UPS SWOT Analysis analyzes, Only a handful of companies can operate successfully in an industry for over a century with UPS being one of the chosen few. The company has gone through some of the worst economic periods in history and emerged stronger. By employing highly effective strategies throughout its long and illustrious operations, UPS grew to become the largest logistics and delivery service company.
Did you know? UPS presently serves over 200 countries and territories, including every single address in North America and Europe. UPS has the world’s ninth largest airline, with 268 jet aircraft, and over 92,000 package cars.
One of the leading players in global logistics, United Parcel Service popularly known as UPS is a multinational courier and parcel services headquartered in the US. In addition to logistics, UPS also offers supply chain management solutions.
This can only be achieved through a firm with extensive knowledge, experience and innovative strategies. To determine the strengths of the company potential, weaknesses, opportunities and threats, it is necessary to conduct a SWOT analysis by UPS.
UPS At A Glance – UPS SWOT Analysis
Company: United Parcel Service(UPS)
Founders: James E. Casey
Year of establishment: 28 August 1907, Seattle, Washington, United States
CEO: Carol B. Tomé
Headquarters: Atlanta, Georgia, United States
Employees (Dec 2020): 5,43,000
Ticker Symbol: UPS
Type: Public
Annual Revenue (Dec 2020): USD$84.6 billion
Profit net income (Dec 2020): USD$6.44 Billion
Products & Services: Business Cards & Stationery | Flyers & Brochures | Manuals & Presentations | Menus & Forms | Online Printing Services | Personalized Calendars | Postcards & Invitations | Posters & Banners
Company Website: www.ups.com
UPS Competitors
Competitors: FedEx | DHL International | Kuehne + Nagel | CEVA Logistics | Blue Dart | Royal Mail | C.H. Robinson | Deutsche Post | DB Schenker | GLS | XPO Logistics | Purolator | YRC Freight
UPS SWOT Analysis
SWOT Analysis Of UPS analyzes the brand based on its strengths weak points, weaknesses, opportunities, and threats. With UPS SWOT Analysis it is clear that the advantages and disadvantages are internal factors, while threats and opportunities are external elements. Here we are going to talk about UPS SWOT Analysis. Below Is The Detailed SWOT Analysis Of UPS.
UPS Strengths – UPS SWOT Analysis
1. A Strong Global Presence: UPS has just expanded the UPS Worldwide Express and UPS Express Plus to include 40 countries in the section and is now offering time-definite delivery to companies in 140 different countries and territories. In addition, it provides small delivery services across around 220 different countries in its International Package operations.
2. Online Tracking: UPS offers one of most sophisticated online tracking systems in the business, and monitors the delivery of 295 million packages every day.
3. Smart Network: Effective delivery operations depend on the seamless integration of distribution and collection mechanisms. UPS put in $20 billion in the construction of the Southeast Metro Automated Routing Terminal (SMART) logistics network facility: In Atlanta that connects all equipment and systems across its entire network.
4. Outstanding Customer Care: In order to attract, delight and keep customers businesses must offer consistent, high-quality customer service that is especially important for delivery services. UPS has excellent customer support and is more popular with satisfaction with its customers over FedEx.
5. Highly innovative: Delivering parcels globally in time requires a lot of technological innovation. To ensure that each parcel is delivered in time UPS’s Chief Information Officer at UPS designed an intelligent logistics system and was awarded an award from Forbes. Forbes CIO Innovation Award.
6. Speedy Delivery: Timely deliveries consistently is a key benefit. UPS simplifies its operations by using simple handheld devices to communicate, scan packages, signatures of customers as in addition to complex automation, such as its GPS technology and reroute. All of these operations strategies help ensure that UPS is able to deliver faster than its competitors.
7. Competitive Pricing: Offering high-quality service at reasonable prices is the most efficient method to attract and keep customers. For the logistics and delivery services, UPS offers competitive prices for shipping overnight and in all other types of.
UPS’s Weaknesses – UPS SWOT Analysis
1. Reliance on the US Market: Even although UPS is a global company but it is heavily dependent in its US market. In the year 2019, US domestic package delivery and freight produced $58.6 billion and international delivery generated $15.41 billion. In the event that there is a chance that the US market slows down because of the receding markets, UPS will be adversely affected.
