A Harvard Case Study Strategy and Industry Analysis

United Parcel Service (UPS): A Harvard Case Study Strategy and Industry Analysis

Read on to learn how the United Parcel Service (UPS) has withstood the test of time with strategic planning.
Wynand van Poortvliet
Strategic Planning at UPS
The United Parcel Service (UPS) has withstood the test of time. The company started as a $100 dream and has grown into a global industry with brand recognition throughout the world (Garvin & Levesque, 2006). All companies have a goal of doing just this, evolving with technology and paving the way for future firms in your industry. However, the tale of UPS can do more than just aid those in the same industry; its strategy and strengths can be analyzed and applied to any industry today.
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How Seriously Does UPS Take Its Strategy?
Strategy has never been taken lightly for UPS. Monthly meetings of teams specifically formed to envision the future and assess decisions have always played a large role in UPS’s approach to low-cost management and differentiation through quality customer service (Garvin & Levesque, 2006). The combination of these approaches creates a generic business-level strategy emphasizing quality as reliability.
By identifying their position on the value creation frontier, the objectives of a company can become more clearly defined (Hill & Jones, 2010). It is through such identification that has led UPS to change its mission statement, further identifying the goals and purposes of the organization in its industry and market segments (Garvin & Levesque, 2006).
The Importance of Focusing on Low Cost and Quality
As a company that focuses on low cost and quality, it is important for UPS to take critical action toward each of these approaches to differentiation. These actions have transpired into tangible and non-tangible potential outcomes for the company (Garvin & Levesque, 2006). The company has created its own sets of terms and norms by allowing the company to adapt to customer needs while staying within the same parameters outlined by the company.
UPS is able to stay ahead of the competition by constantly looking into the future. By knowing where they want to be in the future, the managers are able to see if each investment, functional-level strategy, business-level strategy, or technological advancement will help or hurt the company (Garvin & Levesque, 2006). UPS tries to take advantage of all potential technological advancements, staying true to the heritage of the company (Associated Press, 2010).
Cost Cutting Strategies
UPS stays prominent in its market by focusing on three major areas of need. The business operates as a United States domestic package service, an international package delivering service, and a supply chain and freight service (Associated Press, 2010). UPS takes what many companies would consider extremes in order to cut costs and become more efficient. UPS trucks do not take left-hand turns, for one. It has reportedly saved them 20.4 million miles by having an expert map out their routes before the delivery occurs.
This simple approach has also had a more environmentally friendly effect, reducing their carbon footprint by 20,000 metric tons (Shontell, 2010). Senior Vice President Ben Stoffel also informed the public on CNN Money in 2010 that it is safer and quicker to make a right-handed turn (Shontell, 2010). An employee of UPS told my Management 310 class that when he worked for UPS, there were expectations on how drivers would enter and exit the trucks; using a specific foot to step into the truck saved time and gave UPS another advantage in the field of low-cost strategy.
UPS has dedicated its decision process and strategy to low cost and quality through efficiency and reliability of service (Garvin & Levesque, 2006). They do so by focusing on the importance of pricing options, differentiation, finding the market demand, having a very specific cost structure, and focusing on their particular industry and competitive market structure, all of which are important in a successful position at the business level (Hill & Jones, 2010).
By identifying its strategy and staying fully committed to it, UPS’s actions and strategy is one of great value. This value is exponential due to the fact that UPS is in a very competitive market. The services offered by UPS are comparable to those of FedEx and DHL.
UPS uses cost-cutting, quality-tested strategic planning to stay ahead in a competitive market.
Photo by Ty Lee on Unsplash
How UPS Stays Ahead of the Game Technologically
UPS has become a pioneer in the industry by staying ahead of the game technologically. The company needs to continue to find ways to ship products efficiently and cost-effectively. It is important for UPS to find new segments in the market in order to keep making a profit. UPS also needs to continue to understand the importance of international business and its role in this growing industry. Many businesses are spread across the world and rely on services from UPS and their competitors to do business in a timely, cost-effective manner.
