Report on London Underground

Topics: London Underground, Transport for London, Oyster card Pages: 30 (7333 words) Published: March 29, 2012
Report on London Underground (Notes)

Slide 1 – Introduction

Our team plans to identify the challenges facing London Underground by applying models such as PESTLE, Shareholders analysis, SWOT, and McKinsey’s to bring them into perspective. We shall first analyse the external environment, identify the challenges, then we will look at how one of these challenges is affecting LU internally before making a recommendation.

Slide 2- About LU

Here is a little information about London Underground that we have sourced from the TFL website.

Did you know………

• 275 stations across the Underground & 402 kilometres of track.

• The busiest line on the system is the District Line which carries over 180 million passengers per year over its 40 mile length.

• London Underground Limited (LUL) is part of Transport For London (TFL).

• First underground railway opened in London in 1863 but LUL was formed in 1985 as a Private Public Partnership composed of Metronet and TubeLines.

• Vision is to provide “world class” service to all its customers.

Slide 3 – Monitoring

The adage ‘knowledge is power’ has long been sited as the formula for success. We believe that for LUL to be effective and efficient they must use the knowledge from departments, individual contribution and customers to measure performance. Watson and Gallagher (2005) state that factors which impacts performance and therefore needs monitoring include, but is not limited to:-

1. The finance of the LUL which includes cost and income, shareholders value and added value.

2. The impact of all shareholders on standards, changes in behavior of staff, customer, and economic and political environs as well as innovation will determine how LUL responds to its environment.

Slide 4 - PESTE


• Contextualises the business within a wider framework

• Allows the consideration of external factors

• Encourages forward thinking and identification of future problems

• Enables the organisation to identify and exploit future business opportunities


• The model needs constant re-evaluation to be most effective

• It requires access to external data sources

• Changes in the market place can render any attempts to anticipate future trends spurious

• There is a risk of trying to evaluate too much data given the wide scope of the model


From a political standpoint the newly formed coalition Government may have raised concerns regarding how stable such an amalgamation of two differently manifested parties could be. In an effort to find long-term solutions to the current economic crisis, Chancellor George Osborne (BBC News 2010), with his spending review has implemented strategies to cut £81 million in public spending.

As a public-private organization, Transport for London has received £3.2 billion from the government as reported on the BBC news website.

The decision on how this money is spent is that of Mayor Boris Johnson as it impacts on the economic growth of London. Any plans surrounding a promotion or protection of the economic growth as it relates to labour force productivity must take into account effective and efficient transportation.


Growing operating cost and pressure from environmental groups, the uncertainty of the price of fuel supplies and a decline in oil economy, have caused many cities to re evaluate their public transportation system.

One of the biggest obstacles to achieving an effective and efficient transport system, especially underground rail, is upgrading and maintaining existing equipment.


Public perception of the tube is that it is a system fraught with problems and chaos.

As if to exacerbate these negative perceptions, recent problems of signal failures, power outages, strikes and...
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