United Parcel Service Strategic Management

Executive Summary

This paper provides a thorough strategic analysis of the United Parcel Service (UPS), including a discussion of its mission and objectives, as well as the conduction of internal and external audits. Based on this analysis, it formulates a management strategy, proposes a detailed action plan for its implementation, and evaluates the future external and internal environment and potential challenges.

According to the results of the analysis, the company has a remarkable reputation and implements highly efficient processes of parcel delivery services. It generates most of its revenue through operations within the U.S. but is interested in expanding internationally. This paper proposes the implementation of a concentrated growth strategy that includes both the expansion through online marketing becoming increasingly widespread and the consistent acquisition of foreign businesses operating in the same area.

The United Parcel Service (UPS) is a consolidated parcel delivery service headquartered in Atlanta, the world’s largest company for the transport of small items and correspondence, specializing in express delivery and logistics. It is a leader in supply chain management, offering a variety of options for cargo, information, and cash flow synchronization. The company had provided services since 1907 when its founders, Claude Ryan and Jim Casey, opened a company called American Messenger Company in a semi-basement in Seattle, Washington.

It was involved in a variety of tasks, from fulfilling one-time customer orders to delivering purchases from various stores. Over the past 100 years, UPS has evolved from a small courier company into a leading provider of air, sea, land, and electronic services, which functions in over 200 countries and territories around the world. This paper analyzes the main functional areas of the company and offers an effective management strategy for further development.

Mission and Objectives

The company indicates its mission, priority objectives, core values, and ethical standards. By the UPS vision statement, the company is committed to synchronizing the global business processes of its clients. The company’s mission includes expanding logistics services worldwide, maintaining the company’s financial stability and growth, inspiring employees and business partners, and maintaining leadership as a responsible and sustainable company. Thus, the company has identified priority development areas and values for its team members, clients, and contractors. Each of the above objectives corresponds to a specific marketing or management strategy designed to translate the identified ideals into reality.

UPS has been successful in leveraging global market trends to increase cross-border trade and to reach emerging markets. One of the company’s strategies is close cooperation with foreign logistics organizations and their subsequent acquisition. With this step, the company is significantly increasing its presence in the European and Asian markets. UPS is extending its aircraft park in Europe, from where it generates a large part of its profit. It is also acquiring businesses, such as TNT Express, that are major market players in this region on a par with its main competitors, including DHL and FedEx. These management strategies represent the realization of the most valuable opportunity for UPS to be the global logistics market leader in this area.

Furthermore, to maintain its status as a responsible and sustainable company, the UPS implements specific accounting and Research and Development (R & D) strategies. Informing its accounting reports is guided by the principle of transparency and maximum information disclosure, which was highly appreciated by the Global Reporting Initiative. Moreover, the high ethical standards of business practices are confirmed by the company’s environmental initiatives, which include reducing fuel consumption, CO2 emissions, philanthropic activities, and tree planting in many regions.

Besides, UPS exhibits high social awareness by investing and supporting only those projects and organizations that adhere to a non-discriminatory policy. Women and Afro-Americans are represented in the top executive management of the company. As part of its R & D activities, the company regularly publishes its reports and programs related to social, economic, and environmental concerns. This maintains the high status of the company’s reputation and demonstrates a strong business responsibility.

All employees have a particular share of ownership in the company, which undoubtedly contributes to their involvement in the general affairs of the UPS. This management strategy simultaneously increases the loyalty of the personnel and their key performance indicators (KPI). Along with the corporate dress code and recognizable trademark, this measure contributes to the integrity and cooperativeness of its team. Besides, UPS offers its business partners a wide range of high-quality services related to supply chain and freight. The territorial coverage of the company’s managed chains is more than 190 countries. Thus, customers can be confident in the experience and professionalism of the team and the global reach of services provided by the company.

It should be noted that delivery activities within the United States generate more than half of the company’s income. Given the global development of transnational trade and delivery, as well as the rapid growth of online marketing, the international sphere is one of the main potential areas of growth for the company. In addition, consulting and operational supply chain and freight services also represent significant market opportunities.

The company uses particular financial marketing strategies to increase its presence in the international market. For instance, it employs a flexible purchasing strategy, offering customers various delivery and pricing options to select from. It should be noted that at the moment, clients are becoming less inclined to pay more for urgent delivery, choosing more long-term and economical options. It bears mentioning that customers are increasingly using online services for retail purchases. The application of computer information systems (CIS) and online marketing strategies would allow UPS to take advantage of the many benefits of the digital space.