The future plans and strategy of UPS are important, but so is the past. UPS focuses a tremendous amount of time and effort on the future. Learning from mistakes and shortcomings is also very advantageous. UPS is ahead in its industry, but it does need to keep a close eye on the mistakes of the competition as well as the successes.
UPS’s Initial Public Offering
UPS had the largest initial public offering (Garvin & Levesque, 2006). The company still boasts a high stock price. According to Yahoo! Finance, the stock for UPS closed at $65:57. The company has had stock prices over $70 this year, and its low has remained at about $60. The company is optimistic in this trying economy.
UPS predicts that this fiscal year their returns will be $4.15 to $4.40 per stock. This is up three cents from the original predictions by the company. Their focus on efficiency and low-cost looks as though it may really pay off in the future for their investors even as oil prices stay high (Bomkamp, 2011).
Works Cited
Associated Press. (2010, May 26). United parcel service inc. ups:nyse, industrials/air freight & courier services.
Bomkamp, Samantha (2011, April 26). Ups raises outlook while eyeing economic risk.
Garvin, David A., Levesque, Lynne C. (2006, June 19). Strategic planning at united parcel service
Hill, Charles W.L., Jones, Gareth R. (2008). Strategic management: an integrated approach. Mason, OH: South-Western Cengage Learning
Shontell, Alyson. (2010, March 24). Why ups is so efficient “our trucks never turn left.
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Strategic Planning at United Parcel Service Case Study Analysis & Solution
Harvard Business Case Studies Solutions – Assignment Help
Strategic Planning at United Parcel Service is a Harvard Business (HBR) Case Study on Strategy & Execution , Fern Fort University provides HBR case study assignment help for just $11. Our case solution is based on Case Study Method expertise & our global insights.
Strategy & Execution Case Study | Authors :: David A. Garvin, Lynne C. Levesque
Case Study Description
In March 2005, CEO Michael Eskew has asked the Corporate Strategy Group to recommend changes to the strategic process to ensure it allows United Parcel Service (UPS) to continue to transform itself over the next several years. Describes the evolution of UPS’s strategic process, with special attention on the company’s use of scenario planning techniques, as well as other critical elements of the process: the development of the company charter, strategic planning, strategic decision making, and strategy implementation. Also discusses the roles of the various players in the process, focusing especially on the CEO and corporate strategy staff.
Creativity, Decision making, Leadership, Strategic planning, Strategy execution
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[۱۰ Steps] Case Study Analysis & Solution
–companyname– hbr case study solutions & analysis
Step 1 – Reading up Harvard Business Review Fundamentals on the Strategy & Execution
Even before you start reading a business case study just make sure that you have brushed up the Harvard Business Review (HBR) fundamentals on the Strategy & Execution. Brushing up HBR fundamentals will provide a strong base for investigative reading. Often readers scan through the business case study without having a clear map in mind. This leads to unstructured learning process resulting in missed details and at worse wrong conclusions. Reading up the HBR fundamentals helps in sketching out business case study analysis and solution roadmap even before you start reading the case study. It also provides starting ideas as fundamentals often provide insight into some of the aspects that may not be covered in the business case study itself.
Step 2 – Reading the Strategic Planning at United Parcel Service HBR Case Study
To write an emphatic case study analysis and provide pragmatic and actionable solutions, you must have a strong grasps of the facts and the central problem of the HBR case study. Begin slowly – underline the details and sketch out the business case study description map. In some cases you will able to find the central problem in the beginning itself while in others it may be in the end in form of questions. Business case study paragraph by paragraph mapping will help you in organizing the information correctly and provide a clear guide to go back to the case study if you need further information.
My case study strategy involves –
Marking out the protagonist and key players in the case study from the very start.
Drawing a motivation chart of the key players and their priorities from the case study description.
Refine the central problem the protagonist is facing in the case and how it relates to the HBR fundamentals on the topic.
Evaluate each detail in the case study in light of the HBR case study analysis core ideas.
