Ups Value Chain Analysis Essay

892 Words Mar 22nd, 2011 4 Pages
Value Chain Model and Competitive Force Model

BUSA 310: Dr. Chris Lee
Carl Field
Justin Kelly
Jacob Augustine
Monique Becker
Value Chain Model


Value Chain Model of United Postal Service United Postal Service (UPS) and every business has a Value Chain Model in order to be able to make sure that you have the best values for your internal and external customers. We have two activities, which are the Support and Primary. The UPS Support activities involve the Firm Infrastructure, Human Resource Management, Technology Development, and Procurement. The Firm Infrastructure has to deal with the important aspects of Financial Policy, Accounting, and Community Affairs. In order to make sure that UPS has the best
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Furthermore UPS employees 6,700 tractors and 22,100 trailers (; in essence making UPS the 900 lb gorilla with the bargaining power. UPS has a large IT network and employs 4,700 IT specialists ( giving UPS the knowledge and flexibility to find the best IT supplier. Thus UPS has bargaining power of its suppliers creating a cost cutting advantage over rivals DHL, USPS, and FedEx. Substitute Products or Services is fairly low. Services such as email and fax exist to serve document communication and delivery, but cannot handle parcel delivery. Bike delivery is an arcane method used in developing and underdeveloped countries but as UPS and its rivals expand into all potential markets this method will be phased out; until then bike delivery is considered a substitute for local delivery. Company delivery services are shrinking due to the continued success of outsourcing. Although a viable option for many companies wishing to control the logistics of their business, nevertheless companies are seeing the advantage of outsourcing to specialized companies. All substitute methods outside of fax and email are only employable in close proximately due to distance, flexibility, and cost. Nevertheless UPS must continue to contend with the slowly declining substitute service on the local level. Bargaining Power of Buyers is on par with the rest of the industry. Parcel

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