UPS Company Financial, SWOT Analysis Example

A company that I have worked for in the past is the UPS Company. The United Parcel Service (UPS) is one of the most successful and longest operating mail courier businesses in the world. The company was established in 1907 and started out as just a messenger business in the United States of America. UPS is head-quartered in Atlanta, Georgia where the company employs about 408 thousand workers. Ever since their modest beginnings, UPS has expanded from a small sized messenger service to a $36 billion dollar publically traded corporation. (Reuters, 2015)

The UPS Company should manage a budget for future sustainability in the case that the global economy suffers another financial crisis such as the one in 2008. They should also plan a budget for projected growth in the company. The positive outcome for this budget plan for the UPS Company is that it will promote financial stability in the company. The negative outcome might be that the UPS Company will be limited to the budget as far as spending and investment opportunities.

UPS is a multi-national business and stand as one of the most recognized and reliable brands in the postal industry around the world. UPS is also one of the largest chain of package delivery services in the world and the primary competitor of other companies in the postal industry such as FedEx and DHL in both the industry and in operations of supply chain management. Every day, UPS manages the flow of funds, goods, and information in over 200 countries and relevant territories around the world. (Reuters, 2015)

Company Analysis

UPS, holding the title of the world’s greatest package delivery service and the global head in supply chain management in its respective industry, realizes that optimizing their efficiency of business is imperative for their company to deal with the constantly increasing pressures of management. This attributes to the company’s global plans to offer their customers’ beneficial methods of streamlining their supply chain management system as well as further improving their profound business performance. (Sullivan, 2005)

The corporate culture of the UPS Company is based on its affluent history. This is mainly because the UPS Company for decades had been trialing and testing their strategies to solidify their courier system on which they are built on in order to administer to their customers the satisfaction and quality should exist in the postal industry. The corporate culture of the UPS Company is constantly coping to the flows of ever changing times in order to ensure that their business models and strategies do not go obsolete or get rendered ineffective. (Sullivan, 2005)

It became very important for UPS to realize that their corporate culture is an arrangement of proportioned ethical values and beliefs that have an impact on the customers, business system, and structure of the company itself. It is a well-developed belief system that shapes the way operations are executed, a logical sense of how to work, as well as where to establish priorities in achieving company goals. (Francisco, 2013)

Management

The business module strategy currently being utilized by UPS’s management is the called the Total Quality Management (TQM) approaches. They apply this strategy throughout every aspect of their business module. The reason surrounding the selected strategy of this approach which was integrated into UPS in 1994 presented by their previous CEO was primarily due to the fact that they wanted to ensure that the quality of UPS services were the most favored in their industry. The induction of this type of business module was executed in order to better their efficiency, productivity, and overall quality. (Daily, 2013)

One of the main benefits of integrating this business strategy is that puts emphasis on the continuous desire for improvement. It operates as a cross functional and management headed philosophy that results in bettering customer satisfaction. The reason that UPS is so effective in using this business model is due to the fact that they possess all of the basic requirements for the integrating of this company philosophy. Their head of management actively enforces this business model and ensures that every department within the organization integrates it as well. The other reason behind this is mainly due to the idea that this business model runs conjointly within UPS managements. UPS believes in being highly capable of adaption in order to enhance their services. TQM helps to focus on consistent improvements. (Sullivan, 2005)

UPS makes sure all of the dimensions ranging from skill set variety, task identity, task significance, autonomy, and feedback are addressed by their employees. As a result, the UPS employees are more self-efficient. UPS is aware that in order to successfully integrate this business strategy their employee body should have benefits which would compel them to strive towards the improvement of the company. Therefore, UPS management provides their employees with a network system of support and benefits in the structure of career development. (Reuters, 2015) (Sullivan, 2005)

Macroeconomic Analysis

One of the primary business elements that UPS should bring more attention to is their business exposure. Although they currently have operation throughout Asia, Africa, Europe and the Middle East, they focus mainly on their domestic markets established within the US. An example of this is when UPS appeared benefited from substantial revenues for the fiscal year 2009, but nearly 75 percent of that was generated through their domestic markets. This is financial element can be compared to their competitors such as FedEx, DHL and TNT, all whom have operations in various Asian and European countries like Australia, China, The Netherlands, Brazil, Italy, Germany, India, among many others. (Francisco, 2013) (Reuters, 2015)

UPS relies too much on a single region in where they operate in their domestic markets. This exposes the business to much negative influence. For example, the recession of 2008 in the US had a major impairment on UPS. This is due to the fact that they are excessively exposed to the risks of down turns in the US’s macro-economic environment and this increases its business and financial risk.

Even though UPS tends to rely too much on their domestic market in the US and is having continued debts, the company is showing significant improvements in regards to their performance. The UPS Company currently has more than 300 thousand workers employed and their assets are continuing to increase. The company currently delivers over 13 million parcels per day and their annual revenue stands at an average of more than $25 billion USD. Given that they operate in more than 200 countries around the world and that they are presently investing significant amounts of money into technology, the UPS Company will definitely increase their market share because they have been consistent in being driven forward through excellence in the business factor of quality and pricing. (Reuters, 2015) (Finance, 2015)

Litigation

Government regulation has an impact on the business strategies of UPS because they are subject to various other laws and regulations in relation with their non-package services, including customs regulation, Food and Drug Administration (FDA) regulation of the transportation of drugs and pharmaceuticals, as well as state and federal financial regulations. These applicable laws and regulations impact the UPS Company’s operations on their customer sites and in some case, bring added costs on the company’s finances. Any violations of such laws and regulations might result in the incursion of fines and penalty fees or even the discontinuation of the company’s existing contracts. Such regulations might also put pressures on the company management and have an effect their cost structure. (Daily, 2013)

In regards to work stoppages, the UPS Company might lose some of their customers permanently, if they are unable to provide the expected uninterrupted services. This might adversely affect the company’s business module, financial standing, and the results from operations. The factors of futuristic collective bargain agreements also might impact the company’s competitive positions and quality of operations. Labor problems may disrupt the company’s business operations, resulting in decreased revenue and loss of credibility from their stakeholders. (Reuters, 2015) (Francisco, 2013)

The intensified competition in the postal industry is continuing to consolidate. Competition remains solid. As a result of such consolidation, the UPS Company’s competitors such as FedEx or DHL, might increase their market shares and better their financial capacity. This might even intensify their competitive positions within the postal industry. Business combinations might also result in such competitors establishing a more broadened variety of similar products and services at competitive prices, which could adversely have an impact on UPS’s financial performances. (Francisco, 2013) (Daily, 2013)

References

Daily, B. (2013, November 22). FedEx, UPS Look For E-Commerce To Deliver Growth. Retrieved from Nasdaq: http://www.nasdaq.com/article/fedex-ups-look-for-ecommerce-to-deliver-growth-cm305061

Finance, N. (2015). UPS Company Financiala. Retrieved from Nasdaq Finance: http://www.nasdaq.com/symbol/ups/financials?query=balance-sheet

Francisco, U. o. (2013, August 20). UPS Logistics a Masterpiece of Streamlined Supply Chain Management. Retrieved from Supply Chain 24/7: http://www.supplychain247.com/article/ups_logistics_a_masterpiece_of_streamlined_supply_chain_management/green

Reuters. (2015). UPS Background. Retrieved from Reuters: http://www.reuters.com/finance/stocks/companyProfile?symbol=UPS.N

Sullivan, M. (2005). UPS Supply Chain White Paper. Retrieved from UPS: https://www.ups-scs.com/solutions/white_papers/wp_six_sigma_RFID.pdf