Subject category:
Strategy and General Management
Published by:
Amity Research Centers
Length: 14 pages
Data source: Published sources
Topics:
Peripheral environment scanning; Turnaround strategies; Transformation challenges for government organisation; Downfall of USPS; The Postal Accountability and Enhancement Act; Core business model; Emergence of digital age; Planto profitability; Core business strategies; Surviving in financial difficulty; Innovative service offerings
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Abstract
The United States Postal Services (USPS), a preferred mail services provider across the US, had gained enormous repute in the mailing and shipping industry. The key businesses of USPS - Mailing services and shipping services, managed a total mail volume of 202.8 billion in 2002 which increased to 213.1 billion in 2006. At the same time, the annual revenues too increased to $72.2 billion in 2006 from a level of $66.4 billion in 2002. But, The Postal Accountability and Enhancement Act (PACA) in 2006 left the USPS with severe financial implications. As per the mandate, USPS was required to pre-fund the obligations under the retiree benefits in tune of $5.5 billion per year to fund a 75-year liability over a 10-year period. Meanwhile, the technological advancement and evolution of digital age, started threatening USPS’ core business ie; delivery. A net loss of $5,067 million in 2011, stunned many stakeholders of the USPS. To get back on the profitability track, USPS implemented various initiatives under the Plan to Profitability - a 5 Year Business Plan - and also chalked out Core Business Strategies. Through such initiatives, USPS, planned to save $19.6 billion and $20.8 billion in the year 2012 and 2013 respectively. How USPS revives its gloomy financial outlook in the wake of the digital age through its strategic initiatives remained to be seen.
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Abstract
The United States Postal Services (USPS), a preferred mail services provider across the US, had gained enormous repute in the mailing and shipping industry. The key businesses of USPS - Mailing services and shipping services, managed a total mail volume of 202.8 billion in 2002 which increased to 213.1 billion in 2006. At the same time, the annual revenues too increased to $72.2 billion in 2006 from a level of $66.4 billion in 2002. But, The Postal Accountability and Enhancement Act (PACA) in 2006 left the USPS with severe financial implications. As per the mandate, USPS was required to pre-fund the obligations under the retiree benefits in tune of $5.5 billion per year to fund a 75-year liability over a 10-year period. Meanwhile, the technological advancement and evolution of digital age, started threatening USPS’ core business ie; delivery. A net loss of $5,067 million in 2011, stunned many stakeholders of the USPS. To get back on the profitability track, USPS implemented various initiatives under the Plan to Profitability - a 5 Year Business Plan - and also chalked out Core Business Strategies. Through such initiatives, USPS, planned to save $19.6 billion and $20.8 billion in the year 2012 and 2013 respectively. How USPS revives its gloomy financial outlook in the wake of the digital age through its strategic initiatives remained to be seen.