Strategic Planning at United Parcel Services

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Strategic Planning at United Parcel Services

• 1/28/2009
• Baringin
• Emily
• Matthew Smith
• Shin-haa

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Background
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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

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Background

• In 2006, a 37B corporation
• Worlds 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

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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

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Culture

• Consensus building
• Focused on efficiency and execution
• Continuous improvement
• Strong values service excellence, employee
  ownership, commitment to stability
• Low turnover, loyal workforce

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Competition

• Private postal companies
• Federal Express
• Large government-supported agencies
• USPS
• Deutsche Post

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Strategic Planning at UPS
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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

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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

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Centennial Plan

• Organized by Eskew in 2002
• Meant to guide company through its 100 year
  anniversary5 year plan
• Provided themes and broad overall direction
• Developed a strategy roadmap
• But, what happens after 5 years?

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Scenario Planning
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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 UPSs global business in
  an ever-changing competitive environment
• Developed 4 different scenarios

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Uncertainty

• Worked to determine driving forces and critical
  uncertainties
• Defined two axes of uncertainty
• Horizontalthe market environment
• Flow of goods and funds across borders
• Regional and national markets
• Trade barriers to a more global market
• Verticaldemand characteristics
• Nature of consumers
• Types of goods and delivery required
• Traditional consumers versus Prosumers

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The 4 Scenarios

• Tangled Paths
• Highly competitive business environment
• Strong regional and national regulations
• Desire for more variation in products
• Regressive World
• Strong regional and national regulations
• More traditional supply chain, competitive
  landscape, and set of consumers

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The 4 Scenarios (contd)

• Global Scare Prevails
• Slow adoption of new technology due to stable
  demand
• More traditional consumers and industry
  consolidation
• Brave New World
• Deregulated globalized marketplace
• Mass customization of goods and services to
  proactive consumers
• New forms of competition and virtual
  organizationsalliances and business webs

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Outcomes
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Example Slide 1

• Plain slide

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Example Slide 2

• Slide has the whiteboard dude

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Example Slide 3

• Just a plain brown slide

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Slide Example 4

• Slide with a truck