Step 3 – Strategic Planning at United Parcel Service Case Study Analysis
Once you are comfortable with the details and objective of the business case study proceed forward to put some details into the analysis template. You can do business case study analysis by following Fern Fort University step by step instructions –
Company history is provided in the first half of the case. You can use this history to draw a growth path and illustrate vision, mission and strategic objectives of the organization. Often history is provided in the case not only to provide a background to the problem but also provide the scope of the solution that you can write for the case study.
HBR case studies provide anecdotal instances from managers and employees in the organization to give a feel of real situation on the ground. Use these instances and opinions to mark out the organization’s culture, its people priorities & inhibitions.
Make a time line of the events and issues in the case study. Time line can provide the clue for the next step in organization’s journey. Time line also provides an insight into the progressive challenges the company is facing in the case study.
Step 4 – SWOT Analysis of Strategic Planning at United Parcel Service
Once you finished the case analysis, time line of the events and other critical details. Focus on the following –
Zero down on the central problem and two to five related problems in the case study.
Do the SWOT analysis of the Strategic Planning at United Parcel Service . SWOT analysis is a strategic tool to map out the strengths, weakness, opportunities and threats that a firm is facing.
SWOT analysis and SWOT Matrix will help you to clearly mark out – Strengths Weakness Opportunities & Threats that the organization or manager is facing in the Strategic Planning at United Parcel Service
SWOT analysis will also provide a priority list of problem to be solved.
You can also do a weighted SWOT analysis of Strategic Planning at United Parcel Service HBR case study.
Step 5 – Porter 5 Forces / Strategic Analysis of Industry Analysis Strategic Planning at United Parcel Service
In our live classes we often come across business managers who pinpoint one problem in the case and build a case study analysis and solution around that singular point. Business environments are often complex and require holistic solutions. You should try to understand not only the organization but also the industry which the business operates in. Porter Five Forces is a strategic analysis tool that will help you in understanding the relative powers of the key players in the business case study and what sort of pragmatic and actionable case study solution is viable in the light of given facts.
Step 6 – PESTEL, PEST / STEP Analysis of Strategic Planning at United Parcel Service
Another way of understanding the external environment of the firm in Strategic Planning at United Parcel Service is to do a PESTEL – Political, Economic, Social, Technological, Environmental & Legal analysis of the environment the firm operates in. You should make a list of factors that have significant impact on the organization and factors that drive growth in the industry. You can even identify the source of firm’s competitive advantage based on PESTEL analysis and Organization’s Core Competencies.
Step 7 – Organizing & Prioritizing the Analysis into Strategic Planning at United Parcel Service Case Study Solution
Once you have developed multipronged approach and work out various suggestions based on the strategic tools. The next step is organizing the solution based on the requirement of the case. You can use the following strategy to organize the findings and suggestions.
Build a corporate level strategy – organizing your findings and recommendations in a way to answer the larger strategic objective of the firm. It include using the analysis to answer the company’s vision, mission and key objectives , and how your suggestions will take the company to next level in achieving those goals.
Business Unit Level Solution – The case study may put you in a position of a marketing manager of a small brand. So instead of providing recommendations for overall company you need to specify the marketing objectives of that particular brand. You have to recommend business unit level recommendations. The scope of the recommendations will be limited to the particular unit but you have to take care of the fact that your recommendations are don’t directly contradict the company’s overall strategy. For example you can recommend a low cost strategy but the company core competency is design differentiation.
Case study solutions can also provide recommendation for the business manager or leader described in the business case study.
Step 8 -Implementation Framework
The goal of the business case study is not only to identify problems and recommend solutions but also to provide a framework to implement those case study solutions. Implementation framework differentiates good case study solutions from great case study solutions. If you able to provide a detailed implementation framework then you have successfully achieved the following objectives –
Detailed understanding of the case,
Clarity of HBR case study fundamentals,
Analyzed case details based on those fundamentals and
Developed an ability to prioritize recommendations based on probability of their successful implementation.
Implementation framework helps in weeding out non actionable recommendations, resulting in awesome Strategic Planning at United Parcel Service case study solution.
