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EBA 612 Contemporary Issues in Business Dr. James Coleman

TRANSPORTATION AND LOGISTICS COMPANIES AS ENABLERS OF E-COMMERCE, ECONOMIC GLOBALIZATION, AND OUTSOURCING April 8, 2006. EBA 612 Contemporary Issues in Business Dr. James Coleman. Joel Bulger Nelton Gaertner Matt Otto Stephanie Turpin Fritz Valsaint Andri Weathersby.

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EBA 612 Contemporary Issues in Business Dr. James Coleman

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  1. TRANSPORTATION AND LOGISTICS COMPANIES AS ENABLERS OF E-COMMERCE, ECONOMIC GLOBALIZATION, AND OUTSOURCINGApril 8, 2006 EBA 612 Contemporary Issues in Business Dr. James Coleman Joel Bulger Nelton Gaertner Matt Otto Stephanie Turpin Fritz Valsaint Andri Weathersby

  2. Presentation Overview • Provide brief review of the Transportation and Logistics industry and the key players • Summarize UPS’ position within the industry, provide a few company facts and its SWOT analysis • Introduce our proposed five UPS business strategies as required • Show how each business strategy will be modified to fit rapidly developing and lesser developed countries. UPS Procurement Services

  3. Transportation & Logistics IndustryMarket Size • 2002 Transportation and Logistics market size $778.6 Billion • Trucking – largest segment with approximately 78% of revenue UPS Procurement Services

  4. Transportation & Logistics IndustryMarket Size and Key Players • In 2005 U.S. Market size is approx. $900 billion • More than 10 percent of the U.S. gross domestic product • Global market size is approx. $3.43 trillion • Sample companies and historical revenues in billions UPS Procurement Services

  5. UPS Facts (2005) • Founded 1907 • Headquarters in Atlanta, GA • $42.6 Billion Annual Revenue ($36.6 Package Operations, $6 billion Supply Chain) • 407,200 worldwide employees (384,000 U.S., 58,800 International) • 3.75 Billion Packages (14.8 million packages/documents daily volume) • Service More Than 200 Countries and Territories • 7.9 million customers • 10 million daily on-line tracking requests • 917,700 Package Cars, Vans, Tractors and Motorcycles • 268 Jet Aircrafts; 9th Largest Airline in the World • 309 Chartered Aircrafts • 1,788 Operating Facilities UPS Procurement Services

  6. UPS SWOT Analysis UPS Procurement Services

  7. Proposed UPS Business Strategies • Develop and market a portfolio that combines procurement and supply chain management services on a web-based platform • Expand access to Asia, Europe and South America (inter/intra) via continued organic growth and mergers and acquisitions • Develop a comprehensive web-based trade management tool to minimize cross border complexities to enable global commerce • Develop greater access to retail and other channels to increase B2B and B2C accessibility to UPS products and services • Develop and market a Small Business Resource Center to leverage e-commerce and small business growth UPS Procurement Services

  8. Proposed UPS Business Strategies • Develop and market a portfolio that combines procurement and supply chain management services on a web-based platform • Situation • UPS wants to be the global provider of choice in managing the three flows of commerce: goods, information and funds • Opportunity • UPS will appear at all points along the customer’s supply chain. These points provide: • Global movement of goods • End to end visibility • Finance customer’s supply chain UPS Procurement Services

  9. Proposed UPS Business Strategies • Expand access to Asia, Europe and South America (inter/intra) via continued organic growth and mergers and acquisitions • Situation • UPS’ business is growing at explosive rates in Asia, Europe and Latin America. Capacity is not currently in place to support sustained growth of this magnitude • Opportunity • Growth through Mergers and Acquisitions • Organic growth • Developing countries have the ability to become trail blazers • There is no vested interest to protect and no existing business to cannibalize UPS Procurement Services

