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Using PESTLE/Porter ‘s 5 Forces / Scenario Modelling or any other relevant place the cardinal strategic Macro challenges the Company faces.

Using Financial Analysis / Marketing Mix / Core Competencies / Balanced Scorecard or any other relevant tools, scan Network Rail ‘s Internal / Micro Environment to inentify the cardinal Micro challenges the Company faces.

Pull your decisions sing parts 1 and 2 together in the signifier of a SWOT analysis. You could besides place what options an ANSOFF matrix for Network Rail would propose are the most feasible.

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Given your analysis, what do you reason about the relevancy of the Key Objectives above ( to gain and retain a authorization etc. ) and

What should be the scheme of Network Rail in the coming 2-5 old ages? And what would be the critical few steps which would assist to track advancement toward accomplishing your suggested scheme.


I have been employed in the UK Rail industry for over 30 old ages, and am presently based at Saltley Delivery Unit in Central Birmingham. My function is Infrastructure Maintenance Engineer, which gives me overall duty for all of the care carried out by Netwrok Rail on its chief substructure, which is the paths and Signing system connected to them. My geographic country of duty tallies from London Marylebone, through Banbury and Birmingham Snow Hill and onto Droitwich Spa. I have 300+ staff coverage to me through a squad of Engineers ( 3 ) and Section Managers ( 9 ) , working out of two chief terminals, Saltley And Banbury, with smaller terminals at Stourbridge, Whitacre, Leamington, Aylesbury, High Wycombe and London Marylebone.


Network rail has been in being since October 2002 when they took over the running of Britain ‘s Rail substructure from Railtrack. They presently employ over 35,000 people in assorted facets of this work, from twenty-four hours to twenty-four hours care to major reclamation undertakings. In

Using PESTLE/Porter ‘s 5 Forces / Scenario Modelling or any other relevant place the cardinal strategic Macro challenges the Company faces

When you analyse the macro-environment, designation of the factors that might impact a figure of critical facets that will act upon the supply and demand and costs of the company is critically of import. ( Kotter and Schlesinger, 1991 ; Johnson and Scholes, 1993 )

Assorted checklists are in usage as ways of cataloguing the huge figure of possible issues that might impact different industries. A PESTLE analysis is one of that is simply a model that categorises environmental influences as political, economic, societal, technological, legal and environmental. PESTLE examines the likely impact of each of these factors on the industry. The consequences are so used to take investigate and enable chances and to be cognizant of and to do eventuality programs for menaces when edifice concern scheme ( Byars, 1991 ; Cooper, 2000 ) .

In a recent survey ( 1998 ) , Kotler claims that PESTLE is a strategic tool that can be utile to assist understand market growing and worsen alongside concern place, in order to make up one’s mind on possible and future way

The usage of PESTLE analysis reveals that the major external influences upon Network Rail are:

POLITICAL: The recent alteration in Government could still hold a far making consequence upon Britain ‘s rail industry, the recent Comprehensive Spending Review has made certain that the industry must alter and in a large manner.

ECONOMIC: The current economic clime of the United Kingdom is such that a batch of riders will be believing of alternate ways to go, low cost manager and coach services will hold their entreaty increased, albeit the long term chances for rail travel are good, given the current anteroom against route conveyance by the green parties. In order to stay an attractive option, the rail industry must vie economically with route conveyance.

SOCIAL: The major societal construct in the UK Government ‘s Sustainable Development Strategy ( DEFRA, 2005 ) is noted as: “ guaranting a strong, healthy and merely society ” , but this can be split into six chief facets:

aˆ? Suiting the diverse demands of the population both now and in the hereafter ;

aˆ? advancing personal wellbeing ;

aˆ? promoting societal coherence and inclusion ;

aˆ? keeping equal chances for everyone ;

aˆ? advancing good administration ; and

aˆ? prosecuting the creativeness, energy and diverseness of the people of Great Britain.

The Rail industry has a major portion to play in the satisfaction of these societal

ends. Increasingly the industry will be judged on presenting the services, and even more so on the manner they are delivered. The UK Railways run aboard houses belonging to a huge array of the population, and it must be seen to prosecute right with all of its lineside neighbor. The industry must besides be seen to be an employer that values it ‘s work force and handle them correspondingly. Safety of the going populace is a major societal factor in the concern, both those traveling by train and the route user that use any of the hundred of degree crossings on the web each twenty-four hours. The cardinal causes of accidents on the railroad substructure are trespass and the abuse of degree crossings.

TECHNOLOGICAL: The unbelievable velocity of engineering progresss has a large consequence on any conveyance industry. The likes of faster and more dependable broadband connexions will increase the sum of work done by teleconferencings and cut down travel to meetings. Faster and more efficient trains will consequence upon the nature of Network Rails substructure, and oblige the company to look at new ways to keep the substructure, and new signifiers of powering the trains.

LEGAL: Legally Network Rail is governed by many organic structures with an influence, including The Office Of Rail Regulators, The Health & A ; Safety Executive, UK Government, Environment Agency.

ENVIRONMENTAL: Network Rail has a duty to keep it ‘s substructure and the immense figure of wildlife home grounds alongside the railroad. The company besides has to go as “ green ” as possible, guaranting lumber that they use is from sustainable beginnings, and that all terminals and offices are committed to cut down their C footmark every bit much as is possible.

