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UPS Strategic Planning Overview

This document provides background information and discusses strategic planning processes at United Parcel Service (UPS). It describes UPS's history and growth from a small messenger service to a $37 billion global logistics company. It outlines UPS's traditional centralized organizational structure. The document then discusses UPS's early strategic planning approaches and its progression to more formal strategic planning processes in the 1990s driven by increased competition. In the early 2000s, UPS developed a 5-year strategic plan called the Centennial Plan but recognized the need to plan beyond 5 years. UPS then engaged in scenario planning facilitated by consultants to develop 4 scenarios exploring different potential futures for UPS's global business environment.

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42 views21 pages

UPS Strategic Planning Overview

This document provides background information and discusses strategic planning processes at United Parcel Service (UPS). It describes UPS's history and growth from a small messenger service to a $37 billion global logistics company. It outlines UPS's traditional centralized organizational structure. The document then discusses UPS's early strategic planning approaches and its progression to more formal strategic planning processes in the 1990s driven by increased competition. In the early 2000s, UPS developed a 5-year strategic plan called the Centennial Plan but recognized the need to plan beyond 5 years. UPS then engaged in scenario planning facilitated by consultants to develop 4 scenarios exploring different potential futures for UPS's global business environment.

Uploaded by

adeeltariq409
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Strategic Planning at United Parcel Services

1/28/2009
Baringin
Emily
Matthew Smith
Shin-haa
Background
History
• Founded by Jim Casey in 1907 on $100 borrowed
from friends
• Originally, focused on delivering messages in Seattle
• Several Transformations:
• From messages to package delivery
• To international air transport company
• Finally, in the 1990s, to a logistics company
Background
• In 2006, a $37B corporation
• World’s largest package-delivery company
• Leader in specialized transportation and logistics
• Serves 200 countries
• 3,500 retail locations via purchase of Mail Boxes, etc.
• Employs 384,000
• Operates one of the 10 largest airlines
Organization
• CEO is Mike Eskew
• Centralized, hierarchal with traditional structure at
the top
• Senior management and staff set direction, priorities,
budgets, and initiatives
• Tactical at the regional level, strategic at the
corporate level
• Low levels of autonomy at the regional level
Culture
• “Consensus building”
• Focused on efficiency and execution
• Continuous improvement
• Strong values: service excellence, employee
ownership, commitment to stability
• Low turnover, loyal workforce
Competition
• Private postal companies
– Federal Express
• Large government-supported agencies
– USPS
– Deutsche Post
Strategic Planning at UPS
Early Strategic Planning
• Early on done by a small group of senior managers
• Project-based
– E.g.: expansion to Canada and Germany
• In the 1991, strategy driven by a corporate mission
and strategy statement
– Goal to serve: customers, UPS people, shareowners, and
communities
Advancements
• Driven by competition
• 1996, Jim Kelly establishes the CSG to develop future
processes for planning for the future
• Result of the CSG was to develop its own strategic
process
– In 1997, held scenario-planning session
– In 1999, drafted the UPS Charter to move from “leadership
in package distribution” to an “enabler of global
commerce”
Centennial Plan
• Organized by Eskew in 2002
• Meant to guide company through its 100 year
anniversary—5 year plan
• Provided themes and broad overall direction
• Developed a strategy roadmap
• But, what happens after 5 years?
Scenario Planning
Background
• UPS struggled to come up with creative ideas
• Chose to bring in consultants from Global Business
Network to facilitate scenario planning
• Conducted interviews and developed a key focal
issue: “the future of UPS’s global business in an ever-
changing competitive environment”
• Developed 4 different scenarios
Uncertainty
• Worked to determine driving forces and critical
uncertainties
• Defined two axes of uncertainty:
1. Horizontal—the market environment
• Flow of goods and funds across borders
• Regional and national markets
• Trade barriers to a more global market
2. Vertical—demand characteristics
• Nature of consumers
• Types of goods and delivery required
• Traditional consumers versus Prosumers
The 4 Scenarios
1. Tangled Paths
• Highly competitive business environment
• Strong regional and national regulations
• Desire for more variation in products
2. Regressive World
• Strong regional and national regulations
• More traditional supply chain, competitive landscape,
and set of consumers
The 4 Scenarios (cont’d)
3. Global Scare Prevails
• Slow adoption of new technology due to stable demand
• More traditional consumers and industry consolidation
4. Brave New World
• Deregulated globalized marketplace
• Mass customization of goods and services to proactive
consumers
• New forms of competition and virtual organizations—
alliances and business webs
Outcomes
Example Slide 1
• Plain slide
Example Slide 2
• Slide has the whiteboard dude
Example Slide 3
• Just a plain brown slide
Slide Example 4
• Slide with a truck

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