Consideration should be given to several aspects of the audit about the reviewed company. The external audit is an independent examination of the company’s accounting and financial statements to conclude their reliability. As a rule, it is carried out by an independent auditor or a specialized organization in the interests of owners, shareholders, investors, credit institutions, and government agencies. Thus, this type of audit is a form of external control for the company. It should be emphasized that UPS has proved to be a highly responsible and sustainable company. It is among the top ten U.S. corporations that have received the highest rating for superior transparency within the Global Reporting Initiative. It is possible to conclude that the company’s audit ethics of accounting and disclosure are at a senior level and meet the highest standards.

Moreover, it should be noted that the financial indicators from the UPS income statement and the balance sheet correspond to the actual operational processes of the company and business trends. This fact serves as additional evidence of the reliability of the accounted information. For instance, the data demonstrates that most of the company’s revenue is generated by domestic operations within the U.S., while international operations appear to have some negative indicators for recent years.

Besides, the major operating expenses are compensation and benefits, purchased transportation, and fuel, which is entirely consistent with the nature of the company’s business. A detailed and qualitative analysis of the authenticity of financial information requires a thorough verification of the accounting documents. However, it is possible to draw a preliminary conclusion on the reliability of the data based on the evidence mentioned above.

Internal audit is an element of the inner control system at an enterprise. It assists management in exercising more competent administration, accurately assessing the use of assets, and analyzing the effectiveness of financial investments. In this case, the examination of financial indicators is used to track economic trends and propose further plans. Thus, the UPS accounting information presented should be analyzed to identify corresponding tendencies and dynamics.

It should be emphasized once again that services provided within the U.S. constitute the largest part of the company’s income. At the same time, it was noted that international market activity promises great opportunities and perspectives, both in Europe and in emerging Asian markets. Operating expenses have increased by approximately 20 percent over one year, accompanied by an almost five-fold decrease in operating profit. This occurred as a consequence of a dramatic increase in compensation and benefits costs, which could have been due to either higher personnel expenditures or rapid workforce expansion.

Also, during the last fiscal year, investment income almost halved, but given that it increased 14 times in the previous fiscal period, it is difficult to identify the economic trend in this regard. Total current liabilities increased by about 28 percent, the long-term debt remained virtually unchanged, and pension and postretirement benefit obligations almost doubled. The increase in labor expenses, as well as the decrease in operating profit and an increase in operating costs, can be precisely explained by the company’s expansion in the global market. It should be noted that these financial indicators suggest that the company’s economy is in a transitional period.

Strategy Formulation

It should be noted that UPS has several significant competitive advantages, which should be taken into account when developing a management strategy. First of all, it concerns the acquired TNT Express, a successful expansion policy, a large park of aircraft and vehicles, and well-established logistic processes of the company. Besides, the company has a brilliant reputation for its social, economic, and environmental concerns.

As mentioned earlier, the company’s key external opportunity is to expand into the international market. This is especially relevant in connection with the increasing plans for the export of U.S. retail companies supplying high-tech products to the growing middle class of other countries. It should also be noted that additional benefits and perspectives are also related to the growth of the company’s presence in the digital environment, the popularity of which is steadily growing.

The main weakness of the company is the transitional period of economic processes reshaping to the operation on an international scale and is temporary. As a result, the company has to spend more funds on operating expenses. One of the external threats is the decrease in demand for premium parcel services, which indicates the need to restructure the strategy of communication with the consumer.

The primary threat to the UPS is the activities of its main competitors, FedEx and DHL, who also intend to expand internationally and acquire national packaging businesses. These global corporations are also rapidly growing in the international market, including in the European and Asian regions, have an extensive transport fleet, and are keeping pace with UPS in terms of expansion trends. To achieve its world-class commercial goals, a company should use all of its competitive advantages.

Based on the above analysis, the principal objectives of UPS are to purchase national companies with a similar range of operations, acquire customers outside the U.S., and make greater use of the digital environment. The concentrated growth strategy focused on improving the company’s market position among its competitors meets the above goals to the greatest extent. The strategies of this type are based on the concentration and intensification of resources available to the company to achieve its marketing goals. It is aimed at strengthening and developing the business to the highest degree.

