9-306-002
REV: JUNE 19, 2006

DAVID A. GARVIN
LYNNE C. LEVESQUE

Strategic Planning at United Parcel Service
We fully recognize that it is not possible to develop a true strategic plan more than a few years out and that business plans should have an even shorter horizon. But we are convinced that it is possible and wise, indeed necessary, to develop a set of very long-range scenarios that can form the foundation for our future strategic plans. — Michael (Mike) J. Eskew, Chairman and
Chief Executive Officer, United Parcel Service (UPS)
As Mike Eskew walked through the long, open atrium of UPS’s corporate headquarters late in
March 2005, he thought about his upcoming lunch meeting with Vice President of Corporate Strategy
Vern Higberg. Higberg was preparing a presentation for the senior management strategy committee, the Strategy Advisory Group, on improvements to the strategic-planning process. While the company had made major progress in planning for the future over the past 10 years, Eskew had charged
Higberg and his colleagues with developing recommendations for moving forward, citing one of his predecessors, who had said, “The future of our company will be no better or worse than the quality of planning we do to prepare for it.”

Company Background
History
In 1907, 19-year-old Jim Casey borrowed $100 from friends to start the small company that eventually became UPS. From its humble origins delivering messages for the city of Seattle,
Washington, UPS had grown into a $37 billion corporation (see Exhibit 1 for financial performance).
Over the 98 years since its founding, it had transformed itself several times, first into a packagedelivery company, then into an international air transportation company, and finally, in the late
1990s, into a logistics company. In November 1999, after 92 years as a private company, UPS went public in the