Business Strategy in Transport Module Handbook (LT 3010N)

London Metropolitan Business School 1

Module Title: Business Strategy in Transport Module Code: LT 3010N Module Booklet Semester B Year 2012

Contents: Staff Details Module Summary Module Aims Learning Outcomes Learning Time, Teaching and Learning Methods Weekly Programme Reading Assessment Requirements Assessment Completion Deadlines Appendix: Standardization of assignment presentation

Module Code: LT 3010N Module Title: Business Strategy in Transport 2

Semester B, Year 2011/12 Level: Undergraduate Honours Prerequisites: none Staff Steve Shaw (Module Leader) Janet Rangeley Room: SH 3.20 Email: s.shaw@londonmet.ac.uk Office hour: Thursdays (teaching weeks) 17.30-18.30 MODULE SUMMARY Code: LT 3010N Business Strategy in Transport BRIEF DESCRIPTION This module enables students to apply theories of business strategy to the management of airlines, high speed rail and other modes of transport in the context of increasing global competition. The emphasis is on critical application of principles of business strategy to practice through live examples, the relationships between business and government, and the implications for consumers, employees and other stakeholders. SEMESTER: Spring PREREQUISITE: ASSESSMENT: Two Courseworks: Two essays requiring critical application of theory to practice, approximately 2000 words total (40%) and a further written assignment based on desk research on an original case study, approximately 2500 words (60%) SUMMARY AND DESCRIPTION OF ASSESSMENT ITEMS Assessment type CWK CWK Description of item Two essays Written assignment on case study % Weighti ng 40% 60% Wee k due 9 12

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MODULE AIMS 3

To provide a through understanding of the principles of strategic management as they apply to transport and travel. To examine the formulation of business strategy and decision making by transport and travel undertakings, with particular reference to business ethics. To assess the control and influence of the state and other agencies that regulate transport and travel undertakings at national and international level LEARNING OUTCOMES AND ATTRIBUTES

On successful completion of this module students will be able to: identify the key external and internal influences on the strategies of carriers (A2) critically examine the formulation of strategy and performance of transport and travel undertakings in relation to theories and models of competitive behaviour (A2) provide an informed discussion of the control and influence of the state and other agencies which regulate transport undertakings at national and international level understand the ethical dimension of strategic decision making by transport and travel undertakings in a competitive environment, critically assessing alternative positions which may be adopted by transport managers (A3) critically assess the validity of alternative theories and models of business strategy in the specific context of transport undertakings as business organisations (A3) LEARNING TIME, TEACHING AND LEARNING METHODS

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The module consists of 150 student learning hours initially comprising: Staff/student contact: Directed learning: 30 hours 45 hours 4

Self managed learning:

75 hours

The formal staff/student contact will consist of a series of sessions which will be made up from tutor input/lectures, large and small group seminar discussions and exercises, student presentations, analysis of case studies, and individual tutorials to discuss progress and provide guidance on the assessment. The directed learning will be used primarily to prepare for seminar sessions and assessment. WEEKLY PROGRAMME (2010), SEMESTER B, WEEKS: 1. 2. Introduction to Business Strategy in Transport (09/2) SS Seminar: briefing for assignments 1 and 2 Owners and Entrepreneurs (16/2) SS Seminar: questions from Reader (A: new entrant) Please indentify one or two routes that you could use as your case study (assign. 2) Public Intervention and collaboration (23/2) SS Seminar: study Reader (B: owners) before the seminar and answer q. 1 Please bring your essay plan to answer q. 1 (p. 7 below) Reading week (01/3): No lecture or seminar this week please work up your essay Generic Strategies for Carriers (08/3) JR Seminar: study Reader (C: public intervention) and answer q. 3 Please bring your essay plan to answer q. 3 (p. 7 below) Liberalisation of international airline services (15/3) SS Seminar: study Reader (D: generic strategies) and answer q. 2 Please bring your essay plan to answer q. 2 (p. 7 below)

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Alternative Styles of Management (1) (22/3) SS Seminar: progress with courseworks 1 and 2 (please bring completed getting started sheet, page 14) to discuss your chosen route in class 8. Alternative Styles of Management (2) (29/3) JR Seminar: study Reader (F: machine organizations) and answer q. 4 Please bring your essay plan to answer q. 4 (p. 7 below) 5

