It is necessary to assess Porter’s five forces within any organization in order for companies to identify their strengths and shortcomings. Without this model, any organization would be unable to accurately examine the areas that require improvement in order to enhance their firm. The five forces are the customers’ negotiating power, the threat of replacement products, the suppliers’ bargaining power, the threat of new entrants, and the level of competitive rivalry (Isabelle et al., 2020). United Parcel Service, Inc. is a prominent delivery service. However, conducting an analysis of Porter’s five forces within this industry reveals the specific strengths and disadvantages encountered. The plan suggested in this proposal represents a strategy for making our operational practices at United Parcel Service in line with the company’s long-term goals. The plan contains an analysis of Porter’s Five Forces model that reveals our competitive landscape, assesses the effectiveness of our current leadership model, and gives alternative models that facilitate the operation process. Moreover, the proposal outlines the exact measures that can be taken to close the operational gaps between operational activities and strategic objectives.
Porter’s Five Forces Analysis
The primary factor that influences United Parcel Service, Inc. is the customers’ ability to negotiate and exert influence over the company. The customer’s desires are at the center of any company’s operations. According to the popular phrase, “The customer is always correct.” UPS does not have to be overly concerned about the power of customers, as they already have a well-established and robust customer base (Universal Parcel Services, 2023). A sizable number of customers purchase goods from international businesses, which UPS then distributes all over the world.
The subsequent influence that affects UPS is the potential for alternative products. This implies that another enterprise would have the capability to replace this service using another approach. This poses a minimal threat to UPS, given that there are limited alternatives for other businesses to ship items without replicating UPS’s existing operations.
The bargaining strength of suppliers is another influential aspect that affects UPS. Several companies lack their resources and rely on assistance from their suppliers. These vendors exert various forms of influence on the companies. At UPS, the provider possesses control over some key processes of the company. Occasionally, UPS is faced with a high volume of deliveries that necessitate the rental of additional vehicles not owned by them. They also rely on external transportation providers, including airplanes, to meet their delivery demands. Swift Transportation, Budget, and The Boeing Company provide the modes of transportation (Universal Parcel Services, 2023) Any of these companies can terminate their contracts with UPS at any given moment, necessitating the search for an alternative contract with another entity, perhaps resulting in higher costs.
The second influential factor that affects UPS is the potential threat of new competitors entering the market. The entrance costs for the delivery industry are substantial. Given the long-standing presence of the sector, it would be extremely challenging for any small or new delivery company to successfully compete. The source cited is “Business Strategy,” with no date provided. Competitive competition is the final force that affects UPS. There are presently numerous companies that have been in existence for a considerable number of years, providing identical services to UPS. The competitors include FedEx, DHL, and USPS. UPS is positioned at the top of the delivery chain due to its extensive knowledge and ability to handle a larger number of products (Universal Parcel Services, 2023). Upon analyzing Porter’s five forces, it appears that UPS is performing satisfactorily. However, some areas require more enhancement to ensure their continued dominance. The components of the five forces are the strength of suppliers and competitive competition. The reason is that suppliers may abruptly cease operations or withdraw, while competitors may discover new strategies to attract existing clients to their side.
Analysis of the Effectiveness of the Leadership Contingency Model
At UPS, the majority of leaders utilize the Blue Ocean Leadership Model, which emphasizes the importance of asking individuals to modify their actions and activities rather than their inherent values, qualities, and behavioral patterns (Shao, 2019). Currently, there exists a completely novel approach to accomplishing tasks, resulting in a transformation like leadership as well. The ability to be a leader is contingent upon the specific circumstances at hand. The UPS model adheres to the current state of society, contributing to their success. The baby boomer age is gradually diminishing, making way for the rise of millennials. Consequently, there is a noticeable disparity in leadership styles between these two generations.
Recommendations for the Leadership Model and Operational Needs
The sole critique of UPS’s present leadership strategy is that the millennial generation has less favorable opinions compared to the baby boomers. Occasionally, even millennials may exhibit laziness, resulting in a disruption to the company’s efficiency. This leadership style was effective in the past, but without proper training, millennials will tend to approach tasks uniquely. Training is necessary to instruct millennials in various leadership styles, enabling them to select the most suitable approach for themselves.
When addressing operational requirements, it is necessary to discover innovative methods to propel the organization forward in comparison to its rivals. This entails discovering novel and enhanced methods to execute deliveries in order to distinguish oneself. In addition, UPS could consider engaging in collaborations with its opponents rather than engaging in direct competition. Having allies is consistently preferable to having adversaries. An additional strategy to continue progressing is to establish a greater number of suppliers. Amazon is now a prominent corporation that utilizes UPS as its delivery service provider. They are now seeking to expand their clientele by identifying additional companies in need of delivery services. An increased number of providers results in a larger client base.
Conclusion
In conclusion, the proposal presents a comprehensive analysis of United Parcel Service’s operational needs aligned with its strategic goals, employing Porter’s Five Forces model and assessing leadership effectiveness. While UPS appears to perform satisfactorily in the competitive landscape, areas for enhancement include supplier management and adapting leadership approaches to the evolving workforce dynamics, particularly the transition from baby boomers to millennial leadership styles. The proposal offers insightful recommendations, advocating for diversified supplier networks and training programs to accommodate varying leadership styles. By leveraging collaborative opportunities with competitors and investing in workforce development, UPS can further solidify its position in the delivery industry. This strategic alignment ensures UPS’s continued relevance and competitiveness in an ever-evolving market landscape.
References
Isabelle, D., Horak, K., McKinnon, S., & Palumbo, C. (2020). Is Porter’s Five Forces Framework Still Relevant? A study of the capital/labour intensity continuum via mining and IT industries. Technology Innovation Management Review, 10(6). https://www.timreview.ca/article/1366
Shao, Z. (2019). Interaction effect of strategic leadership behaviors and organizational culture on IS-Business strategic alignment and Enterprise Systems assimilation. International Journal of Information Management, 44(1), 96–108. https://doi.org/10.1016/j.ijinfomgt.2018.09.010
Universal Parcel Services. (2023). Investor Relations. United Parcel Service, Inc. https://investors.ups.com/X
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