BUSINESS MODEL OF UPSBUSINESS MODEL OF UPS

GROUP 18GROUP 18! ! NEVEREVERNEVEREVER ! !

Ryan DetweilerRyan DetweilerMichelle Fisher Michelle Fisher Michael Hines Michael Hines

Bora KaraogluBora KaraogluNeslihan KucukatesNeslihan KucukatesMurat OmuralMurat OmuralSezin UmarSezin UmarFeyzettin YilmazFeyzettin Yilmaz

SHORT COMPANY HISTORYCOMPANY WEBSITE CRITICSASSUMPTIONSVALUE PROPOSITION ONLINE OFFERINGRESOURCE SYSTEMFINANCIAL MODELCONCLUSION

SHORT COMPANY HISTORY United parcel service is founded during the period 1907-1912 in United parcel service is founded during the period 1907-1912 in

America to cover the need of private messenger and delivery America to cover the need of private messenger and delivery services.services.

The company made its first expansion beyond Seattle to Oakland in The company made its first expansion beyond Seattle to Oakland in 1919 and chose its present name, United Parcel Service.1919 and chose its present name, United Parcel Service.

1924 was the year of UPS’ debuting of the technological innovations 1924 was the year of UPS’ debuting of the technological innovations that would shape its future.that would shape its future.

UPS became the first package delivery company to provide air UPS became the first package delivery company to provide air service via privately operated airlines in 1929. service via privately operated airlines in 1929. 

In 1953 UPS resumed air operations by offering two-day service to In 1953 UPS resumed air operations by offering two-day service to major cities on the east and west coasts. major cities on the east and west coasts. 

By 1985, UPS Next Day Air service was available in all 48 states By 1985, UPS Next Day Air service was available in all 48 states and Puerto Rico.and Puerto Rico.

SHORT COMPANY HISTORY GO ON

In 1985 UPS started international air service between the United In 1985 UPS started international air service between the United States and six European countries.States and six European countries.

In 1989, domestic air service was added in Germany.In 1989, domestic air service was added in Germany. By 1993 UPS was delivering 11.5 million packages and documents By 1993 UPS was delivering 11.5 million packages and documents

a day for more than one million regular customers.a day for more than one million regular customers. In 1994, UPS.com went live and consumer demand for information In 1994, UPS.com went live and consumer demand for information

about packages in transit soared.about packages in transit soared. In 1995 UPS formed UPS Logistics Group to provide global supply In 1995 UPS formed UPS Logistics Group to provide global supply

chain management solutions and consulting services.chain management solutions and consulting services. In 1998, UPS Capital was founded to provide a comprehensive In 1998, UPS Capital was founded to provide a comprehensive

menu of integrated financial products and servicesmenu of integrated financial products and services,, which enabled which enabled companies to grow their business.companies to grow their business.

COMPANY WEBSITE CRITICS

ADVANTAGESADVANTAGES;;USER-FRIENDLYUSER-FRIENDLYEASILY ACCESSIBLEEASILY ACCESSIBLEPROVIDES LINKSPROVIDES LINKSLOADS FASTLOADS FASTAVAILABLE ANYTIMEAVAILABLE ANYTIME

COMPANY WEBSITE CRITICS

DISDISADVANTAGESADVANTAGES;;TOO FORMALTOO FORMALNOT ATTRACTIVE NOT ATTRACTIVE

ENOUGHENOUGHREGISTRATION TAKES REGISTRATION TAKES

LONG LONG

ASSUMPTIONS

UPS has several sub companiesUPS has several sub companies RReferefereencesnces are generally from www.ups.com. are generally from www.ups.com.

We cannot test the truth of information.We cannot test the truth of information. We neglected changes during last year.We neglected changes during last year. We used generally data of US for finance; it may We used generally data of US for finance; it may

change for UPS worldwide.change for UPS worldwide. For the analysis of business model, we thought For the analysis of business model, we thought

general work of UPS. general work of UPS. At online offering part, we assumed that there is At online offering part, we assumed that there is

a strong competitiona strong competition

VALUE PROPOSITION

·CUSTOMERS·CUSTOMERS

·· PRODUCTS & SERVICESPRODUCTS & SERVICES

·· MARKETSMARKETS

·· TECHNOLOGYTECHNOLOGY

·· SUSTAINABILITY, PHILOSOPHY & SUSTAINABILITY, PHILOSOPHY & SELF-CONCEPTSELF-CONCEPT

·· CONCERN FOR PUBLIC IMAGESCONCERN FOR PUBLIC IMAGES

CUSTOMERSCUSTOMERS

Customer benefits from many things at UPS Customer benefits from many things at UPS like: just in time and hand-to-hand like: just in time and hand-to-hand transportation systems. Moreover small transportation systems. Moreover small shifts more frequently of UPS make shifts more frequently of UPS make customer benefit increase with 1.3 million customer benefit increase with 1.3 million packages and documents international and packages and documents international and 13.6 million packages and documents in 13.6 million packages and documents in

USA.USA.

