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Ups Case

Industry External Analysis

Considerations of Macro Environment

Market Demographics: The target market is everyone in the world who needs to ship an item. Christmas time is a particularly busy time for shipping items across the world, whereas people need a company like UPS to do the delivering for them.

Economic: Gasoline prices, along with rising energy prices are the major concern. Jet fuel prices are at $2.80/gallon! However, many people would rather have items shipped rather than spend money on gas to go and buy the item.

Legal: International express services can be delayed by government policies and restrictions that can include anticompetitive practices of government-owned or authorized monopolies, licensing requirements, customs procedures, restrictions on access to aviation markets, restrictions on access to ground transportation systems, and restrictions on foreign investment.

Socio-Culture: The economy is really bad right now, so many people don’t have extra money to make a lot of online purchases and businesses are not selling as much, therefore not needing to ship as much.

Global: Worldwide packaging shipping volume is increasing as a result of global exchange, e-commerce, and changes in supply-chain management.

Technological: The internet has expanded the reach of direct marketing.
Industry Analysis:

Dominate Characteristics: With globalization, shipping is now a major priority for businesses and many individuals, especially those that use the internet to do a lot of shopping.

Driving Forces: Globalization and the internet, along with Christmas.

The Competitive Forces are: The biggest competitor is Fed Ex, and they cannot compare. UPS did 2.5 times the volume through its sophisticated delivery machine.

Rivalry in the Industry (Porter’s Five Forces):

Real Threat of New Entrants: Fed Ex, DHL, and TNT have capabilities in certain regions on par with UPS, but new entrants are unlikely to build such a...