Key success factors and risks for UPS
What are the key success factors and risks for UPS given its business strategy
The Advantageous Factor
The UPS enjoy the economy of scale because they have significant market share, and they can deliver a lot of parcels across the world. The company can cut the cost of transportation by ferrying a lot of the products at once. The logistics for the parcel sending companies is the key factor. In that regards, when the company can transport its goods in bulk, the cost of logistics reduces significantly. Consequently, the economies of scale enable the company to distributes the parcels efficiently. Also, the firm has embraced the ecommerce platform. This platform is useful in the numbers of ways. First, the company can engage its customers without any movement, which characterized the analog marketing strategy. As a result, firm sales have increased tremendously.
When the sales increase the cash flow increases in the company, ultimately, the company financial status grows stronger. For instance, the company is in the category of the AAA firm. This AAA rating shows that the company have financial muscles compared to its peer in the market segment. The financial stability attracts the investors to the company, and the company creates confidence for all its stakeholders. For the case of the UPS, the organization can quickly raise the money from the public since the majority of the people have confidence with the company management and stability.
The stability of the company and the quality service of the company makes the company have a desirable reputation (Abimbola, 2001). The status of the company is critical for organization growth. When the customers perceive the product of the specific company is of quality services, they will continue to purchase or use that secure company services, whether the company increases the price or not. For the UPS the company has provided quality services over the past 70 years the company has existed.
The primary factor in the Ups is its employees because the employees play a key role in the distribution of the parcels and services. Therefore, the packages and other services that the company distribute prone to damages and failure of some documents to reach the right owners (Carter, 2010). In summary, the company main risk is the destruction of the clients’ goods. When the products the employee destroys the company may face incur extra costs and lose its reputation, which the firm has established for the past few years.
References
Abimbola, T. (2001). Branding as a competitive strategy for demand management in SMEs. Journal of research in marketing and entrepreneurship, 3(2), 97-106.
Carter, R. D. (2010). U.S. Patent Application No. 12/481,834.