Group MembersGroup Leader = Fahad Ismail

Ahsan Ali Zubair Khan

Abdul WaheedAbdul Qadir

S. Abdul RehmanShariq

Rahmat

CASE STUDY- UNITED PARCEL SERVICES

United Parcel Services (UPS) is the largest logistics Company in the world based on revenue and package volume. Operating in the air delivery and freight services industry They operate under three

principles:1. U.S. Domestic Packages,

2. International Packages, and the newer and much smaller,3. Supply Chain.

They are also one of the largest package delivery companies in the world and a major competitor of UPS’s are FedEx and DHL. Every

day, they manage the flow of goods, funds, and information in more than 220 countries and territories worldwide.

 

INTRODUCTION

VISION 

Our Goal is to synchronize the world of commerce by delivering business solutions that create value and competitive advantage for our customers.

 MISSION

 What We Seek to Achieve

 • Grow our global business by serving the logistics needs of customers,

offering excellence and value in all that we do• Maintain a financially strong company-with broad employee ownership-that

provides a long-term competitive return to our shareowners.• Inspire our people and business partners to do their best, offering

opportunities for personal development and success• Lead by example as a responsible, caring and sustainable company making a

difference in the communities.

VISION & MISSION

VISION 

We will globalize the world of Logistics and providing Customer Services by creating values and transform them through investments.

 MISSION

 Our Mission- What we seek to achieve 

• We offering precious and excellent customer services, logistics, distribution and commerce need worldwide in all manners.

• We are ethical, well-regarded and responsible employer by providing our people rewarding, appreciation and cooperative environment with the opportunity for advancement.

• We serve as Environment Friendly by caring our society and responsible corporate citizen.

• We make our business globalize by servicing prior logistics to the customers and offering them a valuable services.

• Maintain as financially strong Company through skilled employee and respectable owners (Stakeholders) that serves a long term commitment.

PROPOSED VISION &MISSION STATEMENT

STRENGTH AND WEAKNESS

Ten Strengths Below

1. Strong market position2. Board portfolio of services3. Financial Strength4. Servicing in many countries5. Brand name6. Customer Relationship7. Advanced Supply Chain Activities8. Global Presence9. Strong Revenue growth10. Environment Friendly

Ten Weaknesses Below

1. Geographical Focus2. High Debts3. Market Share growth constant4. Low employee productivity5. High Turnover6. Increase prices7. Business to Business8. Stock-based Compensation9. Laws and regulation10. Rise in Fleet charges

  Internal Factor Evaluation Matrix (IFE)        Strengths Weight Rating Weighted Score1. Strong market position 0.05 4 0.202. Board portfolio of services 0.25 3 0.753. Financial Strength 0.10 3 0.304. Servicing in many countries 0.15 3 0.455. Brand name 0.10 4 0.406. Customer Relationship 0.05 4 0.207. Advanced Supply Chain Activities 0.10 4 0.408. Global Presence 0.10 3 0.309. Strong Revenue growth 0.05 3 0.1510. Environment Friendly 0.05 3 0.15

  Weaknesses Weight Rating Weighted Score1. Geographical Concentration 0.18 2 0.362. High Debts 0.14 2 0.283. Market Share growth constant 0.10 2 0.204. Low employee productivity 0.05 1 0.055. High Turnover 0.05 1 0.056. Increase prices 0.10 1 0.107. Business to Business 0.11 2 0.228. Stock-based Compensation 0.16 2 0.329. Laws and regulation 0.07 1 0.0710. Rise in Fleet charges 0.04 1 0.04  TOTALS 2.00   4.99

INTERNAL FACTOR EVALUATION

Ten Opportunities Below1. Geographical Expansion2. Online Shopping and distribution3. Change in Consumer Behavior

4. Alternative facility5. Global Expansion6. Emerging Market Growth7. Logistics Outsourcing8. Retail e-commerce growth9. Technological advancements10. Integrated Global network

Ten Threats Below

1. Compliance with Government 2. Strikes and work stoppage3. Intense Competition4. Change in Consumer Behavior5. Premium charges for delivering good6. High Cost of trade7. Distribution Network8. Shifting to subsidies (From air to sea)9. Changing prices of energy10. Privacy Breach or IT system

OPPORTUNITIES AND THREADS

  External Factor Evaluation Matrix (EFE)        Opportunities Weight Rating Weighted Score1. Geographical Expansion 0.18 3 0.542. Online Shopping and distribution 0.10 3 0.303. Change in Consumer Behavior 0.08 4 0.324. Alternative facility (provide sea logistics @ discount price) 0.07 3 0.215. Global Expansion 0.08 4 0.326. Emerging Market Growth 0.14 2 0.287. Logistics Outsourcing 0.11 2 0.228. Retail e-commerce growth 0.06 3 0.189. Technological advancements 0.08 4 0.3210. Integrated Global network 0.10 3 0.30