Porters Five Forces

The Porter ‘s Five Forces theoretical account is a simple tool that can be utilised to assist strategic understanding where power lies in a concern state of affairs. The tool can besides be used to understand both the strength of a company ‘s current competitory place, alongside the strength of a place the company may be looking to travel into. The Five forces model focuses on concern concerns instead than public policy but it can besides underscore drawn-out competition for value instead than merely competition among bing challengers. The easiness of its usage has inspired legion companies every bit good as concern schools to follow it. ( Wheelen and Hunger, 1998 ) .

If you have clear apprehension of where your power presently lies, you are able to take advantage of a state of affairs of strength or act to better a state of affairs of failing.

Porters 5 Forces for Network Rail:

Supplier Power: For Network rail, it supplier power can be said to be comparatively high, there is a really rigorous blessings procedure to travel through earlier any point can be introduced into the substructure. This procedure can be clip devouring and expensive for new providers and so those that already hold this blessing have a big sum of power to exert. There are besides really few providers that provide the dedicated engineering that is used to supply modern signalling systems which once more will supply a great trade of provider power.

Buyer Power: Buyer power with respect to Network Rail would be classed as low. The company is runing in somewhat of a monopoly, giving purchasers really small flexibleness to shop elsewhere for similar services. Network rail is hence in a really strong place when it comes to ordering footings.

Competitive Competition: Other than companies supplying technology expertness with reclamation of rail substructure, there are few houses who could supply the twenty-four hours to twenty-four hours expertise that Network Rail has in the safe running of the railroad web in Great Britain. The figure of staff employed by Network Rail ( 18,000+ ) would besides be a barrier to the menace of permutation by smaller houses, non willing to take on the immense duty that using this figure of dedicated staff would show.

Menace of Substitution: The menace of permutation may be classed every bit medium as there may be options to a rail system within GB. Other than Road Transport, there is really small realistic direct competition for the services that Network Rail provide. Road conveyance does show a certain sum of competitory competition to Network Rail, but there would be few that would be able to vie direct with taking the GB Rail web. Obviously this puts Network Rail in a place of great strength.

Menace of New Entry: The cost and clip elements required for companies to be set up to supply effectual competition to Network Rail would be barriers that would forestall this occurrence. For this ground the menace of New Entry is low.

Using Financial Analysis / Marketing Mix / Core Competencies / Balanced Scorecard or any other relevant tools, scan Network Rail ‘s Internal / Micro Environment to inentify the cardinal Micro challenges the Company faces.

Using FiMO as discussed during the BES faculty of the Network Rail concern leaders programme to scan the Internal or Macro Environment shows the undermentioned consequences:

Finance: Network Rails strengths are based around it ‘s immense plus base and its turning plus value. Network Rail besides owns a monolithic belongings portfolio that can be used for variegation. The major failings of Network Rail are based around possible Governmet disbursement cuts, the Recent Comprehensive disbursement reappraisal and Lord McNulty ‘s value for money study.

Market: Strengths – Presently the concern is good thought of by relevant organic structures including the Office Of The Rail Regulator, OFT and HSE ( BES 2010 )

Prime locations for retail developments, Achieving Control Period 4 ( CP4 ) marks to day of the month. Weaknesses – Internal fiscal procedure that makes it about impossible to merchandise with other parts of the same company.

OPERATIONS – Strengths include an enviable safety record, both for it ‘s ain work force and for the going public. Delivery of it ‘s ain promise “ The Timetable is our Promise. When we Promise a train can run, it will run – safely, duly and reliably.A And we Promise that more trains are able to run following twelvemonth. ” Network Rail ( 2010 )

Failings – . The industry is perceived as hard to work with, by others within the industry.

As portion of the BES class a RECoiL exercising for Network Rail as a company was completed, the tonss have been reproduced below.

Network Rail





Controls and Systems


Ideas & A ; Innovation




This would look to foreground issues within two chief sectors, those being Controls & A ; Systems and Leadership.

Controls and Systems

There is a school of idea that its procedures are far excessively bureaucratic and that any alteration can merely be effected over a long period of clip. This may good hold a bearing on the evident issues with leading


There seems to be a big figure of long functioning trainmans in supervisory and direction places. This has the consequence of making a opposition to alter. There seems to be a feeling that the procedures and processs inflicted corporately are so stiff that they prevent invention because of sum of bureaucratism in topographic point.

Pull your decisions sing parts 1 and 2 together in the signifier of a SWOT analysis. You could besides place what options an ANSOFF matrix for Network Rail would propose are the most feasible.

Harmonizing to Barney ( 1995 ) , a SWOT analysis is a model that points to the relevancy of external and internal forces to give an apprehension of the

beginnings of competitory advantage. SWOT analysis will assist make up one’s mind if the chief jobs confronting a company revolve around a demand to alter its scheme, a demand to better its current scheme and the execution of it, or both of the above.

The tool helps look at the company ‘s current public presentation ( Strengths and

Failings ) and its hereafter ( Opportunities and Threats ) by accounting

for the factors that exist in the external environment. The model is a powerful and at times extremely successful technique that can be applied to persons, groups, squads, or administrations ( David, 1997 ) .

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