Sunday, September 8, 2019
A Strategic report on The CrossChannel Transport Business and Essay
A Strategic report on The CrossChannel Transport Business and Eurotunnel (GET.SA) - Essay Example Choice affects outcomes and this is the nature of strategy. Whereas organizations can often function just fine in periods of stability, this is not appropriate for long-term success. Environmental turbulence and competition are sure to increase at some point, at which the company that was relying so heavily on the stability will be adversely affected. This is the very basis of the formation of strategic management. Whatever strategy a company decides to employ will be based on their unique organizational structure, their access to resources, their relationship with the environment, and their desired objective(s) (Wikipedia, 2008). Capacity on Cross-Channel traffic has grown with the opening of the tunnel in 1994, and with bigger modernized ferries, and fast hydrofoil services. Unlike low-cost airlines where lower prices have led to a growth in travel, demand for vehicle transit across the channel has not also grown rapidly, therefore and intensely competitive situation persists, especially away from holiday 'peaks'. It is easily notable here that while Eurotunnel is experience steadiness, they are not experiencing the growth they desire. People have other choices for travel, such as flying. When the price of airline travel goes down, Eurotunnel experiences less business. Road freight traffic grows steadily with economic growth in the EU; car traffic (especially from the UK) is largely dependent on shopping and vacation choices. Eurotunnel also has 'rail-user' customers 'Eurostar' and 'Rail-freight'; the former is growing rapidly, the latter has problems. According to the company information that is provided to the public on their corporate website, "Eurotunnel is the holder, until 2086, of the Concession to operate the cross-Channel Fixed Link made up of twin rail tunnels and a service tunnel below the bed of the Straits of Dover, of two terminals in Folkestone (Kent) and Coquelles (Pas-de-Calais) which provide access, as well as a fleet of 25 Shuttles which transport passenger vehicles or trucks. This impressive undersea structure, the longest in the world, also gives passage to passenger and freight carrying trains belonging to rail operators" (Eurotunnel, 2008). There are current and future key issues and trends that are likely to affect this market and GET.SA's strategy-making. One major issue is the abolishment of the Strategic Rail Authority in 2006, as it is yet to be determined how this will strategically affect the industry. The United Kingdom's growth rate largely determines the condition of the passenger and freight transport markets in the country. According to Bharat Book Review: "The present economic climate remains favourable for companies operating in the market, with economic growth steady, and both inflation and unemployment levels relatively low by historical standards. Rail passenger markets benefit from the fact that work-related trips, both the journey to work and trips undertaken as part of business activity, are likely to be relatively inelastic to short-term changes in the economic climate. Rail freight, which serves markets for the carriage of industrial materials, is likely to be relatively unaffected by any short-ter m fluctuations in consumer demand (2006). There are other customer concerns that are affecting this market. First of all, they are concerned about issues such as safety and security.