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problem about Competitive Strategy


The package delivery industry has become an all out war between the two main competitors; UPS and FedEx. Right now the battle appears to be going in UPS favor. Smaller flashier Fed Ex has been described as a "collection of marketers with trucks and planes" whereas UPS had been described as "industrial engineers with a collection of trucks and planes". In 2003 UPS earned 2.9 billion on sales of 33.5 billion. Fed Ex earned 431 million on sales of 16.3 billion. Founded in 1907 UPS practically owns the business of economical ground delivery of packages to any address in the United States and is striving to do the same around the world.

Ups once considered itself a trucking company with technology. Not its eyeing a future far beyond just simple package delivery and considers itself more a technology company with trucks. For ex in one building of the companies sprawling 4 million square foot facility in Louisville Kentucky International airport, repair technicians are working on faulty laptops, cell phones, printers, and digital projectors. In another building, workers are packaging sports apparel or distribution. And in yet another building, , UPS employees are packaging digital cameras with CD ROM's, straps, and operating instructions. These work tasks are all part of the company division known as UPS Supply Chain Solutions and represent UPS'S aggressive moves for a new business and deeper more lucrative relationships with companies. But UPS isn't ignoring is roots as a package delivery company. At that same facility, itself a modern marvel of automation and technology, countless cameras, scales and scanners photograph, weigh and monitor every package, while belts, tracks, and chutes, miraculously pilot the lot of them... with no package getting closer than 18 inches to the next- to their outgoing gates. And that's just the first process in delivering more than 13 million packages, and documents per business day throughout the United States and to more than 200 countries. To effectively and efficiently run this part of the business UPS has a fleet of about 88, 000 motor vehicles and more than 575 jets. But it takes more than just resources to do what UPS does. Over the years they had developed a successful business model in which uniformity and efficiency where the strategic factors behind the 340 precise methods of correct package delivery. For instance it's legendary operations training encompassed everything from training drivers to hold their keys on a pinky finger so they didn't waste time fumbling in their pockets for the keys to asking employees to clean off their desks at the end of the day so that they can have an efficient start in the morning. These strategic factors weren't going to change instead, the company began looking at how to build on its key resources, capabilities and compitancies using a new tool?technology. The company had a vast electric tracking system whose anchor is the smart label that is found on every package. The labels contain exhaustive details about the parcel from its class of service to its destination. And the label can be scanned from any angle, a plus for people and packages on the go. Other technologies include Delivery Information Acquisition Device, the brown tablet PDA that customers sign when they receive their delivery. All UPS drivers carry one for capturing and transmitting package pickup and delivery data. And once a package gets to the warehouse, the information flow doesn't stop. UPS loaders scan labels on incoming packages with a wearable scanner device. A Bluetooth transmitter sends the tracking information to a terminal, which is then transmitted VIA a Wi-Fi network to the company's data base. The goal is to get the information from the customer to the driver to the warehouse to the web and back to the customer as quickly as possible. As UPS declares on its web-site, it's not just in the delivery business; it's in the customer satisfaction business. Meeting and exceeding customer's needs will continue to be the companies driving force.


1. Describe UPS competitive strategy Using Miles and Snows framework, Abels' Framework, and Porters Framework, describe each of your choices.
2. What competitive advantages do you think UPS has?
3. Have its' resources, capabilities, and core competencies contributed to its' competitive advantages? describe.
4. Do UPS functional strategies support its competitive strategy? describe.
5. What do you think UPS is going to do to maintain its strong competitive position?

Operation Research, Management Studies

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