UPS in India-A

Package Deal?
Group-02
Kewal Krishna Bhoi (15PGP025)
Prabina Kumar Meher (15PGP095)
Mohit Rai (15PGP132)

United Parcel Service

Presence in more than 200 countries
Alliance with Jet Air and AFL limited in India
DHL-Blue Dart Major competitor with huge
market share
Increasing Earnings/Revenue ratio
Huge Cash in hand
Among top-15
companies

Worlds

Most

Respected

Among Top-10 Global Logistics company

Worlds Largest Package

Delivery Company
Started in 1907 in Seattle.
2010 Annual Revenue $49.545 billion
Reaches 4 Billion people in more than 200
countries/territories worldwide
Every address in the United States
Common Carrier Rights
UPS Airlines
Largest IPO to date
Synchronized commerce
Hub & Spoke Model

India mania
12th Wealthiest nation in the world
Annual GDP growth rate of more than 7%
High population of English Speakers
Attractive policy changes (Foreign Trade Policy & SEZ Act)
Growing purchasing power and per capita income
Logistics industry to grow at an annual rate of 15-20 %
74% FDI allowed in cargo carriers
Major issues- Land Acquisition, Developing Infrastructure,
Environmental Clearances
Highly influenced by global oil prices
Cargo Carriers
Air-19%
Ocean-19%
RailRoad- 62%
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India mania
More than 7500 Railway stations
Rairoads carry Million tons of freight everyday
High sales tax on ATF and High Airport Charges
Increased demand for integrated logistics
Lack robust internet infrastructure
Expected growth in Internet Shopping
10% of Revenue towards USO Fund

Industry Analysis
Low
Threat of
New
Entrants

High

Bargaining
power of
Suppliers

Bargaining
Power of
Buyers

Competitive
Rivalry

High

High

Threat of
Substitute

Low
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SWOT Analysis
Global Brand
Intense experience as low cost
Logistics Provider
Strong Global Network

2nd mover
Low domestic penetration
Weak Partnerships
Weak Distribution Network

Strengths

Weakness

Opportunity

Threat

Fairly Growing Indian Market

Emerging online Shopping
Expected Deregulation in Oil
Prices

Fairly regulated oil prices

Intense Competition with Strong
DHL Presence
Potentially slowing US economy

Proposed Options to UPS

Investment in Infrastructure through SEZ channel
Acquisition or Alliance with GATI
Organic Growth with intensive Advertisements

Investment in Infrastructure Development

Development of Warehousing & Large Distribution Centers with SEZ route

Advantage

Tax Benefits from Tax Holidays

Major Growth Driver for Industry

Can create more business opportunities from expected growth in e-commerce

Disadvantage
Requires huge investment
May fail to fulfill business objective with changing regulations

Acquisition or Alliance with GATI

Advantage

Increase in market share and UPS Visibility

Highly penetrated distribution network

Deep network & domain knowledge

Access to other distribution and Supply chain Solution

Business

Help in competing against existing market leader

Disadvantage
High cost of acquisition
Cultural & Business difference
Very less operating margin & business control in
alliance

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Organic Growth with Intensive Advertisement

Advantage
Increase in market share with positive brand
image
Comparatively Less investment requirement
No cultural & Business hurdle
Disadvantage
Slow market share gain
Lack of infrastructure to provide its wide
range of services
Weak distribution and market coverage
Weak Internet penetration

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Recommendation
Acquisition or Alliance with GATI
Why?
Less investment at risk
Access to local network
domain knowledge
Access
to
existing
infrastructure & network

&

GATI

Can help in easily taking up with

rising competition from DHL and
numerous small 3PL players
Can benefit from synergies
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Questions?

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