PRODUCTS & SERVICESPRODUCTS & SERVICES As a delivery company, UPS service as;As a delivery company, UPS service as;Key Services;Key Services;                        Logistics and distributionLogistics and distribution                        Transportation and freight (air, sea, ground, Transportation and freight (air, sea, ground, rail)rail)                        Freight forwardingFreight forwarding                        International trade management and International trade management and customs brokeragecustoms brokerageSpecialty Services;Specialty Services;                        Service parts logisticsService parts logistics                        Technical repair and configurationTechnical repair and configuration                        Supply chain design and planningSupply chain design and planning                        Returns managementReturns managementUrgent parts deliveryUrgent parts delivery

MARKETSMARKETS

*Africa *Africa *North America*North America*South America*South America *Europe*Europe*Asia*Asia *Caribbean*Caribbean *Middle East *Middle East *Central *Central AmericaAmerica *Australia/New *Australia/New ZealandZealand

TECHNOLOGYTECHNOLOGY

Electronic Data Process (90 % of all shipments)Unique Network Structure88000 package cars, vans, truckers and motorcycles257 Jet Aircraft326 Chartered AircraftOther Investment of technology ($ 600

million)

ONLINE OFFERING

Scope of OfferingsScope of OfferingsCustomer Decision Customer Decision ProcessesProcesses

Scope of OfferingsScope of OfferingsSome of the features that UPS offer online are as follows:Some of the features that UPS offer online are as follows: UPS Signature TrackingUPS Signature TrackingTMTM Tool - obtains valuable Proof of Tool - obtains valuable Proof of

Delivery information including a digitized signature and Delivery information including a digitized signature and delivery address delivery address

UPS Rates & Service Selection Tool - lets online shoppers UPS Rates & Service Selection Tool - lets online shoppers compare prices and select shipping services compare prices and select shipping services

UPS Time in Transit Tool – enables customers to compare the UPS Time in Transit Tool – enables customers to compare the speeds of different UPS shipping services to everywhere UPS speeds of different UPS shipping services to everywhere UPS delivers around the world delivers around the world

UPS Address Validation Tool- ensures that customer-entered UPS Address Validation Tool- ensures that customer-entered shipping addresses are correct at the time of order shipping addresses are correct at the time of order

UPS File Download for Quantum ViewUPS File Download for Quantum ViewTMTM Tool - automates Tool - automates retrieval of Quantum View files, which can then be integrated retrieval of Quantum View files, which can then be integrated into back-end systemsinto back-end systems

UPS Tracking Tool - provides up-to-the-minute package status UPS Tracking Tool - provides up-to-the-minute package status to your customers to your customers

UPS Shipping Tool - brings UPS Web-based shipping to employees' UPS Shipping Tool - brings UPS Web-based shipping to employees' desktops.desktops.

ONLINE OFFERING

Some examples of the partnerships Some examples of the partnerships it will have to develop include:it will have to develop include:

IInternet Service Provider (ISP)IInternet Service Provider (ISP)PPackaging supplies companyPPackaging supplies companyTTransportation providersTTransportation providersGGas/diesel companyGGas/diesel companyCCredit card approval company CCredit card approval company RRoute planning softwareRRoute planning softwareSSupply chain/logistics SSupply chain/logistics businessesbusinesses

FINANCIAL MODEL

Financial Highlight of UPSFinancial Highlight of UPS

·· REVENUE MODELREVENUE MODEL

·· SHAREHOLDER VALUE SHAREHOLDER VALUE MODELMODEL

·· GROWTH MODELGROWTH MODEL

SHAREHOLDER VALUE SHAREHOLDER VALUE MODELMODEL

1,533,333,334 shares of Class A-1 Common 1,533,333,334 shares of Class A-1 Common StockStock

1,533,333,334 shares of Class A-2 Common 1,533,333,334 shares of Class A-2 Common StockStock

1,533,333,334 shares of Class A-3 Common 1,533,333,334 shares of Class A-3 Common StockStock

5,600,000,000 shares of Class B Common 5,600,000,000 shares of Class B Common StockStock

200,000,000 shares of Preferred Stock200,000,000 shares of Preferred Stock

CONCLUSION

UPS has a business to costumer (B2C) UPS has a business to costumer (B2C) model relying on balancing economic, model relying on balancing economic, social and environmental objectives.social and environmental objectives.That That makes makes also crucial for its employees, also crucial for its employees, customers, communities and customers, communities and shareholders.shareholders.

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