UPS has its key priorities in ensuring the customers’ desires are attained before others. It has a leading innovation strategy that enables it to advance its service delivery continually. The company’s strategic position depends on its culture and the continuity in offering quality service delivery to its customers globally. In addition, UPS company targets key growth areas, including the small and medium businesses that offer service and manufacturing services in the global market. However, these priorities directly affect the company’s WTP and costs.
The strategies adopted by the company hinder its WTP since the company has focused on achieving a long-term goal of ensuring its customers are satisfied with the few available resources. Therefore, this plan hinders the company budget and overstretches the managerial decision depending on market trends and consumer demands. To ensure the customers’ demands are attained before the organizational objectives, the company exploits its resources to ensure that clients offer the best digital services (Wescott, 2021). Achieving the customer needs priority affects the costs and the overall WTP of the UPS company since it increases the costs factors in the budget and reduces the operational income attained during the service delivery period.
FedEx and DHL activities and their Effect on WTP & Cost
The two competing firms of UPS company include FedEx and DHL. The DHL and FedEx companies deal with the transportation and movement of goods and services from one place to the other. Both companies are in the logistics industry since they offer key supply services to their customers. In providing these services, the two companies have continued to focus on digitalizing their services to ensure that they offer quality and efficient services to their customers. In addition, the companies have continued to include new services and other products, which have continued to raise their costs regularly. The inclusion of various services and products in the company plans has hindered revenue realization since there are increased costs while the income reduces.
DHL has simplified its shipping services by integrating the company profile into the digital platform for effective shopping. However, this strategy affects the company’s WTP and its costs since it increases the expenses on the company budget. In addition, to ensure that customers enjoy their comfort frequently, DHL has devised pick-ups and various delivery parcels at its service points, increasing their costs due to the nature and demands of these services (Wescott, 2021). Besides, the FedEx company deals with various eCommerce clients, with its services being implemented in various authorized locations globally. This integration of the service point enables the company to access a wider range of customers at the expense of the company’s revenues.
Comparison of UPS Performance and Industry Average
When the UPS company performs is compared to the industry averages, the various performance indexes from UPS are above the industry averages, indicating that the company performs slightly better in the market. The company’s Return on Assets (ROA) increased from 11% in 2017 to 19% in 2021, above the industrial averages of 8% and 11% in 2017 and 2021, respectively (Wescott, 2021). This trend indicated that UPS company could manage its assets effectively to realize income over the four years. In addition, the strong Return on Assets portrayed by UPS company performances showed that the company was experiencing a strong pattern of business operations over the years of service delivery than its competing firms.
UPS’s Return on Sales (ROS) was above the industry averages over the four years of comparison. The Return on Sales of UPS company increased from 11% in 2017 to 18% in 2021 compared to the performances in the industry of 8% to 11% in 2017 and 2021, respectively. The performances reflected in UPS’s Return on Sales ratio indicated that the company managed its resources effectively and attained better sales than its competing firms. Overall, the company has better financial performance than the average industrial indexes in the period of its operations.
Wescott, S. (2021). USPS vs. UPS vs. FedEx: Which is the best shipping carrier? Merchant Maverick. Web.