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United States Postal Service - 2009Case Notes Prepared by: Dr. Mernoush anton

Case !uthor: Dr. "red David and Dr. "orest David

A. Case Abstract

USPS Corporation #$$$.USPS.co%& is a co%prehensive strate'ic %ana'e%entcase that includes the co%pany(s )iscal year-end Septe%ber 20* 200+ )inancialstate%ents* co%petitor in)or%ation and %ore. ,he case ti%e settin' is the year2009. Su))icient internal and eternal data are provided to enable students toevaluate current strate'ies and reco%%end a three-year strate'ic plan )or theco%pany. ,he Postal Service !ct o) 9/9 trans)or%ed the Post ))iceDepart%ent into the United States Postal Service* an independent establish%ento) the eecutive branch o) the 'overn%ent o) the United States. ,he Postal

1eor'aniation !ct re3uired that the 'overn%ent a'ency be sel)-supportin'.,his $as achieved in 9+2* and the postal services have been )ree )ro% tapayersupport since then.

B. Vision Statement #!ctual&

ur vision o) the )uture be'ins $ith a stron' )oundation. 4e $ill continue tostren'then our core operations and services* balancin' an i%%ediate and ur'entneed to reduce costs $ith a continued co%%it%ent to strate'ies such as5ntelli'ent Mail6* $hich are essential to our )uture. 4e $ill be 'uided by oneprinciple: $e eist to serve our custo%ers. ,his vision is our co%%it%ent toensurin' a vital Postal Service )or )uture 'enerations. ur vision rests on three%a7or strate'ies: #& "ocus on $hat %atters %ost to custo%ers. #2& 8evera'e ourstren'ths to create custo%er value and pro)its to invest in continuedi%prove%ent. #& %brace chan'e in the $ay $e respond to e%er'in' custo%erneeds and a rapidly evolvin' business environ%ent.

Vision Statement #Proposed&

,o be the )irst choice in postal and courier service to our custo%ers.

C. Mission Statement #!ctual&

,o provide every household and business across the United States $ith theability to co%%unicate and conduct business $ith each other and the $orldthrou'h pro%pt* reliable* secure and econo%ical services )or the collection*trans%ission* and delivery o) %essa'es and %erchandise.

Copyri'ht ; 20 Pearson ducation* 5nc. publishin' as Prentice

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Mission Statement#Proposed&,o provide the %ost superior* reliable and a))ordable %ail service to allpatrons #* 2* * =& throu'h our easy access locations or via hi'hlyadvanced and %ost updated $eb site #>&. 4ith our dedicated e%ployees#9&* $e continue to 'ro$ and be pro)itable #?* /&. 4e strive to have a

positive i%pact to everyone across the United States #+&.

. Custo%er2. Products or services. Mar@ets>. ,echnolo'y?. Concern )or survival* pro)itability* 'ro$th/. Philosophy=. Sel)-concept+. Concern )or public i%a'e9. Concern )or e%ployees

D. External Audit

CPM Competitive Profile Matrix

USPS UPS edEx

Critical Success actors!ei"#

t$atin

"!ei"#ted Score

$atin"

!ei"#ted Score

$atin"

!ei"#tedScore

!dvertisin' 0.0+ 2 0./ 0.2> > 0.2

,op Mana'e%ent 0.0/ 0.0/ 2 0.2 > 0.2>Custo%er Service 0.09 2 0.+ 0.2= > 0./,echnolo'ical

!dvances 0.09 2 0.+ 0.2= > 0./5nternational Mar@etSales 0.0= 0.0= 0.2 > 0.2+

Alobal pansion 0.0+ 0.0+ 0.2> > 0.2

"inancial Position 0.0= 2 0.> 0.2 > 0.2+

Custo%er 8oyalty 0.0 2 0.20 0.0 > 0.>0

Mar@et Share 0.09 2 0.+ 0.2= > 0./

Product Buality 0.09 2 0.+ 0.2= > 0./Mar@etin' 0.0+ 2 0./ 0.2> > 0.2

Price Co%petitiveness 0.0 > 0.>0 2 0.20 0.0

%otal &.'' &.(( ).*+ ,.('


