Running head: Analysis

Analysis

Name:

Institution:
ANALYSIS 2

USPS was founded in 1775 and entails significant parts of present day transportation

systems. The company came up with customer satisfaction model regarding parcel delivery

service. USPS delivers goods to the address within the nation and is gradually going

international. Parcel delivery organizations should aim at satisfying customers need for

professionalism and responsiveness in their work. USPS has 31,000 postal offices and is the

biggest single fleet vehicles, operator. In 2012, it recorded net loss amounting to 15.9 billion

dollars. In the same year, its retiree health benefits amounted to 11.1 billion dollars. It's nine

governors are appointed by the president, and 95% of its revenue comes from domestic services

that include packages, first-class mail, and standard mail.

Key strategic issues in United States Postal Service Case are:

1. Mission and vision statements

2. The external environments
3. The internal environment
4. New strategy proposal
5. Risks related to strategy change

Mission and vision statement

USPS Mission statement

USPS mission statement The postal service shall have as its primary functions the

obligation to provide postal services to bind the nation together through the personal,

educational, literary and business correspondence of the people. It shall provide, prompt,

reliable and efficient services to patrons in all areas and shall render postal services to all

communities" USPS has tried quite much to live up to their mission statement. However, USPS

is highly regulated by the Congress and the president, factors that place major hindrances in

embracing innovation.
ANALYSIS 3

An in-depth analysis of USPS mission statements brings out split components required in

a mission statement. Since USPS is a company responsible for delivering packages to its clients,

then companies of this nature should be responsible for efficient packages delivery to its

customers. No wonder the company as included markets, markets, stakeholders concerns,

services in its mission statement. However, USPS has no vision statement.

External environment

The essential components of an external environment are the competitor, general and industry

environments.

USPS industrial environment-the company uses highway and air as the primary

transportation method. The company uses aircraft and customer centers as well as drivers,

thus offering responsive strategy as opposed to efficiency.

Competitor environment-USPSs main competitors are UPS, USPA, FedEx, and DHL. To

differentiate itself from FedEx which has been a tough USPS competitor, USPS uses the

executive competency model which prepare mid-level managers to take over the

executive seats in future. USPS ensures quick delivery of goods and services within the

shortest timeframe, regardless of the cost. USPS enjoys 36, 496 distribution and retail

facilities and 218, 684 vehicles.

General environment-USPS has regional offices located at the convenient physical place

for easier access by the customers. In this manner, USPS responds to its clients in an

efficient manner. However, USPSs competitors have more efficient ways of reaching

their client. Transportation cost as USPS has resulted in higher expenses than revenues,

thus incurring net losses for years.

The ground vehicles use less fuel as compared to aircraft, ultimately making its cost of

delivering goods extremely high.

ANALYSIS 4

The sociocultural environment at USPS has faced a challenge with the use aircrafts to

deliver merchandise. However, the company changed from high fuel consumption

vehicles to low consumption vehicles in June 2009. The change was carried out to reduce

to cost of fuel. However, the company fairs well in ethical and cultural issues that are

seen in diversity at top corporate executives' composition. The mixed-integer

programming solves problems related to vehicle routing.

The technological environment portrays USPS as a company that is slowly embracing

technology in fostering globalization, which has forced the company to re-strategize in its

internal environment. USPS uses Retail Channel Strategy.

The internal environment

The supply chain cost could be minimized by increased use of highway transportation

and decreased use of air travel. However, the use of low fuel consumption vehicles aimed at

lowering the cost of doing business was a commendable move in reducing losses. Employee

training at USPS has resulted in highly competent prospective executive managers. The

upper management impacts strategy changes enabling easier transportation of goods in US

and UK as well as other parts of the world. The top managers also undertake controlling of

prices of products as well as their quality. The employees particular job description is

managed to ensure efficient in-service delivery. Using both local and international means,

USPS delivers goods to billions of its customers daily. For such a huge business, USPS

implements proper planning and organizing of products to reach the global clients. In its

international delivery, USPS contracts FedEx in its global market that has reached 190

countries.
ANALYSIS 5

USPS has various e-commerce as well as internet based services and products dealing

with delivery of messages, money and merchandise. In enhancing e-commerce, USPS has

continued to increase its use of internet in offering the postal services. Web-related channels

saw the growth of customer satisfaction due to timely delivery of goods and services. Use of

emerging technologies enabled USPS to enhance value and broaden international access in

delivery of goods, messages, and money.

USPS identifies executive competencies among the employees by conducting interviews

to ensure they are appointed to posts that best suit their careers. In the executive competency

model, USPS trains the employees and identifies potential successors in their executive

positions. Mid-level managers are appropriately trained to succeed in their roles. Skills like

business vision are targeted for training to enable the employees to come up with strategies

for dealing with competitors.

New strategy proposal

According to USPS Retail Channel Strategy, the companys new strategy should focus on

cost leadership strategy. The infrastructure would increase the use of ground vehicles as

opposed to using aircraft in the delivery of goods. The new plan would embrace the low cost

and timely delivery of merchandise while centralizing the facility to maintain low

infrastructure costs. However, other courier services would be sought as opposed to

increasing that facilities. Greater use of technology in service delivery would be embraced as

well.

Risks related to change of strategy

ANALYSIS 6

Before engaging in a strategy change, a forecast should portray the competitors strategy

as increasing surplus related in Retail Channel Strategy. In case the new strategy is found to

match with the competing one, then differentiation will not be achieved after implementing

the new strategy. In case culture is ignored during the new policy implementation, then a loss

will be incurred within the operating profit.