  10. Proposed UPS Business Strategies 3. Develop a comprehensive web-based trade management tool to minimize cross border complexities to enable global commerce • Situation: • Today, trade rules are issued by more than 200 countries creating a daunting challenge for businesses • In 2003, $1.25 trillion in goods entered the United States. • By 2020 an estimated 85% of manufactured goods will be sold across borders versus 20% in 2002 (Mckinsey & Company) • Opportunity: • UPS has the ability to help transform cross-border shipping from a daunting challenge to a competitive advantage by: • Helping shippers improve regulatory compliance • Reduce expenses, eliminate rework through standardized processes • Streamline global supply chains UPS Procurement Services

  11. Proposed UPS Business Strategies • Develop greater access to retail and other channels to increase B2B and B2C accessibility to UPS products and services • Situation • Explosion of commerce between B2C and individual to individual • Current Retail Access: The UPS Store, 4,400; Mail Boxes Etc., 1,300; UPS Customer Centers, 1,000; Authorized outlets, 17,000; UPS Drop Boxes, 40,000 • Opportunity • Position UPS services in high-traffic locations to provide access for consumers and small businesses • Create a self-service or smart kiosk for areas such as airports, convention centers, universities and malls • Other benefits to UPS, businesses and consumer • UPS – treat the consumer like a business – consumer can drop and pickup packages at closest point (no 2nd and 3rd attempt by UPS) • Business/Consumer – Consumer receive product first time - no return • Allows any company with web-access to be a global player UPS Procurement Services

  12. Proposed UPS Business Strategies • Develop and market a Small Business Resource Center to leverage e-commerce and small business growth • Situation • Help UPS capitalize on the growth and development of Small Office Home Office (SOHO) market and ecommerce. • Opportunity • UPS to offer business starter kit • E-commerce interface to conduct business • Employee hiring, training and development • Accounting/Tax/Finance (access to capital) • Legal services • Healthcare/Discounts • Marketing • Supply chain management consulting UPS Procurement Services

  13. Rapidly Developing Vs Lesser Developed Countries UPS Procurement Services

  14. Lesser Developed • Limited (due to the “digital divide”) • Lesser Developed • Focus on trans-continental shipping for inter-country, primarily exports leveraging third-party agents • Rapidly Developing • Focus on providing reliability-centered supply chain services for US-based multinational companies • Rapidly Developing • Focus on expanding trans-continental shipping presence for inter-country, and partner with local carriers for intra-country service Modification of Proposed UPS Business Strategies • Develop and market a portfolio that combines procurement and supply chain management services on a web-based platform. • Expand access to Asia, Europe and South America (inter/intra) via continued organic growth and mergers and acquisitions UPS Procurement Services

  15. Lesser Developed • Limited opportunity due to the “digital divide” • Lesser Developed • UPS Stores • Lesser Developed • Limited opportunity due to the “digital divide” • Rapidly Developing • Limited use for multinational corporations due to infrastructure issues • Rapidly Developing • UPS Stores/Drop Boxes • Rapidly Developing • Leverage third party agents/ partners to provide support Modification of Proposed UPS Business Strategies • Develop a comprehensive web-based trade management tool to minimize cross border complexities to enable global commerce • Develop greater access to retail and other channels to increase B2B and B2C accessibility to UPS products and services • Develop and market a Small Business Resource Center to leverage e-commerce and small business growth UPS Procurement Services

  16. Proposed UPS Business StrategiesRecap • Develop and market a portfolio that combines procurement and supply chain management services on a web-based platform Key Takeaway: Position UPS in previously untapped areas of the supply chain • Expand access to Asia, Europe and South America (inter/intra) via continued organic growth and mergers and acquisitions Key Takeaway: Expand global footprint for core business • Develop a comprehensive web-based trade management tool to minimize cross border complexities to enable global commerce Key Takeaway: Combine localized tools into an enterprise wide systems • Develop greater access to retail and other channels to increase B2B and B2C accessibility to UPS products and services Key Takeaway: Increase touch-points for customers • Develop and market a Small Business Resource Center to leverage e-commerce and small business growth Key Takeaway: Help businesses help themselves UPS Procurement Services

  17. Thank You!

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