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-pportunities. n avera'e* the co%petitors are %ore epensive in services they o))er

co%pare to USPS2. Aovern%ental control o))ers the ability to 'et etra )undin' as needed. More consu%ers are shoppin' online )or 'oods and services

>. Aro$in' pac@a'e delivery to international %ar@ets?. Creatin' 7oint venture $ith popular eCo%%erce shoppin' sites such aseay* !%aon* verstoc@* and %any others

/. pansion into %ar@ets such as urope* S. !%erica* China and apan=. "or% 7oint venture $ith "ed and UPS to areas that USPS does not

deliver currently

%#reats. 4ea@ econo%y has i%pacted %any businesses and consu%ers due to

do$nsiin' and cut bac@s2. 1ise in )uel and 'asoline prices has i%pacted businesses and consu%ers

ne'atively* resultin' in cuttin' bac@ in spendin' %oney on posta'e andpac@a'e delivery. %ail has replaced sendin' letter* cards and other docu%ents>. nline bill pay and receivin' bills and state%ents electronically have

caused a %a7or drop in posta'e usa'e?. Co%petitors have a %ore advanced and user )riendly $eb site that attracts

businesses and consu%ers/. Co%petitors have struc@ deals $ith popular businesses and retailers )or

usin' their services $hen shippin' %erchandise

External actor Evaluation EE/ Matrix

0e1 External actors !ei"#t $atin" !ei"#tedScore

-pportunities

. n avera'e* the co%petitors are %oreepensive in services they o))er co%pare toUSPS

0.0+ 2 0./

2. Aovern%ental control o))ers the ability to 'etetra )undin' as needed

0.0= > 0.2+

. More consu%ers are shoppin' online )or

'oods and services

0.09 0.2=

>. Aro$in' pac@a'e delivery to international%ar@ets

0.09 0.09

?. Creatin' 7oint venture $ith populareCo%%erce shoppin' sites such as eay*

!%aon* verstoc@* and %any others

0.0/ 0.+


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/. pansion into %ar@ets such as urope* S.!%erica* China and apan

0.09 2 0.+

=. "or% 7oint venture $ith "ed and UPS toareas that USPS does not deliver currently

0.0= 0.2

%#reats

. 4ea@ econo%y has i%pacted %anybusinesses and consu%ers due todo$nsiin' and cut bac@s

0. 2 0.2

2. 1ise in )uel and 'asoline prices has i%pactedbusinesses and consu%ers ne'atively*resultin' in cuttin' bac@ in spendin' %oneyon posta'e and pac@a'e delivery

0.09 0.09

. %ail has replaced sendin' letter* cards andother docu%ents

0. 0.

>. nline bill pay and receivin' bills and

state%ents electronically have caused a%a7or drop in posta'e usa'e

0.0 0.0

?. Co%petitors have a %ore advanced and user)riendly $eb site that attracts businesses andconsu%ers

0.0= 2 0.>

/. Co%petitors have struc@ deals $ith popularbusinesses and retailers )or usin' theirservices $hen shippin' %erchandise

0.0+ 2 0./

%otal &.'' ).'2

Positionin" Map


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E. 3nternal Audit

Stren"t#s. Non-auto%ation presort and "irst Class 5nternational letters eperienced

increases in volu%e2. Dependent on 'overn%ent )or additional )undin' i) needed. Drop in )ield and career e%ployees could help reducin' the operatin'

epenses #hibit &>. Deliveries to %ore than >0 %illion addresses every day?. USPS is the $orld(s leadin' provider o) %ail and delivery services* o))erin'

so%e o) the %ost a))ordable posta'e rates in the $orld/. n-ti%e delivery o) )irst class %ail reached record levels in 200+=. 5n ctober 200+* USPS published ision 20* a )ive-year strate'ic plan*

coverin' the period 2009 to 20

!ea4nesses. "irst Class Mail revenue decreased E22/ %illion* or 0./ percent* $hile

volu%e decreased by >./ billion pieces* or >.+ percent* in 200+2. Decline in sin'le-piece "irst Class letters* $ith a decrease o) over billion

pieces o) %ail. ,he lon' ter% in sin'le-piece volu%e continued to decline* due to the

i%pact o) electronic diversion as businesses* nonpro)it or'aniations*


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'overn%ents* and households continue to %ove their correspondence andtransactions to electronic alternatives* such as 5nternet bill pay%ent*auto%atic deduction* and direct deposit #hibit =&