Step 9 – Take a Break
Once you finished the case study implementation framework. Take a small break, grab a cup of coffee or whatever you like, go for a walk or just shoot some hoops.
Step 10 – Critically Examine Strategic Planning at United Parcel Service case study solution
After refreshing your mind, read your case study solution critically. When we are writing case study solution we often have details on our screen as well as in our head. This leads to either missing details or poor sentence structures. Once refreshed go through the case solution again – improve sentence structures and grammar, double check the numbers provided in your analysis and question your recommendations. Be very slow with this process as rushing through it leads to missing key details. Once done it is time to hit the attach button.
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What is SWOT Analysis & Matrix? How you can use SWOT Analysis for Strategic Planning at United Parcel Service
At EMBA PRO , we specialize at analyzing & providing comprehensive, corporate SWOT Analysis of Strategic Planning at United Parcel Service case study. Strategic Planning at United Parcel Service “referred as Parcel Strategic in this analysis ” is a Harvard Business Review (HBR) case study used for MBA & EMBA programs. It is written by David A. Garvin, Lynne C. Levesque and deals with topics in areas such as Strategy & Execution Creativity, Decision making, Leadership, Strategic planning, Strategy execution
SWOT Analysis stands for – Strengths, Weaknesses, Opportunities, and Threats that Parcel Strategic encounters both internally and in macro environment that it operates in. Strengths and Weaknesses are often restricted to company’s internal – resources, skills and limitations.
Opportunities and Threats are factors that are analyzed in view of the prevalent market forces and other factors such as economic , technological, legal & environmental, political, and social, health & safety.
According to global executive survey done by Harvard Business Review & Brightline Initiative – Only 20% of the strategic targets set by organizations are realized. Rest 80% of the strategic targets are not achieved because of incomprehensive planning, limited resource allocation, and poor execution.
The successful organizations such as Parcel Strategic are the one who able to predict market trends better than others, provide resources to develop products and services to leverage those trends, able to counter competitors’ threats, and meet customers’ expected value proposition.
Case Description of Strategic Planning at United Parcel Service Case Study
Case Authors : David A. Garvin, Lynne C. Levesque
Topic : Strategy & Execution
Related Areas : Creativity, Decision making, Leadership, Strategic planning, Strategy execution
Case Study Solution & Analysis of Strategic Planning at United Parcel Service
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Mattheus Biondi 29113056-YP49B Strategic Decision Making and Negotiations Strategic Planning at United Parcel Service
Company Background
It was formed in 1907, by 19-year-old Jim Casey. Originally, focused on delivering messages in Seattle . Over the 98 years since its founding, it had transformed itself several times. First into a package delivery company, then into an international air transportation company, and finally, in the late 1990s, into a logistics company. By
2005, UPS was the world’s largest package delivery company, as well as a leading
global provider of specialized transportation and logistics services. It served more than 200 countries and territories worldwide. The United Parcel Service (UPS) delivers more than 15 million packages a day to about 6.1 million customers in 200
countries around the world, making it the world’s
largest package delivery company. UPS is headquartered in Atlanta, Georgia and operates primarily in the United States
with about 428,000 employees. Also UPS itself have a slogan, “What can Brown do for you” emphasizes the company’s ability to provide ser
vices to almost any one in the world, at any address.
In 2006, it was a $37 Billion corporation. It is world’s largest package
-delivery company. The company was leader in specialized transportation and logistics and it Serves 200 countries. It had a 3,500 retail locations via purchase of Mail Boxes, etc. and employs 384,000. The company operates one of the 10 largest airlines. Top competitors of UPS include Federal Express (FedEx), DHL International and the United States Postal Service
Organization
The CEO is Mike Eskew, and for the organization is centralized, hierarchal with traditional structure at the top. Senior management and staff set direction, priorities, budgets, and initiatives. Tactical at the regional level and is strategic at the corporate level. And last thing is low levels of autonomy at the regional level is also observed.
