs around the world. This has led to increasing expense which lowers its profitability margins. Therefore, it is encouraged that the company should look for alternative options which are not costly. The company can develop and train effectively a new department which is focused on developing the e-commerce section. To deal with rising expenses, the company should also implement peak-oriented surcharge. This will help the company to effectively handle the evolving demands of the market. UPS should launch its On-Road Integrated Optimization Navigation System. This system has been attributed to lower operating expenses which will positively influence the revenue margins of the company (Team, 2015). These recommendations are vital in ensuring that the company can move forward without facing limited margins.
References
Aldrich, R. (2016). UPS CEO Abney: develop these habits to become a successful business leader. Retrieved Online, December 6, 2017, www.thestreet.com/story/136711714/1/ups-ceo-abney-develop-these-habits-to-become-a-succesful-business-leader
Clinton, R.S. (2008). Importance of technology investments in the logistics service providers: a case study of UPS and its use of online tools . The Journal of Applied Business Research, 24(2), 67-78.
Dicosta, H. (2017). Analyzing today’s market share for-united parcel service, inc (UPS) . Retrieved Online, December 6, 2017, www.news4j.com/2017/12/01/analyzing-todays-market-share-for-united-parcel-service-inc-ups
UPS. (2017). Company Information . Retrieved Online, December 6, 2017, www.ups.com/us/en/Home.page
Gerald, R.V. (2014). United parcel service financial challenges in a developed or developing nations . Strategic Management Quarterly, 2(1), 2-9.
Gibson, J. (2017). Taking a fresh look at united parcel service, inc (UPS) . Retrieved Online, December 6, 2017, www.stocknewsjournal.com/2017/10/03/taking-a-fresh-look-at-united-parcel-service-inc-ups-2/
Niemann, G. (2007). Big brown: the untold story of UPS . John Wiley & Sons.
Pressroom. (2017). UPS’s values, mission and strategy . Retrieved Online, December 6, 2017, www.pressroom.ups.com/pressroom/ContentDetailViewer.page
Prince, S. (2016). United parcel service: driving down memory lane . Retrieved Online, December 6, 2017, www.marketrealist.com/2016/04/united-parcel-service-company overview/
Team, T. (2015). UPS’ margins to improve with increased operational efficiency . Retrieved Online, December 6, 2017, www.forbes.com
