Our USPS SWOT analysis examines the Strengths, Weaknesses, Opportunities, and Threats of the US postal service company as they maneuver in the new digital age.
Imagine living in 1922, a century back, with no phones and laptops. How would you communicate with your friend who lives in some other state of the US? The answer to this question is simple, through USPS, of course.
Some of you who have yet to use the postal service in the US might not know what USPS is. The USPS is a postal service in the US. It is an independent agency authorized by the US government to carry out postal operations across the US.
The USPS has been operating in the US for centuries. It has made the US grow over the years. The US post did carry out communication between individuals for the longest time possible.
It made communication possible in cities and rural areas. To understand better, think of USPS as the only email portal in the US. People used to use USPS for personal as well as professional communication.
The USPS was considered responsible, which is why the government also used to share documents via USPS. Although an alternative to postal service is now available in emails and text messages, USPS still has relevance, so today, we have decided to conduct a USPS SWOT analysis.
Jim Makos
Before proceeding to the SWOT analysis, you need to know the history of USPS.
The roots of USPS trace back to 1639, when the first post office was established in Boston. USPS experienced significant growth when Benjamin Franklin was appointed postmaster general in 1775.
He made USPS more efficient by cutting the delivery time. After a few decades, USPS set the first postal rate. According to these rates, 25 cents were required to send a letter anywhere within 450 miles radius.
The USPS achieved growth over the years and used railroads to deliver the mail in 1832 for the first time. Although using railroads for delivery reduced the delivery time significantly, the problem with railroads was that they only delivered mail wherever the train track was present.
To cover the rural areas in between, Pony Express was launched in 1860. The Pony Express consisted of horse-mounted riders who used to deliver mail between Missouri and California. Then, at the start of the 20th century, USPS introduced a parcel post delivery system that proved much more efficient.
USPS improved its operations significantly in the 20th century. For example, in 1950, the postal service introduced automatic letter sorters and facer-cancellers. Using this saved a lot of time and helped USPS deliver more mail daily.
The USPS kept on improving its service over the years. However, when the 20th century was ending, USPS launched its internet website in 1994. The internet revolutionized the operations of USPS.
In 2009, the posting service launched its iPhone app to facilitate its users. The app had various functions that made mailing more convenient for users. For example, customers could track their parcels via the USPS app.
Although digital communication increased in the coming years, USPS maintained the quality of operations, preventing its revenue from dropping. Therefore, if we analyze the revenue of USPS in the last two decades, it increased at a slow rate but didn't drop as such.
In 2022, the revenue of USPS was recorded at $78.5 billion. The USPS operates all over the US. It had 31,247 offices in the US that dealt with 128.9 billion mail in 2021. The USPS is a huge source of employment in the US. It provides employment to 516,316 career employees and 136,531 non-career employees.
Now that you must be fully aware of the operations of USPS let's quickly discuss what SWOT analysis is.
A SWOT analysis is a business technique used to analyze an organization's strengths, weaknesses, opportunities, and threats.
A SWOT template makes the readers understand what external and internal factors impact an organization's operations.
Now that we have also discussed the significance of SWOT analysis let's proceed and conduct a USPS SWOT analysis.
USPS Strengths
Strengths are the factors that consolidate the position of an organization in the market. They provide a competitive edge to them, which helps them attract new customers and grow in general. Now it's time to look at some of USPS's strengths.
Large-Scale Operations
Businesses try to increase the size of their operations, but that can only be done after a period of time. USPS has been operating in the market for centuries now.
USPS entered the market when no other postal service was available in the entire US. Over the years, the company grew, and now it carries out operations across the US. If you want to imagine the size of operations of the USPS, just know that last year the postal service dealt with 128.9 billion mail.
Such large-scale operations help the company generate large revenues, which benefits the company.
Highest Market Share
The prime objective of any business is to make a profit. Therefore, businesses always try hard to gain more market share to enjoy higher profits. USPS is one of the most renowned and reliable postal services in the US; this is why people trust USPS the most.
This trust of customers and the good reputation of the service has made USPS the postal service with the highest market share by volume in the US. In 2020, the market share of USPS was 32%, while all the other postal companies, such as FedEx, UPS, and Amazon Logistics, had lower market shares.
Large Net of Postal Offices
To gain customers, businesses need to have a vast geographical presence. USPS has the highest number of offices in the entire US. If we compare the number of USPS offices with FedEx offices in the US, we know that USPS has around 31,247 offices. On the other hand, FedEx has only 2,200 offices in the entire US.
This large net of offices helps the USPS attract more customers since they are more easily available.
