United Parcel Service of America, Inc

Abstract

UPS had become a global public company, with a market cap of $74 billion, more than 428,000 employees, $47 billion in revenue, and operations in more than 200 countries. A recognized leader among package-delivery companies, its growth had been above industry averages and had historically been through geographical expansion. In 1998, UPS changed its business model to Synchronized Commerce and adopted a new growth strategy called the Four Quadrant Model, hoping to expand its market space by transforming itself into a logistics-solutions company. But eight years after these changes, UPS was generating only 17% of its revenue from its nonpackage deliveries, with only $2 million of its operating profit coming from the new businesses. In the company's 2006 Annual Report, the UPS chairman and CEO acknowledged the disappointing results and realized that these results required a response to the public market. Excerpt UVA-S-0143 UNITED PARCEL SERVICE OF AMERICA, INC. United Parcel Service of America, Inc. (UPS) had grown spectacularly from its humble beginning in 1907, when 19-year-old Jim Casey borrowed $ 100 to start a messenger and home-delivery service for Seattle department stores. By 2007, UPS had become a global public company, with a market cap of $ 74 billion, more than 428,000 employees, $ 47 billion in revenue, and operations in more than 200 countries. A recognized leader among package-delivery companies, its growth had been above industry averages and had historically been through geographical expansion. In 1998, UPS changed its business model to Synchronized Commerce and adopted a new growth strategy it called the Four Quadrant model. UPS had hoped to expand its market space from $ 90 billion to $ 3.2 trillion by transforming itself into a logistics-solutions company. But eight years after these changes, UPS was generating only 17% of its revenue from its nonpackage deliveries, with only $ 2 million of its operating profit coming from the new businesses. In the company's 2006 annual report, UPS Chairman and CEO Mike Eskew acknowledged the disappointing results and realized that these results required a response to the public market. Growth History Store locations . . .