Case study: Optimizing Operations at UPS
1. Analyze UPS using the competitive forces and value chain models: 2. What is UPS’s business strategy? How do information systems support that strategy? 3. Why was a DSS to optimize delivery routes so important for UPS? What decisions did it support? 4. How successful are these DSS for helping UPS achieve a copetitive advantage? Explain your answer.
1. Competitive forces: UPS is the industry leader in the delivery of goods purchased over the Internet. a. Suppliers: the suppliers have low power
i. Since most of UPS has a big fleet of vehicles for ground delivery, it is using their own aircraft, airplanes and big ships for overseas transportations. Only in some situations they are using additional services from other companies. ii. The have their own facilities for pickup of packages and for sorting, transfer, and delivery of packages. iii. The information system suppliers are also important since they provide with most of the software or optimization and they integrate new technologies (real-time information, bar-code labels, logistics software). b. Buyers: they have high power
i. The customers are searching for delivery option that is most cost-effective and appropriate for their requirements, so they can easily switch the delivery service (low switching costs) between the so many different companies. The company is installing an UPS system on the regular customers computers in order to provide them with tracking information for their deliveries. By doing this they make a lock-off to the customers. c. Potential entrants: the power here is low
i. Since the competition in this sector is very high, the power for new entrants is very low. ii. It is needed capital requirements for entry, since the transportation method and the information systems are very expensive features....
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