UPS China Strategy - The Logistical Leader

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UPS : The Logistical Leader UPS: China Strategy

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Sameer Mathur BuddingMarkets.com Asst. Professor (Marketing) 2009 – 2013 Ph.D. and M.S. (Marketing) 2003 – 2009

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Company Background Strategy in USA Global Strategy UPS in China Competition with FedEx Agenda

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World’s largest package delivery company Recently involved in logistics Founded in Seattle, Washington in 1907 by James E. Casey as the American Messenger Company United Parcel Service Company Background:

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Growth began primarily across U.S.A. 1975: First went international in Canada 1980s: Major expansion across the globe Growth & Expansion UPS purchased its first aircraft for air delivery service in 1981 Company Background:

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Service in over 220 countries and territories 2011 total revenue: $53.1 billion Package Operations: $44 billion Supply Chain & Freight: $9.1 billion 8.8 million customers daily Average of 32.1 million daily tracking requests UPS Today Company Background:

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UPS Commercial

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UPS has fostered strategic focus around operational excellence Renowned for its efficient/reliable delivery service USA Strategy

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Customer Intimacy E -commerce My Choice Mail Boxes, Etc. Aggressive investment “The UPS Store” for 3,300 Franchises USA Strategy

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Target market: small & medium sized enterprises (SMEs) “We Love Logistics” communications program Value chain infrastructure largely comprised of companies UPS has acquired over years Acquisition of Mail Boxes Etc. in 2001 USA Strategy

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UPS has transitioned from a leader in package distribution to a facilitator of global commerce UPS views whole world as a single market Operations are standardized across regions Aggregation  economies of scope Global Strategy

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As developed markets mature, there is huge potential for trade growth in emerging markets China is known as “the world’s factory” Transportation of goods between U.S.A and China growing rapidly Intra-China market for express delivery expected to grow by 20% annually UPS in China: Why China?

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Cultural differences Hired local executives to leverage local knowledge Administrative differences Joint venture with Sinotrans (1988-2001) Customs brokers to keep up with changing customs laws Granted license for domestic express services Geographic differences International air hub in Shanghai Asia Pacific hub in Shenzhen UPS in China: Overcoming Differences

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Committed to large-scale growth globally Expecting economic leader to be Asia Pacific UPS plans to acquire TNT Express Goal to expand market presence in Europe and Asia UPS in China: Continuing to Pursuing Growth

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Competition Categories ‘What can brown do for you?’ Slogan ‘The world on time’ ‘Inspire our people & business partners to do their best, offering opportunities for personal development & success.’ Mission Statement ‘Customer requirements will be met in the highest quality manner appropriate to each market segment served. ‘ Customers Main focus Professionalism 15.8 million packages Ave. Daily Shipment 6.9 million packages 91% On-Time delivery 88% 103,922 fleet Total Fleet 22,694 fleet $45 billion USD Revenue $35 billion USD UPS My Choice Unique Services Customer Resource Center

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Over 500,000 views from more than 95 countries http://www.slideshare.net/ProfessorMathur/ Sameer Mathur BuddingMarkets.com http://www.facebook.com/ProfessorSameerMathur Please Visit M y W ebsite

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