>. ?2 %illion dollars )ro% 200= to 200+=. USPS co%pleted )iscal year 200+ endin' Septe%ber 0 $ith a net loss o)

E2.+ billion+. Mail volu%e in 200+ totaled 202.= billion pieces* a decline o) 9.? billion

pieces* or >.? percent* )ro% 200=9. 0.2>

n-ti%e delivery o) )irst class %ail reachedrecord levels in 200+

0.0= > 0.2+

5n ctober 200+* USPS published ision 20*

a )ive-year strate'ic plan* coverin' the period2009 to 20

0.0? 0.?

!ea4nesses

"irst Class Mail revenue decreased E22/%illion* or 0./ percent* $hile volu%e decreasedby >./ billion pieces* or >.+ percent* in 200+

0.0/ 0.0/


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Decline in sin'le-piece "irst Class letters* $itha decrease o) over billion pieces o) %ail

0.0? 2 0.

,he lon' ter% in sin'le-piece volu%econtinued to decline* due to the i%pact o)electronic diversion as businesses* nonpro)it

or'aniations* 'overn%ents* and householdscontinue to %ove their correspondence andtransactions to electronic alternatives* such as5nternet bill pay%ent* auto%atic deduction* anddirect deposit #hibit =&

0.0? 0.0?

?2 %illion

dollars )ro% 200= to 200+

0.0/ 0.0/

USPS co%pleted )iscal year 200+ endin'Septe%ber 0 $ith a net loss o) E2.+ billion

0.0? 0.0?

Mail volu%e in 200+ totaled 202.= billionpieces* a decline o) 9.? billion pieces* or >.?percent* )ro% 200=

0.0> 0.0>

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. Drop in )ield and careere%ployees could helpreducin' the operatin'epenses #hibit &

>. Deliveries to %ore than

>0 %illion addressesevery day?. USPS is the $orld(s

leadin' provider o) %ailand delivery services*o))erin' so%e o) the%ost a))ordable posta'erates in the $orld

/. n-ti%e delivery o) )irstclass %ail reachedrecord levels in 200+

=. 5n ctober 200+* USPSpublished ision 20* a)ive-year strate'ic plan*coverin' the period2009 to 20

billion pieces o) %ail. ,he lon' ter% in sin'le-

piece volu%e continuedto decline* due to thei%pact o) electronic

diversion as businesses*nonpro)it or'aniations*'overn%ents* andhouseholds continue to%ove theircorrespondence andtransactions toelectronic alternatives*such as 5nternet billpay%ent* auto%aticdeduction* and direct

deposit #hibit =&>. ?2 %illion

dollars )ro% 200= to200+=. USPS co%pleted )iscal

year 200+ endin'Septe%ber 0 $ith a netloss o) E2.+ billion

+. Mail volu%e in 200+totaled 202.= billionpieces* a decline o) 9.?billion pieces* or >.?percent* )ro% 200=

9.

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%illion* a .9 percentincrease over 200=

-pportunities S5- Strate"ies !5- Strate"ies

. n avera'e* the

co%petitors are %oreepensive in servicesthey o))er co%pare toUSPS

2. Aovern%ental controlo))ers the ability to 'etetra )undin' as needed

. More consu%ers areshoppin' online )or'oods and services

>. Aro$in' pac@a'e

delivery to international%ar@ets?. Creatin' 7oint venture

$ith populareCo%%erce shoppin'sites such as eay*

!%aon* verstoc@*and %any others

/. pansion into %ar@etssuch as urope* S.

