Virgin Trains - Essay Example

?Case Study: Virgin Trains Summary of the Paper The research paper is mainly based on one of the most important railway companies of United Kingdom namely Virgin Trains. The research paper begins with the introduction of the company followed by the research. The introduction of the company will enable to assess the existing scenario of Virgin Trains in the context of the UK rail service. The research is conducted with the help of SWOT and Porter’s Five Forces Model. SWOT analysis is done to find out the Strengths, Weaknesses, Opportunities and Threats of the company. Porter’s Five Forces analysis is done to analyze the business strategy of the company to establish the competitive intensity and the attractiveness of the market. The issues reflected in the case study are discussed with the help of Kotter’s Eight Steps Model of Change. Kotter’s Eight Steps Model of Change is used as a body of discussion to find out the changes that could be incorporated in the organization to increase the efficiency of the employees and provide more effective and timely services to their customers. At the end of the research paper, a justification is provided to find out whether the different models used in the research paper would prove to be effective in bringing about the changes in the organization. The research paper further depicts how the company can make use of its strengths and opportunities in order to overcome its weaknesses and threats. Table of Contents Introduction: Company Background 4 Evidence of Research 5 SWOT Analysis of Virgin Trains 5 Porter’s Five Forces Analysis 7 Body of Discussion 10 Kotter's 8 Steps Model Of Change 10 Conclusion and Justification 12 References 13 Bibliography 16 Introduction: Company Background Virgin Trains is one of the most important railway companies of the United Kingdom. Virgin Trains had triumphed over the “West Coast Franchise with the Cross Country Line” and on 9th March 1997, the train took the control of West Coast Franchisee (Virgin Trains, 2011). The Company will remain franchised till March 2012 (Stagecoach Group Plc, 2010). Virgin Trains is run and owned by two shareholders namely Stagecoach Plc and Virgin Management. The Virgin Management team which is owned by Sir Richard Branson is the majority shareholder, owning around 51% of shares of the company, as compared to Stagecoach Plc which owns 49% of the company’s shares (Leathley, 2011). Both the Virgin Management and Stagecoach have a group of directors. A board, which is known as Virgin Rail Group, manages Virgin Trains and is comprised of Stagecoach and the Virgin Management team. Virgin Trains functions in all major cities of the United Kingdom. The chief services are London to West Midlands, mainly covering London to north of the country such as Scotland, which is covered by all prime cities in England to the North Wales. Another key service is the cross-country service, which operates the highest distance in country (Freecoursework, 2010). Virgin Trains is identified for running fast, high quality and dependable state-of-the-art trains, capable of covering a distance of up to 125 miles per hour. At present, Virgin Trains is operating with 333 trains and the number of passengers exceeds 62,000 per day. The vision of Virgin Trains is to be the most regular, safe, profitable and reliable of the train operating franchise that takes into consideration the different opinions of the employees where they do not need to fear to be honest and open, indicating the forward-thinking style of Virgin Trains (Virgin Trains, n.d.). Evidence of Research SWOT Analysis of Virgin Trains It is the strategic planning which is used to evaluate the business venture of the company. The following are the Strengths, Weaknesses, Opportunities as well as Threats of Virgin Trains. Strengths: Virgin Trains operates in one of the most well-known and important lines in the UK, i.e., the West Coast line. Virgin Trains has a representative railway in the areas of their operation after owning the West Coast Franchise. Virgin Trains has a good brand reputation and fame which has resulted in creating a strong customer loyalty. The company deals with 94% of the complaints within the time frame set by them. They have a good monetary support from the Virgin Group. On the online survey which was conducted by the Institute of Customer Service (ICS), the Virgin Trains was selected as the best operator of trains in Great Britain. The score of the company was 73% on online survey (Politics.co.uk, 2008). Weaknesses: According to Rail Business Intelligence, Virgins Trains has a meager image with regards to the timing due to the fact that train operating from the West Coast rail franchise has been recorded late since the last few months. Virgin Trains’ reputation on train travel was also not good as a train of this company met with an accident in the past. As the railways of the Britain are segregated into the areas by way of franchising, there is a lack of competitive advantage which will result in inefficiency throughout the company owing to little or no competition which can further prevent the company from reaching its goals and targets. Opportunities: The increasing price of fuel for private transport provides an opportunity to Virgin Trains of converting the users to use more