London Underground Limited - Case Study Example

London underground limited (LUL) Contents Contents 2 Introduction 4 Background 4 Nature 4 Factors contributed in LUL’s success 5 Saves passengers time 5 Safety 5 Time management 5 Infrastructure 6 Environmental impacts 6 Criteria used in judging London Underground limited success 6 SWOT Analysis of LUL 7 PESTEL Analysis 8 SWOT and PESTEL in strategic decision making 10 Impact of SWOT and PESTEL in long term success 11 LUL culture in changing business environment 11 Influence of culture in long term success 13 Conclusion 14 References 15 Introduction London Underground Limited is a public railway company providing service in the large area of London. It is one of the oldest railway systems of the world. The company deals in transportation and logistics industry. The tube rails of London Underground Limited connect many important places of London. These rails provide very fast and quick service. The company operates in a very large network. These underground rails are very much popular in London. Everyday huge numbers of passengers travel through these tube rails. With the increase in demand of tube rail service London Underground Limited is gradually extending its network for providing service to more people. Background In 1843 London Underground Limited was mainly formed by Sir Marc Brunel. His son Isambard also assisted him in forming this company. On 10th January 1863 the company inaugurated its first underground rail. This underground railway system was established between Paddington and Farringdon Street. In 1868 South Kensington and Westminster districts were connected by this underground tube rail. The first Tube tunnel was opened in 1880 for these underground rails. Nature London Underground Limited is providing service to huge number of people in London for past 150 years through its tube rails. It is the oldest underground railway network of the world. Gradually the tube rails of London Underground Limited are developed as per the changing environment of the country. Many modern facilities are provided in tube rails for facilitating the passengers. For the efficient railway system provided by this company most of the people of London relies on this underground rails. For benefiting the passengers London Underground Limited has made the railway station WiFi. The stations also have the facilities of car parking. Factors contributed in LUL’s success There are many factors which have contributed in the success of London Underground Limited. These factors are as follows: Saves passengers time The tube rails of LUL connect different places of London within very short time. If a person travel by road then for reaching some place in London then he will face traffic problem, congestion etc which will increase his travelling time. But if he travel by tube rail then he don’t have to face all those things as a result he can reach the destination quickly. The well organized rail network of LUL contributes a lot in saving the time of passengers (Wolmar, 2002). Safety The safety issues of the tube rails have significant impacts on the success of LUL. High level of safety is maintained within the trains and in platforms. Many projects are undertaken by LUL for improving the safety factors of tube rails. LUL assess different types of risk which can hamper its underground railway system and according to that it improves its security system in the railways. Time management The tube rails of LUL always maintain accurate time. These rails are famous for their time management. Normally these trains are not late. But if in any case the time schedule of tube rail changes then the passengers are informed earlier (Schabracq, 2009). Infrastructure The infrastructure of underground rails and its stations are very much developed. The modern infrastructure used in these rails and in the stations facilitates the passengers in many ways. For this modernised infrastructure passengers of underground rails need to spend less time for getting into the train. Environmental impacts LUL has been able to create positive impact on environment. The underground trains of LUL travel huge distance but they do not create significant sound and noise pollution. The trains are designed in such a way that they are able to provide comfort to the passengers. Large number of passengers travels through these trains which help to reduce road traffic and congestions (Fill, 2006). As a result the pollution level can be controlled with the help of LUL. Criteria used in judging London Underground limited success Judging the success or failure of a venture like London underground limited is a complex task. There is a range of impacts that needs to include in appraising the success of London underground limited. To measure the success of London underground limited both the financial and social benefits and criterion should be measured. The strength or fitness of the appraisal will be accessed on whether it is able to quantify all effects of the scheme successfully. However the problem with judging the success of a project like London underground limited is that many of the criteria that are used to judge the success or failure of such a project is essentially subjective in nature. Here subjective refers to the consideration of the value that the passengers place on the different aspects of the London Underground limited (Johnson, Scholes and Whittington, 2014). Some of the factors that should be incorporated in the appraisal of a project like London Underground limited are: Cost effect Cost is an important cost in judging the success of a project. The cost included in the appraisal is not just the initial cost or the upfront capital cost but annual costs or the periodic costs are also included in counting the costs (OECD, 2014). Thus a high initial cost for a particular project may be justified if the ongoing maintenance cost is low in some instance. In judging the cost factor it needs to be taken into account the cost benefit ratio of the project should be analyzed (Johnson, Whittington and Scholes, 2011). Effect of passenger Along with reducing the cost another important parameter that is used to judge the success of the project is the improvements in the travel conditions that the project has brought into effect. Time changes Whether the new transportation reduced the time of travel is also to be taken into consideration. Some of the other factors are reliability, relief from congestion and impact on environment SWOT Analysis of LUL