Strategic Options Available to the UK Government with Regard to the UK Railways Industry - Case Study Example

Strategic Management Case Study on British Railway Name: Roll No: Class: Teacher: Subject: March 04, 2008 University: Strategic Options Available to the UK Government With Regard To the UK Railways Industry Introduction The growing industry of Britain might during the nineteenth century experienced the exciting boom in the building of rail that in fact transformed the movement of people and goods. But as it is a well-known fact that during the decades ranging from 1960s to 1980s rail was being disregarded and written off as an obsolete mode of transport. The times have changed and we are in the age in which global warming pose huge concerns for every one. The legacy that had been dismissed some thirty years back is in fact a sustainable way of transport- one the moves people and goods effectively and efficiently across the country with a significant low impact particularly on environment. Having one billion passengers making journey every year and the high volume in tonnages of freight viewed in generation, UK is among one of the fastest developing railways in Western Europe. Even though handsome dividends have been paid, UK Railways is under severe attack in the media for its deteriorating service and high concerns on safety issues. As such a great deal has to be done. For instance even though rail is a carbon efficient mean of transport as compared with car, road freight and aviation the industry is received huge assault in the media in the month of January this year. As such in the wake of the criticism UK Railways is experiencing there are certain strategic options available to UK government with regard to UK Railways Industry. Throughout this paper we shall discuss such options with the objective of suggesting and highlighting the alternatives that can be adopted for improving its operations. (ETSU 2005) Strategic Options Available The Intercity Express, to commence the options, needs a huge focus on cutting carbon and weight emissions and establishing in flexibility for responding effectively to the future alterations in power and fuel supply. A large segment of people are of the view, as per some poll, that train is among the greenest mode of travelling specifically for long-distance journeys not only in UK but in entire Europe. This demonstrates clearly that the green advantage of rail is clearly understood by travelers. As the public are becoming more aware about the personal options having an impact on climate change they are increasingly discerning about the manner in which they travel. The industry cannot tend to afford for not remembering that there exist no room for complacency. The other means of transport- specifically road transport- have progressed tremendously in cutting emissions through technology and the development in technology is not going to stop here. The UK railways need to sustain cutting carbon releases and safeguarding the global environment even though it is also significant. The railway should recognize the responsibility to the domestic environment and almost five million people who live in the radius of half a mile distance of railway line. Another significant issue is of the noise. UK Railways is also under attack for not dealing effectively the issue of noise and had received large number of complaints about unnecessary and excessive noise that are made by train horns. This issue is not insignificant as people during sleep with trains blowing their horns at every hour during night adjacent to houses are not a trivial matter. The primary issues that are involved in the noise management include quality and type of track; quieter operating and rolling stock; noise barriers and railway structures; urban design and spatial planning; building insulation. It is more effective and less costly for noise and vibration control methods to be incorporated at the initial stage of projects and programs rather adding certain remedial actions. (ETSU 2005) The design needs to be optimized for controlling noise. The divisions and resources demands a significant improvement and as such alterations in the railway industry should be made that will provide an opening fro reappraisal. It is vital to maintain a good quality track that should include making certain that railway sleepers are bedded firmly in the ballast as many complaints are recorded in this respect. The government should allocate comprehensive responsibilities and also consider appropriate funding mechanism for this particular industry for the purpose of developing cost effective and comparatively calm and quite railway track management and technology systems. (DEFRA, 2006) Research should attempt to construct certain parameters for low cost good practice that should be executed swiftly and take into account all the available necessary expert guidance. There are conventional iron block tread brakes that are fixed with most of the vehicles and result in toughening of the wheel treads and needs necessary changes in this regard. A strong suggestion for reducing this particular problem is the usage of block materials. Overall improvements should be ensured in railway reliability to shun pressure specifically for higher speeds in order to catch up on delayed running. Many parts of the primary infrastructure of London Underground is in a bad shape and require urgent repair. It has been estimated that almost sixty percent of the delays are in fact caused by rolling stock failures and infrastructure. A heavy backlog exists of investment required on London Underground rail network. This investment is needed for the purpose of providing passengers with continuously comfortable, reliable, safe and secure facilities. Engineering assessment at full and quantification of the invested capital is needed for the purpose of re-establishing the system to effective repair that were not made. Huge concerns are present on the operational structure and complex financial that is inherent at the inadequate level of investment that is specifically related to need and also available from the fare revenue and government grant. A significant strategic option available to government with regard to UK railway is that most of the assets renewals should aim at providing gigantic opportunities for improvement in facilities, infrastructure and addressing specific issues like vibration and noise. Certain