UPS Should Be Recognized for Its Strategic Vision

There are a few parts of building a strategy that I bring to any analysis, no matter who is asking me:

1 - Build a picture of where consumers are going, and why.

2 - Decide what you are, and why. What is your core value that you will pursue regardless of how hard it is?

3 - Decide what you are not going to be, or can never be.

Sometimes when observing a company, you can build a clear picture of a few things, even from the outside:

- How strong their Board is - How strong their Management team is - How honest they are with themselves.

Let's be honest, no one does strategic planning like Amazon. They think on 10 year horizons. They started preparing for Shipageddon almost 8 years ago, at full throttle. When others, well.... didn't.

But stepping down from that high standard, then you have others that I think are equally great at strategic planning. I've talked bout Target here for obvious reasons. But I think #UPS goes in the same bucket.

Why?

It is VERY OBVIOUS to me - even as an outsider - that there is an executive summary attached to strategic review of UPS 4-5 years ago which contained the following lines:

"The dynamics of the parcel business have changed fundamentally with the combination of Amazon's 3 reinforcing structural advantages which power its growth:

1 - Amazon Prime. 2 - Amazon Marketplace (3P) 3 - Amazon Logistics"

These self-reinforcing dynamics are a flywheel which gives Amazon a structural growth advantage when you analyze parcel carriers as a sector. Any carrier's Enterprise marketing and sales team cannot match the simple consumer dynamics of Amazon's flywheel. Full stop.

The only logical conclusion of this analysis is that Amazon is going to be the largest carrier in North America.

The path forward for UPS is then clear. Strive to build "the second biggest carrier", or choose a different path.

The path for them is a strict segment focus on three areas: - Business to Business - Healthcare - SMB parcel volume

And jettisoning everything else.

In a strategic review being honest about #3 "What You Will Not Be" can either set up your company for success or doom it to failure.

#supplychain