How Global Investment Banking Process Has Assisted United Parcel Service

            Through the global investment banking process, United Parcel Services (UPS) has been able to diversify its operations across different parts of the world. Over the years, UPS has been able to establish its operations in Africa, Asia, Australia, Europe, and in almost all the states of the United States of America. To be able to establish these operations, UPS has been utilizing financial assistance of various global investment bankers through seeking long-term financing: venture capital. This way, UPS has been able to maximize its dividends because of diversification of risks.

            UPS has also benefited from the global investment banking process through assistance in development of protective strategies against UPS competitors. For instance in the 1980s, entry of Federal Express Corporation threatened existence of UPS in the American parcel service market. Federal Express Corporation’s entry strategy was characterized by overnight shipment of parcels by air. To counterattack this strategy, UPS took a huge loan: approximately $29 million, from a global investment banker (not mentioned), and used it to acquire nine used 727 airplanes from Braniff Airlines. It started a two-day delivery by air, known as Blue Label Air. UPS’s counterattack strategy from its global investment banker also included running adverts on television to convince businesses to utilize its two-day parcel delivery service. Eventually, the strategy was a success and UPS was able to regain its market share in the United States.

            Moreover, UPS has managed to acquire a number of subsidiaries through utilization of M&A (mergers and acquisition) services of global investment banking. Some of these subsidiaries include Prost-Transports SA Speditionsgesellschaft mbH in Germany, UPS Yamato Company in Japan, IML Air Services Group and UPS of America in United Kingdom, and UPS Parcel Delivery Service Ltd. in Thailand. UPS have been able to acquire many of its principal subsidiaries through M&A undertaken by various global investment bankers.