changes are required in engineering or other related standards that should be altered that could have important cost implications. The ‘client side’ abilities in vibration and other significant infrastructure and environment are needed to be developed for the purpose of quantifying advantages of these issues in business terms. Additional sources are required for implementing these suggestions. The government should ensure that UK railway industry should take certain initiatives in order to reduce the level of risk from passenger behavior particularly at stations. The risk of occurrence of many passengers rushing at a time for trains should be reduced. It could be implemented by ensuring an improvement of data base at stations and where it is suitable specific barriers to avoid access adjacent to departure times and also not engaging in advertising of train services on displays screens that are closely located to the times of departure. Moreover the condition of stairs needs to be improved. This could be accomplished by marking noising on those stairs at stations that are considered high-risk for reducing falls, slips and trips. Better signage should be provided and effective steps need to be assured about the usage of crowd-flow paradigm for busy station. The risk from the behavior of passenger on trains is mostly caused by those passengers that are struck against certain fixed objects and also being struck during leaning out of train and also falling from a train already in motion. Driver safety should be enhanced and the rosters for drivers should be evaluated. The usage of train simulators needs to be expanded. Awareness of driver-signaler needs to be improved. For this purpose signal boxes, cab rides and visits for drivers can be used. New system needs to be developed for effective management of specifically monitored drivers. The train door operations should be reviewed continuously. A risk evaluation for train dispatch also be developed. Public awareness needs to be improved and that could be done by developing a specific education program for passengers for powered doors. (Rumelt, R.P. 1998) Most of the risks exposed for track workers are similar to those affecting construction workers. The extra risk however is also present for the track workers as they work closely to operational trains or particular rail preserving vehicles. The risk resulting from operational railway is acute specifically for maintenance workers doing their work mostly in short-term line obstacles or blockage or depending on a warning system to obtain clearance of track whenever a train approaches. The strategic options available commence by improving knowledge of behavior of workforce. A program should be implemented for supporting supervisors and managers for understanding in a better way of risk present in workplace and improving controls systems that are in fact more sensitive elements. Work plan processes should be improved further to reduce ambiguity about responsibilities and roles through making improvements to the processes in making method statements. The utilization and availability of the warning system should be increased. Portable and fixed light should be introduced at maintenance sections. Railway access points also need improvement along with the development of detection system. Last but not least step is to increase the number of physical inspections and reviewing continuously the lighting system in stations. Strategic Challenges for Virgin of Virgin Railway Industry Company Virgin company has adopted a conservative approach for financing and due to its high profile status the company is able to have low level of financial output and still have quite a considerable equity stake when it initiates new business venture that tends to leave most of the risks to investors. The transportation industry has proven to be non-profitable in the past decades. The rate of interest has in fact slipped to negatives, much awful comparing to some of the profitable industries like IT. The railway industry in Britain is privatized with not an exemplary infrastructure. Virgin has not set a commendable record since its entry in 1997. In fact it has experienced a poor track record regarding punctuality and financial performance that present strategic challenges for Virgin. The culture of entrepreneurship of Virgin and huge focus on innovations is not compatible with the conventional financial services which is another strategic challenge faced by Virgin. Five Forces Analysis on Virgin Railway Industry Company Due to the fierce competition a strategy is required to be formulated for the purpose of opposing the frail points as per five forces of Porter. An exclusive strategy among the railway industry abilities and far from the competitors of industry is in fact the ultimate solution to further development in the industry. Some of the suggestions based on the five forces analysis on Virgin Railway industry are given hereunder: (Porter, M.E. 1998) Buyers: Attractive loyalty bonus programs for the purpose of discouraging switching; the firm should form some strategic alliances with other companies for offering a wide network of destinations and making the customer loyal. Suppliers: Virgin needs to support direct purchasing through Internet at comparative cheaper rates; a strategic choice of leasing is available for loosing working capital. Entrants: For competing with the new entrants Virgin should attempt to offer more service on same routes presenting new entrant Substitutes: Buy out completely the threatening substitute. Rivals: A nice and effective manner of competing would be cutting of price and offering additional competitive advantage focused on quality; all offerings value added in nature should be removed on travel; strategic alliances should be formed with other firms on routes not adopted below. References Hemsworth B. 2007. Silent Freight Project- Final Report. European Rail Research Institute DEFRA, 2006. Towards a National Ambient Noise Strategy Consultation paper. DEFRA. ETSU. 2005. Development of a Renewable Energy Assessment and Targets for London. Report to Government Office for London and the Greater London Authority by the Energy Technology Support Unit. Porter, M.E. 1998. What is Strategy? in S. Segal-Horn, The Strategy Reader, pp. 75-99. Rumelt, R.P. 1998. How Much Does Industry Matter? in S. Segal-Horn, The Strategy Reader, pp. 104-124. Appendix Read More