Union Pacific Case Study for Strategic Alternatives
Union Pacific: A Case Study for Strategic Alternatives
PART 1: INTRODUCTION
Union Pacific Railroad Company (UNP) is one of the four major railroad companies that transports a variety of goods across North America and is an American staple of industriousness and endurance. Union Pacific with its workforce of 43,000 highly trained people has been in operation since 1862, and its span of operation stretches from Western to Southern United States and internationally into Western Canada and Northern Mexico. The American Association of Railroads has classified Union Pacific as part of the Class I Railroad Group, which consists of seven other railroad companies but Union Pacific is by far the standout in terms of size, revenue, operation and resources.
The success of Union Pacific can be attributed to the 30,000 route miles it runs on, the American population that it serves, and the transport of bulk commodities. In 2006 Union Pacific had revenues of $15.5 billion dollars which surpassed the required $346.8 million needed to be classified as a Class I Railroad company and in 2010 it reported revenues of $16.9 billion while closing out the year with $43 billion in total assets. Although Union Pacific has dominated the rail industry it does have three major competitors that also serve the continental United States.
These competitors include Burlington Northern Santa Fe (BNSF), Norfolk Southern and CSX, all operating and competing with UNP on price, transit time and reliability. BNSF operates west of the Mississippi and is Union Pacific’s major competitor as they both primarily operate in the same region. CSX operates east of the Mississippi with little geographic overlap by Union Pacific around the Chicago and New Orleans area while Norfolk Southern and CSX compete for the same area of operation. Like its competitors, Union Pacific is dependent upon customers who employ this rail company to not only transport their
PART 1: INTRODUCTION
Union Pacific Railroad Company (UNP) is one of the four major railroad companies that transports a variety of goods across North America and is an American staple of industriousness and endurance. Union Pacific with its workforce of 43,000 highly trained people has been in operation since 1862, and its span of operation stretches from Western to Southern United States and internationally into Western Canada and Northern Mexico. The American Association of Railroads has classified Union Pacific as part of the Class I Railroad Group, which consists of seven other railroad companies but Union Pacific is by far the standout in terms of size, revenue, operation and resources.
The success of Union Pacific can be attributed to the 30,000 route miles it runs on, the American population that it serves, and the transport of bulk commodities. In 2006 Union Pacific had revenues of $15.5 billion dollars which surpassed the required $346.8 million needed to be classified as a Class I Railroad company and in 2010 it reported revenues of $16.9 billion while closing out the year with $43 billion in total assets. Although Union Pacific has dominated the rail industry it does have three major competitors that also serve the continental United States.
These competitors include Burlington Northern Santa Fe (BNSF), Norfolk Southern and CSX, all operating and competing with UNP on price, transit time and reliability. BNSF operates west of the Mississippi and is Union Pacific’s major competitor as they both primarily operate in the same region. CSX operates east of the Mississippi with little geographic overlap by Union Pacific around the Chicago and New Orleans area while Norfolk Southern and CSX compete for the same area of operation. Like its competitors, Union Pacific is dependent upon customers who employ this rail company to not only transport their
Cited: 1. Hitt, M., Ireland, R., & Hoskisson, R. (2011). Strategic Management: Competitiveness & Globalization (10th ed). Mason, OH: South Western, Cengage Learning. 2. Gambrel, D. (2013, June 26). Getting PRB Coal to Asia Now. Coal Age. Retrieved from: http://www.coalage.com/index.php/departments/transportation-tips/2826-shipping-prb-coal-to-asia-now.html 3. Western Organization of Resources Council (2011, January) Exporting Powder River Basin Coal: Risks and Costs [PDF File]. pp. 1-15. Retrieved from: http://www.worc.org/userfiles/file/Coal/Exporting_Powder_River_Basin_Coal_Risks_and_Cost.pdf