Culture
“Consensus building” and was focused on efficiency and execution. It believed in
continuous improvement of company. Strong values: service excellence, employee ownership, commitment to stability Low employee turnover, loyal workforce
Evolution of Strategic Planning at UPS A.
Early Years
Until the early 1990s, there was no formal strategic-planning process. Instead, strategy was the responsibility of a small group of senior managers and involved little more than a series of discrete, ad hoc projects.
B.
The Decade of the 1990s
In 1996, Jim Kelly, the soon-to-be CEO, began to address these challenges. He set up the Strategy Advisory Group, a small subset of his direct reports, to meet monthly for half a day to consider and debate strategic issues. Kelly also established the CSG, a staff organization of 20 people, most of them tenured UPS managers with significant line and staff experience. He expected the CSG to develop the strategic processes for planning for the future, to research and frame key strategic issues, and to assist the Management Committee and the Strategy Advisory Group in strategy development. Activities included scenario planning, strategic planning, and support for strategic decision making and strategy implementation. The implementation of the new strategic process involved several steps that unfolded over a period of years.
C.
Into the New Century
In January 2002, shortly after Eskew became CEO, he convened the fourth step in
the strategic process, a “Strategy Road Map,” was developed to take the
Centennial Plan to an executable level of detail. Since the Centennial Plan was segmented by years, an annual plan could be separated out and translated into regional business plans that were handed down to the regions to execute.
D.
1997 Scenario Planning
The senior management in 1997 reviewed alternative long-range planning approaches. They ultimately chose to bring in consultants from Global Business Network to facilitate a set of scenario-planning workshops.
a.
Axes of uncertainty
Participants, primarily UPS managers representing different functions and generally reporting to a Management Committee member, went through
several hours of discussion over driving forces and critical uncertainties. The
horizontal axis was the “Market Environment,” or the flow of goods and funds
across borders, a continuum that ranged from regional and national markets with trade barriers to a more global market with a free flow of goods. The
vertical axis was “Demand Characteristics,” or the nature of consumers and the
type of goods and delivery mechanisms they required.
b.
Scenarios
In combination, these two axes produced four scenarios 1.
Tangled Paths

Highly competitive business environment
Strong regional and national regulations
Desire for more variation in products 2.
Regressive World
More traditional supply chain, competitive landscape, and set of consumers 3.
Global Scare Prevails
Slow adoption of new technology due to stable demand
More traditional consumers and industry consolidation 4.
Brave New World
Deregulated globalized marketplace
Mass customization of goods and services to proactive consumers
New forms of competition and virtual organizations
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alliances and business webs Results of these meetings: Tangible and intangible solutions. Change in the
company’s purpose from serving the package
-delivery needs of customers to enabling global commerce. Defining themes for future:
Proactive shift directly to the end consumer, eliminating usage barriers;
Leveraging this end-consumer positioning to win additional business-to-business customers within the demand chain;
Focus on customer solutions that integrated goods movement and
financial and information services;
Identification of opportunities to be selectively captured across entire demand chains, with integrated solutions between companies; and
Maintenance of a global growth perspective.
Strategic Plans
The third major step in the UPS strategic process occurred when Eskew became CEO at the beginning of 2002. He recalled: to plan for future capabilities and accomplishments, and to identify missing pieces. After all, nothing happens overnight in a company like this. And also he knew that he needed to create a future together
and felt that if he didn’t focus on these longer
-term issues in an off-site, he would keep talking only about the day-to-day responsibilities and numbers. Four Strategic Imperatives:
Winning Team: attracting and developing a highly skilled, diverse, and aligned global workforce
Value-Added Solutions: providing customers with value-added services combining movement of goods, information, and funds
Customer Focus: building customer loyalty and expanding UPS’s services
worldwide
Enterprise Excellence: creating an environment of high-quality service and value
Strategic Implementation
A Project and Program Oversight Committee was responsible for providing project management support and rigor to the initiatives, applying standards, monitoring progress, resolving resource conflicts, and aligning the functions with the critical initiatives
McDevitt’s Role
For some managers, McDevitt
was “the coordinator of strategic initiatives”; to others, he was “the champion of strategy execution.” The job involved a lot of change, since
various parts of the organization were working on different projects and often using competing metrics. Roles were not always consistently defined. There were also
different opinions about what we were trying to accomplish and how to get these imperatives operationalized. his responsibility was to make sure that all the teams delivered what they said they were going to deliver. he also made sure ideas went from being a gleam in the eye to reality.
