Strategic Analysis of the United States Postal Service: A Case Study

This case study presents an external audit of the United States Postal Service (USPS), an agency of the US Federal Government. The analysis includes a summary of the agency's advantages, such as its extensive reach and increasing demand for package delivery, and disadvantages, including labor union complexities and competition from UPS and FedEx. The study incorporates an EFE (External Factor Evaluation) Matrix and a CPM (Competitive Profile Matrix) to assess the USPS's strategic position. The EFE matrix evaluates factors like customer preferences and regulatory requirements, while the CPM compares USPS with UPS and FedEx across various performance indicators. The study also highlights the financial challenges faced by USPS, such as defaulting on health benefits and reliance on borrowing funds. The case study uses the strategic management framework to analyze the USPS's performance and strategic challenges.

Running head: CASE STUDY
Case Study
Name of the Student:
Name of the University:
Authors Note:

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CASE STUDY
External Audit for United States Postal Services (EFE and CPM):
USPS is an agency of the Federal Government of US. The agency is providing postal services
throughout the country at a uniform cost irrespective of geographic locations. On the basis of the
external audit of the agency the following points have been summarized.
Advantages:
 Comparing to the relatively less profitable mailing business UPS and FedEx operate in
most profitable segment of business, i.e. package business.
 UPS and FedEx will have to use the services of USPS to deliver the packages to the
customers due to the huge reach of the agency.

 The final delivery of packages made by the USPS gives the agency an opportunity to
directly interact with its customers.
 The demand for package delivery is increasing with every passing day due to the
revolution of online shopping.
 Ever increasing customers’ preference to receive post office boxes.
 The shipping packages have experienced modest increase in each of last three years.
Currently the shipping packages of the agency accounts for almost 18.5% of the total
revenue of the packages.
 The changes introduced by the management in 2000 to reduce the work hours have
resulted in huge savings in operation expenses. In fact the agency is able to reduce $21
billion in expenses in each year due to the reduction in work hours.
 The total value of buildings and equipment owned by the agency is around $44 billion.
 The agency is currently operating as per the five year strategic plan drafted in 2011.

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CASE STUDY
 The agency is well on its way to achieve the 13,000 part time rural post offices in all
across the country to improve its efficiency.
 The agency operates the largest vehicle fleet in all across the globe with 218000 vehicles
to reach each and every address within the country (David & David, 2017).

Disadvantages:
 There are number of labour unions within the agency, in fact 4 labour unions represent
the employees of the agency thus, introducing any changes is extremely difficulty within
the organization.
 UPS and FedEx are the top competitors in market and are fiercely competing with USPS
in the lucrative business of packaging.
 Ever increasing fuel pricing making it difficult for USPS as it operates with uniform cost
irrespective of geographic locations.
 At present the agency delivers mails in 142 million delivery points on each day. Thus,
the huge number of delivery points make the operations of the agency extremely
difficult.
 There are number of regulatory requirements that USPS has to follow is huge as
compared to minimum requirements needed to be followed by USP and FedEx. .
 Number of limitations imposed by the US Government on USPS binds the ability of the
agency to introduce new products and services whereas the same is not the case with
UPS and FedEx as government interventions are almost zero in these organizations.

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CASE STUDY
 The agency has defaulted in providing mandatory health benefits to the retired workers
with failure to pay the accrued $11.1 billion in 2012 when the agency suffered a loss in
excess of $15 billion.
 The agency does not received any support from the tax payers of the country as it does
not get any funds from the government for the services it provides to the citizens. Often
the agency borrows funds from US Treasury which increases the operating cost of the
agency (David & David, 2017).
EFE Matrix:
Advantages Weight Rating Weighted rating scale
Increasing
willingness of the
customers to received
post office boxes
instead of home
delivery
0.10 3 0.30
Increase demand for
packages with
revolution of online
shopping
0.15 4 0.60
Junk mail dislikes by
general customers
0.10 1 0.10

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CASE STUDY
Disadvantages Weight Rating Weighted rating
scale
4 labour unions 0.15 2 0.30
Rising cost of fuel 0.20 2 0.40
Heavy regulatory
requirements
0.10 2 0.20
Limitations imposed by
US Govt.
0.10 1 0.10
Competitive Profile Matrix (CPM):
Factors
influencing the
performance of
the agency
USPS UPS FedEx
Weights Rating Score Rating Score Rating Score
Marketing and
promotional
campaigns
0.20 2 0.40 3 0.60 3 0.60
Services provided
to customers
0.25 2 0.50 2 0.50 3 0.75

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CASE STUDY
Penetration of
market
0.15 1 0.15 3 0.45 3 0.45
Location of units 0.15 2 0.30 1 0.15 1 0.15
Loyalty of
customers
0.15 2 0.30 2 0.30 2 0.30
Price
competitiveness
0.10 2 0.20 2 0.20 2 0.20
Total 1.85 2.20 2.45

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CASE STUDY
References
David, F., & David, F. (2017). Strategic management (2nd ed., pp. 12-237). Harlow: Pearson
Education Limited.