United Parcel Service: Critical Success Factors - Case Study Example

Case study United Parcel Service critical success factors The company success lies in the ability to respond to customer demands and request on time when it comes to deliveries. The company has invested heavily on resources to ensure operational excellence is, and things removed smoothly.UPS has a fleet of cars and a number of airplanes that are used to make delivery across the globe. The teams responsible for responding to deliveries are well trained to ensure that the goods delivered arrive safely in their intended destination. Consequently, the reputation of the company has continued to grow due to the excellent services the company offers (Study mode, 2014). The company’s website offers customers a platform in which they can track their orders and make inquiries regarding their requests. Interestingly, the service is offered at very affordable rate. Therefore, it can be clearly stated that given UPS business strategy, the key success factors and risk that are responsible for the company’s fortune growth are, prompt response to customer needs. The success is also attributed to competition based pricing strategy and accuracy. The company’s ability to offer a service that enables customer track their order is a major milestone for the organization. In addition to the service, the UPS introduced another service that allows customers to change the destination of their orders before the order reaches its destination (Study mode, 2014). However, the company also faces when it comes to managing its fleet of cars and airplanes. Maintaining the huge number of vehicles and airplanes is very expensive for the company. The cars and planes require regular servicing because of the many trips that are made hence have to be in a good condition. Achieving the objective can be a daunting task to the management because it translates to more cash outflow. Conversely, the company also uses its staff to send orders to customer. Workers may fail to respond to customer’s orders promptly a situation that may extend the lead time for an order. Furthermore, they may fail to deliver according to the expectations of the customer, or even may not deliver. Moral issues put UPS operations at a risk (Study mode, 2014). The performance of UPS has been growing over the current years. In the year 2012 during the first month, the price of a share was $4.53 while the revenue stood at an estimated $5.4 billion. In the current financial year, the dividends of the company are expected to fall between $4.80 and $5.06. The fall represents a 6%-12% increase from the year 2012 which is a remarkable achievement (UK essays, 2014). Driving factors UPS is a market leader in the delivery business and has witnessed constant financial records over the years. The performance of the company has been on the rise because the number of people who send small has increased over the years by approximately 9%.The Company provides a wide variety of services efficiently something that has helped the organization retain a large customer base. Workers of the company and other stakeholders have vast opportunities to create their wealth because the company performs well in the stock market. Hence, subscribers of share reap the benefit when the company performs well (UK essays, 2014). Fedex performance During the 2012 financial year, Fedex was showing a remarkable performance. The company recorded revenues of more$42 billion. The dividends grew by 40% amid the political situation in the United States of America. The company is a major competitor of UPS and recently acquired RPS. The move is at positioning the organization strategically to challenge UPS dominance in the market. The company offers similar services offered by UPS such as freight services, transportation, logistical support, and value chain addition both locally and globally. The company is also doing well when it comes to targeting high-end customers. Its core business activities lie in express services, freight services, ground services and other services. The express service concentrates in shipment of products and services. It is also responsible for distribution of cargo by air and water and offers customs services worldwide. Although UPS and Fedex offer almost similar services, their scope of operation differs (UK essays, 2014). Key factors for UPS’s stock value the Company’s strengths lie in offering ground services and air services to customers who have increasingly demanding needs. The company is also estimated to control more than 50% of the parcel delivery service and extends the lead in ground services too. The organization also has a proper financial management technique which is imperative in influencing stock performance and has received approval from councils as a way of regarding it as excellent institution (UK essays, 2014). However, the UPS has its weaknesses that need to be on especially in areas pertaining to orders made in the night. The company also needs to tap into the existing opportunity with the growing usage of telecommunication technology that has made growth of online purchasing. The trend is increasingly being adopted due changes in customer taste and preferences that keeps escalating from time to time.UPS is endowed with resources that may be required for the expansion of activities of the company and the introduction of new services. Globalization has also created many opportunities for the organization because the market has been opened up, and it is has been made more accessible by the internet. The gross domestic product for countries is on the rise implying that more people are capable of affording services and products being offered in the market (Business teacher, 2014). UPS exists in highly competitive environment from other players such as Fedex; that may pose a threat to the American company. The company needs continually to formulate strategies that will help counter moves made their competitors to retain its dominance. In addition, it needs to review the cost incurred in operating its fleets of cars and planes. Huge costs can affect the performance of an organization and hinder it from attaining the desires of the shareholders (Business teacher, 2014). UPS respond to more than 1.2 million customer orders in more than 220 countries where it is present. In the previous years, the company used to deliver slightly more than 15 million packages globally in a day. In 2011, the revenue of the company stood at $5.1 million. Today, the company boasts to be the leading company in parcel delivery in the whole world. Most of the company shareholders are employees of the company while the public has the lesser say in the company’s decisions (Business teacher, 2014). References Business teacher, (2014). Key Success Factors and Risks for Ups [14.11.2014] Study mode, (2014). How Is Ups Performing What Factors Are Driving This Performance Is The Current Performance Likely To Be Sustained Why Or Why Not Essays and Term Papers.[14.11.2014]. UK essays, (2014). The Key Success Factors and Risks for Ups Business Essay. [14.11.2014] Read More