9. Final questions and answers on your two essays assignment (19/4) JR Seminar: please bring your revised essay plans and latest version of the two essays 10 Submit (two essays) coursework (1) to Undergraduate office (26/4) No lectures/seminars 11. No lecture: Final seminar sessions to discuss coursework (2) (03/5) JR Submit (case study) coursework (2) to Undergraduate office (no lectures/seminars) (10/5) READING a) Reading (please see LT 3010N Module Reader on Weblearn for relevant extracts): Johnson, G., Scholes, K. and Whittington R. (2007) Exploring Corporate Strategy, Prentice Hall Financial Times Lynch, R. (2006) Corporate Strategy, Pitman Morgan, G. (1997) Images of Organisation, Sage Prideaux, B. (1999) Tracks to Tourism: Queensland Rail Joins the Tourist Industry, International Journal of Tourism Research, 1, pp 73-86 Pender, S. (2005) Is it a tram? Is it a bus? No, its ftr, CILT Focus, July, pp. 1821 Shaw, S. (2002) Transport: Strategy and Policy, especially chapters 5, 9, 11, 14, 16, Blackwell Background Reading: Barrett, S. (1999) Peripheral market entry, product differentiation, supplier rents and sustainability in the deregulated European aviation market - a case study, Journal of Air Transport Management, 5, pp 21-30 Doganis, R. (2006) The Airline Industry in the 21st Century, Routledge 6

Holloway, J. C. (2004) Marketing for Tourism, Pearson Page, S. (2009) Transport and Tourism, Global Perspectives, Pearson Prentice Hall Pender, L. and Baum, T (2000) Have the Frills Really Left the European Airline Industry? International Journal of Tourism Research, 2, pp 423-436 Journals: Airline Business; CILT Focus; Harvard Business Review; International Journal of Tourism Research; Journal of Air Transport Management; Local Transport Today; Modern Railways; Tourism Management; Transport Policy

ASSESSMENT REQUIREMENTS COURSEWORK 1: Two essays From the following, please choose any TWO essay questions. Each answer will require critical application of theory to practice, drawing from the module literature, especially from the seminar readings and questions, for which you will be expected to prepare in advance each week. Each essay answer should be 1000 words in lenth (plus or minus no more than 10%), with a total weighting of 40% of the marks for this module (20% for each question). Question 1: a) Compare and contrast the concept of a 'sole trader' with other types of private ownership. Choosing one or more country as an example, explain why many sole traders can be found in particular modes and types of transport and not in others. b) What are the main disadvantages of being a sole trader with respect to finance, human resource management and marketing? Choosing ONE mode or type of transport undertaking, critically discuss a business strategy to overcome these disadvantages and trade successfully, even in a severe economic recession. Question 2: 7

a) Explain Michael Porter's principle of 'cost leadership' as a generic business strategy. b) Critically assess the concept of cost leadership and its relevance to business strategy with reference to ONE mode or type of transport. Question 3: a) Illustrating your answer with reference to examples from around the world, explain the concept of 'light rail'. To what particular market segments might a light service be marketed in medium to large cities such as Manchester, Birmingham, Nottingham, Edinburgh and Dublin? b) From the perspective of the city authorities, what are the advantages and disadvantages of further extending their light rail system on routes where passenger demand is strong? Question 4: a) Explain Gareth Morgans concept of a 'machine' organisation? Why, in the nineteenth century, did this offer an attractive model for organising commercial businesses for transport modes such as shipping, railways, and in the twentieth century for airlines? b) With reference to the transport industry in the twenty-first century, assess the shortcomings of machine organisations from a business strategy perspective. DEADLINE Submit Coursework 1 to Undergraduate Office by Thursday 19th April 2012

ASSESSMENT REQUIREMENTS COURSEWORK 2: written assignment on case study Stormy skies over Europe The second written assignment will be based on desk research and an original case study. This should be written as an essay 2500 words in length (plus or minus no more than 10%), with a total weighting of 60% of the marks for this module: 1.0 INTRODUCTION The skies of the EU have been fully deregulated for 15 years. The full abolition of restrictive Air Service Agreements has encouraged competition on scheduled routes, many of which were previously operated by national flag carriers to the exclusion of new entrants. Deregulation lowered the barriers to market entry, allowing new players to enter the field. Initially at least, most new entrants had substantially lower operating costs than the more established fullservice airlines, but the latter retaliated by cutting their costs too, and by adopting many aspects of the cost leadership business model. The deregulated open skies over the expanded European Union with 27 Member States has provided business opportunities for new carriers. However, since 2008/9 the economic downturn has created great uncertainty in the airline industry, fuel prices have fluctuated, credit has been squeezed. In 2010, many full-service airlines in Europe suffered further losses due to unexpected climatic and environmental conditions that grounded operations and stranded passengers: ash clouds in the spring, and snow and ice at many 9

airports in northern and central Europe in the winter. In 2011, some airlines withdrew routes and/or cut schedules (e.g. BMI, Olympic). The continuing financial turbulence in many European countries brings little cause for optimism in 2012. Some established flag carriers are now in serious financial difficulty, but easyJet and Ryan Air - Europes largest low-cost airlines - have produced significant profits for their shareholders. Optimists believe that the demand for business as well as leisure travel will improve on some routes where economies are beginning to climb out of the recession. Might this situation create opportunities for risk-taking new low-cost operators who are brave enough to enter the market on certain routes?

