Marketing Strategy and SWOT analysis of UPS
The United Parcel Services (UPS) is a global leader in logistics offering a broad range of solutions to efficiently manage the world of business. With its wide array of services to more than 220 countries and territories, UPS delivers approximately 16 million packages and documents every day. The facility was first opened in 2007 and is a fully integrated hub and parcel delivery center handling both domestic and international packages. To identify UPS’s secret towards its success, we will analyze the SWOT of this company.
Before we move forward, first, let’s identify the Mission and Vision statements of United Parcel Services.
UPS’s mission statement is the following: “Grow our global business by serving the logistics needs of customers, offering excellence and value in all that we do. Maintain a financially strong company with broad employee ownership that provides a long-term competitive return to our shareowners. Inspire our people and business partners to do their best, offering opportunities for personal development and success. Lead by example as a responsible, caring, and sustainable company making a difference in the communities we serve.”
Everyone who uses online delivery wants to get their order ASAP and drop it at their doorstep. UPS takes that into consideration. Besides the fact that they have a lot of employees, who manage to do their job as accurately as they can. The company is also highly dependent on technologies that they are using to make the best for their customers.
The vision statement of UPS is: “helping customers pioneer more sustainable solutions, delivering packages more efficiently, creating more connections around the world and finding more ways to take action and give back.”
Although this is not UPS’s official vision statement, it embodies all the knowledge and effort of the firm. The primary role of UPS is to link customers, trading partners, and other development prospects with their goods. The company has continuously evolved over the years and is becoming a reputable company to provide answers to individuals and facilities’ logistics, shipping, and trade requirements.
Another fascinating thing worth mentioning about the company is their support to the students working there. Besides the skills and experience that the students get there (to become engineers, for instance), they get tuition support from UPS. The deal is that the students work 15 hours per week and receive $25.000 for both their undergraduate and graduate education.
Next, we are going to do is figure out what positioning strategies United Parcel Services uses for its branding.
United Parcel Services offer a range of opportunities for their customers via their website and social media profiles — the easiest way to get the news about the products and services of the company.
In this post, UPS introduces their new delivery service. Besides the creative design of the vehicle, UPS employees are using that type of transport instead of vans and cars, indicating that the company takes care of the environment, precisely in their customers’ environment. They deliver all the packages to one place and then have the orders to their customers via these vehicles.
Besides choosing an environmentally-friendly vehicle, they offer the ‘city deliveries for free. Someone might be surprised to hear this because the whole process of delivering any kind of product or parcels to customers costs quite a lot of money both on a technological level and based on the employees’ jobs.
This whole expense, the company covers themselves. This approach is undoubtedly one of the ways the company manages to stay at their highest point. The customers enjoy receiving their products for free.
Hence, UPS belongs to the Explorer Brand Archetype.
These are the feature we should take into consideration when we talk about the Explorer:
Desire: the boundless opportunity to find out who you are through exploring the world.
Goal: to have a better, actual and fuller existence.
Strategy: travelling, seeking and experiencing new things, escaping trap and forbearance.
Messages we get from the Explorer Brand Archetype are:
Level One: alienation, unhappiness, ruin, want, boring.
Level Two: hit the open road, walk in nature, explore the world.
Level Three: search for your personality, individualization, fulfilment.
Level Four: expressing individuality and singularity.
The Explorer Archetype might provide identity for the brand if:
- the product lets individuals feel free, is incompatible or in some way pioneer.
- Product is robust in dangerous environments or occupations for use in nature.
- Product may be acquired from the catalogue, the Internet, etc.
- The product encourages people to express themselves (e.g., fashion, furnishings).
- The product can be bought and eaten ‘on the move’.
- Try to distinguish your brand from a successful Regular Guy/Gal or another conformist one.
- The organization has a culture of Explorer.
Now, as we already know the type of Brand Archetype UPS belongs to, we can dive into the SWOT analysis:
Strengths:
Active Global Presence: UPS has expanded its UPS Worldwide Express and UPS Plus to 40 countries and now delivers delivery to enterprises in 140 countries and territories on a time-bound basis. In addition, in more than 220 countries, it conducts modest delivery services under IP operations.
Web Tracking: UPS has one of the industry’s most advanced online tracks, with 295,000 deliveries a day.
High-Quality Customer Services: Companies must continually give high-quality service, which is particularly crucial in attracting, satisfying, and retaining customers. UPS provides outstanding customer service and is satisfied with the customer over FedEx.
High level of Development: The timely worldwide delivery of parcels calls for enormous creativity. The chief information officer of UPS has created an intelligent logistics network to deliver each box on schedule and has won the Forbes CIO Innovation Award.
Quick Deliveries: Prompt delivery are a vital force regularly. UPS simplifies its work using essential handheld devices such as GPS navigation and reroute technology for communication, scanning packages, client’s signatures and complicated automation. UPS delivers all these operational techniques faster than its competitors.
