Write a report approximately 2000 words which

GNER –

Great North Eastern Railways:

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A Competitive Analysis and Examination of Key Success Factors

Contentss Page

Introduction……………………………………………………………………………3

Competitive Analysis……………….…………………………………………………3

Key Success Factors……………… … …………………………………………………6

Recommendations..……………………………………………………………………7

Conclusions……………………………………………………………………………8

Bibliography… …………………………………………………………………………9

Appendices…….…………………………………………………………………..…11

Appendix A – Swot Analysis………… … ……………………………………..……11

Appendix B – Plague Analysis…..……… … ………………………………………..…12

Appendix C – Porter’s Five Forces………… … …………………………….……..…13

Introduction

Great North Eastern Railways ( GNER ) runs rider rail services on the East Coast Main Line between London King ‘s Cross, the East Midlands, Yorkshire, the North East of England and Scotland. They carry more than 17.4 million riders a twelvemonth ( GNER, 2007 ) .

This study aims to set about a competitory analysis of GNER. A SWOT analysis will be undertaken. A SWOT analysis is a model for placing and analyzing strengths, failings, chances and menaces. It is a footing for measuring nucleus capablenesss and competencies.

In add-on this study aims to utilize the decisions drawn during the competitory analysis to place the cardinal success factors of GNER. Key success factors concern the competitory capablenesss, properties, competences and market accomplishments with the greatest bearing on company profitableness.

The 3rd and concluding purpose of the study is to utilize all of the informations gathered to do recommendations to better GNER’s competitory place. From the analysis of GNER and its current state of affairs, the study will develop and propose suited tactics and schemes for GNER in the hereafter.

Competitive Analysis

Before set abouting a competitory analysis, an scrutiny of the available informations on GNER and its quality is of import. As with any major company GNER efforts to guarantee that merely good information is available to the populace. However, bearing this in head, there is a batch of information about GNER and the railroad industry available and this has aided the creative activity of this study.

The cardinal environmental forces at work can be divided between macro and micro forces. Macro forces are those that are external to GNER and micro forces are those that are internal to it. Both types of force are of import when sing GNER’s competitory place. They can both be seen in the SWOT analysis matrix of GNER in appendix A.

Micro environmental forces at work for GNER can be classified as either strengths or failings. Strengths include a strong focal point on staff. GNER was the first train operator to accomplish Investor in People position. In the sum-up to the Investor in People study, the assessors said GNER ‘exemplified some of the best and most outstanding people direction practices’ ( GNER, 2005 ) .

A farther internal strength that GNER have is first-class proviso of nutrient. They have both a bite saloon and a eating house. In add-on, all trains provide wireless internet entree. This is progressively of import for commuters, who are GNER’s primary client base.

GNER has good degrees of cleanliness on their trains and good placed, good serviced Stationss. These Stationss include York, Doncaster and Newark. Each is centrally located and good served by both coach and cab services.

Of class, with strength there is besides failing. GNER besides has several failings. These include a deficiency of critical information when service jobs arise. Over 80 three per centum of GNER trains arrived on clip between January 7Thursdayand February 3rdof this twelvemonth ( Scotsman, 2007 ) . Cancellations and short trains at peak times were a peculiar issue for commuters. Of those that did non get on clip information sing holds and cancellations is non ever efficaciously communicated to clients. To be just to GNER, this is a ailment that has been levied at many train operators and GNER does non look to be any worse at this than others.

GNER has comparatively high ticket monetary values. When evaluated along with other suppliers it is comparable. However compared to other signifiers of conveyance GNER’s trains are relatively costly. Road travel is peculiar is seen as a major rival of GNER. Therefore alterations that affect route travel such as the proposed ‘pay as you go’ route revenue enhancement will besides hold a major impact on GNER.

Macro environmental forces at work for GNER can be analysed by utilizing a tool called PEST analysis. PEST is an acronym for political, economic, societal and technological factors. A PEST analysis examines these countries in order to measure the market for a concern. A PEST analysis matrix of GNER can be seen in appendix B.

