Strategic Planning at United Parcel Service SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Strategic Planning at United Parcel Service
In March 2005, CEO Michael Eskew has asked the Corporate Strategy Group to recommend changes to the strategic process to ensure it allows United Parcel Service (UPS) to continue to transform itself over the next several years. Describes the evolution of UPS's strategic process, with special attention on the company's use of scenario planning techniques, as well as other critical elements of the process: the development of the company charter, strategic planning, strategic decision making, and strategy implementation. Also discusses the roles of the various players in the process, focusing especially on the CEO and corporate strategy staff.
Swot Analysis of "Strategic Planning at United Parcel Service" written by David A. Garvin, Lynne C. Levesque includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Parcel Strategic facing as an external strategic factors. Some of the topics covered in Strategic Planning at United Parcel Service case study are - Strategic Management Strategies, Creativity, Decision making, Leadership, Strategic planning, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Strategic Planning at United Parcel Service casestudy better are - – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, wage bills are increasing, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization,
increasing energy prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Strategic Planning at United Parcel Service
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategic Planning at United Parcel Service case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Parcel Strategic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Parcel Strategic 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 Strategic Planning at United Parcel Service can be done for the following purposes –
1. Strategic planning using facts provided in Strategic Planning at United Parcel Service case study
2. Improving business portfolio management of Parcel Strategic
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Parcel Strategic
Strengths Strategic Planning at United Parcel Service | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Parcel Strategic in Strategic Planning at United Parcel Service Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Parcel Strategic 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 Parcel Strategic in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Parcel Strategic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Parcel Strategic 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.
Analytics focus
– Parcel Strategic 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 David A. Garvin, Lynne C. Levesque 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.
Cross disciplinary teams
– Horizontal connected teams at the Parcel Strategic 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.
Superior customer experience
– The customer experience strategy of Parcel Strategic in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Parcel Strategic in the sector have low bargaining power. Strategic Planning at United Parcel Service has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Parcel Strategic to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Parcel Strategic is present in almost all the verticals within the industry. This has provided firm in Strategic Planning at United Parcel Service 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.
Successful track record of launching new products
– Parcel Strategic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Parcel Strategic 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.
Organizational Resilience of Parcel Strategic
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Parcel Strategic does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– Strategic Planning at United Parcel Service firm has clearly differentiated products in the market place. This has enabled Parcel Strategic to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Parcel Strategic to invest into research and development (R&D) and innovation.
Innovation driven organization
– Parcel Strategic is one of the most innovative firm in sector. Manager in Strategic Planning at United Parcel Service Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Parcel Strategic 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 Parcel Strategic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Strategic Planning at United Parcel Service Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Strategic Planning at United Parcel Service | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategic Planning at United Parcel Service are -
Need for greater diversity
– Parcel Strategic 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.
Low market penetration in new markets
– Outside its home market of Parcel Strategic, firm in the HBR case study Strategic Planning at United Parcel Service needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Parcel Strategic has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Parcel Strategic has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, David A. Garvin, Lynne C. Levesque suggests that, Parcel Strategic 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.
Lack of clear differentiation of Parcel Strategic products
– To increase the profitability and margins on the products, Parcel Strategic needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Parcel Strategic 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Parcel Strategic is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Strategic Planning at United Parcel Service can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Parcel Strategic supply chain. Even after few cautionary changes mentioned in the HBR case study - Strategic Planning at United Parcel Service, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Parcel Strategic vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Strategic Planning at United Parcel Service, in the dynamic environment Parcel Strategic has struggled to respond to the nimble upstart competition. Parcel Strategic has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Parcel Strategic has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Strategic Planning at United Parcel Service should strive to include more intangible value offerings along with its core products and services.
Opportunities Strategic Planning at United Parcel Service | 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 Strategic Planning at United Parcel Service are -
Learning at scale
– Online learning technologies has now opened space for Parcel Strategic 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Parcel Strategic can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Parcel Strategic to increase its market reach. Parcel Strategic 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Parcel Strategic can use these opportunities to build new business models that can help the communities that Parcel Strategic operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Parcel Strategic can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategic Planning at United Parcel Service 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Parcel Strategic is facing challenges because of the dominance of functional experts in the organization. Strategic Planning at United Parcel Service 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.
Creating value in data economy
– The success of analytics program of Parcel Strategic has opened avenues for new revenue streams for the organization in the industry. This can help Parcel Strategic to build a more holistic ecosystem as suggested in the Strategic Planning at United Parcel Service case study. Parcel Strategic can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Parcel Strategic can develop new processes and procedures in Strategy & Execution 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.
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 Parcel Strategic in the consumer business. Now Parcel Strategic can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Parcel Strategic in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Parcel Strategic 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 Strategic Planning at United Parcel Service - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Parcel Strategic to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Parcel Strategic 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
– Parcel Strategic can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Threats Strategic Planning at United Parcel Service External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategic Planning at United Parcel Service are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Parcel Strategic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Parcel Strategic business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Parcel Strategic can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Strategic Planning at United Parcel Service .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Parcel Strategic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Parcel Strategic 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 Strategy & Execution industry regulations.
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 Parcel Strategic.
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 Parcel Strategic in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Technology acceleration in Forth Industrial Revolution
– Parcel Strategic has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Parcel Strategic needs to keep up with the evolution of technology in the Strategy & Execution 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 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. Parcel Strategic needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Parcel Strategic in the Strategy & Execution industry. The Strategy & Execution 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.
Consumer confidence and its impact on Parcel Strategic 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Strategic Planning at United Parcel Service, Parcel Strategic may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Strategic Planning at United Parcel Service 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 Strategic Planning at United Parcel Service 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 Strategic Planning at United Parcel Service 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 Strategic Planning at United Parcel Service 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 Strategic Planning at United Parcel Service 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 Parcel Strategic needs to make to build a sustainable competitive advantage.