Competitive Prices: The most successful strategy to attract and maintain consumers is to offer high-quality service at cheap costs. UPS offers reasonable costs for over-the-air shipments and all other categories in the logistics and delivery business.
Weaknesses:
Reliance on US Market: Even if UPS is worldwide, it mainly depends on the US market. In 2019, USD 58.6 billion in national and freight packages was generated, while USD 15.41 billion in overseas delivery. UPS will be badly harmed if the US market slows down as a result of the recession.
Adverse Financial Consequences in the Peak Holiday Season: UPS has to spend far more than usual periods to stay up to demand and deliver on time in the peak online shopping season. The enormous amount spent to handle the typical package volume twice hinders the company’s profitability from benefiting maximally from peak holidays.
Weak Employee Safety: Poor and dangerous working conditions diminish employee morality, efficiency and production. Several UPS employees were wounded, and a member died when the Covid-19 virus was contracted.
Transportation Costs Bought Burdening: Transport expenses have an enormous influence on the delivery business. When UPS uses third-party carriers, the purchased transport fee is incurred. In the fiscal year 2019, around 19% of UPS’ operational expenses are for transportation purchased. UPS may lose its profitability if the cost of transport continues to rise.
Opportunities:
Drone Testing: UPS has tested and increased its drone supply capacity. At Wake Med Hospital Campuses UPS tested its drone delivery technology, transporting laboratory samples to several hospital campus facilities.
Development of e-Commerce Operations: With the continual entry of new competitors, the e-commerce market is rising quickly. This industry is based on services that UPS can use to boost its operations and e-commerce offerings.
Expand by Fusions and Purchases: Companies can expand fast into new markets through mergers and acquisitions. Although USPS failed to entirely conquer the European market after the collapse of its contract to merge with TNT Express, it can buy small European logistics companies to boost its market share.
‘Grow’ to Seven-Day Delivery: A 7-day shipping service was introduced by UPS. Previously, 6-days (Monday-Saturday) pick-up and delivery service for UPS. UPS includes delivery on Sunday with the rise of internet shopping and high customer expectations.
Development of Target Market: For online merchants like Amazon, UPS works primarily as a business supply service for B2B and B2C, even while the number of ordinary consumers using supply services is quickly expanding. By broadening its target market to include ordinary people, the corporation can boost its growth.
Threats:
Profound Competition: During heavy rivalry, UPS’s market share and revenues are constantly threatened by FedEx, DHL, Amazon, YRC, Old Dominion and many more.
Trade Tensions: UPS relies on revenues from many regions to provide stability, sustainability, and profitability as a worldwide operator. That puts the company’s commercial tensions at risk.
Recession is Imminent: With numerous countries already deeply recessionary, the epidemic has wreaked devastation and destruction worldwide. After a 13% decrease in profit in the first quarter, UPS lowered it’s 2020 earning prediction. The company’s profits will decrease significantly if the recession is severe.
The Strike Threat: Although employees in UPS are not on strike since 1997, the risks and obstacles associated with various contractions in the economy and the workforce fuel discontent and frustration. The corporation can even cost millions a short strike.
That’s it for the SWOT analysis of United Parcel Services! Each component has a significant meaning which determines the companies progress, regress and digress. The company should consider paying attention to it so that they will know what the threats are that they might face inside the UPS and outside of the company.
Last but not least, let’s see what type of customers UPS prefers to offer their services.
To do so, let’s watch one of their commercials.
To put it short, the whole idea of the commercial — presents people who are very much determined in what they are doing. All of the commercial participants introduced people who work in different spheres; e.g., someone is an engineer, the other person is an IT specialist. The dedication towards their jobs unites them, and UPS highlights their success over and over again. Those who have high goals, motivated and inspired to develop their knowledge and skills in the fields they are working or studying, have a practical outlook on life. They don’t waste their time – they mature. They grow and overcome challenges.
If we pay close attention, most of the busy people with their job had packages next to them. This highlights that UPS goes through the life challenges of their customers with them. This is how UPS shows their support to their customers.
The characteristic features that we found in the commercial indicate that UPS targets Actualizers.
These are some interesting facts about this Segment:
- Family means a lot to them. They feel responsible for taking care of children and educating them. They love helping children achieving their goals with high results.
- They try to keep a healthy and balanced lifestyle for their families. They are ready to pay more for non-artificial food.
- They are intellectual and modern. They love arts, music, foreign culture and events.
- They keep up with the development of the technologies.
- Reach information actively to support you in your many duties. They read a lot to keep informed about what is happening both in your surroundings and worldwide.
- Looking for good amusement and good programming
- Watch TV for special interest shows. Would seldom switch it on if you are engaged with other things. They listen to the radio quite often.
Summing up, we managed to deeply analyze the Marketing Strategies and SWOT of UPS. We highlighted the company’s target segment, their strength, weaknesses and threats. I hope this helped you get a better understanding of what UPS is and how it works.
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