!%erica* China and

apan=. "or% 7oint venture $ith"ed and UPS toareas that USPS doesnot deliver currently

. Aet additional )unds

)ro% the 'overn%ent byreplacin' old andoutdated e3uip%ent*%achinery* truc@s andauto%obiles $ith a %oreeco )riendly* )uele))icient ones #2* ?*S?* S/&

. 5%prove the $eb site

$ith better technolo'yand %a@e the site user)riendly and then 7oin)orces $ith pri%aryonline %erchants suchas eay* !%aon and%any others )or onlinepay%ent processin'#* 2* * >* ?*42* 4+&

2. pand to international

%ar@ets such as apan*China* urope and S.!%erica #4* 42* >*/&

%#reats S5% Strate"ies !5% Strate"ies

. 4ea@ econo%y hasi%pacted %anybusinesses andconsu%ers due to

do$nsiin' and cutbac@s2. 1ise in )uel and 'asoline

prices has i%pactedbusinesses andconsu%ers ne'atively*resultin' in cuttin' bac@in spendin' %oney on

. Cut bac@ on Saturday%ail delivery #S?* S/*,2* ,* ,>&

2. 1educe bene)its and cut

additional labor )orce by?G #S* S* S?* S/* ,2*,&

. Develop a ne$ %ar@etin'and pro%otional plan byo))erin' discount i) onlineservices are used throu'hUSPS.co% #4* 4>* 4+*49* 40* ,* ,2&

2. 1educe %ail delivery )ro% /to ? days a $ee@ #4* 42*4* 4/* 4+* 49* 40* ,2*,* ,>&


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posta'e and pac@a'edelivery

. %ail has replacedsendin' letter* cardsand other docu%ents

>. nline bill pay andreceivin' bills andstate%entselectronically havecaused a %a7or drop inposta'e usa'e

?. Co%petitors have a%ore advanced anduser )riendly $eb sitethat attracts businessesand consu%ers

/. Co%petitors have struc@deals $ith popularbusinesses and retailers)or usin' their services$hen shippin'%erchandise


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6. SPACE Matrix

inancial Stabilit1 S/ Environmental Stabilit1 ES/

1eturn on 5nvest%ent Une%ploy%ent -2

8evera'e ? ,echnolo'ical Chan'es ->

8i3uidity 2 Price lasticity o) De%and -2

4or@in' Capital / Co%petitive Pressure -

Cash "lo$ / arriers to ntry -/

inancial Stabilit1 S/ Avera"e +.+ Environmental Stabilit1 ES/ Avera"e 5,.+

Competitive Stabilit1 CA/ 3ndustr1 Stabilit1 3S/Mar@et Share -/ Aro$th Potential Product Buality - "inancial Stability 2Custo%er 8oyalty -> ase o) Mar@et ntry 2Co%petition(s Capacity Utiliation - 1esource Utiliation ,echnolo'ical Hno$-

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Competitive Stabilit1 CA/ Avera"e 5+.) 3ndustr1 Stabilit1 3S/ Avera"e &.+

I-ais: "S J S K >.> J #-.>& K .0L-ais: C! J 5S K #->.2& J #.>& K - 2.+

7. 6rand Strate"1 Matrix

. 1etrench%ent2. 1elated diversi)ication. Unrelated diversi)ication>. Divestiture?. 8i3uidation


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3. %#e 3nternal5External 3E/ Matrix

%#e 3E %otal !ei"#ted Score

Stron'.0 to >.0

!vera'e2.0 to 2.99

[email protected] to .99

0.2

2. Aovern%ental control o))ers the ability to 0.0= --- --- --- ---


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'et etra )undin' as needed

. More consu%ers are shoppin' online )or'oods and services

0.09 0.09 > 0./

>. Aro$in' pac@a'e delivery to international%ar@ets

0.09 --- --- --- ---

?. Creatin' 7oint venture $ith populareCo%%erce shoppin' sites such as eay*!%aon* verstoc@* and %any others

0.0/ 0.0/ > 0.2>

/. pansion into %ar@ets such as urope* S.!%erica* China and apan

0.09 --- --- --- ---

=. "or% 7oint venture $ith "ed and UPS toareas that USPS does not deliver currently