SWOT ANALYSIS

Strengths

USPS is among the oldest postal companies in America and enjoys a dominant position.

The company has a diverse supplier and networks with other businesses to ensure delivery of its

goods. Since its monolithic in mail delivery, USPS is quite prevalent among the US-based

movers. It has strict standards regarding privacy, making it quite attractive to movers. The

regional office network makes it easy for customers to send and receive their goods, thus saving

time. Besides, the state mandate enjoyed by USPS makes it readily acceptable to a wide range of

customers, both locally and internationally. For technology users, USPS has a national address

database enabling a prospective client to acquire vital data regarding the kind of services offered

by USPS. Technology has further allowed USPS to penetrate all parts of America. In some

situations, USPS offers better prices and ensure home delivery in each part of America.

Weaknesses

There is poor communication between the US government and USPS which hinder

innovation. Data sharing at USPS is prohibited with the title 39-use 412. Insufficient staffing

lowers the employees morale culminating in customer dissatisfaction. Ultimately, migration of

USPSs customer to electronic communication has been going on mainly due to government
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regulations on USPS. Customer dissatisfaction also results from poor value. The companys

brand and products are considered inferior as compared to UPS and FedEx. According to the

American Customer Satisfaction Index, UPS offered the best mail services followed by FedEx

who scored 85 and 83 respectively. USPS had 79 in their express mail services and 74 in its

regular mail services, which has been higher in previous years. The remaining clients in USPS

regular mail category are due to loyalty and not due to satisfaction.

Opportunities

USPS should come up with business initiatives enabling it to lower the cost of doing

business. The company should invest in a delivery fleet as opposed to the massive use of air

transportation. There should be a definite trend towards online marketing as technology has

increased the number of online shoppers. Title 39 and 13- should be re-interpreted to allow data

sharing. The governors should be allowed to make decisions regarding retirement and health

plans of USPS employees. Both UPS ad FedEx rely upon USPS to deliver their millions of

letters years. USPS should harness its mail delivery to maintain the reliance of its competitors in

delivering their letters.

Threats

USPS faces the threat of substantial debt which may lead the company to bankruptcy. The

intense competition from other parcel delivery companies poses a significant threat to USPS.

Most USPS competitors have embraced technology and gone online while new businesses are

slowly taking over former business strongholds of USPS. FedEx and United Parcel service

(UPS) have embraced online shipping which has posed significant competition to USPS as many

people are shopping online. Both FedEx and UPS have enjoyed multi-billion dollars in profits in
ANALYSIS 8

the recent years, even with the increased use of email. Foreign postal administrators have come

up with formal strategies regarding the development of e-commerce, which has competed

effectively with the rigid USPS (Plesnicar & Zaletel-Kragelj, 2013).

Three strategies that USPS should consider

1. Cut cost of delivering goods and services

The use of airplanes in merchandise delivery is expensive mainly due to fuel cost. USPS

should capitalize of using the highway as the main channel of delivering the local

merchandise.
2. Minimize labor expenses
The current retirement and health plans should be re-evaluated and new programs set to

decrease the amount of money paid out. Besides, the companys governors should impose

layoffs of some of the workers. USPS has approximately half a million employees, who

with increased use of technology should be reduced. At USPS, labor accounts for 80% of

its expenses which compares to 32% at FedEx and 53% and UPS, its main competitors.
To further minimize labor cost, USPS should implement the 2012 proposal by McKinsey,

the Postmaster General to close various post offices. The proposal to do away with half of

Americas post offices would have saved the cost of running these unprofitable

businesses. Such an undertaking would result in saving at least 200 million dollars by

2020. The public should be sensitized on the positive aspect of closing the post offices to

minimize protests. The postmasters should become low-paid part-time employees, giving

them an opportunity to venture into other money making undertakings (Bhasin, 2011).
3. Embrace technology
Instead of capitalizing on postal service, USS should embrace technology in its service

delivery. Modern customers are no longer interested in going to post offices to get their

parcels. There is an increased preference to visit parcel companies websites and arrange

for shipping. Besides, the rate hikes at USPS discourage customers who increasingly opt
ANALYSIS 9

for better treatment at FedEx and UPS. Technology will enable USPS to enact on-call

delivery and pickup times as well as shipment tracking to ensure timely delivery of

merchandise. In particular, USPS should allow packaging tape as their competitors offer

the service. The requirement that customers should pay for the packaging tape is poor

customer service (Bhasin, 2011).

Summary
USPS should reorganize and increase its efficiency to restore customers trust.

Since its government owned, USPS should ensure proper running of service delivery to

end the continued loss of funds caused by poor management. Cutting jobs, changing the

pricing model and cutting locations may supplement the change process.
ANALYSIS 10

References
David, F. R., & David, F. R. (2015). Strategic management: Concepts and cases :

a competitive advantage approach. Upper Saddle River, New Jersy: Person Education.
Bhasin, K. (2011, September 6). Here's The Real Reason Why The Postal Service

Can't Compete - Business Insider. Retrieved from http://www.businessinsider.com/us-

postal-service-congress-2011-9?IR=T
Plesnicar, A., & Zaletel-Kragelj, L. (January 01, 2013). SWOT analysis. A

Handbook for Teachers, Researchers and Health Professionals. Vol. Ii, Health

Investigation, 464-471.