Usps Report

Executive Summary

        USPS has been going through a difficult time because there has been an unprecedented decline in its revenue generation. They have been faced by fierce competition from many private players. More than the competing player, there has been a change in the mailing and delivery infrastructure with the advent of prevalent internet technology. People have been resorting to take advantage of emails, e-cards, and fax technology to send their message. Therefore, USPS has been struggling in growth and is faced with a very stagnant and declining economy. To add to the adversity, the company still maintains its infrastructure to cover its monopolistic obligation to deliver correspondence mails to the remotest location in the country. Maintaining such an extensive infrastructure for storage and handling of packages to be shipped is a very costly aspect for the company. Moreover, the company has a very large employee resource. The work force of the company requires huge investment. USPS provides for its workforce’s health benefit programs and retirement investment plans. The company’s huge work force has been draining its resources in contrast to the stagnant revenue generation.

        The company has the largest vehicle fleet in the world that requires huge running cost. USPS must invest in marketing research and come up with better and efficient operation strategy to lower its operation cost in the industry, and, at the same time, increase in its market share. Resorting to customer segmentation and extensively studying customers’ needs would enable the company to efficiently adjust the marketing mix levers – Product, Place, Promotion and Price.

        USPS can expand in the global market and invest in aircraft carriers to diversify its product mix, taking advantage of the Ansoff’s strategic opportunity matrix. Investment in flight carriers is going to not only reduce USPS’s dependence on its competitors, but also add to its revenue generation. Contracting with the key competitors leads to cash outflows, thus enriching the competitors, while investment on aircraft carriers leading to taking up assignment for other key players would lead to cash inflows.

Business Mission Statement

        The company USPS is in parcel delivery service since ages, but recently the company is faced with many challenges with the advent of technological revolution in the field of internet, mobile phone and mobile applications. USPS must invest in technological development to speedy its delivery process that would result in customer satisfaction. The company must diversify its product mix to add to the advantage of its consumers. Providing a speedy delivery and, at the same time, at an effective cost would position its service in the market as a reliable and an economically viable option available to the consumers. Request customers for their feedbacks and evaluate them for the shortcomings in the services delivered and rework on the company’s strengths, overcoming its weaknesses. The company must look for opportunities to expand its business model, not only in the domestic market but also in the international market.

        The company must invest in marketing research to optimize its operation strategy. More effective the business operation is in the industry, more competitive the pricing can be in the market. Lesser the price charged for the service provided, more is the value added to the service for customer satisfaction.         

Customers

        Currently USPS has the mission to provide the American population with trusted and universal postal service delivery service at an affordable price. USPS has been granted a statutory monopoly on the delivery of first-class mail. USPS has the restricted access to mailboxes in the country. USPS’s competitors – FedEx and UPS – are not allowed to carry non-urgent mails. At the same time, USPS doesn’t accept big parcels.

        USPS’s customer base includes households and individuals, who send their correspondence mail to any remote location in the country. Many business firm and organization exploit USPS’s mail delivery service for sending their advertisement mailers. The company is also known to deliver monthly bills. With the advent of internet technology and paperless, e-bills, the correspondence mailing industry is facing a steep decline in that customer base. Educational institutions and online retailers rely on USPS to deliver their parcel. With an increase in online retailing, parcel delivery industry can capitalize on such opportunities to expand their services and increase their revenue generation.

        Military Postal Service Agency is an extension of USPS. They cater to mailing service needs of department of defense personnel and their family members. When such defense personnel are internationally based, USPS partners with other agencies to meet their needs. US military is dependent on USPS for moving its mails.        

Competition
        The government agency providing mail and parcel delivery services, USPS is faced with fierce competition from private players in the mailing business: FedEx, UPS, DHL and many other small players. FedEx, over the years, has emerged in the market with a very strong brand image. FedEx is positioned amongst the consumers as offering time certain deliveries. Because of their increased expense on their brand promotion, they have expanded their operations over the years. FedEx is not only a competitor in providing its express mail delivery services, but it is also a leader in providing the services of its aircrafts to carry freights.

        Besides FedEx, UPS – United Parcel Service – is the other major player that gives good competition to USPS. UPS excels in global delivery and carrier of parcels. The huge revenue, generated from its global operation, is used to make it a more integrated and efficient player in the market. Another major direct competitor, in the international market, to USPS is the German provider of logistic solutions – DHL. DHL has a diversified business model. They operate via air, ocean and land in their delivery services. They have the potential to expand through contracts and to launch new services in the market.

        With the advent of digital media and various smart-phone technologies, and accessibility of internet, the notion of people writing letters in print or handwriting has become an obsolete trend. Since there is no need of mailing services to drop an addressed envelope in people’s mailboxes, the mailing industry, as a whole, has suffered a huge loss in its market share or revenue generation opportunities. Therefore, the new technology and internet have proven to be indirect competitors, restricting the revenue of the parcel delivery industry.