Business Strategy

Five Force Model

Threat of existing rivals (Medium): The threat of existing rivals to UPS is medium. There are companies that are already established and compete with UPS like FedEx, DHL Express, USPS, and Schenker AG.

Bargaining power of customers (Medium): It’s hard to determine the force strength of the customers’ bargaining power because although there are options, that would make it hard for UPS to do something like increase prices and expect no change in customer demand, UPS provides great customer service that would make it hard for customers to pick another option like USPS.

Bargaining power of suppliers (High): The reason is this high is because the suppliers like UPS can control the prices of how much they would do the services for.

Threat of Substations (Low): Besides shipping through UPS, all other substitutions would not be able to meet the expectations that UPS already comes with. The internet might be a substitute to certain things like letters but there will always be the danger of privacy being violated. If a customer wanted his package delivered outside the US, the customer would have to pay a lot of money because it would only be for one package. Unlike UPS, which fully utilizes the space in their air carriers.

Threat of new entrants (Low): Companies like UPS are too difficult to compete with because companies would legitimately have to have a lot of capital and somehow increase a customer loyal base as big as UPS. The brand name of a new company has to work hard to be a big as UPS’s brand name. Along with the growth it would need to compete not only to the US but also out to other countries.

Competitive Strategy

UPS competitive strategy is better service across the industry. It's a constant battle between UPS and their rivals so to be different from the best of the competitors, UPS focuses on providing the best service to everyone that uses their service across the industry.

Information System

Our information system helps with us delivering to our customers on time. Devices from the UPS Hubs and Centers are becoming increasingly connected to customer’s devices where customers no longer have to manually check the website to receive updates on packages but instead receive notices from the app.

UPS benefits from having a very comprehensive order fulfillment process. More importantly it's technological advances allow it to optimize every aspect of the services they provide.