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SWOT Analysis of UPS | UPS SWOT Analysis

 

There is no hesitation to claim that UPS is one of the leading delivery service companies. It was established in 1907 by James E. Casey. Since then, they are working successfully and have a very strong customer base. The success is due to its effective strategies and hard work. If you want to learn UPS’s success story and its working style, then you should learn this SWOT analysis. We will talk about the strengths, weaknesses, opportunities, and threats of UPS. You can learn a lot with this SWOT analysis of UPS and also get motivation. Let’s begin.

 

Company Name: United Parcel Service (UPS)

Founder: James E. Casey

Year founded: August 28, 1907

Headquarters: Atlanta, Georgia

CEO: Carol Tomé

Industry: Courier, Transport, and Logistics

Type: Public

Area Served: Worldwide

Employees (2019): 495,000

Annual Revenue (FY2019): US$ 74.09 Billion

Profit | Net income (FY2019): US$ 4.44 Billion

 

SWOT Analysis of UPS | UPS SWOT Analysis

Strengths of UPS:

 

Robust International Presence:

No doubt, UPS is now leading the market with its services and deliveries. Currently, it is delivering shipments in more than 140 countries and regions. It is also working as a small delivery service in approximately 220 countries. They offer time-definite shipments due to their strong global presence.

Online Tracking:

UPS has a more innovative and advanced online tracking system. They can track 295 million shipments per day. This thing makes the company highly competitive and innovative in the eyes of customers.

‘’SMART’’ System:

The useful delivery system is based on an uninterrupted supply chain network and assimilation of collection. They invested 20 billion dollars to construct SMART (Southeast Metro Automated Routing Terminal) network service in Atlanta, which is fully functional and equipped.

Outstanding Customer Service:

In order to attract and retain customers, UPS offers high-quality customer service. They satisfy their customers by providing on-time delivery. Their customer satisfaction service is better than FedEx.

Extremely Innovative:

International deliveries and shipments require professional treatment and innovation. The main quality of UPS is that they offer on-time delivery to customers. They also achieved the Forbes CIO Innovation Award.

Fast Shipping:

Timely shipment is one of the biggest strengths of UPS. Their operations are very smooth and innovative that ensures timely deliveries. This is all possible with innovation and the use of high-quality technology.

Feasible Prices:

They offer their services at a much lower price which is a major strength. In this way, they retain and attract new customers. Their timely deliveries at reasonable prices allow the company to earn more.

 

SWOT Analysis of UPS | UPS SWOT Analysis

Weaknesses of UPS:

Dependence on the US:

As we know UPS works globally, but they deeply depend on the US market. UPS generated almost 80 percent of its profits from the US. This clearly shows that they heavily rely on the US which is a major weakness of UPS.

Late Shipping During Holiday Season:

During the holiday season and special events, they take more than usual time to deliver shipments. This depicts that they face difficulty in peak times. This thing can affect the company’s profitability and growth. It is also a major weakness of UPS.

Operational Problems:

They are using old and outdated infrastructure in this fast-moving world. The management postponed the upgrading and purchasing of new products. This is because it costs more than 20 billion dollars to upgrade the system.

Poor Safety:

They are really poor in employee safety programs. Due to this reason, they are facing many problems and issues in working and operations. These types of major weaknesses can create a bad impact on its working and delivery system.

Transportation Costs:

It is a fact that UPS working is based on transportation costs. But in the last few years, its transportation costs are increasing which can damage the company’s profitability and disturb its operations. This is due to the overreliance on third party carriers.

 

SWOT Analysis of UPS | UPS SWOT Analysis

Opportunities for UPS:

 

Drone Experiment:

UPS is working on a drone delivery system. They also test this system by transporting lab samples to different hospitals. It is a great opportunity for UPS to invest in this sector because it can streamline its operations and boost profitability.

Focus on eCommerce Operations:

Many companies and organizations are using e-commerce channels to enhance their work. UPS should think about to strengthen its online operations and services. This sector has huge potential and can expand the profitability of UPS.

Acquisitions and Mergers:

Without successful mergers and acquisitions, you can’t achieve goals and specific targets. They can increase their market share and growth by acquiring and merging with different companies and delivery services.

Expand Portfolio:

UPS should diversify its portfolio by using different channels like e-commerce. In this way, they can stabilize their operations and can compete with competitors effectively. They should focus on global operations in order to expand their growth.

Enlarge the Target Market:

Basically, UPS is a business delivery service for different retailers such as Amazon. They can attract or target customers by exploiting different channels. There are several services like Amazon that UPS can target to deliver their online products.

 

SWOT Analysis of UPS | UPS SWOT Analysis

Threats of UPS:

 

Stiff Competition:

There are several big players in this sector like FedEx, Amazon, DHL, and so on. They are dominating the market with their services and offerings. They can create a bad impact on UPS’s profitability and market share.

Overdependence on Amazon:

According to a report, UPS generated almost 12 percent of its revenue from Amazon by delivering their online orders. Amazon is also a big player in delivery service, so it can create a bad impact on UPS revenue and profit.

Trade Tension:

As UPS works globally and their stability and revenues depend on different regions of the world, but due to certain trade tensions they can lose their worth. Strict governmental policies and high tariffs also a big threat for UPS.

Employer’s Strikes:

Well, employees are satisfied with the company’s policies. But in the future, any type of protest or strike from employees can create a bad impact on a company’s image and profitability. So, UPS should reduce this kind of risk with effective strategies.

Looming Recession:

Due to Coronavirus, many companies are suffering and facing financial decline including UPS. The second wave of pandemic also a big threat to UPS. They already face a 13 percent decline in their profit due to this reason.

Current Worldwide Pandemic:

The Coronavirus has left destruction and devastation across the globe. UPS already faces a huge decline in its profits due to restrictions on air freight. It is also the biggest threat to the market share of UPS.

 

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