Choosing partners
This global expansion, however, has hardly been from the ground up. Since 1999, UPS has made at least 25 acquisitions of supply chain and logistics companies domestically and worldwide. The best known of these domestic acquisitions is the one of the 3,000 Mail Boxes Etc. stores, which most franchisees have renamed "The UPS Store."
Eskew says all acquisitions must meet three criteria — the market must have the potential for growth; it has to leverage UPS skills such as its brand, technology, people or its information networks; and it has to fit UPS’s strategy.
"Our strategy, simply stated, is to enable global commerce," Eskew says. "If we think it takes our customers around the world, gives them touch, makes them more successful, lets them do more things, that’s our strategy. If those acquisitions meet all three of those guidelines, we’re in the market."
Putting a face on UPS in these new markets, however, requires different marketing campaigns. In March, Eskew unveiled a redesign of the company’s famous shield logo to go on the company’s vehicles, facilities and uniforms worldwide. And its latest advertising tagline — "What Can Brown Do For You?" — has been successful domestically, but is not used everywhere.
"Markets develop differently in different lands," Eskew says. "In some lands, domestic markets are not as important and not as developed as they are here in the U.S. In some countries, the express market is not as developed as it is here as in the U.S. On the other hand, in some countries, we may enter as a supply chain player. In terms of our brand, our brand plays great all over the world, but our commercials are tailored to the country."
Eskew estimates supply chain management is a $3 trillion business worldwide, compared with the relatively paltry $60 billion U.S. small package delivery market. So it’s no surprise that in the last decade, the UPS management team has diversified its services to include consulting and logistics, as well as a financing arm to fund supply chain projects for customers.
To support these new global initiatives, UPS has spent at least $1 billion a year for the last 15 years on technology, and Eskew says it will continue to do so. Its Web site, www.ups.com, is accessible in 21 languages and dialects, and contains dedicated content for 104 countries.
The result? Last year, operating profit more than doubled for the company’s international segment.
"It’s not just a trend, because it can’t be stopped," Eskew says. "In the last two years, we’ve seen horrible terrorism, a war and various health threats. And none of it has stopped world commerce. Global trade has kept moving forward."