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BRIEF The assignment will take the form of an essay with two main sections. Firstly, you will research and critically examine the prospects for an imaginary entrepreneur: an optimist who wants to use his/her own wealth (not borrowed money) set up a new low cost scheduled airline within the EU, starting with just the one route. You will research the market and consider the opportunities for the entrepreneur, taking into account both supply and demand factors on the route you have chosen. Secondly, you will analyse the business environment using Michael Porters Five Forces model, and assess the significance of barriers that may still inhibit market entry to that particular route.

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STRUCTURE AND CONTENT The introduction and conclusion are important features of the essay. The introduction should interpret the main questions, and explain the context and scope of the essay as a whole. The conclusion should summarise the market opportunities and potential problems for the new entrant with regard to your chosen route. (The introduction/ conclusion is worth 20% of total marks) In the first part of your essay you will select one route between any city pair (pair of cities) within the EU that the new entrant might fly. This may be a route that crosses national borders (e.g. London Copenhagen) or a domestic route (e.g. Frankfurt - Berlin). You may choose a route that is already being operated with a direct service by one or more established carriers. Alternatively, you may identify a route between two cities where no direct flights are currently offered 10

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and passengers are obliged to change (if so please identify the airport where they change planes). For your chosen route, you will consider the market opportunities for the new low-cost scheduled airline service, set up by the (imaginary) optimistic entrepreneur. Please identify the two airports (i.e. the one at either end of the route). In each case, what distance is the airport from the main centres of passenger demand (i.e. cities, resorts, etc)? Please show this on a map. From your own experience as a passenger, what is good or bad about the surface transport between the airports and these centres: how easy, quick and convenient (or not!) it is to get to the airport by road (car, bus, taxi) and/or rail, as the case may be? Identify all the competitors (if there are any) that the passengers for this route might use: other airlines, high speed rail, and fast roads (for shorter routes only)? On this particular route, what type of passenger demand is there likely to be (identify the market segments that are characteristic of your case study route, e.g. (cultural tourists taking city breaks, spa and health tourism, conference-goers)? What are the prospects for growth on this route, i.e. in the foreseeable future: is this a growth market, flat and unchanging or in decline? Are there any pronounced peaks and troughs in passenger demand (seasonal, weekly or daily, e.g. business meetings returning the same day)? Is most demand generated at one end of the route, or else fairly balanced between the two cities served? (This first part of your essay is worth 30% of total marks) 3.3 In the second part, you will analyse the business environment influencing the commercial prospects for all airlines on this particular route. In your own words, interpret the following forces included in Porters Five Forces model, and apply them to the route you have chosen as the subject of your essay. Discuss the relative significance (strength) of each force on this particular route with regard to the: Industry competitors: the intensity of competition between (any) existing or incumbent airlines Power of new entrants: prospective start-up airlines, such as the imaginary scenario in the first part of your essay Power of suppliers (you must work out who or what these might be) Power of buyers (you must work out who or what these might be) Power of substitutes (you must work out who or what these might be). 11

Now, from the point of view of the prospective new entrant you discussed in part one of your essay, critically assess the importance of any barriers to entry that remain, despite the freedom allowed through deregulation. Please use the following framework of potential entry barriers as a checklist with reference to your chosen route. In each case you must explain what the term means and apply it critically to air transport on your case study route: a) b) c) d) economies of scale capital requirements of entry access to supply or distribution channels differentiation by incumbents (airlines already established on the route) that distinguish them from the new entrant, and which mean that customers remain loyal to them e) experience (which incumbents have and which the new entrant hasnt got) f) expected retaliation from incumbents g) legislation or government action likely to affect the new entrant more than the incumbents Use these headings as a check list, and critically assess their relevance to your case study route. You may decide that some of these will be significant problems for the new low cost airline service. Others may be less important in the context of the route you have chosen. Please make reference to the module literature, especially Johnson, Scholes, and Whittington (2007) and Lynch, R. (2006), key extracts from which are in your Reader. (This second part is worth 50% of total marks) MORE GUIDANCE ON LENGTH, APPENDICES, REFERENCING The essay should be 2500 words in length (plus or minus 10%), and may be supplemented by appendices and any illustrative material (e.g. maps/diagrams), which you consider appropriate. All sources must be acknowledged in the text using standard international Harvard system of referencing. Please see details in Appendix 2. Full details of the sources that you have cited in the text of the essay should also be given in the List of References at the end of the essay . Likewise, any data used in tables must also be referenced to indicate the source. As with published sources, all website reference MUST BE REFERENCED IN THE TEXT OF YOUR ESSAY AS WELL AS AT THE END. 12

