eba 612 contemporary issues in business dr. james coleman
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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. - PowerPoint PPT PresentationTRANSCRIPT
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
UPS Procurement Services 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
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
Transportation & Logistics IndustryMarket Size and Key Players
Year UPS FedEx CSX CFN
2000 $24.1 $18.3 $7.9 $5.6
2001 $24.0 $19.6 $7.9 $4.9
2002 $23.9 $20.6 $7.9 $3.0
2003 $33.5 $22.5 $7.6 $3.2
2004 $36.6 $24.7 $8.1 $3.7
2005 $42.6 $29.4 $8.6 $4.2
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
Strength WeaknessesLeading market position
Large operating base
Technological edge
Financial strength
Acquisitions of Menlo and Overnite
Brand/Reputation/Trust
Loss of domestic market share
Low presence in Asia
Unionized labor force
Integration of its acquisitions
Speed/response to market due to size
Opportunities ThreatsAcquisitions
Rise in demand for LTL services
Growth in ecommerce services and Smalls Businesses
Expanded access to China
Growth in procurement and supply chain management
Rising oil prices
Government regulation
Quasi government competitors
Seasonality in business
UPS Procurement Services 7
Proposed UPS Business Strategies
1. Develop and market a portfolio that combines procurement and supply chain management services on a web-based platform
2. Expand access to Asia, Europe and South America (inter/intra) via continued organic growth and mergers and acquisitions
3. Develop a comprehensive web-based trade management tool to minimize cross border complexities to enable global commerce
4. Develop greater access to retail and other channels to increase B2B and B2C accessibility to UPS products and services
5. Develop and market a Small Business Resource Center to leverage e-commerce and small business growth
UPS Procurement Services 8
Proposed UPS Business Strategies
1. 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
2. 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
4. 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
5. 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
Developing Lesser Developed
China Afghanistan
South Africa Bangladesh
Chile Cambodia
Argentina Ethiopia
India Gambia
Costa Rica Mozambique
Taiwan Nepal
Saudi Arabia Uganda
United Arab Emirates
Zambia
UPS Procurement Services 14
1. Develop and market a portfolio that combines procurement and supply chain management services on a web-based platform.
2. Expand access to Asia, Europe and South America (inter/intra) via continued organic growth and mergers and acquisitions
Modification of Proposed UPS Business Strategies
Rapidly Developing
• Focus on providing reliability-centered supply chain services for US-based multinational companies
Lesser Developed
• Limited (due to the “digital divide”)
Rapidly Developing
• Focus on expanding trans-continental shipping presence for inter-country, and partner with local carriers for intra-country service
Lesser Developed
• Focus on trans-continental shipping for inter-country, primarily exports leveraging third-party agents
UPS Procurement Services 15
Modification of Proposed UPS Business Strategies
3. Develop a comprehensive web-based trade management tool to minimize cross border complexities to enable global commerce
4. Develop greater access to retail and other channels to increase B2B and B2C accessibility to UPS products and services
5. Develop and market a Small Business Resource Center to leverage e-commerce and small business growth
Rapidly Developing
• Limited use for multinational corporations due to infrastructure issues
Lesser Developed
• Limited opportunity due to the “digital divide”
Rapidly Developing
• UPS Stores/Drop Boxes
Lesser Developed
• UPS Stores
Rapidly Developing
• Leverage third party agents/ partners to provide support
Lesser Developed
• Limited opportunity due to the “digital divide”
UPS Procurement Services 16
Proposed UPS Business StrategiesRecap
1. 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
2. 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
3. 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
4. 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
5. Develop and market a Small Business Resource Center to leverage e-commerce and small business growth
Key Takeaway: Help businesses help themselves
Thank You!