  Threats Weight Rating Weighted Score1. Compliance with Government Regulations 0.20 3 0.602. Strikes and work stoppage 0.10 2 0.203. Intense Competition 0.15 4 0.604. Change in Consumer Behavior 0.15 3 0.455. Premium charges for delivering goods 0.05 2 0.106. High Cost of trade 0.05 2 0.107. Distribution Network 0.05 2 0.108. Shifting to subsidies (From air to sea) 0.10 2 0.209. Changing prices of energy 0.05 2 0.1010. Privacy Breach or IT system 0.10 3 0.30  TOTALS 2.00   5.74

EXTERNAL FACTOR EVALUATION

SWOT MATRIX

SWOT MATRIX

BCG MATRIX

CASH COW•Domestic PackagesCash cow for the Company is to be analyze as delivery of Domestic packages because is seem like a major factor of prioritization of the Company as seen in the balance sheet. The US market growing rapidly and 70% of the profit of UPS comes from domestically, so it is a chance to hold the delivery packages more and more.

Supply Chain & FreightSupply Chain & Freight give nominal profit but consider as cash cow because it make profit domestically with the contribution of domestic packages as well.

STARSInternational PackagesStars represent the International services that are providing by the Universal Parcel Services (UPS), because this market has vast opportunity to grow as UPS Financial strength is concerned they invest more on internally to diversified themselves into more countries and increase their profits and comes this sector into cash cows and it is good part for UPS for attracting customers.

BCG CONTINUE…..

• As per the size of UPS, it may save the cost of fuel domestically by proving them alternative fuel consumption vehicles like hybrid technology to save cost.

• According to their financial strength is concerned, UPS should diversified into unrelated/related business to reduce their risk of losses.

• UPS should also reduce the price of the logistics as when the fuel consumption cost reduce it will reduce the cost of logistics which absorb the increasing other cost.

• Building or maintain relationship with the Business partners or make practice to increase Business to Business strategy.

• Enter into the new markets with the product development technique.• Give extra benefits and packages to their customers on Holidays and

any festival to increase their Market Shares and attract New Customers.

RECOMMENDATION

• Use advance Technology regarding Information Technology e.g; SAP/ORACLE, which combines the entire department on one link.

• UPS adopt Corporate Culture that shared values and beliefs with their employees, as a result this impact on people of the organization, system and structure of a particular company.

• Expanding on global trade and emerging market growth, as this seems to be investment and growth for their current customers and it will be a source of contribution of Big revenue in there balance sheet.

• UPS should follow Just in Time (JIT) strategy to reduce the fleet cost also reduce the cost of ware houses as well.

CONTINUED…

Earning Per Share = Net income-Preferred DividendNumber of shares of common stock

(earning available to the owners of stock)Earning Per Share= 3.38

Earning per share of Universal Parcel Services increase in between 6% and 12 % over adjusted in 2012 EPS. They expect to achieve this growth in spite of increased pension expenses, unfavorable currency comparisons and a mixed global economic outlook. Ups focused on increased shareowner distributions, that raised share repurchase plan. UPS remain committed to their long-term target of 10 % to 15 % growth in earning per share. They intend to leverage their human and financial capital to capture profitable opportunities.  

EARNING PER SHARE-ANALYSIS

INCOME STATEMENT

• During the past year, we demonstrated our ability to adapt to the dramatic changes in retail and other industries. 2015 will be a year in which we not only reinvest, but reexamine, reengineer and refine our operations to ensure we are more efficient and more profitable going forward.

• We anticipate that earnings per share in 2015 will increase between 6 and 12 percent. Overall, UPS expects operating profit to increase between 5 and 9 percent.

• In 2014, our adjusted net income* increased 1.2 percent, to $4.39 billion on a 5 percent increase in revenue, to $58.2 billion.

• Our free cash flow generation remained robust in 2014 at $3.4 billion.

EXPLANATION

Universal Parcel Services make a Strategy that effectively controlling operational cost and minimizing fuel consumption that requires not only understanding but also synchronizing UPS’ three distinct activities and services: Global Small Package, Supply Chain Services, and Freight Services. This will be done with JIT (Just in Time) Method. For this instance they required to make coordination with production, planning, sourcing and logistic also.

Furthermore UPS also designing a new, smoother and quicker packages that will be use not nation wide but also internationally. UPS also Spread them self Internationally, in BCG Matrix showed that UPS has chance to Spread themselves internationally more and more because they has Broad portfolio with huge Financial strength and also have market position and good will that helps them to increase there market shares and being maintain themselves as a world class Company.

CONCLUTION