Industry External Analysis Essay
Considerations of Macro Environment
Market Demographics: The target market is everyone in the world who needs to ship an item. Christmas time is a particularly busy time for shipping items across the world, whereas people need a company like UPS to do the delivering for them.
Economic: Gasoline prices, along with rising energy prices are the major concern. Jet fuel prices are at $2.80/gallon! However, many people would rather have items shipped rather than spend money on gas to go and buy the item.
Legal: International express services can be delayed by government policies and restrictions that can include anticompetitive practices of government-owned or authorized monopolies, licensing requirements, …show more content…
Bargaining Power of Suppliers: The suppliers who provide the boxes and envelopes most likely sale the products in bulk, this is economies of scale and allows UPS to sale them at a cheaper price.
Bargaining Power of Buyers: Businesses can buy in bulk and get a cheaper rate.
Intensity of Rivalry among Competitors in Industry: Faced with rational competitors, UPS continues to enjoy pricing power for most of its service offerings. New entrants are unlikely to build such a globe-spanning infrastructure, then incur the expense of trying to steal share from this established network.
Implications of Competitive Forces and Rivalry: A critical aspect of UPS’ competitive forces lies within the use of its resources to transport urgent packages. World wide shipping volume is increasing as a result of global exchange, e-commerce, and changes in supply-chain management.
Position of Rival Companies with similar products in industry: UPS’ outperforms its closest rival, FedEx, by more than 2.5 times FedEx’s average daily