CASE STUDY – UPS – United Parcel Service Inc. US$42.6 Billion This article is excerpted from E-Volve-or-Die.com: Thriving in the Internet Age Through E-Commerce Management, by Mitchell Levy (New Riders Publishing, 2000, ISBN 0-7357-1028-7). www.ups.com
History of Transformation
UPS has been in the package delivery business for 95 years, providing services to businesses and consumers worldwide in more than 200 countries. In 1994, UPS began to investigate the potential of e-commerce and started an internal group focused on enabling e-commerce. UPS redefined its core business and found ways to change its structure and processes, forming new businesses to take advantage of new opportunities.
Products and Services
UPS is in the transportation industry. They move goods, information, and funds between individuals and companies. Their operations provide delivery by land and by air, and they offer services at customer shipping centers, as well as online through UPS.com. They operate in more than 200 countries worldwide, do business in 15 different languages and dialects, and deliver an average of 13.2 million packages per day.
Catalyst for Change
UPS was interested in finding ways to leverage their extensive infrastructure and expertise in basic transportation of goods, services, and information. They wanted to enter new markets and continue to grow. They also wanted to undergo a more fundamental change—to transform their company into an enabler of global commerce.
Vision and Strategy
In 1991, the company's vision was to be "the leading package delivery company." They were able to grow significantly toward that goal, but they weren't satisfied with just that. They wanted a larger challenge for the company. In 1999, they changed their vision statement to "the enablers of global e-commerce." It was at this time that their company purpose (vision), mission, and strategies were redefined as follows: • Purpose (why they are in business): To enable global commerce. • Mission (what they seek to achieve): Fulfill their promise to constituents by: o Serving their evolving needs
o Sustaining a strong and employee-owned company
o Continuing to be a responsible employer
o Acting as a caring corporate citizen
• Strategy (their plan of action): Sustain the core and create their future by: o Investing in the core business of worldwide distribution and logistics o Building competencies in the integration of goods, funds, and information o Using technology to create new services
o Attracting talented people
o Studying customer behavior and anticipating their needs o Practicing innovation that leads to growth
o Developing an environment that enables them to treat each customer as if he or she were the only one
Changes Made/Evolutionary Process
When UPS began the process of transformation, they started at the basic level—taking a hard look at their core competencies and expertise. They also examined the assets in their multifaceted infrastructure, from data communications, to their fleets of trucks and aircraft, to their call centers. They did this analysis and examination with the idea of finding ways to leverage the growing technology and connectivity of the Internet in order to build entirely new subsidiaries of UPS. In the process, they found several gold mines. With additional investment in information technology (at the rate of more than $1 billion USD per year), they were able to transform a very sizable company in record time. Once they had identified opportunities within their own company and finished their internal analysis, they reexamined the external world to learn more about e-commerce, markets, and their customers. After taking a look at what people were doing with e-commerce in the external business world, UPS decided that their own definition of e-commerce was not about technology, but was...
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