United Parcel Service (ups) Introduction

United Parcel Service (UPS) Introduction

UPS (United Parcel Service) was founded in 1907 and initially operated as Messenger Company; it is currently considered a Multinational Corporation (MNC) with operations in more than 200 countries (Kohli, 2007). United Parcel Service is currently (2011); ranked 48 as a fortune 500 company; with revenues exceeding $49 million, in comparison with Federal Express; one of many competitors; who rank 73 as a fortune 500 company; with revenues exceeding $34 million. UPS managed almost 50% profits over the previous year's fourth quarter results; even with the rising cost of fuel and extreme weather conditions. UPS is also taking steps to reduce the company's dependence on fuel; by adding 48 trucks fueled with liquefied natural gas to its fleet. There are also plans to add more if the natural gas infrastructure improves in the United States ("Fortune 500," 2011). United Parcel Service has various business units and has managed to diversify its business in today's global economy. From a strategic perspective the companies has grown in leaps and bounds; and remain one of the top companies in its industry.

Strategic Business Units Defined: Competitive Environment and Market Conditions

By focusing on goals and strategic management and planning; United Parcel Service is currently a multi-billion-dollar corporation. In the area of Transportation and Logistics it is one of the world's largest package delivery companies. From an operational and logistics perspective the company manages the flow of goods, funds, and information in more than 200 countries and territories worldwide. United Parcel Service operates various strategic business units; which creates a competitive edge, especially in the current global economy and economic market conditions; especially in area of increasing fuel costs. Below is a list of some of United Parcel Service Strategic business units (United Parcel Service, n.d.):

* The UPS Store

* UPS Air Cargo

* UPS Capital

* UPS Consulting

* Customer Solutions

* UPS Express Critical

* UPS Freight

* UPS Mail Innovations

* UPS Supply Chain Solutions

United Parcel Service has maintained a competitive edge in the current environment with the

creation of a more diverse company with various strategic business units; the different business units has allowed the company to capture different market based on different customers' needs. UPS has streamlined its airfreight, and implemented technologies which are also very beneficial in today's global market place. There are different units which will be discussed in reference to competitive in the current competitive environment and today's market conditions.

The UPS Store

UPS Store, or Mail Boxes Etc; Mail Boxes Etc was just short of 3000 retail outlets in 1997; which made it appealing purchase for U.S. Office Products. However, U.S Office Products expanded the business too quickly with new ventures and had to file for bankruptcy in 2000. This positioned a highly profitable franchise a great purchase for United Parcel Service; the purchase occurred in 2001. UPS was able to expand its retail presence, with a potentially more profitable segment than their normal business-to-business (B2B). In 2003 UPS test-marketed several new concepts and strongly encouraged franchise owners to reposition their Mail Boxes, Etc outlets as "The UPS Store." The re-branding entailed shifts in pricing strategy, emphasis on different products, as well as changes in the store décor (McCrea & Torres-Baumgarten 2011). Currently, the UPS store, which is a competitor of the United States Postal Service; which also offer many office services, such as printing, copying, etc; UPS decision to purchase this franchise has proven to be a wise strategy from a competitive perspective; as well as from a environmental perspective which offers an alternative to going to the United States Post Office which is normally crowded; which very slow service.

UPS Air Cargo

United Parcel Service Air Cargo; the leading package-delivery company which averages more than 13 million packages a day, with approximately 8 million customers in over 200 countries and territories. This company has over 256 aircrafts, with others on order; it's the 11th largest commercial airline worldwide, and the 9th largest in the United States. To provide expedited delivery services as same-day; SonicAir, Nextday Air, and second day air, the key is the company's internal infrastructure.

A group of Operations Research Specials was created within United Parcel Service and teamed up with Massachusetts Institute of Technology (MIT). The result was a system used to optimize the design of service networks for delivering express packages. The creation of this system allows planners to simultaneously determine package routing, aircraft routes, and fleet assignments, to ensure overnight delivery; with a cost saving over the previous systems used. The system's solution and insight is used by planners to improve plans. Saving of $87 million has been realized between 2000 and 2002. Future savings are expected to be in the hundreds of millions. This system which was developed by the UPS team and MIT is called (VOLCANO) Volume, Location, and Aircraft Network Optimizer. It is based on optimization of the planning system which transforms the planning of business processes within UPS Airlines. It uses innovative modeling and an algorithmic approach to streamline the planning and logistic of the air network. It has proven to be very successful within the airline and academic community (Armacost, Barnhart, Ware, & Wilson, 2004).

The UPS Store and UPS Air Cargo are two of United Parcel Service's business units which have demonstrated success in the current global environment with the current economic conditions. UPS has proved sustainability from an economy perspective; by strategically purchasing Mail Boxes, Etc which increased the company market share, as well as allowed the company to gain a new type of customer with the UPS store; also with the streamline of UPS Air Cargo with the use of VOLCANO.

Current Growth Strategies and Implications Evaluated

Growth strategies can be defined in many ways, acquisitions, mergers, joint ventures, alliances, partnerships, Market