0.0= 2 0.> > 0.2+

%#reats

. 4ea@ econo%y has i%pacted %anybusinesses and consu%ers due todo$nsiin' and cut bac@s

0. --- --- --- ---

2. 1ise in )uel and 'asoline prices has

i%pacted businesses and consu%ersne'atively* resultin' in cuttin' bac@ inspendin' %oney on posta'e and pac@a'edelivery

0.09 > 0./ 0.09

. %ail has replaced sendin' letter* cardsand other docu%ents

0. --- --- --- ---

>. nline bill pay and receivin' bills andstate%ents electronically have caused a%a7or drop in posta'e usa'e

0.0 --- --- --- ---

?. Co%petitors have a %ore advanced anduser )riendly $eb site that attractsbusinesses and consu%ers

0.0= > 0.2+ 2 0.>

/. Co%petitors have struc@ deals $ith popularbusinesses and retailers )or usin' theirservices $hen shippin' %erchandise

0.0+ 0.0+ 0.2>

%-%A< &.'' &.'( &.=2

Stren"t#s

. Non-auto%ation presort and "irst Class5nternational letters eperienced increasesin volu%e

0.0= --- --- --- ---

2. Dependent on 'overn%ent )or additional)undin' i) needed

0.0= --- --- --- ---

. Drop in )ield and career e%ployees could

help reducin' the operatin' epenses#hibit &

0.0/ 0.+ 2 0.2

>. Deliveries to %ore than >0 %illionaddresses every day

0.0+ 0.0+ > 0.2

?. USPS is the $orldFs leadin' provider o) %ailand delivery services* o))erin' so%e o) the%ost a))ordable posta'e rates in the $orld

0.0/ 0.0/ 0.+

/. n-ti%e delivery o) )irst class %ail reached 0.0= 2 0.> > 0.2+


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record levels in 200+

=. 5n ctober 200+* USPS published ision20* a )ive-year strate'ic plan* coverin'the period 2009 to 20

0.0? --- --- --- ---

!ea4nesses

."irst Class Mail revenue decreased E22/%illion* or 0./ percent* $hile volu%edecreased by >./ billion pieces* or >.+percent* in 200+

0.0/ > 0.2> 0.0/

2. Decline in sin'le-piece "irst Class letters*$ith a decrease o) over billion pieces o)%ail

0.0? 0.? 0.0?

. ,he lon' ter% in sin'le-piece volu%econtinued to decline* due to the i%pact o)electronic diversion as businesses*nonpro)it or'aniations* 'overn%ents* andhouseholds continue to %ove their

correspondence and transactions toelectronic alternatives* such as 5nternet billpay%ent* auto%atic deduction* and directdeposit #hibit =&

0.0? --- --- --- ---

>. ?2%illion dollars )ro% 200= to 200+

0.0/ > 0.2> 2 0.2

=. USPS co%pleted )iscal year 200+ endin'Septe%ber 0 $ith a net loss o) E2.+ billion

0.0? 0.? 2 0.

+. Mail volu%e in 200+ totaled 202.= billionpieces* a decline o) 9.? billion pieces* or >.?percent* )ro% 200=

0.0> > 0./ 0.2

9.

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consu%ers are s$itchin' )ro% %ail to e-billin'. cept retailers* %ostbusinesses are closed on Saturday and Sunday. !ccordin'ly* i) the %ailis delivered Monday throu'h "riday* USPS can save billions o) dollars inoperational costs epenses )ro% utility* )uel* salary and %any otherepenses. ,he branches should re%ain open )or patrons on Saturdays

hal) days as they have been in the past.

* and the actual nu%ber $ascon)ir%ed yesterday. ,he nu%ber o) 5ntelli'ent Mail "ull Service %ailersincreased to =* a /0 percent increase )ro% %id-Dece%ber. ,o date*5ntelli'ent Mail "ull Service has 'enerated E billion in revenue.

,he Postal Service receives no ta dollars )or operatin' epenses* andrelies on the sale o) posta'e* products and services to )und its operations.


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David Sm13e Cn 14