2. Negative financial impact during the peak Holiday Season: For UPS to meet the demands and be able to deliver in time during the holiday shopping periods the company must spend much more than usual times. The massive amount required to manage as high as twice the normal daily volume of packages impacts the profit of the business, allowing it to maximize the advantages of the high holiday season.
3. Operational Issues: Its management team has delayed upgrading of delivery and equipment systems for years. The use of 19th century infrastructure in the fast-paced environment in the 21 century is challenging, but modernizing the systems will cost $20 billion in which is around five years of profits for UPS.
4. Poor Safety of Employees: Poor and unsafe working conditions undermine morale productivity, efficiency, and morale of employees. There have been numerous instances of UPS employees suffering injuries in the workplace. In addition, an employee died following contracting the Covid-19 virus.
5. Inflicting a burden on Purchased Transportation Costs: The delivery business is greatly affected by transportation costs. The cost of transportation is an expense incurred when UPS makes use of third-party transportation companies. The figure is around 19 percent of UPS operating costs are allocated to the purchase of transportation in the financial year 2019. If the cost of transportation continues to rise, UPS can lose its profit margins.
UPS’s Opportunities – UPS SWOT Analysis
1. Drone testing: UPS has been testing and expanding its drone delivery capabilities. UPS has tested its drone delivery system on Wake Med hospital campuses by transporting laboratory samples throughout various hospital campus structures.
2. Enhance e-Commerce Operations: The e-commerce industry is expanding rapidly, as emerging players entering the market regularly. This industry is dependent heavily on the delivery service that UPS is able to benefit by strengthening its e-Commerce services and operations.
3. Expand by Mergers and Acquisitions: Acquisitions and mergers allow businesses to grow quickly in new areas. Even if UPS did not manage to penetrate the European market completely following the failure of its bid to join forces TNT Express TNT Express, it is able to acquire smaller European logistics companies to boost their percentage of the market.
4. Diversify Portfolio: There are three primary business segments that are part of UPS operations. It is possible to Diversify into the B2C online retail market to support Small and Medium-sized Businesses (SMBs) as well as using its vast global network against rivals. In the report on the fiscal year of 2019, UPS revenue share of its three primary business segments is as the following:
– Domestic Package 62.7 percent ($46.49 Billion)
– The International Package 19.2 percent ($14.2 Billion)
– Supply Chain & Freight 18.1 percent ($13.38 Billion)
5. Increase the market for HTML0: UPS operates primarily as an enterprise delivery service(B2B or B2C) for online retailers such as Amazon for example, even when the amount of normal customers using delivery services is growing rapidly. The company can drive its growth by expanding its market to include everyday consumers.
6. Extend to 7-Day Delivery: UPS recently launched the delivery service 7 days a week. In the past, UPS pickup and delivery service was available for six days (Monday through Saturday). Due to the increase in online purchases and the rising expectations from customers, UPS has added delivery on Sundays.
UPS’s Threats – UPS SWOT Analysis
1. Intense Competition: With fierce opposition by FedEx, DHL, Amazon, YRC, Old Dominion, and many others The market share and profit margins of UPS remain in danger.
2. Dependence on one client “Amazon”: Ecommerce giant Amazon was responsible for around 11.6 percent of UPS’s revenue during the year of fiscal 2019. In the event that Amazon prepares to compete with Amazon in the field of transportation and delivery, getting ready to compete in transportation and delivery services, UPS revenue can be at risk due to any changes in their relationship with Amazon.
3. Trade Tensions: Being a globally-based business its reliability, sustainability, and financial viability of UPS depend on revenue from various regions. This creates the trade wars the biggest risk to the business.
4. The risk of a strike: Even though UPS employees haven’t been to strike since 1997 the threats and difficulties of battling the pandemic and numerous contractions create anger and discontent in the workforce. A strike of just a few minutes could cost the UPS millions.
5. The looming recession: This pandemic brought destruction and destruction all over the globe with several countries already deep in receding. UPS has trimmed its forecast for 2020’s earnings after an 13% decline in profits in its first-quarter. If the recession gets severe, the company could suffer a greater decline in profit.
6. Global Pandemic: UPS’s earnings are projected to fall by 7%in the full year 2020, as this pandemic has brought the globe to a standstill. If there’s a subsequent round, UPS could lose even more.
This is the SWOT report that UPS has done. Please let us know if you have additional suggestions to add.
UPS SWOT Analysis Template
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