Ups Case Study

Eastern University

Managerial Finance

UPS's IPO Case Study

Eric Burnley, Shaohua Yan, Mengning Zhu

UPS was founded in 1907 in Seattle, Washington. It is the world's largest package delivery company and a leading global provider of specialized transportation and logistics services. On November 10, 1999, UPS offered shares of its stock to the public for the first time. This initial public offering strengthened UPS by giving the company the ability to use a publicly traded security to make strategic acquisitions in important markets around the world. The offering of UPS looked likely to be the largest IPO in United States history.

In my point of view, in the delivery industry time is the biggest success factor. UPS is offering a two-day service between major cities that called Blue Label Air so customers can get their package very fast. As the world largest parcel delivery company in the world and over 13 million packages delivered each business day, UPS has enough money to invested in technology and develop its computer systems. For the customer, the biggest concern is their package information, UPS’s strong computer systems had ensured to UPS customers and excellent service, so the customers can get their package location information easily. For example, in order to collect and track more than 200 data elements for per package that they shipped, UPS build their IT network and database, and they did very well because UPS has more than 13 million packages delivered each business day, that is a huge data supporter.

In the package delivery industry, UPS has some strong competitors, they also doing very in the delivery. To compete for customers, the big companies in the package delivery industry start a price war, they pushing prices down is the major risk for UPS. UPS is a global package delivery company, so the political is another risk factor that the UPS must have to consider, such as the tariff, retaliation, and protectionism.

UPS’s performing very...