Case Study Description of UPS and Corporate Sustainability: Proactively Managing Risk
This case traces UPS's first corporate sustainability report (CSR), "Operating in Unison," from its origins up to its publication in 2006. It is based on interviews with managers who championed and shaped the report internally. UPS took its CSR quite seriously, basing its reporting and goals on the more stringent Global Reporting Indices (GRIs) as opposed to merely complying with U.S. regulations. Soon after going public, UPS was significantly expanding its European operations; it followed that its CSR ultimately took the form of many European CSRs, addressing the relationships among financial performance, environmental sustainability, and engaging stakeholders such as employees and the community. By 2008, some form of CSR would become routine in the United States. Yet not all CSRs are created equal; the case includes copious examples from UPS's first report, with key performance indicators in all categories. Given UPS's employee-centered culture, the company debated how much internal information to report. UPS also has an engineering culture whose innovative thinking helped align its business model with efficiency and reduce its carbon footprint. UPS managers and employees are invariably motivated by "doing the right thing"-a phenomenon increasingly found in strong brands. UPS's reporting grew out of its culture. Yet a major topic for our times is how to manage reputational risk, especially when these risks are inherent to the business. As corporate social responsibility gains public attention, will first-movers such as UPS be rewarded for taking CSR seriously?
Swot Analysis of "UPS and Corporate Sustainability: Proactively Managing Risk" written by James R. Rubin, Barbara Carmichael includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ups's Ups facing as an external strategic factors. Some of the topics covered in UPS and Corporate Sustainability: Proactively Managing Risk case study are - Strategic Management Strategies, Sustainability and Organizational Development.
Some of the macro environment factors that can be used to understand the UPS and Corporate Sustainability: Proactively Managing Risk casestudy better are - – increasing commodity prices, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China,
increasing household debt because of falling income levels, increasing energy prices, etc
Introduction to SWOT Analysis of UPS and Corporate Sustainability: Proactively Managing Risk
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in UPS and Corporate Sustainability: Proactively Managing Risk case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ups's Ups, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ups's Ups operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of UPS and Corporate Sustainability: Proactively Managing Risk can be done for the following purposes –
1. Strategic planning using facts provided in UPS and Corporate Sustainability: Proactively Managing Risk case study
2. Improving business portfolio management of Ups's Ups
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ups's Ups
Strengths UPS and Corporate Sustainability: Proactively Managing Risk | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ups's Ups in UPS and Corporate Sustainability: Proactively Managing Risk Harvard Business Review case study are -
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Ups's Ups digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ups's Ups has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Ups's Ups
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ups's Ups does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Ups's Ups has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study UPS and Corporate Sustainability: Proactively Managing Risk - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Ups's Ups is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by James R. Rubin, Barbara Carmichael can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Organizational Development field
– Ups's Ups is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ups's Ups in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Ups's Ups has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in UPS and Corporate Sustainability: Proactively Managing Risk Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Ups's Ups has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in UPS and Corporate Sustainability: Proactively Managing Risk HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Ups's Ups in the sector have low bargaining power. UPS and Corporate Sustainability: Proactively Managing Risk has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ups's Ups to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Ups's Ups in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Ups's Ups is one of the most innovative firm in sector. Manager in UPS and Corporate Sustainability: Proactively Managing Risk Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Ups's Ups are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Organizational Development industry
– UPS and Corporate Sustainability: Proactively Managing Risk firm has clearly differentiated products in the market place. This has enabled Ups's Ups to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Ups's Ups to invest into research and development (R&D) and innovation.
Weaknesses UPS and Corporate Sustainability: Proactively Managing Risk | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of UPS and Corporate Sustainability: Proactively Managing Risk are -
Capital Spending Reduction
– Even during the low interest decade, Ups's Ups has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ups's Ups is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study UPS and Corporate Sustainability: Proactively Managing Risk can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study UPS and Corporate Sustainability: Proactively Managing Risk, is just above the industry average. Ups's Ups needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Ups's Ups needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Ups's Ups has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study UPS and Corporate Sustainability: Proactively Managing Risk, it seems that the employees of Ups's Ups don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As UPS and Corporate Sustainability: Proactively Managing Risk HBR case study mentions - Ups's Ups takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the UPS and Corporate Sustainability: Proactively Managing Risk HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ups's Ups has relatively successful track record of launching new products.
Lack of clear differentiation of Ups's Ups products
– To increase the profitability and margins on the products, Ups's Ups needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study UPS and Corporate Sustainability: Proactively Managing Risk, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Ups's Ups has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ups's Ups even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities UPS and Corporate Sustainability: Proactively Managing Risk | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study UPS and Corporate Sustainability: Proactively Managing Risk are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ups's Ups in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Loyalty marketing
– Ups's Ups has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Manufacturing automation
– Ups's Ups can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Ups's Ups to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ups's Ups can use these opportunities to build new business models that can help the communities that Ups's Ups operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ups's Ups to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ups's Ups to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Ups's Ups has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study UPS and Corporate Sustainability: Proactively Managing Risk - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ups's Ups to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Ups's Ups has opened avenues for new revenue streams for the organization in the industry. This can help Ups's Ups to build a more holistic ecosystem as suggested in the UPS and Corporate Sustainability: Proactively Managing Risk case study. Ups's Ups can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Ups's Ups can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Ups's Ups can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ups's Ups to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Ups's Ups can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ups's Ups can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, UPS and Corporate Sustainability: Proactively Managing Risk, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats UPS and Corporate Sustainability: Proactively Managing Risk External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study UPS and Corporate Sustainability: Proactively Managing Risk are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study UPS and Corporate Sustainability: Proactively Managing Risk, Ups's Ups may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
High dependence on third party suppliers
– Ups's Ups high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ups's Ups.
Environmental challenges
– Ups's Ups needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ups's Ups can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ups's Ups business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ups's Ups in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ups's Ups in the Organizational Development sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Ups's Ups is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ups's Ups with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Ups's Ups needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Consumer confidence and its impact on Ups's Ups demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of UPS and Corporate Sustainability: Proactively Managing Risk Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study UPS and Corporate Sustainability: Proactively Managing Risk needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study UPS and Corporate Sustainability: Proactively Managing Risk is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study UPS and Corporate Sustainability: Proactively Managing Risk is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of UPS and Corporate Sustainability: Proactively Managing Risk is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ups's Ups needs to make to build a sustainable competitive advantage.