of public transport and it will provide them benefits to grow even more in future. In order to achieve this, it may take rigorous marketing efforts. The developments in technology have facilitated Virgin to purchase a high speed train. By doing this, more people are likely to select railway journey thereby allowing Virgin Trains to increase its profits and revenues. Technological advancement has provided Virgin Trains the opportunity to offer continuous access to internet with the help of Wi-Fi system to its customers. This system would comprise of a radio-transmitter after every few miles on the track that will allow both the first class passengers as well as the economy class passengers to access. Virgin Trains is in a good condition and is well maintained which provide them an opportunity to attract more customers. The company has high-speed 3G connection in the trains which is highly required now-a-days. Virgin Trains runs in fast track such as London to Birmingham that provides the image of time saver to their customers (Slideshare, 2011). Threats: As Virgin Trains will be a franchise company till the year 2012, the management of Virgin Trains needs to work hard in order to obtain another franchise for its routes before any other competitor makes its entry. Since the passengers demand fast journey, they are making use of domestic flights compared to the trains. This proves to be a big threat for Virgin Trains for long routes (Stagecoach Group Plc, 2010). Porter’s Five Forces Analysis Source: (Virbus, n.d.). Threat of New Entrants After the British Railway was privatized; several other railway operator companies came into the business. Even though no company achieved the desired success, there is probability of new arrivals since it is an open market. However, the threat of new entrants for Virgin Trains is low due to the fact that Virgin Trains is quite popular in the country and it is much settled in its business field (Jstor, 2000). Bargaining power of suppliers There is high bargaining power of suppliers for Virgin Trains as it is into the railway business and in this business, a few suppliers exist. The main supplier of Virgin Trains is the Network Rail which enables the company to operate in a lane only after receiving the contract for that particular lane. Virgin Trains is entitled to operate on the basis of demand and contract from the Network Rail (Stagecoach, 2006). Threat of Substitute Products or Services Public transport, private vehicles or flights for a long distance, be it for fast journey or for a comfort or safety comprises the substitutes of trains. The chief responsibility of Virgin Trains is to operate on time meeting the requirements of their customers in train such as drinks, entertainment facilities, i.e. music channels, food and others. Taking this into consideration, Virgin Trains are well equipped and well maintained. Thus, there is not much threat from its substitute services. Bargaining Power of Buyers The bargaining power of the passengers is also not much due to the fact that traveling is the vital requirement and it is not possible to travel in public or private transport all the time, whether it is for a distant journey or for safety and comfort. Virgin Trains is in a strong position with respect to the bargaining power of its buyers. Rivalry amongst Existing Firms As compared to the other competitors’ positions, Virgin Trains is more ahead of them. In the UK, there are other railways service providers such as Heathrow Express, Eurostar, National Rail service, and others. The rivalry among these competitors is quite high, though Virgin Trains with its superior services has been able to stay ahead of its competitors. According to Porter’s Five Forces Model, Virgin Trains is well organized for the public market. Body of Discussion Kotter's 8 Steps Model Of Change Business is all about a ‘change’. To bring about the change, Kotter’s eight steps model can be applied which is as follows: Source: (Klein, 2011). Creation of Urgency: Virgin Trains should create a sense of urgency which would enable them to ignite the early motivation to get things accomplished. The entire team of Virgins Trains should be made aware of the market realities such as customers’ expectations, prevailing competitive scenario so as to respond quickly and effectively to the present and future needs of the customers (Deane, 2010). Formation of Powerful Coalition: Virgin Trains should identify influential and enthusiastic people from various departments and motivate them for bringing change. These people would be in turn asked to constantly motivate the other members in the team to do the same (Deane, 2010). Creation of a Vision for the Change: Virgin Trains should create a ‘vision of change’ so that it is clearly understood by all the people working in the company. The Virgin Trains should identify the values that are central to the change and develop strategies in order to execute the vision set by them (Deane, 2010). Communication of the Vision: Virgin Trains should communicate the vision to all the people working in the company with regards to the ways in which things are accomplished. The top management should talk about the ‘vision of change’ citing examples and tying the vision with the operations such as training, hiring process and others (Rajesh