We intend to leverage our small package and freight customers through cross-selling the full complement of UPS services" (UPS 2008 Annual Report).
Focus on environmentally friendly operations -- UPS has already declared a supporter of environmentally friendly operations and in order to prove this standpoint they have already purchased 200 hybrid electric and 300 compressed natural gas vehicles. The move not only increased their fleet to the largest private fleet in the industry, but also made a strong statement. UPS has also invested in the purchase of hydraulic hybrid automobiles, a new technology that promises to reduce emissions and fuel consumption (UPS 2008 Annual Report).
3.2. Available Strategic Courses of Action
Given the current status quo, the company has four alternative courses of action that need consideration. Before a decision is made however, they must consider the present state of the economy in which demand for their services is decreasing. In this light of events, the first strategic course of action is then the implementation of a prudential approach that strives to reduce operational costs in order to ensure that UPS is able to overcome the challenges imposed by the contemporaneous economic crisis. Then, the second alternative would be that of responding to the crisis by striving to increase demand for their products and services in order to generate more revenues that help overcome the financial difficulties. This basically means that the package delivery organization could implement aggressive growth strategies through which it would expand to new regions. The third alternative is that of further diversifying its offering. UPS has already launched such strategies but the revenues generated by financial and logistics services still hold a reduced percentage in the overall income. Finally, the fourth strategy sees a recognition of the employees as the company's most valuable assets and revolves around investments in the training and retention of the best staff members. This course of action is based on the rationale that the human resource is the one that directly interacts with the customers and is able to satisfy them in means that creates customer loyalty and sustainable organizational revenues.
4. Strategic Recommendations
Out of the four proposed courses of action, the managerial team at United Parcel Service has to identify that which best serves their current needs. Otherwise put, it is crucial at this stage to reveal the main interest of the company and identify the strategy which is best able to serve the purpose. In this order of ideas, the objective followed by UPS is that of successfully overcoming the financial crisis and achieving sustainable growth. The table below presents the advantages and limitations of each of the four proposed strategies as well as their ability to reach the proposed goals.
Pros
Cons
Ability to meet goals
Prudential Strategy
No additional costs
No real gains
Reduced
Aggressive Growth
Increased number of customers, brand recognition, increased revenues
Financial investments, risks of failure
Depending on success; if successful, high ability to overcome crisis; if unsuccessful, minimum ability
Diversification
Maximization of gains and minimization of losses
Additional financial investments and risks of failure; estranges the company from its initial operations
Increased due to advantages in column 2 but also due to the fact that the population will require financial assistance and this could generate growing demand for the UPS Capital services
HR Investments
Satisfied an drained employees perform at increased levels, satisfy the customers and generate increased revenues
Additional investments and the consumption of financial resources that could be otherwise used
Medium as employees can only impact...
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