United Parcel Services E-Strategy

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Table of Contents

Executive summary
Body
Recommendation
Conclusion
References

Executive summary

Two teenagers, Jim Ryan and Claude Casey started the United Parcel Services in a small basement office. They promised the best services at the lowest rates. The two teenagers successfully came up with a company that is a world leader in package delivery. Despite the stiff competition from FedEx and Airborne Express, UPS has invested in has invested heavily in information technology to beat its competitors.

Current figures suggest that UPS spends over 1 billion shillings to maintain high levels of customer service. Moreover, they ensure that the costs of package delivery are kept low. UPS has adopted the use of technology to ensure that the business remains highly competitive in the market.

Body

A strategy is a plan of various activities in an organization, undertaken by management with an aim of achieving organizational goals and objectives. Firms adopt different strategies to ensure that they can survive in a competitive market. Strategic process allows managers to align the organization to the new plans (Porter, 1996). Businesses analyse both the internal and external structures to ensure that they can meet challenges presented by the market.

Business strategy must conform to the long-term issues that determine the success of the entity (Carr, 2003). United Package Services’ adoption of an e-strategy presented the company with merits over that of their competitors. Among the benefits derived from adoption of an e-strategy are lower costs of operation, competitive advantage, and employee motivation.

From the article, it can be deduced that by using e-strategy, UPS managed to cut the delivery costs. Delivery trucks cut the mileage by 28 million through use of an automated system that gave the drivers shorter route to their destination.

This has saved the company 3 million gallons of fuel thus reducing the costs of purchasing fuel. Moreover, proper training of staff ensured that the company reduced its operational costs. Cutting the operational costs made it easier for UPS to offer customers mail delivery services at cheaper rates than their competitors.

Cost reductions have enabled UPS to maintain a competitive edge in the market. Therefore, the management of UPS has benefited from the e-strategy by meeting their long-term goal of providing the best services at the lowest rates.

Furthermore, adoption of the e-strategy has enabled the company to achieve long-term benefit of improving employee conditions. Drivers in the company are trained to use 340 methods that improve performance. The drivers are equipped with hand held computers that enable them to perform their tasks effectively and efficiently.

When Jim Ryan and Claude Casey started the United Parcel Services their main objective was to provide the best services at the lowest rates. Adoption of the e-strategy ensured that the company was able to meet this objective. UPS continues to maintain quality services by adopting a 1 billion dollar strategy.

This strategy enables the company to cut their operational costs. In turn the company transfers the benefit of lower costs to their customers in terms of low prices and quality services.

Using a SWOT analysis, the impacts of the e-strategy can be determined (Overby, 2011). One of the strengths of UPS Company is that it has maintained a competitive advantage in the market over the years. This shows that adoption of the e-strategy strengthened the position of UPS as a market leader.

The weakness associated with adoption of the e-strategy is the cost of adoption. UPS uses over 1 billion dollars a year to maintain quality customer services. This means that even though the e-strategy is successful, the cost of its implementation is still extremely high.

Opportunities associated with the e-strategy include an increased market share. Adoption of the e-strategy enabled UPS to increase its market share. The company has a market share that enables them to deliver over 15 million packages a day in the current market. This is a considerable increase compared to the early pioneer stage when Ryan and Casey started the company.

Another impact of the e-strategy is that it led to adoption of new technology. This technology has ensured that the staff operates efficiently and effectively, especially the drivers. However, the technology adopted is being threatened by the arrival of the Global Positioning System (GPS). Currently manufacturers of cars and phones have incorporated the option of a GPS to be used in finding routes free of charge.

Internally, adoption of the e- strategy has led to the company training their employees on use of different technology. Drivers have been trained on 340 methods that would optimize their performance.

Moreover, the e-strategy has improved the employee working conditions by providing them with equipment that increases efficiency such as the DIAD. Therefore, it can be said that adoption of the e-strategy by the company has ensured that the company aligns to the objectives set by the founders

The UPS e-strategy goals include ensuring that costs are minimized, increasing efficiency, and ensuring that the package delivery system works smoothly. The UPS strategy is to incorporate technology that minimizes the costs of operation while ensuring quality services are provided to the customer at cheaper rates.

The goals of the e strategy can be aligned to the UPS strategy by ensuring that the implementation of the e-strategy is performed by competent personnel. The management of UPS took the liberty of training their drivers in 340 methods developed by engineers in order to optimize performance (Laudon and Laudon, 2011).

This shows one method that the company used to align the strategy goal with UPS strategies. In addition to this, the company provided the drivers with DIAD that they used when deciding the routes.

This shows that the management ensured that objectives of the e-strategy of minimizing cost and increasing were aligned to the strategy of the company that involved incorporating technology that minimized cost while ensuring customer needs were addressed.

Another way of aligning the e-strategy to the UPS is by consultation. Management determines the long-term goals of the company and then communicates these goals to the company’s staff. After consultation management have a general idea of what the employees are willing to accept and what they are not willing to accept. Moreover, the consultations provide management with weaknesses in their system.

Scenario planning may be used after consultations to ensure that all the possible weaknesses in the goals of the e-strategy are eliminated (Laudon and Laudon, 2011). Consultation when used ensures that the company can align the goals of the strategy to the goals of the company.

Recommendation

Personal recommendation to the UPS is that they should eliminate some of the costs incurred in adopting technology similar to GPS that is now available in most cars and smart phones for free

Conclusion

UPS adopted e-strategy to ensure that they remained highly competitive in the market. This strategy has been successful and ensured the company still remains a leader in the package delivery industry despite the fact that they have competition from FedEx and Airborne Express.

References

Carr, N. 2003, ‘IT Doesn’t Matter’, Harvard Business Review, Vol. 81 No. 5, pp. 41-49.

Laudon, K. & Laudon, J. 2011, Management Information Systems, Prentice Hall, Upper Sadle.

Overby, S. 2011, IT Value is Dead. Long Live Business Value. Web.

Porter, M. 1996, ‘What Is Strategy?’, Harvard Business Review, Vol74 No. 6, pp. 61-78.

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