Assignment 1 - UPS

Yongzhe Wang

Introduction
UPS was formed in 1907, by 19-year-old Jim Casey. Originally, focused on delivering messages
in Seattle. Over the 98 years since its founding, it had transformed itself several times. The
corporate has earned $ 37 million till 2005 from its existences and became one of the ten largest
airlines. It is the worlds major package-delivery company which serving as a leader in
transportation and logistics industry in more than 200 countries. The company possesses 3,500
retail locations with 384,000 employees that make the process of package transportation very
easy for the customer. The company is based on the principle of centralization with a traditional
hierarchal structure followed by the higher management of the company. The senior management
with involving employees from different departments is performing priorities, investment
decisions, and innovation.
Context
The company makes strategic plans on two basic levels, one on the regional and the other on the
corporate level. However, provincial business units are not allowed to make decisions on
themselves. Currently, the company is facing a variety of difficulties that the company will
handle in its coming future. UPS is planning to develop a new technology that serves their
information system for its competitiveness in the market. However the company is putting its
efforts to tickle its strategic problem that repeatedly asks to grow UPSs air services business.
The CEO of United Parcel Services Michael Eskew wants to develop a strategic process through
which the company would remain competitive in the packaging supply and logistic industry. An
external strategic planning group has asked to prepare a strategic process, which ensures a
continuous transformation of the company as it has been performing since its existence over the
past several years. The company is performing this task along with an external organization by
evaluating vital processes of UPS. In this evaluation, the company does its strategic development
with the help of scenario forecasting procedures. In the scenario planning the company identifies
critical elements that includes the upgrading of companys licenses, strategic organization of
individual business entities along with their decision-making criteria and applications.

Q1. What are the strengths and weaknesses of scenario planning?

Scenario planning is a process that stimulates imaginative, creative thinking to better prepare an
organization for the future. It has been described as a way of rehearsing the future to avoid
surprises by breaking through the illusion of certainty. Scenario planning entertains multiple
possibilities because it investigates several uncertainties simultaneously.
Strengths
Insights are drawn from many sources, in most cases its internal company task, rich details are
being added to foreseen futures, it stimulates organizational learning.
Abundant details which beyond the constraints of quantitative models and includes contingencies
that are difficult to measure.
Develop a series of stories about plausible future states that take into account the dynamic
interactions between stakeholders, organization and its role in creating the future.
Multiple plausible scenarios are constructed to cover a range of limits of possibility of future
outcomes and uncertainties; diverse perspectives are taken into account.
System dynamics causal interactions are analyzed.
Determine long-term opportunities, uncertainties and risk factors in the contextual environment
of the organization.
Weaknesses
No consistency and logical causality scenarios will be just imaginative speculations and science
fiction.
Non-quantifiable Scenarios are non-quantifiable because of their nature descriptive.
There is always a room for considering dominant personality opinions or excluding individual
ideas and replacing them by group thinking, another problem could be perceiving current
conditions as future possibilities.
Possible lack of consensus due to different perspectives and participants opinions there might be
a problem with common conclusions and formulating shared strategy.
Q2. What is your evaluation of UPSs 1997 scenario planning exercise? Its Horizon 2017
planning exercise? How do the two compare?

UPSs 1997 scenario planning provided a common basis to allow investigating growth
opportunities and competitive strategies. It overall can be termed as success, although the
planning exercise was confusing as it would be difficult to say what would happen in the world.
It helped tremendously by allowing the company managers to think beyond the businessplanning horizon. It forced the company to answer several what-if questions and respond to
strategic threats.
The 2017 planning exercise was necessary for a future further. It was add-on to the1997 in the
sense that the basic framework was now laid out and one needed to adjust to newer realities.
Differences between these two scenario planning.
First, Eskew and the CSG decided to take the scenarios and implications deeper, to regional
levels as opposed to a single global picture.
Second, extensive interviews, perspective of academics, consultants and etc.
Third variation involved participants. As before, participants from operations were excluded.
Q3. What are the other key elements of UPSs approach to strategic planning? In particular,
what is your evaluation of:
a. UPS charter?
b. The Centennial Plan?
c. The Strategy Road Map?
a)

Charter is very customer-focused and is poised for success as it clearly articulates how UPS
makes their customers successful.

b)

Centennial plan provided the themes and broad over-arching direction. Four strategic
imperatives were defined:
Winning Team
Valued add solutions
Customer Focus
Enterprise Excellence

c)

The strategy roadmap provided took the four elements of the plan and came up with 100
distinct projects to implement the strategy.

Q4. Why was John McDevitt put in charge of strategic integration? Should he remain in
that role?
John McDevitt was put in charge because progress on some initiative seemed to have stalled. He
was considered by many to be the champion of strategy execution and had the necessary skills to
reach consensus. Without him, Esken would have been the only one to resolve issues at that
level.
I think he should remain in that role because there are different opinion about what was being
accomplished and how to get things done. Because one of the biggest weaknesses of scenario
planning is the possible lack of consensus due to different perspectives and participants opinions
there might be a problem with common conclusions and formulating shared strategy. So keep
John McDevitt in the role can make sure that all teams delivered on what they were being asked.
Q5. How does UPSs strategic planning process compare with the approach at your
organization?
Strategic Planning process at UPS is different from the companies I have worked at Huaze
Aluminum Corporation. I just know the main purpose of my old company is to become one of
the top mining industry corporations. But I dont the other part of scenario planning. I dont
know if there are other parts but just senior managers know or there is no other part at all. I
prefer that all the employees should know scenario planning.
Conclusion
Scenarios are possible views of the world, described in narrative form that provides a context in
which managers can make decisions. By seeing a range of possible worlds, decisions will be
better informed and a strategy based on this knowledge and insight will be more likely to
succeed. Scenarios do not predict the future, but they do illuminate the drivers of change:
understanding them can only help managers to take greater control of their situation.
Scenario planning is one of many foresight methodologies. It well develop and test across
government, business and education. Scenario planning also provides structured process for
people to start consciously thinking about the longer-term future and possible implications for
strategy today. A creative and shared process that allows time for reflection about the
organization and its future. Scenario planning strengthens a managers strategic management

toolbox which focuses on the future. It combining both the past the future makes thinking about
strategy and promotes more responsiveness, flexibility and competitive advantage. It allows a
shared view of the future to be developed and then provide the opportunity for an organization to
consider how it wants to position itself in that future. The major drivers of changes are social,
technological, economic, environmental and political.