UPS IPO Case Study HBS
Case Summary One: United Parcel Service Financial Statement Analysis
Alexis Lusitana-Ruiz
Point Loma Nazarene University
Abstract
“In July of 1999, United Parcel Service (UPS) surprised both Wall Street and Main Street with the announcement that, after more than 90 years as a private, employee-owned operation, it was planning an initial public offering that would transform “Big Brown” into a publicly traded company (Healy 2005)”. This paper reviews UPS against FedEx on financial statements, business strategy, performance and sustainability with provided figures and IPO article published in Harvard Business School Case Study 9-103-015.
United Parcel Service Key Success Factors
Main key success factors for UPS given its business strategy are developed technological infrastructure, integrated ground and air operation, economies of scale, market leader, diversified strategy (delivery solutions and supply chain management), human resource management – low turnover rate and high working culture (promotion from within), operational efficiency from rigid operational guidelines (developed by industrial engineers, rooted in time-motion studies), strong financial performance (AAA rating), and 70 years of reputation.
United Parcel Service Key Risk Factors
Main risk factors for UPS given its business strategy are that their competitiveness drives margins lower, human error – late deliveries, damaged or lost packages, worker strikes, tariffs and political barriers from expanding to international markets, losing market share in each segment- although UPS is Currently the leader in ground service (1-6 days) but UPS is losing market share each year (1990: 87%, 1999: 79%) (Healy, 2005).
United Parcel Service Performance Overview
Based off the information provided in the case study, it is safe to conclude that UPS is presenting solid performance. Between 1994 and 1998 net income has generally risen from $943 to $1,741, and represents a CAGR of 16.6% (Healy 2005). UPS also
Alexis Lusitana-Ruiz
Point Loma Nazarene University
Abstract
“In July of 1999, United Parcel Service (UPS) surprised both Wall Street and Main Street with the announcement that, after more than 90 years as a private, employee-owned operation, it was planning an initial public offering that would transform “Big Brown” into a publicly traded company (Healy 2005)”. This paper reviews UPS against FedEx on financial statements, business strategy, performance and sustainability with provided figures and IPO article published in Harvard Business School Case Study 9-103-015.
United Parcel Service Key Success Factors
Main key success factors for UPS given its business strategy are developed technological infrastructure, integrated ground and air operation, economies of scale, market leader, diversified strategy (delivery solutions and supply chain management), human resource management – low turnover rate and high working culture (promotion from within), operational efficiency from rigid operational guidelines (developed by industrial engineers, rooted in time-motion studies), strong financial performance (AAA rating), and 70 years of reputation.
United Parcel Service Key Risk Factors
Main risk factors for UPS given its business strategy are that their competitiveness drives margins lower, human error – late deliveries, damaged or lost packages, worker strikes, tariffs and political barriers from expanding to international markets, losing market share in each segment- although UPS is Currently the leader in ground service (1-6 days) but UPS is losing market share each year (1990: 87%, 1999: 79%) (Healy, 2005).
United Parcel Service Performance Overview
Based off the information provided in the case study, it is safe to conclude that UPS is presenting solid performance. Between 1994 and 1998 net income has generally risen from $943 to $1,741, and represents a CAGR of 16.6% (Healy 2005). UPS also