strategic-management

144 FRED AND FOREST DAVID
package delivery company and services more than 200 countries. UPS had $51.4 billion in
revenues in 2008 and a net income of over $3 billion. UPS is most known for its chocolatecolored
trucks. UPS transports some 16 million packages and documents per business day
throughout the United States and to more than 200 countries and territories. Its delivery
operations use a fleet of about 107,000 motor vehicles and about 570 aircraft. In addition
to package delivery, the company offers services such as logistics and freight forwarding,
through UPS Supply Chain Solutions, and less-than-truckload (LTL) freight transportation
through UPS Ground Freight.
E-mail
E-commerce companies offer products and services that substitute for traditional postal
services. E-mail has indeed become one of the most common means of communication for
people across the country and around the world. E-mail saves people time, money, and useless
effort. The well-known phrase “You’ve got mail” has become a significant part of the
English language. People have become extremely reliant on the instantaneous delivery and
short response time provided by e-mail and the Internet, and this has made it a significant
competitor of the USPS.
Future Outlook
The outlook for the USPS is somewhat gloomy. A weak economy, advertising decreases,
e-mail, FedEx, and UPS all hurt the USPS, which is having to downsize. Some analysts
argue that the USPS should convert to a centralized mailbox delivery system rather than
home delivery to all. This change would save millions. Note in Exhibits 8, 9, and 10
respectively, there were 27,232 post offices in 2008, 269 processing centers, and
197,898 delivery and collection vehicles. Other analysts suggest that the USPS
should cease to continue with cooperative agreements with FedEx and UPS. It has been
said that these companies gain more from the USPS than they give, so therefore the
deals are not in the best interest of the USPS. Exhibits 11, 12, 13, and 14 provide more
operating data for USPS. Help this organization manage better strategically in the
future.
Note: Much of this case is based on the USPS 2008 Annual Report.
EXHIBIT 8 USPS Real Estate Inventory
2008 2007
(Actual numbers)
Leased Facilities 25,272 25,450
Owned Facilities 8,546 8,487
GSA/Other Government Facilities 357 381
Total Real Estate Inventory 34,175 34,318
Annual Rent Paid to Lessors
(Dollars in millions) $ 1,011 $ 973
Retail and Delivery Facilities
(Actual numbers)
Post Offices 27,232 27,276
Classified Branches 1,493 1,508
Classified Stations 3,358 3,379
Carrier Annexes 658 532
Contract Postal Units 3,148 3,131
Community Post Offices 834 895
Total Retail and Delivery Facilities 36,723 36,721
Source: www.usps.com.