UPS performance
- How is UPS performing? What factors are driving this performance? Is the current performance likely to be sustained? Why or why not
The performance of UPS is terrific given the compound annual growth rate (CAGR) for four years (1994 to 1994). For example, considering the revenue at the beginning of the year, 1994which was 943 billion, and the receipt for the year 1998 revenue was 1,117 billion. Therefore, the CAGR is
1117/943^1/4-1 to which gives us a CAGR of 4%.
The CAGR indicates that the company had been growing with a rate of 4% every year. In that case, future company prospects are good. Because the growth rate indicates, the firm is steady throughout the years. The firm return on equity is also favorable when a comparison is with the FedEx Company, which has 10% while the UPS has 25%. The UPS can attract the investors in the future because the management has proved that they are utilizing the company’s resources prudently.
The factors influencing the UPS growth,
The trends in the global arena are influencing is the growth of the corporation. From the year 1994, most of the company had started trading in the international market. The UPS was no exception. The company has a potential of widening its market to countries such as Japan and Latin America. If the firm has a resource to go global, such a firm is prone to grow efficiently. In summary, the globalization in the industry has enabled the UPS to increase its growth since the investors consider the firm with enough resources with the potential to venture in international markets.
In that error, the company began to trade online. The website was developed to assist the customers in ordering, tracking, and receiving goods and services with ease. The e-commerce business opens a doorway for the success of the business.UPS utilized the opportunity to attract more customers. They also increased the efficiency of serving their clients with ease. In that regard, the company was able to increase its base of the market through the online platform. Also, the firm was able to tract the company progress.
I believe the company will sustain its growth. The two key factors the e-commerce and globalization will alleviate the loss that is unforeseen in the future. The company will continue to expand and to grow though I anticipate the growth to slow down in some year. However, the slow growth in a particular year will be compensated in the years, which will yield high revenue. If the economy in some year will be volatile, I believe the company will mitigate the losses, and I expect the company to have a compound annual growth of at least 4% and above in the future.