Bheda Consulting, 2010). Removal of Obstacles: The management of Virgin Trains should talk to the people working in the company making them aware of the hurdles that they are facing in accomplishing the company’s vision. They should search the root cause of the professional and personal problems, guide the employees and encourage them to contribute their share for achieving the determined vision (Deane, 2010). Creation of Short-Term Wins: Virgin Trains should make short-term targets in order to motivate the entire team. They should reward and acknowledge the team members for their contribution in accomplishing the preferred goals (Rajesh Bheda Consulting, 2010). Building on the Change: Virgin Trains should continue looking for improvements. At every success they should investigate what went wrong and what went right. They should further set goals to persist building on what they have achieved (Rajesh Bheda Consulting, 2010). Anchor the Change in the Corporate Culture: The management team of Virgin Trains should continuously make efforts to make certain that the change is observed in every aspect of the organization. They should identify the people publicly who aided in bringing about the change which in turn would inspire them to continue doing the good work and others to improve their work (Deane, 2010). Conclusion and Justification By bringing about changes in the organization, Virgin Trains can provide better and timely services to their customers. The company can make use of their strengths and opportunities in order to overcome their weaknesses and threats. For example, Virgin Trains had been recorded to travel in late schedules. The company can prevent this by forming a strong working team and incorporating changes from time to time taking the feedback and suggestions of the employees in a more collaborative approach to management which would benefit not only the employees but also the organization and the customers. It can also prevent accidents by providing timely services. References Deane, A., 2010. Change Management – Kotter’s 8 Step Change Model. Business Process and Workflow. [Online] Available at: http://adamdeane.wordpress.com/2010/03/25/change-management-kotter/ [Accessed May 06, 2011]. Freecoursework, 2010. Virgin Train. Home. [Online] Available at: http://www.freecoursework.info/content/business/marketing-and-market-research/691 [Accessed May 06, 2011]. Jstor, 2000. Keeping Privatization On Track: The Active State, The Unwilling Investor And The Case Of The Rail Freight In The UK. Home. [Online] Available at: http://www.jstor.org/pss/20004054 [Accessed May 06, 2011]. Klein, T. J., 2011. John Kotter's 8 Steps Change Model. A Doctoral Journey. [Online] Available at: http://teddyklein.blogspot.com/2011/01/john-kotters-8-steps-change-model.html [Accessed May 06, 2011]. Leathley, A., 2011. The Media Room - Virgin Trains Press Releases. Home. [Online] Available at: http://mediaroom.virgintrains.co.uk/ [Accessed May 06, 2011]. Politics.co.uk, 2008. Virgin Trains Is Best Train Operator. News. [Online] Available at: http://www.politics.co.uk/press-releases/virgin-trains-best-train-operator-$484746.htm [Accessed May 06, 2011]. Rajesh Bheda Consulting, 2010. Create Urgency. Form a Powerful Coalition. [Online] Available at: http://docs.google.com/viewer?a=v&q=cache:02pk9btCDNYJ:rajeshbheda.com/pdf/rbc-article7.pdf+kotlers+8+Step+of+Change”&hl=en&gl=in&pid=bl&srcid=ADGEESjti9GQWJB-6kH [Accessed May 06, 2011]. Stagecoach Group Plc, 2010. Sustainability of Rail Profits. A Track Record of Performance. [Online] Available at: http://www.investis.com/scg/docs/ar2010.pdf [Accessed May 06, 2011]. Stagecoach, 2006. Stagecoach Wins South Western Rail Franchise. Media. [Online] Available at: http://www.stagecoachgroup.com/scg/media/publications/newspaper/issue64/issue64.pdf [Accessed May 06, 2011]. Slideshare, 2011. National Association of Realtors. Home. [Online] Available at: http://www.slideshare.net/guest74aac1ec/national-association-of-realtors-transportation-tool-kit [Accessed May 06, 2011]. Virbus, No Date. Porter’s Five Forces Analysis. Home. [Online] Available at: http://www.virbusgame.eu/virbus/mediawiki/index.php/Porter%27s_Five_Forces_Analysis [Accessed May 06, 2011]. Virgin Trains, No Date. Safe and Secures Service. On Our Way to Sustainability. [Online] Available at: http://www.virgintrains.co.uk/assets/pdf/green-policy/on-our-way-to-sustainability.pdf [Accessed May 06, 2011]. Virgin Trains, 2011. Virgin Trains. Company. [Online] Available at: http://www.virgin.com/company/virgin-trains [Accessed May 06, 2011]. Bibliography Balmforth, J., 2007. Virgin Trains a Decade of Progress. Ian Allan Publishing. Fine, L. G., 2009. The SWOT Analysis: Using Your Strength to Overcome Weaknesses, Using Opportunities to Overcome Threats. CreateSpace. Johnson, 2008. Exploring Corporate Strategy: Text & Cases, 7/E. Pearson Education India. Kotter, J. P., 1996. Leading Change. Harvard Business Press. Pahl, N. & Richter, A., 2009. SWOT Analysis - Idea, Methodology and a Practical Approach. GRIN Verlag. Singh, K., 2009. Organizational Behavior: Text and Cases. Pearson Education India. United States Dept. of Agriculture. Risk Management Agency, 2008. SWOT analysis: A Tool for Making Better Business Decisions. U.S. Dept. of Agriculture, Risk Management Agency. Read More