Ups Presentation

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1. What is this case about?

The main concern of this case is United Parcel Service, created in 1907, and that is nowadays considered as the world leader in packaging delivery with its famous slogan “What can we do for you?”. More than its position towards competition and the different stakes that rule this market, we’ll here have a look at UPS structural organization, and its recognized ability to develop strategies that fit with the evolution of the market.

Indeed, it appears that UPS has become a reference in anticipating and answering every challenge it has had to face, from a technological or economical point of view. Thus this text settles the UPS model in strategic planning, mainly focusing on the two last decades to underpin its talking.

Like we will see a bit later, the UPS model is based on four steps that are :

• Scenario building
• Strategic planning
• Centennial planning
• Strategy Road Map

Moreover, it’s important to notice that such a strategic planning was enabled by the hierarchical structure of the company: indeed, a clear distinction was made between top management, responsible for decision making authority, and lower management in charge of tactical work. Such an organization brought high specialization within each department and a great control of the whole system. We can that UPS is thought to be tactical at the department level and strategic at the corporate level.

1. What are the key elements of UPS’s Approach to strategic planning?

Like we have just said at the end of the first question, UPS organizational structure provides at the same time flexibility and a very strict sense of hierarchy. The Chairman is “the chief strategist” but as long as top managers have “the backing at the top”, any strategic plan can be settled. This paradox of freedom and “military operation” is at the basis of the success of UPS strategic planning.

We will now have a look at the key elements that enable the UPS’s approach to strategic planning.

• UPS Charter

Firstly written in 1999, the UPS charter that englobes the values and guiding concepts of the firm is the result of group discussions. This charter reflects the evolution of company’s goal that first focused on “serving the package-delivery needs of our customers” before moving to “enabling global commerce”. It is made of four parts:

• Our values (“integrity and excellence are the core of all we do”)
• Our purpose (“We enable global commerce”)
• Our mission (“We serve the evolving distribution, logistic […] offering excellence and value in all we do”)
• Our strategy (“We will continue to expand our distribution and supply chain solutions to synchronize the world of commerce”)

Thus it appears that such a charter defines the framework within which any decision has to be taken and the values it has to respect or aim at. Once again, it is not related to any concrete planning, it’s just a guideline to be followed.

• Centennial plan 

Managers were asked to think about a certain numbers of suppositions they thought could occur in UPS’s future. The answers were very diversified, because of the very opened question. From these allegations, the firm draw its centennial plan, composed of its goals in financial, human, competitive terms. It also developed “an overarching sense of direction” to generate a great unification at the whole company’s level. Last, it described four strategic imperatives: “Winning team, Value-added solutions, Customer focus and Enterprise excellence”.

Concerning this point, it seems to us that there is absolutely nothing innovative in such an initiative. These are only words that don’t provide any concrete solution. It’s a fashion, a way to declare that you are conscious of your responsibilities towards your customers or your own workforce. But it doesn’t give any tool to the worker who needs a solution.

• Strategy Road Map:

This strategy road map declined the four imperatives described previously into discrete projects, each of them detailed into specific projects. Thus, it appears that this step tends to make the link between the very narrative and dematerialized concepts thought by top managers and the concrete needs workforce face. Would it be from a functional or a simply human point of view, this strategy road map enables any employee to feel part of a whole.