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THE UNITED STATES POSTAL SERVICE

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THE UNITED STATES POSTAL SERVICE. Introduction - Karthik ... The Volumes Of Various Products Of The USPS ... USPS CURRENT STRATEGY. Defender Strategy ... – PowerPoint PPT presentation

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Title: THE UNITED STATES POSTAL SERVICE


1
THE UNITED STATES POSTAL SERVICE
2
Introduction
  • Introduction - Karthik
  • Challenges in Current Market - Tammie
  • Current Strategy - Curt
  • Future Strategy - Rebecca Brian
  • New Strategy Implementation - Dorinda

3
How Big is the Postal Service?
  • Daily - 250,000 Postal Service Letter Carriers
    deliver to the nations 13.5 million addresses
  • Postal Services 38,000 post offices, stations
    and branches provide more retail outlets than
    McDonalds and Exxon Mobil combined

4
How Big is the Postal Service?
  • In an average week, the Postal Service mail
    volume matches the annual volume of United Parcel
    Service
  • In two days, the Postal Service delivers what Fed
    Ex delivers in a year
  • 800,000 career employees, one of the largest
    employers in the United States

5
MISSION STATEMENT
  • To bind the nation together through the
    correspondence of the people,to provide access to
    all communities and to offer prompt,reliable
    postal services at uniform prices.

6
VISION STATEMENT
  • To become an organization that can improve
    performance and affordability,implement
    innovative ways to grow both its revenues and
    those of the mailing industry,and find flexible,
    responsive solutions to the challenges raised by
    technology and the seismic shifts in the global
    postal environment.

7
The Volumes Of Various Products Of The USPS
8
The Relative Share Matrix Of Different Products
Of The USPS
9
CHALLENGES IN THE CURRENT MARKET
10
Highly Regulated
  • Postal Rate Commission
  • General Accounting Office
  • Office of the Inspector General

11
Domestic Competition
  • Fed Ex and United Parcel Service (UPS)
  • Profitable High Value Documents and Packages
  • High Density and High Volume Neighborhoods

12
Foreign Competition
  • Since 1986 - Monopoly protection for outbound
    international mail was eliminated
  • Global Competitors have entered the traditional
    letter and print market - Deutsche Post (Germany)
    and TPG (Netherlands)

13
Technological Competition
  • Over 1/2 of US households have Internet Access
  • New Technologies - Direct Deposit, EDI
    (Electronic Data Interchange) and EBPP(Electronic
    Bill Presentment and Payment)
  • (1999) 2/3 of the 880 million Social Security
    checks, tax refunds, and other payments sent by
    the Department of the Treasury were sent
    electronically

14
The Projected Usage Of E-bills Payments By
2004.
15
Technological Competition
  • Postal Service - long- term projections indicate
    that approximately 50 of the bills and payments
    that are currently mailed will be replaced with
    electronic alternatives.
  • The Postal Service forecasts in its 5-Year
    Strategic Plan for total First-Class Mail volume
    to decline at an average annual rate of 3.6
    (Fiscal Years 2004-2008)

16
Delivery Costs
  • Daily - 680 million pieces of Mail to more than
    135 million addresses
  • 2000 - Added 1.7 million new delivery points -
    equivalent to the city of Chicago

17
Reduced Mail Volume
  • First Class Mail Growth rate is diminishing
  • 1980 to 1989 48 Percent
  • 1990 to 1999 19 Percent
  • First Class Mail comprises 50 of total mail
    volume but accounts for 69 of current postal
    revenues

18
Consequences
  • Growing Organizational Debt
  • Could exhaust the Postal Services statutory 15
    Billion borrowing limit by the end of fiscal year
    2003
  • Constricted by the Universal Service Mission
  • Increasing Costs
  • Lower Mail Volume

