The SWOT analysis

The United States Postal Service established its operations in 1971 as an “independent establishment of the executive branch of the Government of the United States. ” Its mission is to provide universal mail service at a fair price. The company operates primarily in the domestic market; international operations account for only 3% of the total revenue. The company delivers mail to over 149 million delivery points. It currently accounts for almost 37,000 locations, employs over 765,000 people (third largest employer in the country) and possesses a fleet of over 215,000 vehicles.

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The company offers two types of services: mailing (89% of revenues) and shipping (11% of revenues). It holds a monopoly for its mailing division; the company’s main competitors in the shipping division are FedEx and UPS. For the fiscal year that ended in September 2008, the company produced operating revenue of $74. 9 billion (up from $74. 7 billion in 2007). Operating expenses totaled $77. 7 billion resulting in a net loss of $2. 8 billion. The company processed an average 667 million pieces of mail per day during the year (down from an average of 705 million pieces during 2007).

In this paper we are going identify the strengths, weaknesses, opportunities and threats that the USPS faces as a company. This is known as the SWOT analysis , in which we evaluate the internal and external factors that are favorable and unfavorable to a company and then determine what the company can do in order to grow in the future. Strengths United States Postal Service is without a doubt the most recognizable provider and the undisputable leader of the mailing industry. They effectively deliver more than 212. 2 billion pieces of mail every year. Additional services include packages, passports, and Money Orders.

Selling of boxes, envelopes and additional merchandise at all of its locations has also contributed to the increased earnings of the business. The biggest advantage over its major competitors like UPS and FedEx is the fact that in addition to the 37,000 post offices and the 623 processing centers, every household of the country has a mailbox outside of the property that is serviced exclusively by USPS. They currently service a total of 300 million addresses and add about 1. 8 million additional addresses every year, with a daily service of more than 9 million customers.

This immense reach gives USPS one the most profitable opportunities to also reach companies interested in advertisement. Their strong infrastructure also includes one of the largest fleet of vehicles in the US with a total of 219,522 vehicles. Including some alternative fuel vehicles that have been recently added in order to reduce cost and help improve the environment. USPS has incorporated cutting edge technology software that very efficiently stores and analyzes all the information and security of the business. It helps locate, track, and analyzes the information entered at any given time in order to measure the company’s performance.

USPS has one of the world’s largest e-mail systems, delivering more than 9 million emails daily with an average delivery time of fifteen seconds. They work with innovative companies to design web based services and creates new mail applications. The company intranet connects more than 28,000 locations to critical business systems twenty four hours a day for 365 days of the year. A service storing a total of 2 pet bytes of data, an equivalent to 4,000 years of songs played on an mp3 player without stop or repetition of any song. The Standard Mail section of the company is the strongest and most revenue producing segment of the company.

They have recorded a strong performance for the last five years and accounts for 37% of the total revenues every year. The Standard mail is typically used for bulk advertisement to multiple delivery addresses. USPS offers the advantage to reach a very specific area to be targeted since it can be divided from a single household, street, block, neighborhood, and zip code to all of the households of the country. The USPS in order to control the resources used to deliver any output including labor, materials, transportation and capital deployed has implemented the TFP indicator software.

It measures the relationship between resources and outputs. Since its implementation, TFP has helped the company lower the expenses a total of 12. 8% which is equivalent to a total of $1. 2 billion dollars annually. In a further attempt to improve efficiency, USPS is developing more flexible logistics networks by creating Surface Transfers Centers to expand transportation surface reach. USPS is also creating partnerships with the additional mailing providers like FedEx. They now distribute most of the rush services, and in exchange they transport FedEx packages.