The SWOT analysis of LUL focuses on some internal and external factors which affects the service and operations of the company. Strengths: It is the oldest underground railway system of the world. LUL has expanded it railway networks in different parts of London and it has become the second largest railway system of the world. Daily a huge number of passengers use underground rails. The underground rails of LUL connect many places of London and its total tracks are around 400kms. LUL provides its railway service in around 280 stations. The efficient railway system of LUL helps its passengers to save time. Weakness: The physical environment of some areas where LUL operates its railway services is not good. Sometimes it hampers the tube rail service (Joshi, 2005). LUL has strong dependency on other business services which often damages the service and facilities of underground rails. Opportunities: LUL is internationally famous for its efficient service and networks. The tube rails and the stations are counted as important tourist destinations of London. The company is able to create huge employment opportunities in London. With the increase in demand for underground the company can expand its railway networks. Threat: Various environmental factors earthquake, flood etc can create problem in the underground railway system of LUL. In the modern time many other mode of transport are developing day by day which give strong competition to tube rails. PESTEL Analysis PESTEL analysis of LUL helps to analyse various external factors which are affecting the performance of tube rail services. These factors are as follows: Political: Transport service plays a vital role in UK economy. The government of UK has made many rules and regulations which the transport companies have to follow. The government of UK puts major stress on reduction of CO2 emission. As a result all types of transporting company in this country need to follow this rule. LUL also follows this government policy. LUL has modernised it railway engines for reducing the level of CO2 emission. The government of UK provides different facilities and benefits to the transportation system of the country. For holding a major part in the transportation service of London, LUL also enjoys those facilities and benefits. Economic: London experiences a good economic condition. The income level of the people living in London is high. Therefore the spending capacity is also high. While travelling most of the people in this city focuses more on comfort, time etc. This facilitates LUL in building large customer base as the tube rails of this company provide good comfort level to its customers. The people of London have to pay huge tax on fuel. For this reason people prefer to use rail transport than to use their own cars (Kotler and Keller, 2012). Social: The social habits and tastes of people residing in London are changing at a faster rate. The people are becoming very much concerned about environment. For this reason they prefer to use public transport like bus, rail rather than using private cars or large cars which causes more pollution. A large number of young people travel through tube rails whereas the old people generally avoid underground rails. Therefore for this social habit LUL is able to get large number of customers. Technology: UK is experiencing a continuous development and innovation in technology. This technological development influences the growth and development of the country. The transport system of London has a contribution in this growth and development. The technological development also creates a positive impact on the transport system of this state. LUL has been benefited by this (Lasserre, 2012). The development of automatic train control system has helped LUL to improve its train service. Environmental: The industries and the government of UK use best practices to reduce environmental damages. The companies operating in this country have to follow these environmental rules for reducing negative impact on environment. The transport companies have to work on reducing noise pollution, carbon emission etc. LUL has to follow these rules for maintaining environmental balance. Legal: UK has many legal rules for benefiting and facilitating the employees. The companies operating in this state have to follow those rules. LUL has large number of employees in all over London. The company provides facilities and benefits as instructed by the government to its employees (Magretta, 2012). SWOT and PESTEL in strategic decision making SWOT and PESTEL help to analyse the external and internal factors which affects the business or services of LUL. Large number of people daily uses tube rail. Therefore for maintaining large crowd properly the company needs to maintain well trained staffs that will help and guide the passengers. For handling large number of passengers the customer service LUL needs to improve. In the changing business environment the company needs to expand its service more for serving customers and to increase its revenue. To overcome its weakness LUL can try to reduce its dependency on other business services (Proctor, 2014). The company can find out alternative ways for getting products and services from other companies. Natural disaster can damage the network of tube rails. Therefore the company needs to develop a group of employees who will handle or manage such situations effectively. LUL needs to improve the infrastructure and facilities of tube rail to match with modern transport system. As per the political condition of London the government provide support to the transportation company. LUL can enhance its underground rail service by accepting supports from UK government. As per the social taste and habit of people residing in London, older generation do not prefer to travel in tube rails. LUL can make special compartment or coach for them (Wintzer, 2007).This will help the company to attract aged passengers. The transport system of this country puts more focus environmental issues. Therefore the company should update its railway operating systems and different other technologies which affects different environmental factors. Impact of SWOT and PESTEL in long term success As the analysis of SWOT and PESTEL, LUL will develop strategies which will help the company to enhance its growth and the quality of service. These external and internal analyses of the company and its business environment will facilitate it to understand the importance of different factors related