Case Study Description of Renationalization of Railtrack?
Railtrack faces bankruptcy five years after its privatization. Railtrack's performance deteriorated since its privatization in 1996, exhibited by its weakening financial health, unsatisfactory services, poor safety record, and mismanaged investment program. In October 2001, the U.K. government decided to put the company in administration. What had gone wrong with privatization in Railtrack's case? What alternatives were there for Railtrack post the administration?
Swot Analysis of "Renationalization of Railtrack?" written by Alexander Dyck, Irina Christov includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Railtrack Railtrack's facing as an external strategic factors. Some of the topics covered in Renationalization of Railtrack? case study are - Strategic Management Strategies, Financial management and Global Business.
Some of the macro environment factors that can be used to understand the Renationalization of Railtrack? casestudy better are - – cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, geopolitical disruptions, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Renationalization of Railtrack?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Renationalization of Railtrack? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Railtrack Railtrack's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Railtrack Railtrack's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Renationalization of Railtrack? can be done for the following purposes –
1. Strategic planning using facts provided in Renationalization of Railtrack? case study
2. Improving business portfolio management of Railtrack Railtrack's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Railtrack Railtrack's
Strengths Renationalization of Railtrack? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Railtrack Railtrack's in Renationalization of Railtrack? Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Railtrack Railtrack's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Railtrack Railtrack's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Railtrack Railtrack's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Alexander Dyck, Irina Christov can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Railtrack Railtrack's in the sector have low bargaining power. Renationalization of Railtrack? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Railtrack Railtrack's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Railtrack Railtrack's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Renationalization of Railtrack? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Global Business industry
– Renationalization of Railtrack? firm has clearly differentiated products in the market place. This has enabled Railtrack Railtrack's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Railtrack Railtrack's to invest into research and development (R&D) and innovation.
Training and development
– Railtrack Railtrack's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Renationalization of Railtrack? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Railtrack Railtrack's is one of the most innovative firm in sector. Manager in Renationalization of Railtrack? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Railtrack Railtrack's is present in almost all the verticals within the industry. This has provided firm in Renationalization of Railtrack? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Railtrack Railtrack's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Renationalization of Railtrack? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Railtrack Railtrack's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Railtrack Railtrack's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Renationalization of Railtrack? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Renationalization of Railtrack? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Renationalization of Railtrack? are -
High operating costs
– Compare to the competitors, firm in the HBR case study Renationalization of Railtrack? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Railtrack Railtrack's 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Railtrack Railtrack's supply chain. Even after few cautionary changes mentioned in the HBR case study - Renationalization of Railtrack?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Railtrack Railtrack's vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Railtrack Railtrack's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Railtrack Railtrack's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Renationalization of Railtrack?, it seems that the employees of Railtrack Railtrack's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Renationalization of Railtrack? HBR case study mentions - Railtrack Railtrack's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Railtrack Railtrack's is dominated by functional specialists. It is not different from other players in the Global Business segment. Railtrack Railtrack's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Railtrack Railtrack's to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Railtrack Railtrack's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Renationalization of Railtrack? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Railtrack Railtrack's has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Railtrack Railtrack's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Renationalization of Railtrack? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Railtrack Railtrack's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Renationalization of Railtrack? should strive to include more intangible value offerings along with its core products and services.
Opportunities Renationalization of Railtrack? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Renationalization of Railtrack? are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Railtrack Railtrack's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Railtrack Railtrack's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Railtrack Railtrack's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Railtrack Railtrack's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Railtrack Railtrack's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Railtrack Railtrack's in the consumer business. Now Railtrack Railtrack's can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Railtrack Railtrack's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Renationalization of Railtrack? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Railtrack Railtrack's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Railtrack Railtrack's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Railtrack Railtrack's to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Railtrack Railtrack's to increase its market reach. Railtrack Railtrack's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Railtrack Railtrack's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Learning at scale
– Online learning technologies has now opened space for Railtrack Railtrack's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Railtrack Railtrack's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Railtrack Railtrack's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Railtrack Railtrack's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Renationalization of Railtrack? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Renationalization of Railtrack? are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Railtrack Railtrack's.
Technology acceleration in Forth Industrial Revolution
– Railtrack Railtrack's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Railtrack Railtrack's needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Railtrack Railtrack's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Railtrack Railtrack's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Renationalization of Railtrack?, Railtrack Railtrack's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Regulatory challenges
– Railtrack Railtrack's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Railtrack Railtrack's in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Railtrack Railtrack's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Railtrack Railtrack's.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Railtrack Railtrack's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on Railtrack Railtrack's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Railtrack Railtrack's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Railtrack Railtrack's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Railtrack Railtrack's business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Renationalization of Railtrack? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Renationalization of Railtrack? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Renationalization of Railtrack? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Renationalization of Railtrack? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Renationalization of Railtrack? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Railtrack Railtrack's needs to make to build a sustainable competitive advantage.