After extensive analyses, we recommend MTR enter the market. This is because that the large market size and considerable demand for mass rail transit render Berlin a particularly appealing market. More importantly, German regulators have lowered the entry barrier of the market.
We recommend MTR provide one of the railway operators, DB with consultancy services on rail-related services (operation & maintenance) and non-fare business (station retailing and advertising), which precisely caters to DB’s needs. Besides, the Octopus Card System should be executed through a partnership with a local organization VBB a local transport association. These recommendations will fully employ MTR’s unique strengths and effectively mitigate possible risks.
The whole expansion plan is estimated to yield a NPV of HK$ 700 million within a ten-year timeframe. It will enable MTR to generate sustainable revenue and enhance the global reputation successfully.
Introduction This report investigates into the rail transit market in Berlin Germany, followed by the feasibility assessment of MTR’s strategic expansion into Berlin. Recommendations will also be given on the grounds of the analyses. The objectives of the report are presented below:
* Pinpoint the opportunities and risks for business development in Berlin via thorough evaluation of the market. * Propose entry strategies to capitalize the opportunities and mitigate the risks through leveraging MTR’s competitive edge. * Generate sustainable profit streams and enhance the global reputation of MTR.
We considered three categories of businesses to tap into in Berlin, namely consultancy services, Octopus Card System and Railway Property Model. All of them have been carefully examined and the results will be exhibited in the Recommendation part.