The U.S. Postal Service: A First Class Disruption SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The U.S. Postal Service: A First Class Disruption
Facing declining revenues, huge fixed costs, bloated employee unions, an inflexible regulatory environment and a generation of millennials that virtually never used its products, the United States Postal Service (USPS) was looking for help. Accordingly, it had hired several advisors who all came from entrepreneurial backgrounds. Their mandate was clear: challenge the status quo, help to frame the magnitude of the disruption that the USPS was facing, identify opportunities for the USPS to enter new markets for new sources of revenue, and develop a solution immediately. Was an entrepreneurial approach likely to be successful? Or would this approach only involve niche ideas that would not produce significant results? Many other developed countries were facing the same disruption; were there lessons to be learned from these other postal services? The advisors gathered together in a small office and settled into a task that, at first blush, seemed impossible. Allen H. Kupetz is affiliated with Rollins College.
Swot Analysis of "The U.S. Postal Service: A First Class Disruption" written by Allen H. Kupetz, Martin Suter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Usps Postal facing as an external strategic factors. Some of the topics covered in The U.S. Postal Service: A First Class Disruption case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The U.S. Postal Service: A First Class Disruption casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of The U.S. Postal Service: A First Class Disruption
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The U.S. Postal Service: A First Class Disruption case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Usps Postal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Usps Postal 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 The U.S. Postal Service: A First Class Disruption can be done for the following purposes –
1. Strategic planning using facts provided in The U.S. Postal Service: A First Class Disruption case study
2. Improving business portfolio management of Usps Postal
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 Usps Postal
Strengths The U.S. Postal Service: A First Class Disruption | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Usps Postal in The U.S. Postal Service: A First Class Disruption Harvard Business Review case study are -
Ability to recruit top talent
– Usps Postal is one of the leading recruiters in the industry. Managers in the The U.S. Postal Service: A First Class Disruption are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Usps Postal is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Usps Postal 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 The U.S. Postal Service: A First Class Disruption - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Usps Postal
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Usps Postal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Usps Postal in the sector have low bargaining power. The U.S. Postal Service: A First Class Disruption has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Usps Postal to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Usps Postal has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The U.S. Postal Service: A First Class Disruption 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.
Sustainable margins compare to other players in Strategy & Execution industry
– The U.S. Postal Service: A First Class Disruption firm has clearly differentiated products in the market place. This has enabled Usps Postal to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Usps Postal to invest into research and development (R&D) and innovation.
Learning organization
- Usps Postal 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 Usps Postal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The U.S. Postal Service: A First Class Disruption Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Usps Postal 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 Usps Postal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Usps Postal is present in almost all the verticals within the industry. This has provided firm in The U.S. Postal Service: A First Class Disruption 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.
Cross disciplinary teams
– Horizontal connected teams at the Usps Postal 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.
High switching costs
– The high switching costs that Usps Postal 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.
Weaknesses The U.S. Postal Service: A First Class Disruption | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The U.S. Postal Service: A First Class Disruption are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The U.S. Postal Service: A First Class Disruption 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 Usps Postal has relatively successful track record of launching new products.
High cash cycle compare to competitors
Usps Postal 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.
No frontier risks strategy
– After analyzing the HBR case study The U.S. Postal Service: A First Class Disruption, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The U.S. Postal Service: A First Class Disruption, is just above the industry average. Usps Postal 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The U.S. Postal Service: A First Class Disruption, it seems that the employees of Usps Postal 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.
Products dominated business model
– Even though Usps Postal 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 - The U.S. Postal Service: A First Class Disruption should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Usps Postal 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.
Slow to strategic competitive environment developments
– As The U.S. Postal Service: A First Class Disruption HBR case study mentions - Usps Postal 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.
Need for greater diversity
– Usps Postal 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.
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 Usps Postal supply chain. Even after few cautionary changes mentioned in the HBR case study - The U.S. Postal Service: A First Class Disruption, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Usps Postal vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Usps Postal products
– To increase the profitability and margins on the products, Usps Postal needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities The U.S. Postal Service: A First Class Disruption | 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 The U.S. Postal Service: A First Class Disruption are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Usps Postal can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Usps Postal can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Usps Postal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Usps Postal 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.
Leveraging digital technologies
– Usps Postal 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Usps Postal 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, The U.S. Postal Service: A First Class Disruption, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Usps Postal can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 Usps Postal in the consumer business. Now Usps Postal can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Usps Postal 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 Strategy & Execution segment.
Using analytics as competitive advantage
– Usps Postal 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 The U.S. Postal Service: A First Class Disruption - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Usps Postal to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Usps Postal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Usps Postal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The U.S. Postal Service: A First Class Disruption 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.
Better consumer reach
– The expansion of the 5G network will help Usps Postal to increase its market reach. Usps Postal 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.
Learning at scale
– Online learning technologies has now opened space for Usps Postal 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.
Threats The U.S. Postal Service: A First Class Disruption External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The U.S. Postal Service: A First Class Disruption are -
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.
Environmental challenges
– Usps Postal 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. Usps Postal can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The U.S. Postal Service: A First Class Disruption, Usps Postal 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 .
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 Usps Postal.
Consumer confidence and its impact on Usps Postal 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.
Shortening product life cycle
– it is one of the major threat that Usps Postal is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Usps Postal business can come under increasing regulations regarding data privacy, data security, etc.
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. Usps Postal 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 dependence on third party suppliers
– Usps Postal 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Usps Postal 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 The U.S. Postal Service: A First Class Disruption .
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.
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. Usps Postal 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 Usps Postal 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.
Weighted SWOT Analysis of The U.S. Postal Service: A First Class Disruption 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 The U.S. Postal Service: A First Class Disruption 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 The U.S. Postal Service: A First Class Disruption 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 The U.S. Postal Service: A First Class Disruption 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 The U.S. Postal Service: A First Class Disruption 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 Usps Postal needs to make to build a sustainable competitive advantage.