Eurostar Strategic Analysis

Topics: High-speed rail, Eurostar, Rail transport Pages: 15 (3603 words) Published: May 6, 2013
Eurostar International Ltd.
Strategic Analysis Report.


1. Introduction
2. Strategic Issue
4. PEST analysis

4.1 Political
4.2 Economic
4.3 Social
4.4 Technological

5. Porter’s 5 Forces

5.1 Barriers to Entry
5.2 Substitutes
5.3 Bargaining Power of Buyers
5.4 Bargaining Power of Suppliers
5.5 Rivalry

6. Grant’s Framework

7. SWOT Analysis

7.1 Strengths
7.2 Weaknesses
7.3 Opportunities
7.4 Threats

8. Generic/ Competitive Strategy

10. Recommendation
11. Implementation
12. Conclusion
Appendix - RACES

1. Introduction:
We have undertaken a strategic analysis of Eurostar Plc. Having looked at the external influences we have identified the difficulties faced by the company and the coming threats. The aim was to particularly identify the strategic issue and possible solutions to tackle and resolve it, taking into account internal resources of the company and their limitations. Through extensive use of frameworks and analysis tools we have identified the strategic issue as “How Eurostar can sustain its monopolistic position with the increasing competition in the cross-channel transportation industry?” We have recommended that this could be best addressed by… Throughout the years Eurostar have been following mainly emergent strategic approach, because it didn’t have any direct competition and therefore could enjoy being passive in its actions. There was simply no necessity to make any deliberate strategic plans. This was acceptable as long as they were the only players in the market and held a monopolistic position. Due to the circumstances they have been focused differentiators as they were the only ones doing cross channel route by rail on passenger trains. However, now, with the opening of the St Pancras International and the Deutsche Bahn waiting to come into the market, the threat of direct competition is real and Eurostar will have to start making strategic plans for their actions. Deutsche Bahn is a very old and strong brand, subsidised by the German Government. Hence, it would be fair to assume that Deutsche Bahn have necessary resources to quickly gain market share in a new market by the means of cost-leadership. Eurostar may use differentiated approach to strengthen their situation against Deutsche Bahn and use deliberate strategies in order to do so. They could differentiate on quality service offerings and make emphasis on climbing the loyalty ladder towards their existing customers. As their main advantage against the German competitor is the existing market share, great efforts have to be put into maintaining and improving relationships with their customers.

2. Strategic Issue:

We have identified an industry as cross channel transportation industry because taking the whole of the industry in this area will require including a lot of unnecessary activities and players that do not affect Eurostar in any way. On the other hand, excluding air and sea in this case would not be right, because the do provide offering substitution for transportation. Therefore, we chose a compromise in the middle. The main competitor to come is Deutsche Bahn. They will come prepared to enter and win market share in the new market. Eurostar may find it difficult to change its strategy planning approach from emergent to deliberate. This may also open doors for other rail direct competitors: Dutch, French and etc. Eurotunnel and Eurostar have managed to ‘share’ up till now, but as competition in this market intensifies – it may lead to more active behaviour from Eurotunnel’s side.

Airlines and Ferries provide increasingly cheaper transportation. However, train saves a lot of hassle as it delivers from the city to the city and therefore must...

References: 1. [Mannion E., Whittaker P., 1996 Volume: 1 Issue: 6 Page: 12 - 16 ‘European Passenger Services Ltd’]
1. [‘Eurostar Card Sorting Case Study’, Sep 12, 2007, by Donna Maurer]
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