CORPORATE STRATEGY PROJECT REPORT

FirstGroup LTD: A Critical Study Of The Strategy Angles Below



FirstGroup LTD: A Critical Study Of The Strategy Angles Below

Introduction

FirstGroup is the UK's largest surface transportation company, with a turnover of £3 billion a year and around 74,000 employees across the UK and North America. It is the UK's largest rail operator, with four passenger rail franchises and one open access operator. It runs nearly one-quarter of the UK passenger rail network, with a balanced portfolio of intercity, commuter and regional rail operations. It also provides freight services through GB Railfreight. The company has a strong track record of delivery and investing in improved services such as new rolling stock and customer facilities across its rail operations. (Porter 2006, 70)

FirstGroup is also the largest bus operator in the UK, running more than 1 in 5 of all local bus services. A fleet of some 9,300 buses carries 2.8 million passengers every day in over 40 major UK towns and cities. The majority of its operations are in urban areas where the bus is the most effective means of tackling traffic congestion. The bus division alone employs over 25,500 people. FirstGroup is working in partnership with local authorities and other stakeholders to provide cost effective transport solutions that improve services and offer more choice for passengers.

FirstGroup's vision is to transform travel by providing public transport services that are safe, reliable, high quality, personal and accessible. This means finding clever, yet practical, solutions to everyday transport issues.

Strategic Context

FirstGroup works closely with Government and local authorities to develop buses as an integral part of their sustainable transport policy and to create a new vision for bus transport across the UK. It has already taken measures to reduce carbon emissions, in the form of greenhouse gases, such as carbon dioxide, which contribute to climate change. These measures include using ultra low sulphur diesel across the entire bus fleet. FirstGroup has made an investment of £66m in new bus vehicles in the last 12 months fitting all new vehicles with either catalytic exhaust or a particulate trap and are fitted with Euro III engines which have a lower emission specification. These engines now constitute 25% of its total vehicle fleet. (Harzing 2009, 211-227)

Strategic Process

During 2004 and early 2005 Mercedes Benz Citaro fuel cell buses entered service in nine European cities. They were introduced as part of the CUTE (Clean Urban Transport for Europe) project to test the vehicles and the hydrogen production infrastructure in cities of different climates and operating conditions. FirstGroup was attracted by the innovation opportunities the project presented. (Gonzalez 2007, 25-45)

The project was partly EU-funded, and the idea that London should participate came from London Buses, part of Transport for London. Other partners of the project in the UK were BP (supplier of the hydrogen), Daimler Chrysler (builder of the buses) and The Energy Savings Trust. FirstGroup operated the vehicles. Due to the congested traffic in London and the very low average speed, London plays a major role in the ...