The railroad industry in the UK has changed in legion ways in the last 30 old ages. The industry was privatised by the old Conservative authorities traveling from being run by British Rail to a new construction where the path and Stationss are maintained by Railtrack and there are a scope of private railroad companies in the assorted parts of the UK. GNER is one of these.

As people ‘s life criterions have risen most households now have at least one auto, if non two. In response the rail companies are viing robustly with route conveyance for clients. Another major societal alteration has been that more people are working from place. This has led to a decrease in demand for rail conveyance, although many office workers commute by rail on the yearss when they visit their offices.

The rail clangs in Ladbroke Grove ( 1999 ) , Hatfield ( 2000 ) and Potters Bar ( 2002 ) have had a negative impact on customers’ assurance on the safety of rail travel. GNER could surely utilize Richard Branson ‘s Virgin Rail’s response to the recent Cumbrian accident as an illustration of positive handling of client concerns.

The most important societal alteration that has had the biggest impact on GNER is the consequence of the London bombardments and other terrorist act related Acts of the Apostless. This has led to a decrease in rider Numberss, particularly in the period merely after the bombardments in July 2005. Any future Acts of the Apostless of terrorist act that may happen will hold a big impact on GNER.

The cost of electricity has risen aggressively in recent old ages. This has meant that GNER’s underlying costs have increased. This tendency is set to go on and GNER will hold to accommodate to these changes in the hereafter.

Changes in engineering mean that on some rail lines we are seeing the development of high velocity trains, as pioneered for illustration, by Richard Branson ‘s Virgin Rail. These trains cut down the clip taken for long distance travel. The impacts on GNER of these technological alterations are that they need to guarantee that they keep up with their rivals and make non let them to utilize technological progresss to their advantage.

Michael Porter provided a model that theoretical accounts an industry as being influenced by five forces. The company seeking to develop a competitory advantage over rival houses can utilize this theoretical account to better understand the industry context in which the house operates. A matrix demoing how the railroad industry can be analysed utilizing Porter’s Five Forces is shown in appendix C.

Key Success Factors

It can be seen that many of the challenges that GNER faces are external. GNER is an interesting company to analyze precisely because it has legion internal strengths. However, these internal strengths are non good aligned to the chances and menaces that GNER presently face.

Having studied GNER’s external environment several cardinal success factors become apparent. For GNER to be successful, they must be good at several cardinal activities. GNER’s cardinal success factors are:

  • an ability to turn to customers’ concerns sing safety
  • a superior in train service
  • an ability to maintain costs at an acceptable degree

Looking at each of these three key success factors in bend, this study examines GNER’s strengths and failings in respect to them. An ability to turn to customers’ concerns sing safety is hard both to make and to mensurate.

From the nucleus competency position, one of the chief strengths of GNER is their ability to supply a superior in train experience. Their strong accent on good people direction means that client service degrees are by and large good. Their proviso of high quality nutrient and good degrees of cleanliness on trains both contribute towards a good in train client experience.

GNER’s ability to maintain costs at an acceptable degree is really much dependant on external factors such as the costs of energy. So their ability to win at maintaining costs at an acceptable degree is out of their custodies.

So in decision, of the three identified cardinal success factors, GNER is able to carry through one of them really good but non the other two. Their abilities are non good aligned to the chances and menaces that they presently face.

Recommendations

Probe of GNER’s competitory place and its cardinal success factors leads to farther analysis of GNER and necessarily to analyze of its failings.

Failings of GNER include its US parent company holding immense debt jobs. This means that it is hard for GNER to put in new engineering or cut down ticket costs.

GNER has faced fiscal problem since the London bombardments in 2005, as rider Numberss dipped, power monetary values rose and Network Rail ‘s compensation payments declined.

To turn to these failings and better their competitory place GNER demand to guarantee that they continue their distinction based on a superior client experience. In add-on, they need to guarantee that they are using their energy in the most appropriate topographic points by concentrating on their cardinal success factors.

The on-going promotion of new technological solutions creates new possibilities to farther gaining control the concern traveler market. However, the success will strongly depend on the ability to respond rapidly to maintain abreast of fast-changing market demands.

