The prevailing difficult business environment has adversely affected companies and institutions performances globally. Business entities are forced to devise innovative counter measures to curb negative effects of such difficult economic environment. Majority of companies are embarking on techniques of cutting down operational costs with the main aim of boosting overall performance. This hardly achieved as the adverse business environment has impacted on pushing up operational costs due to effects of inflation and desire for hire wages among employees. This means that, any attempts to lower operational costs will impact on reduced service level and consequently overall performance will have to decline.
Attempts to raise price with the main aim of boosting revenues is also not realistic in the prevailing business environment. Customers will simply buy from competitor companies or alternatively use substitute goods and services. This due to the fact that, similarly to companies, consumers have also been affected by the difficult economic conditions and are always looking of ways of minimizing their expenses. Therefore, the targeted profit maximization objective is hardly achieved.
To survive in such an environment, it is prudent to deploy alternative innovative techniques which will boost overall revenues and lower the cost without undermining the service level. It is also critical to transform public institutions to business entities. This is challenging and requires proper research on the market trends and full management dedication. This can be achieved through application of strategic management and selection which will ensure only the most optimal decisions are made.
This paper explores US Postal service case as it strives to sustain business operations. Appropriate measures which can reverse the negative performance trend are also discussed.
The US postal corporation has been facing difficult in sustaining overall performance. Attempts to reverse such a trend have previously failed. There is need to clearly evaluate the real cause of such a negative performance. This will lay the foundation for designing appropriate strategies which will reverse the negative performance. This will ensure US Corporation performance improves in the foreseeable future. Application of strategic management technique can reverse such a negative performance. Complete overhaul of marketing and promotional techniques used is critical in boosting overall revenues and enhancing consumer’s loyalty.
US Postal Service
The current business environment is one of the most challenging businesses have ever faced in many years. Difficult economy has impacted on lowering consumer’s purchasing power (Citizens Bank 2012). The situation has made it a necessity for most companies and institutions to remain innovative in design, formulation and implementation of different organization policies. Such organizations have no choice than to meet their escalating budgets level as per what the markets demands (Citizens Bank 2012.).
Financing business operations is also becoming difficult as access to funds becomes very limited (Shaffer 2012). Not for profit organizations and institutions have also been affected due to declined assistance by governments inform of subsidies (Riley & Malloy 2012). The current business is difficult, entrepreneurs and other business stakeholders are optimistic that the environment is going to improve in foreseeable future (Ernst & Entino 2011)
Similarly to other companies in the US, the above difficult business environment has adversely impacted on US Postal Services (USPS) operations. In the year 2012, the USPS was reported to have failed to meet debt obligation owed to treasury amounting to $5.5 Billion. The situation is even worse and the stakeholders have been arguing that the company can boost overall revenues without undermining the service level (Ross 2012). This clearly shows the company operations are likely to end up in liquidation if appropriate strategies will not be implemented.
Service level is declining at an alarming rate. It is quite common for mails to delay in the US. It is reported that US resident received a Christmas card on valentines days post marked December 10th .In yet another case, a real estate agent mailed a lawyer just five blocks away and it took about five days for the lawyer to receive the letter (Ross 2012). This clearly shows declined service level requiring quick action.
The Postmaster General, attempt to reverse the declined performance has failed. The Chief Executive proposed measures of completely transforming US Postal services to a business entity. This means that, mail users would be charged full costs on services extended to them. Other attempts were towards lowering operational costs with the main aim of boosting overall performance (Ross 2012). Such objectives were hardly achieved.
The Company further attempted to make service level the top priority disregarding potential costs involved. It further proposed to reduce operational costs through reducing the payroll expenses (Ross 2012). This is an irony, as it is not realistic to cut down payroll costs as this will possibly impact on reducing employees. This will eventually impact on reduced service level as Mailing services are highly labor intensive.
- Quote paper
- Dr Kelly Clarkson (Author), 2011, US Postal service case as it strives to sustain business operations, Munich, GRIN Verlag, https://www.grin.com/document/213088