The concentrated growth strategy is advisable to use when the company’s strategic opportunities in terms of market capture and production expansion are not fully exploited, and there is particular potential for business development.

Strategy Implementation

The concentrated growth strategies may include a market positioning strategy, market development strategy, and product development strategy. The first type of strategy, which is also referred to as a market penetration strategy, corresponds to the present state and goals of the firm to the greatest extent. It assumes that the firm uses specific instruments to increase production and sales volumes within the selected target market. These include stimulating primary demand by attracting new consumers, expanding market share by taking over competitor firms, concentrating marketing efforts on the most profitable segments of the base market, and improving the firm’s image.

Due to the transition phase of the corporate economy, the first steps should be taken carefully and, in a manner, consistent with the commercial interests of the company. The company may use international social media for promotional and service offering purposes. This measure will not significantly increase operating expenses but will attract a large share of the consumer sector. The use of online services for commercial purposes has, at present, made a dramatic leap and is considered the most innovative and effective way to reach the broadest possible audience.

First of all, the company should promote information about its services, quality standards, trademark, and itself, which would be a successful step given its reputation. Due to the company’s excellent performance in this respect, this competitive advantage may favorably distinguish the company from other market participants. To this end, the company can conclude promotional agreements with social media influencers, purchase advertising in significant web resources, as well as improve its website, taking into account the latest user experience research. Relevant agreements for the promotion and web design should be reached within the first two quarters of the next fiscal year, about $1 million should be spent on this objective.

Given that UPS provides supply chain management and logistics services, one of its priorities should be to cooperate with foreign companies in this regard actively. Strengthening business relationships through consulting services can seriously expand the basis for further acquisitions of such companies. The creation of an open corporate business acquisition program may facilitate the interest of the management of parcel delivery organizations in working under the leadership of the UPS.

This program should include a description of the terms and conditions of acquisition, a minimum specification of production standards at the UPS, and the benefits of operating under the auspices of the company. The development and publication of this program should be carried out during the first half of the financial year, with a budget of about $2 million. In the same period, the company’s external relations department should find potential organizations interested in this proposal and attractive to UPS. A total of three fiscal years are proposed to evaluate the effectiveness of this scheme.

Strategy Evaluation

The achievement of the above objectives concerning online instruments will affect all functional areas of the UPS. The increased presence in the digital space, along with adherence to the latest trends in user experience research, will significantly enhance the demand for international company services. At the same time, companies such as FedEx and DHL may become severe competitors in online marketing.

That is the reason why the promotion of the UPS should also consist of individual data on the achievements, history, and high standards of responsibility and sustainability of the company. The company may face the fact that the service options provided by it may not meet the needs of consumers. In such a case, it will be necessary to employ the means of client involvement and collect valuable feedback. According to the discovered information, the company will have to improve the service options offered, for example, by focusing on economical transportation by water.

In addition to measures aimed at increasing demand for the company’s services, the strategy includes policies directed at increasing actual presence in the international arena. The open corporate business acquisition program and strengthening of consulting cooperation with foreign parcel delivery organizations have that exact purpose. The openness of the program corresponds to the transparent and responsible status of the UPS, which will cause increased confidence in foreign businesses. This sequential business acquisition scheme is potentially expensive, but this strategy involves only initial steps. It has a long-term perspective and promises a significant leap in revenue growth from international sector operations.

Thus, the company will be able, on the one hand, to differentiate itself among other market participants and, on the other hand, to offer services to consumers according to their demands. This is particularly advantageous given the trend of increasing exports of American companies to foreign customers. The financial implications of this strategy should be reviewed based on internal audit data. Implementation of the strategy requires about $3 million, which is about 5 percent of the operating expenses for the last fiscal year. It may be concluded that such costs will not be able to harm the commercial interests of the company even during the transitional economic period.


It should be noted that the company has several competitive advantages associated with its well-established logistics processes for small shipments, an excellent reputation, and personnel policies. The company is in a transitional economic period due to its expansion into the international market. The application of instruments of promotion and customer involvement in the digital space will increase the demand for UPS services. At the same time, the consistent acquisition of national businesses providing similar services will allow the company to expand its ability to interact with customers around the world.

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1. BusinessEssay. "United Parcel Service Strategic Management." January 10, 2023. https://business-essay.com/united-parcel-service-strategic-management/.


BusinessEssay. "United Parcel Service Strategic Management." January 10, 2023. https://business-essay.com/united-parcel-service-strategic-management/.