Decisions

Looking at the SWOT analysis of GNER it is clear that there exist a great figure of political, economic, societal and technological factors that are presently impacting the company. GNER are good positioned to take advantage of these alterations but need to alter their way somewhat to guarantee that they are concentrating on relevant chances.

The analysis of the current PEST factors identified the peculiar importance of socio-cultural, political, economic, societal and technological factors on GNER.

Bibliography

  1. Blithe, J. , 1998. Necessities of Marketing. London: Financial Times Management.
  1. Dixon, F. 1997. Competitive Edge. London: Archway.
  1. GNER ( 2006 ) .About Us GNER. Available from: hypertext transfer protocol: //www.gner.co.uk/GNER/AboutGNER/Company+info/About+GNER.htm [ cited 11th April 2007 ] .
  1. GNER ( 2005 ) . GNER “A Beacon of Excellence” , Say Investor In People Experts. GNER. Available from: hypertext transfer protocol: //www.gner.co.uk/GNER/PressCentre/PressReleases05/GNER+“A+BEACON+OF+EXCELLENCE”+SAY+INVESTORS+IN+PEOPLE+EXPERTS.htm [ cited 11th April 2007 ] .
  1. Kotler P. 1991. Marketing direction analysis, planning, execution, and control. London: Prentice-Hall.
  1. Kotler, P. and Armstrong, G. 2005. A Principles of Marketing. 4th erectile dysfunction. London: Financial Times Prentice Hall.
  1. Orange ( 2007 ) . Orange enables Wifi train service. Available from: hypertext transfer protocol: //www.business.orange.co.uk/servlet/Satellite? pagename=Business & A ; c=OUKPage & A ; cid=1144404013001 [ cited 11th April 2007 ] .
  1. Porter, M. 2004. Competitive Advantage. London: Free Imperativeness
  1. Scotsman ( 2007 ) . Railway route bidder makes trains plight. Available from: hypertext transfer protocol: //news.scotsman.com/topics.cfm? tid=168 & A ; id=409012007 [ cited 11th April 2007 ] .
  1. Webster, B. 2006. Times Online. GNER is no longer sustainable, says adult male who ran it. Available from: hypertext transfer protocol: //business.timesonline.co.uk/tol/business/industry_sectors/transport/article1085670.ece [ cited 11th April 2007 ] .

Appendixs

Appendix A – Swot Analysis Matrix

Strengths

Failings

I

NTERNAL

  • strong accent on good people direction
  • first-class proviso of nutrient
  • all trains provide wireless cyberspace entree
  • good degrees of cleanliness on trains
  • good placed, good serviced Stationss
  • deficiency of critical information when service jobs arise
  • comparatively high ticket monetary values
  • cancellations and short trains at extremum times
  • US parent company has immense debt jobs

Opportunities

Menaces

External

  • growing in possible user base
  • positive economic and demographic alterations in geographical countries served
  • addition in integrating between land usage policy and countries served by rail
  • issues of public assurance associating to public presentation and safety
  • issues of public assurance associating to July 7ThursdayLondon bombardments and other terrorist activities
  • addition in monetary value of electricity
  • Network Rail ‘s compensation payments have declined
  • increased competition from challenger operator Grand Central

Appendix B –PlagueAnalysis Matrix

Political

Economic

  • railroad industry privatised
  • Network Rail ‘s compensation payments have declined
  • addition in monetary value of electricity

Social

Technological

  • additions in auto ownership
  • more people are working from place.
  • development of high velocity trains
  • addition in trust on cyberspace use

Appendix C – Porters Five Forces

Existing competitory competition between providers

  • extremely concentrated industry
  • Low merchandise differences

Menace of new market entrants

  • Positive authorities policy
  • Need for economic systems of graduated table
  • Large capital demands

Dickering power of purchasers

  • Low trade name individuality
  • High monetary value sensitiveness
  • High handiness of replacements such as auto travel

Power of providers

  • Power provider concentration

Menace of replacement merchandises

  • High purchaser disposition to replace
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