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Ups Essay

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UPS has started as a private, employee-owned company mainly focused on the package delivery for the retailors. A steady implementation of new innovation and geographical expansion were the main drivers of the company’s growth. If UPS was one of the leading company in the ground delivery sector, but in the air market the company was significantly losing the competitors. Only in1982 UPS announced the overnight delivery, almost 9 years after FedEx. All these circumstance forced UPS to develop a new strategy in order to “catch up” to its competitors.
Business Trends:
Rapid growth and expansion internationally (Europe, Asia, Latin America)
Orientation on E- Commerce
Supply Chain Managment
 Technology (implementation and development new …show more content…

Constantly increasing demands in a rapid and secure delivery led to the expansion of the delivery ways. Introduction of air delivery service gave a significant impact to the future industry growth. However, with the development of cyber technologies, many people started using digital documents, electronic signatures and etc. These innovations can significantly harm the industry. Another outcome of new technologies was growing popularity of Internet shopping. All these factors triggered a bitter competition on the market. There are three key competitors: UPS, FedEx, and USPS. See Figure …show more content…

Based on the provided analysis in Table 1 and Table 2 UPS showed a steady improvement and increase in revenue with 5% reduction in operating expenses. The operating income outperformed the FedEx operating income by 0.7%. FedEx tax income was lower by 2.1 % in 1998. Gross profit margin raised by 4% from 1997 to 1998. It a double amount of FedEx growth in these two years. Current Ratio grew up by 0.13 points, when FedEx was able to keep the ratio on the same level. Debt –to Equity ratio showed that UPS tried to avoid to rely mainly on debt, although for FedEx it was well balanced usage of equity and debt.
Overall, both company showed satisfied and rational financial ratios. UPS was able outperformed FedEx in the following indicators: ROE (13.6 vs. 4.9%), total Revenue (24 million dollars vs. 15 million dollars), Gross profit Margin (12 % vs 6%). Taking in the consideration the possibility of the future growth of UPS and a rapid expansion to overseas markets, the company will need to obtain additional resources in order to finance its strategy. UPS will require to find the way to mitigate the potential losses, expenses. However, the company has a great potential to develop and

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