REQUIRED READING FOR SEMINARS AND FORMATIVE FEEDBACK It is essential that all students taking this module study the chapters and articles provided on Weblearn in the Reader every week, as instructed in the WEEKLY PROGRAMME (p. 5 above). In most of the seminars you will be discussing questions arising from the lecture that you attended the week before, and readings from Weblearn as directed. Please note that tutors are not able to read draft work for assignments on this module. So, please bring your outline work to the seminars in weeks 3, 4, 5, 6, 7, 8 and 10 as per the weekly programme to receive feedback and advise on a regular basis as your work progresses. Please note these dates for seminar discussion on your work in your diary do not leave it all to the last few weeks!

Submit Coursework 2 to Undergraduate Office by Thursday 10th May

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ASSESSMENT CRITERIA Please note the breakdown of marks (20/40/40) for each aspect of the coursework. As a guide, assessment of your coursework will take account of: Relevance, Breadth, Depth, Accuracy, Ethical Evaluation $ $ $ $ Did the essay the answer questions raised in the brief? Did it demonstrate sufficient breadth and understanding of the relevant management theories and models? Did it demonstrate sufficient depth of understanding, particularly of problems/issues, including the ethical considerations? Was the description accurate within the limits of the available information?

Quality of Research and Critical Thinking to Produce Solutions $ $ Was the case study researched thoroughly, making intelligent use of available source material? Were the principles applied to practice (i.e the case study) with evidence of critical thinking to produce solutions

Clarity, Style and Structure $ $ $ Were the issues and problems clearly explained? Was the coursework written in an appropriate essay style? Was it logically structured and well set out?

GETTING STARTED: Your chosen route for coursework 2 14

Please have this ready to discuss in class, seminar week 6 Give or send to tutor before week 5 if you would like feedback: Name/e-mail: Your city pair within the EU (please specify the airports) for the proposed scheduled service: In each case, what distance is the airport from the main centres of passenger demand (i.e. cities, resorts, etc)? [NB in your essay you will show this on a map]. From your own experience as a passenger, what is the general quality of surface transport between the airports and these centres: how easy, quick and convenient (or not!) it is to get to the airport by road (car, bus, taxi) and/or rail, as the case may be?

Identify all the competitors (if there are any) that the passengers for this route might use: other airlines, high speed rail, and fast roads (for shorter routes only)?

On this route, what type of passenger demand is there likely to be (market segments)?

What are the prospects for growth on this route: in the foreseeable future is this a growth market, flat and unchanging or in decline?

Are there any pronounced peaks and troughs in passenger demand (seasonal, weekly or daily)?

Is most demand generated at one end of the route, or else fairly balanced between the two cities served? 15

PLAGIARISM AND REFERENCING Students are strongly advised to be aware of the University's regulations concerning PLAGIARISM, where the work of other people is (consciously or otherwise) presented by the student as his/her own work. Penalties for plagiarism are severe, and may lead not merely to failing the module, but to failing the entire course. This means that if you copy from any source (for example, books, articles or the internet) you are likely to fail the examination and might fail the entire course. For further information see http://www.londonmet.ac.uk/academic-regulations/misconduct-1.cfm. All coursework submitted must be properly referenced according to academic convention and accompanied by a bibliography using the Harvard system. For further information and guidance: http://www.londonmet.ac.uk/services/sas/libraryservices/referencing/what.cfm

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Appendix 1: London Metropolitan Business School The standardisation of assignment presentation Subject Group Policy Presentation Description Coursework assignments must be presented in typed format on white A4 paper. Coursework must be compiled and submitted with a coursework cover sheet. All papers should be affixed with a SINGLE staple to the LEFT HAND CORNER. (It would help if you put your id no. and page no. on each page in case they fall out of order at any point). Coursework must NOT be presented in a folder of any kind. Note: The above does not apply to postgraduate and honours level dissertations. There is separate guidance on the binding of dissertations. Students may choose to use ARIAL, CALLABRI or VERDANA fonts for their course work. The point size should be 11 point. Line spacing should be 1.5 lines. Single line spacing must not be used. Document text should be justified across the page, unless the student has a dyslexia diagnosis, when left justification is acceptable. Paragraph indentations can only be used if subheadings, bullet points or long quotes are used. Do not indent normal paragraphs. Depending on the instructions contained within each assessment brief, students should structure coursework as an academic paper, essay or report. Check with your tutor if you are unsure. Students MUST use the Harvard Referencing System (HRS).

