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 - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, technology disruption, 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 -
Successful track record of launching new products
– Ups's Ups has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ups's Ups has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
Operational resilience
– The operational resilience strategy in the UPS and Corporate Sustainability: Proactively Managing Risk Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
Diverse revenue streams
– Ups's Ups is present in almost all the verticals within the industry. This has provided firm in UPS and Corporate Sustainability: Proactively Managing Risk case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
High brand equity
– Ups's Ups has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ups's Ups to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
High switching costs
– The high switching costs that Ups's Ups has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Ups's Ups is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ups's Ups is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in UPS and Corporate Sustainability: Proactively Managing Risk Harvard Business Review case study emphasize – knowledge, initiative, 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 -
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study UPS and Corporate Sustainability: Proactively Managing Risk, in the dynamic environment Ups's Ups has struggled to respond to the nimble upstart competition. Ups's Ups has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Increasing silos among functional specialists
– The organizational structure of Ups's Ups is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Ups's Ups needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ups's Ups to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, James R. Rubin, Barbara Carmichael suggests that, Ups's Ups is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
Aligning sales with marketing
– It come across in the case study UPS and Corporate Sustainability: Proactively Managing Risk that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case UPS and Corporate Sustainability: Proactively Managing Risk can leverage the sales team experience to cultivate customer relationships as Ups's Ups is planning to shift buying processes online.
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.
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.
Need for greater diversity
– Ups's Ups has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 -
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.
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.
Buying journey improvements
– Ups's Ups can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. UPS and Corporate Sustainability: Proactively Managing Risk suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ups's Ups can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Ups's Ups can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Better consumer reach
– The expansion of the 5G network will help Ups's Ups to increase its market reach. Ups's Ups will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ups's Ups in the consumer business. Now Ups's Ups can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ups's Ups is facing challenges because of the dominance of functional experts in the organization. UPS and Corporate Sustainability: Proactively Managing Risk case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 -
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.
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 .
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ups's Ups will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
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.
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.
Regulatory challenges
– Ups's Ups needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ups's Ups can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Ups's Ups has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Ups's Ups needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
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.
