First Group: International Expansion of a Transport Service Company

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FirstGroup
International Expansion of a Transport Service Company

Maastricht University
School of Business and Economics
Maastricht, 7th December
Alexander Pfau (i6019678)
Isabel Eichwald (i6017161
Maximilian Commandeur (i6015440)
Otto Lindner (i6018493)
Study: International Business
Course code: EBC-2021
Group number: 29
Tutor: Christopher Buehler
Writing Assignment: Company Paper

Maastricht University
School of Business and Economics
Maastricht, 7th December
Alexander Pfau (i6019678)
Isabel Eichwald (i6017161
Maximilian Commandeur (i6015440)
Otto Lindner (i6018493)
Study: International Business
Course code: EBC-2021
Group number: 29
Tutor: Christopher Buehler
Writing Assignment: Company Paper

Introduction
First Group PLC (First) is a British company engaging in public transportation in the UK, Ireland, North America, Denmark, Sweden and Germany. It is operating trains, metros and buses within these countries, reaching 40 different cities and transporting some 2.5 billion passengers a year. First Group PLC is listed on the London Stock Exchange since 1999 and is currently employing approximately 133000 people. After former CEO Moir Lockhead, who was managing the company since its existence, resigned in June 2010, Tim O’Toole became the new CEO of First. First Group PLC was found in 1995 in Aberdeen, Scotland. It originated from the deregulation of bus services in the United Kingdom as a merger of the Badgerline Group and the GRT Group and started under the name First Bus as a medium-size bus operator in Scotland, England and Wales. The company steadily grew over the next years and changed its name to First Group PLC in 1998, as the company started engaging in railway-transportation, as well. Due to a franchise contract with London Transport, First started running London’s tramway-system, shortly after 1998. Over the years, First continued growing successfully, while still maintaining high quality standards, and became one of the biggest bus-, tram- and train-transportation services of the world. In the following, the main drivers of First Group PLCs’ continuous success will be examined. Firstly, the role of the companies’ subsidiaries, core values and partnerships in regard to the challenges of effectively operating a multinational company will be analyzed. Secondly, the effects of the companies’ degree of corporate social responsibility (CSR) on Firsts’ success story will be evaluated. Thirdly, the expansion strategy of First Group PLC and its way from a local to multinational company will be explored. Finally, after analyzing the main reasons for Firsts’ success, the findings will be drawn together in a final conclusion. 1. First Group: Expansion strategy

After the merger of GRT and Badgerline has been completed and as First continued to steadily grow to eventually become market leader in the UK, the CEOs of both companies jointly decided to look for possible international expansion. Privatization of transport services was increasing in many countries and new market opportunities were growing from Australia to South America and Europe (Helm, 2009).

Being attracted by China’s strong development, First eventually started it internationalization there, follwed by the US, Canada and eventually, after a long time, it extended its operations to countires in Europe, namely Denmark, Sweden, Germany and Ireland. In all these countries, First did not gradually move up the scale of commitment but rather made a straight move into the “high-commitment-high-control mode of operating” (Bartlett & Beamish, 2011). In detail, except China, where it formed a joint venture with New World Services (NWS) 1998, First executed most of its international expansion by acquiring already existing companies and using their core competencies from the home market to create a competitive advantage in the foreign market (Helm, 2009).

Even though First made a straight move into its foreign markets it...
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