19
USPS CURRENT STRATEGY
20
Market Growth
  • Defender Strategy
  • Stability Secure position in First Class
    Standard Mail delivery
  • Limited Scope strategy and design
  • Price leader future plans aimed at efficiency,
    profitability
  • Technology lags behind competitors

21
CORPORATE MESSAGE
  • Focus
  • Efficiency
  • Emotional link with customers

22
Efficiency
  • Technology Employee productivity and accuracy
  • Eliminate Bureaucracy
  • 1999 2000 2001
  • Revenue (mil) 62,726 64,540 65,834
  • Employees 797,796 787,538 775,903

23
Efficiency
  • Flexibility Fed Ex agreement
  • Share air-fleet
  • Doubles reach of most profitable services
  • Online Services
  • Consumers Bill pay, money sending, personalized
    postcards, zip-code finder, change of address,
    postage calculation
  • Small Business Secure e-documents, certified
    mail, tracking and confirmation, direct-mail kit

24
Emotion
  • Patriotism
  • 9/11 and Anthrax Scare
  • American Institution
  • Mail must go through
  • US Cycling Team
  • Corporate Citizenship
  • Diabetes, Adoption, Breast Cancer awareness
  • Issue commemorative stamps
  • Environmental responsibility Closing the
    Circle

25
FUTURE STRATEGY RECOMMENDATIONS
26
Marketing Strategies in a Declining Market
  • Harvesting
  • Maintenance
  • Profitable Survivor
  • Niche

27
Four Niche Segments
  • Personal Correspondence
  • Legal
  • Bill Paying
  • Advertising

28
Personal Correspondence
  • Development of Individualized Products
  • Promotion of Current and Future Products
  • Distribution

29
Legal Niche
  • Development of Services
  • Promotion of Services
  • Increased Quality of Service

30
Bill Paying Ad Segment
  • People who use the post office for sending bills
    personally and for business.
  • Companies that use the Post Office for
    advertising.

31
How Psychological Constructs Shape Positioning
  • Bill Paying Segment
  • Need Reliability
  • Want Dependability
  • Value Feeling of confidence.
  • Macro to Micro

32
How Psychological Constructs Shape Positioning
  • Advertising Segment
  • Need Quality
  • Want Dependability
  • Value Success and Effectiveness

33
Harvesting Strategy
  • Used to exploit the constructs of the Value
    Chain
  • VC constructs
  • Marketing
  • Distribution Logistics
  • Government Regulations Protection
  • Labor Pool.

34
Harvesting Results
  • Post Office has alienated customer segments.
  • Competition in otherwise protected market.

35
Niche Strategy
  • Have message and products satisfy the needs,
    wants, values of your target.
  • Innovate product to satisfy specific constructs.

36
Bottom Line
  • Identify constructs at the macro and micro level.
  • Better understand the target segment.
  • Resulting product innovation will lead to a more
    satisfied consumer base.

37
RECOMMENDED IMPLEMENTATION OF NEW STRATEGY
38
Implementation of New Market Strategy
  • Organizational structures
  • Functional organization of an SBU
  • Product management organization
  • Market management organization
  • Matrix organization

39
Functional Organization of an SBU
  • Simplest design
  • Best suited for stable and slow-growth industries
    where environments are predictable

40
Market Management Organization
  • Single product targeted to a large number of
    markets
  • Popular with consumer goods companies in their
    efforts to increase geographic segmentation and
    cope with the growing power of regional retail
    chains

41
Matrix Organizations
  • Least bureaucratic or centralized and the most
    specialized type of organization
  • A product team is formed which consists of
    representatives from a number of functional areas
    assembled for each product or product line

42
Product Management Organization
  • Decentralizes decision making while increasing
    the amount of product specialization within the
    SBU
  • Entails the development of marketing plans for
    product with centralization of common supports
    such as marketing research, sales, advertising,
    and sales promotion

43
Transformation Plan
  • Growth through added value to customers
  • Operational efficiency
  • Performance-based culture
  • Enabling functions
  • Regulatory and legislative reform
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