UPS : choosing growth versus profit /
United Parcel Service Inc. (UPS) is an Atlanta, Georgia-based, globally leading parcel delivery company operating in both business-to-business (B2B) and business-to-consumer (B2C) segments. In June 2020, UPS appointed Carol B. Tomé as CEO. During the COVID-19 pandemic, as the volume of B2C business...
| Main Authors: | , |
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| Format: | eBook |
| Language: | English |
| Published: |
London :
SAGE Publications: SAGE Business Cases Originals,
2023.
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| Series: | SAGE business cases.
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| Subjects: | |
| Online Access: | Connect to the full text of this electronic book |
| Summary: | United Parcel Service Inc. (UPS) is an Atlanta, Georgia-based, globally leading parcel delivery company operating in both business-to-business (B2B) and business-to-consumer (B2C) segments. In June 2020, UPS appointed Carol B. Tomé as CEO. During the COVID-19 pandemic, as the volume of B2C business began to increase, UPS's domestic per-package margin began to decline. Reasons for this decline include the greater number of stops by UPS drivers and increased miles driven by drivers to make deliveries, with dense and packed urban areas being exceptions. Consequently, domestic profit margins for UPS for the first quarter of 2020 fell by more than three percentage points year-over-year, and operating income decreased by USD 300 million. In January 2021, Tomé formulated a business strategy based on the "better, not bigger" philosophy. She decided to emphasize the higher margin B2B segment and deemphasize the big, high-volume B2C segment, where customers enjoyed favorable pricing conditions. Apart from this change in philosophy, as a part of the cost reduction strategy, Tomé reduced UPS's capital expenditure projects and sold UPS Freight, which was the UPS Less Than Truckload ("LTL") transportation services, to a Canadian firm, TFI International Inc. (TFI). Was Tomé correct in selling UPS Freight? Should she focus more on business segments producing higher profit margins, such as B2B delivery, compared to the volume growth contributing B2C segment? |
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| Physical Description: | 1 online resource : illustrations. |
| ISBN: | 9781529611373 1529611377 |