to its business. On the basis of external analysis the organization can utilize its strengths in an effective way which will help it overcome different external barriers. The improvement of customer care service of LUL will lead to the rise of satisfaction level of the passengers (Werther and Chandler, 2011). LUL can improve the factors which strengthen its service or business position. By this process the firm can enhance its reputation and increase the base of loyal customers. The long term success of a company is achieved by reducing its weakness and by developing competitive advantages. By doing SWOT and PESTEL analysis LUL will be able to develop sustainable development strategies (Mayo, Callaghan and Dalton, 2001). This will facilitate the firm in benefiting the society and people and to enhance its position in the transport industry. LUL culture in changing business environment Londoners or the people of London or more specifically speaking the customers of the transportation business of London shares a unique love hate relationship with the transportation sector. The transportation sector of London has always been intertwined with big events that have affected the city. The London transport which was created in 1933 morphed into Transport for London in 2012. A law was passed on to privatize the bus business and was accompanied by a change in the working conditions, pay etc of the workers of the organization (Pimlott and Rao, 2002). The management pattern of London underground was changed dramatically in the 1990s. The main element that led to the change was a fire that occurred at king’s cross station in 1987 and subsequent report which put the sclerotic, routing management of the underground as to the main cause of the accident (Schein, 2010). The report stated that the routine management led to neglect, delay and disorganization. This in turn led to reorganization and introduction of two new job roles the centurions and the line duty managers. Decision making process was further streamlined and there were more responsibilities that were given to each management level. Management by objectives were introduced along with the introduction of pay that was related to performance. About 22000 jobs were cut in the process (Avril, and Zumello, 2013). There were major changes in the organization culture as a result. After LT was acquired by TfL the organizational culture which had shunned diversity since its creation incorporated diversity at all working levels. In changing business environment LUL tries to manage it culture by using Hofstede theory. The company reduces inequality among its organizational members by giving them equal opportunities and benefits. The employees of this company believe in individualism. So the company provides many facilities to them which help them to enhance their career and fulfil their individual goals and objectives. The masculinity factor is high among its employees. Therefore LUL has established its organizational culture in such a way that motivates its employees to become more successful. Risk taking capacity of LUL’s employees is low. So the organizational culture of LUL tries to match with the changing business environment by taking low risk. The culture of LUL believes in maintaining long term goals and objectives. LUL encourages its employees to enjoy their life and work by improving its culture. Influence of culture in long term success Initially LUL was a government owned company. But after many years the ownership changed into public and private. With the change of ownership the organizational culture of LUL also changed a lot. Many new rules and policies were set up to improve the organizational system of the company. The organizational culture of LUL is characterised change management and diversity of employees (Jones and Brazzel, 2014). Both of these factors help the company to achieve success for long period of time. By managing the changes in business process or business environment the company updates its business process, benefits and facilities. As a result of this LUL is able to satisfy its customers as per their changing needs and requirements. The modern culture of this company helps it to recruit good and efficient employees (Sims, 2007). These employees play a vital role in improving the service of LUL. The firm has diverse workforce. The modern organizational culture of LUL facilitates to manage its diverse workforce. This workforce helps the company to deal with different types of customers (Ashkanasy, Wilderom and Peterson, 2011). With the help of this culture the company is able to provide service to large number of passengers and achieve its business objectives successfully. LUL has implemented Charles Handy Model for achieving long term success through organizational culture. As per this theory culture is classified into four types. These types are power culture, task culture, personal culture and role culture. LUL mainly follows role culture for achieving the goals and objectives of the company. Through role culture LUL delegates responsibilities and roles to its employees as per their skills, qualifications and specializations. This culture helps the company to get best performance from its employees. Here the company gives freedom to its staffs to decide what they can do and as per their capabilities and capacities they accept challenges. Every employee is responsible for his assigned work and he has to complete the work within the stipulated time. He decides the best way to complete the work. Conclusion This case study deals with the famous underground railway company London Underground Ltd. This is an internationally famous company of London which is into the business of transport service for a long period of time. With the changing environment of the country LUL improves its underground railway system by incorporating many benefits and facilities. In the case study there are many factors which contribute in the success of the company. The tube rails of LUL help the passengers to save time. The structure of this underground rail is designed in such a way that it provides comfort to the passengers. There are many safety equipments present in the trains and stations for providing safety and security to passengers. The underground rails of this company are famous for maintain accurate time. References Ashkanasy, N. 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Wolmar, C., 2002. Down the Tube: The Battle for London’s Underground. London: Aurum Press. Read More