External Industry Analysis Market Demographics Considerations Macroenvironment: The target market is anyone in the world who needs to ship an item. The Christmas season is a particularly busy time for shipping items around the world, while people need a company like UPS to make the delivery for them. Economic: Gasoline prices, along with rising energy prices, are the main concern. Jet fuel prices are at $2.80 a gallon! However, many people would rather have the items shipped than spend money on gas to go buy the item. Legal: International express services may be delayed by government policies and restrictions which may include anti-competitive practices of government-owned or licensed monopolies, licensing requirements, customs procedures, restrictions on access to aviation markets, restrictions on access to land transport systems and restrictions on foreign investment. Socio-culture: The economy is really bad right now, so a lot of people don't have extra money to make much of online shopping, and companies don't sell as much, so they don't need to ship as much. Global: The volume of packaging shipments around the world is increasing due to global trade, e-commerce and changes in supply chain management. Technological: The Internet has expanded the reach of direct marketing. Industry Analysis: Dominant Features: With globalization, shipping is now a major priority for businesses and many individuals, especially those who use the Internet to make a lot of purchases. Driving forces: globalization and the Internet, along with Christmas. The competitive forces are: The biggest competitor is Fed Ex, and they cannot be compared. UPS achieved 2.5 times the volume through its sophisticated delivery machine. Industry Rivalry (Porter's Five Forces): Real threat posed by new entrants: Fed Ex, DHL and TNT have capacity in some regions on par with UPS, but new entrants are unlikely to build such a wide infrastructure worldwide, and then bear the costs of trying to steal shares from these consolidated networks. Real Threat of Substitute Products or Services: High customer satisfaction achieved through conscientious drivers, high reliability, and Internet-based tools has kept UPS on top. UPS has created an economic advantage by assembling a dense, integrated global shipping network that is unlikely to be matched by a few global players. Bargaining Power of Suppliers: The suppliers who supply the boxes and bags will most likely sell the products in bulk, this is an economy of scale and allows UPS to sell them at a cheaper price. Bargaining power of buyers: Businesses can buy in bulk and get a cheaper rate.