United Parcel Service Essay

830 Words Apr 7th, 2011 4 Pages
United Parcel Service UPS faced a variety of problems in the near future. UPS had to consider how to develop and grow it’s technology and information services, in order to remain competitive in the market. With that challenge, UPS had to face the challenge of balancing its intent to develop and promote from within, with the need to advance quickly using outside resources. Along a similar vein, UPS struggled with the strategic problem of how to grow their air services business. UPS has to consider whether or not to continue contracting air services from other suppliers, or to acquire another firm. Acquiring another firm would cause UPS to deal with even more problems with cultural integration. Overall, UPS was dealing with the strategic …show more content…
These systems kept customers informed and allowed Federal Express to respond quickly to changes in status. Market trends indicated that increased technology was giving competitors an advantage. In the case of RPS, their ability to give customers tracking data at any point was costing UPS thousands of packages a day. As Federal Express’s technological strengths grew, UPS could expect to lose more packages to competitors which offered customers advanced tracking abilities. In addition, Federal Express’s technological strengths would allow them to be more efficient, cutting unnecessary costs due to the increase in information they gain from their technology. Next, it is important to consider their respective market positions. In 1986, UPS was the number 2 US Transportation Company, based on operating revenue. Comparatively, Federal Express was only the number 14 company. While this may seem like a large enough distance for UPS not to consider them a serious threat, there are other important details to consider. While Federal Express had considerably lower operating revenue than UPS, $2.6 billion and 9.6 billion respectively, Federal Express had noteworthy net income. In net income, Federal Express ranked #5, while UPS ranked #1. Federal Express also managed to increase their net income 74% over the previous year. Federal Express was growing fast, and was capable of utilizing their technology to gain strong income from relatively low revenue. Based on this growth, and

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