USPS Weaknesses
You might see some large businesses and think they wouldn't have any weaknesses, but that's not true. Every business has some strengths and some weaknesses. In the previous section, we discussed the strengths of USPS. Now let's discuss some weaknesses of the postal service.
A large Number of Employees
Businesses always want to expand. However, when the operations expand, they have to hire more employees to carry out these operations. For example, USPS is a company that operates in all states of the US. Hence, they need a large workforce to operate.
USPS provides employment to 516,316 career employees and 136,531 non-career employees. These numbers seem good for the US economy but are not good for USPS. Such a vast workforce causes USPS's operational costs to rise, resulting in low profits.
No Geographical Presence Outside The US
Companies tend to move their operations abroad after gaining a significant domestic market share. For example, USPS doesn't have offices abroad, unlike FedEx. This stops the company from capturing international customers. As a result, the company fails to generate revenue by operating in countries other than the US.
The Election Controversy
Controversies are harmful to businesses since they can lead to a loss of customer base, which affects any business adversely. Recently, USPS was involved in a controversy that damaged the company's reputation and made people wonder if the company is inclined towards a certain political party.
Before the elections of 2020, some changes were made by the USPS that caused massive delivery delays across the US. As a result, even the lawmakers got worried if the ballots would reach on time or not. This damaged the reputation of the USPS since it always claimed to be the most efficient postal service in the US.
USPS Opportunities
Opportunities are the chances that are present for every organization to achieve success in the future. To become successful, businesses need to grab every opportunity they see. So let's look at what opportunities USPS has to grow.
Shift To Digitisation and Automation
Businesses all over the globe are shifting to digitization and automation to decrease their workforce and increase efficiency. By doing so, businesses' operational costs will reduce, and they can enjoy higher profits in the long run. Moreover, higher efficiency provides businesses with a competitive advantage.
USPS can embrace digitization and automation. This will help the company in laying off some of the employees. As a result, the operational cost of the company will decrease. Furthermore, it will increase the efficiency of the company.
Increasing Population of The US
As the years pass by, the population of the US increases. An increasing population always brings the opportunity to grow for businesses since more population causes the demand to increase.
The increasing population of the US acts as an opportunity for the USPS to increase its customer base. Suppose USPS engages in effective marketing and improves its service. In that case, it can attract new customers and increase its market share significantly.
Increase Marketing
No matter how good a company is, if it doesn't market itself correctly, it won't be able to increase its customer base. USPS has been in the market for the longest time and has the highest experience. However, the question arises does it have the best marketing strategy too?
In today's era, the scope of marketing has increased massively from print and digital media to social media. USPS can make the most out of social media to promote itself. This will increase the customer base of the company. As a result, the company will grow.
USPS Threats
USPS is the biggest postal service company in the US. However, it also faces threats from the external environment like any other business. This section will look at the threats USPS face externally.
Increasing Competition
No doubt that USPS is the largest postal service company that operates in the US and holds the largest share by volume. However, USPS is not the only company operating in the entire US. Other companies also offer postal services, like FedEx, UPS, and Amazon Logistics.
USPS must constantly be on its toes and perform well to stay the market leader. Hence, USPS faces the threat of losing its market share to its competitors as they grow.
Growing Technology
Technological advancements are good for businesses usually. However, they don't seem very pleasing in the case of USPS. Initially, when USPS was established, mail was the only way to communicate. As a result, the business of USPS was thriving.
However, technological advancements took place, and the internet arrived. People have replaced emails with emails. This impacted the business of USPS negatively. In the coming years, the world will move further towards digitization. This might impact the current operations of USPS negatively.
Russia-Ukraine War
The conflict between Russia and Ukraine acts as a threat to USPS. Although the postal service didn't operate in Russia like the US. However, it used to deliver mail and packages in Russia.
After the war started between Russia and Ukraine, USPS suspended its operations in Russia. This impacts USPS's operations since it is not taking orders involving Russia. In addition, as the war continues, USPS will suffer financially.
Final Thoughts on USPS SWOT Analysis
USPS is the biggest postal service-providing company in the US. It has the highest number of offices compared to any other postal service. The history of USPS goes very far since the company has been operating for centuries.
This article sheds light on how the company was established and evolved over the years. After that, we discussed the significance of the SWOT analysis and then conducted the SWOT analysis of USPS.
The SWOT analysis of the postal service highlighted what internal and external factors impact the operations of the USPS. A more effective way to represent the findings of this SWOT analysis would be through a SWOT Matrix since it will highlight the results more concisely.
Now that we are done with this article, we assume that you know the significance of USPS and how to conduct a SWOT analysis. Moreover, if you found SWOT analysis interesting, do look at some of the SWOT analysis examples.
