The Five Forces of Competition Model: Union Pacific Corporation
The five forces of competition model include the social or demographic factors,
technological factors, economic factors, environmental or geographic factors and political
factors. All these factors are external environmental factors that affect Union Pacific Corporation
(Yunna and Yisheng, 799).
Social or Demographic Factors
Due to the rapidly growing population, there is a need for a 35% increase in rail services
especially shipping. This will cause expansion of the Union Pacific Corporation. The
organization managers will also have to focus on improving margins and the quality of services
offered. The services offered need to of the highest quality so that the company can have a
competitive advantage over other competitors such as truck companies (Yunna and Yisheng,
802). The management will also plan on how to grow dividends so as to attract more investors.
The company has embraced the technological advancements and found better ways to
accelerate the movement of the trains and running other basic operations of the company.
Technological advancement has also brought in an improvement in environmental performance
such as reduction in pollution of the environment. Distributed Power Units (DPU) replaced the
standard locomotive power as a result of technological advancements and this saves up to 4%
fuel with reduced gas emissions.
Union Pacific Corporation (UPC) is the leading organization in rail shipping and is
adversely affected by the nation’s economic trends. This company mainly deals with
transportation of intermodal, coal, industrial products, agricultural products, chemicals and
automotive. When the economy is poor less of these goods will be demanded to lower the total
revenue of the corporation (Yunna and Yisheng, 802).
Environmental or Geographic Factors
The great need to conserve the environment has enabled the company to devise new and
better ways to perform tasks. The company has developed several ways to improve fuel
efficiency, reduce gas emissions, lower consumption of energy and recycle already used
materials. The company has been able to reach out to almost 23 states of the United States and
ensure a steady supply of goods in those regions.
This company is subject to the government laws set, state laws and also laws set by the
local authorities. The company is serving several states whose set rules and regulations must be
adhered to without compromising. These laws cover issues related to health, safety, environment,
labor, and economy. The law also requires that the company obtains licenses and permits to
validate the services offered. The regulations normally change time after time to govern the
operations of the company.
The industry within which the Union Pacific Corporation (UPC) operates is attractive
because it’s difficult for other companies to enter into the industry due to the high startup capital
required (Yunna and Yisheng, 802). The company...