An Example: Trade Direct
McDevitt’s role in the Trade Direct project, a critical initiative under the Value
-Added Solutions Imperative, illustrated his contribution. Trade Direct was a new service offering that would take goods manufactured abroad and link them into the U.S. delivery system, seamlessly addressing customs, regulatory, logistics, and information-processing needs. The project involved two groups: the Supply Chain Solutions logistics group, which would handle the movement of the goods from China, for example, to the U.S., and U.S. Operations, which would move the goods into the UPS physical-delivery system, The issues were elevated and made visible to the Management Committee,
and we made sure accountability was assigned.” McDevitt believed he was able to do this because “I had access to all of the players because I reported directly to the CEO.” He attributed his success with Trade Direct and other initiatives
to
“accountability through visibility”.
Scenario Planning
The Horizon 2017 session, as it came to be called, was similar to the 1997 session in format and process, with three important variations. 1.
Eskew and the CSG decided to take the scenarios and implications deeper, to regional levels as opposed to a single global picture. 2.
Extensive interviews, perspective of academics, consultants etc 3.
A third variation involved participants. As before, participants from operations were excluded.
This time, the horizontal axis was the range of possible business models and demand characteristics, moving from traditional, proprietary business models and focused, incremental demand to a more proactive, open, and collaborative world of commerce. The vertical axis addressed the global and regional business environments, which
ranged from bordered, chaotic, restricted, and fragmented to borderless, harmonious, free, and holistic.
These axes formed the framework for four scenarios
The upper-
left quadrant was the “Company City” future dominated by large
corporations, with a growing middle class and the proliferation of powerful, integrated supply- focused technologies.
Lower-
left quadrant described a “Bordered Disorder” world, with a hi
ghly regulated, protectionist environment with slow growth in developing nations, guarded intellectual property and technology, and an increase in security threats and environmental and financial shocks.
right quadrant, “Connected Chaos” defined a
future full of global unrest ,
“amoral” commerce, and informal connectivity that was difficult for
governments to control.
Upper-
right quadrant, called “Networks without Borders,” defined a highly
connected, stable world with low barriers to market entry and fast-moving technologies aimed at consumers. UPS has remained the leading shipping/logistics firm for a long time. Their integration of the latest technology has kept them differentiated as well as the cost
leader. Consumers and business’s bo
th rely and trust UPS with their shipping and consulting services.UPS has been aggressive in finding new revenue streams with existing and new customers. They understand not only their customers and related needs, but have also figured out ways to deliver more value. They have expanded the roles they can play in the overall value web by leveraging their infrastructure and expertise.
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Strategy Implementation – Session 2“Strategic Planning at United Parcel Service”Q1UPS’ Strategic Planning evolved with the organisation. An initial Strategic Technical Group(IT project focused) was replaced by the Corporate Strategy Group.UPS did not appear to have an organisational guiding strategy. However, over time, differentaspects were driven by segmental elements including:●Corporate Strategy Group (CSG)●Tactical Strategy Planning●Strategy Implementation●An ‘internal champion’●Scenario PlanningUPS recognized its ‘organizational DNA’ wasn’t compatible with a single corporate strategy,instead utilizing ‘strategic components’, allowing strategy to adapt/evolve.Observations of UPS’ strategy suggest its approach:●Lacked cohesiveness, involving a ‘collection of projects’, not a coherent strategy.●Reflected a ‘strategy as simple rules’ approach1, enabling UPS to grow & adapt asopportunities arose (e.g. Mailboxes Etc.)●Fostered alignment between strategy and functional activities. The ‘degree ofGeneral Manager involvement2’ was high – an amalgam of Eskew & McDevitt●
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