Page layout

Format

Referencing

Further guidance on succeeding in coursework assessment can be gained from: http://learning.north.londonmet.ac.uk/bssmstudy/

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Appendix 2. sources)

How to do your Referencing (Referencing printed

See also: http://www.londonmet.ac.uk/services/sas/libraryservices/referencing/what.cfm An Introduction to the Harvard System This help sheet provides basic guidance on how to reference the books and journal articles which you have used in your essays or reports. The Harvard System is one of several methods available and is the preferred choice of most departments in the University. You should check if your course requires you to use it before you do your first assignment. What is a Reference? A Reference is a detailed description of any document from which you have taken Information. It can relate to a complete book or just a chapter from it, or an article from a journal or newspaper. What is Citing Citing a reference is the act of recording it. This is done in two ways: 1. By putting a brief entry for each source in the text of your work. 2. By listing all your sources in full, at the end of your work. Why do I need to do it? It is required academic practice to provide references to guide your reader to the sources you have used for your research, to support the arguments you are making, and to credit the established work of others. What happens if I dont? Failure to acknowledge your sources will lead to a suspicion of PLAGIARISM i.e. trying to pass off someone elses work as your own. Please see the academic regulations for more detail on the implications and penalties of plagiarism. Putting References and Quotes into the Text of your Essay/Report 18

For each reference you make in the text of your essay, you need to provide the surname (family name) of the author(s) and the date it was published. If the authors name is part of the sentence statement, only the date needs to be in brackets. Example: Hartley (1999) declared that If you do not use the authors name in part of the sentence, then both the name and the year must be in brackets at the end of the sentence, separated by a comma. Example although other authors have denied this (Hartley, 1999) The page number(s) can be added if a specific part needs to be identified, or (ideally) you are using a direct quote, in which you copy a small part of the authors work word for word and place that quote in quotation marks . Example: Jackson (2004) declared that this is the finest example of postmodernism (Jackson 2004, p.575). If you use a particularly long quote, it is clearer to indent the quote and separate it from the main bulk of your text. Example: Sinclair describes the role of tourism in the North West as: so significant to a regional economy in decline, from which many of the core manufacturing industries have departed, and where farming can no longer offset those losses alone. It is essential to maintain the industry with governmental support and private sector investment wherever possible. It would be remiss to do otherwise (Sinclair, 1999, p.250 ) However, be warned, dont use quotes too often or their impact is reduced. Only repeat very significant points verbatim. An essay or report comprising of too many direct quotes will end up reading as a mish mash, it will not flow, and will be confusing to the reader (it may even confuse you!). Listing Your References at the End of your Work Your reference list (to be titled References) should only contain the details of documents or sources of the quotes you have referred to within the text of your work. The list must be in alphabetical order, listed A to Z, according to author(s) surname. Where do I find the full details that I need? You should always take the details of the author, title, etc. from the title page of a book (NOT the front cover). The date, edition, publisher, etc. may be on the back of the title page. Do not confuse an edition with a reprint. The date that you enter next to the author is the date of publication, which is located by the copyright symbol . If the book states that it is a 2nd edition, then you must also note this by inserting 2 nd edition, after you have listed the title. Generally, if you are not used to 19

this procedure, look and see how published authors, especially in academic textbooks, cite their references. The Harvard system gives you the option to use italics or underlining to emphasise the title. Whatever you decide, you must be consistent throughout. Use lower case for all title words after the first unless there is a proper name (as per the library catalogue). The preferred order of presentation is: Surname of author(s), preferably in capital letters, comma, initial(s), full stop. Year of publication (in brackets) Title (underlined), including the edition (if other than the first), full stop. Place of publication (city or town) (followed by a colon) Publishers name, (full stop) A book by a single author: Example ATKINS, P.W. (1998) Physical chemistry 6 th ed. Oxford: OUP If there are two authors: Example: McCARTHY, P. and HATCHER, C. (2002) Presentation skills: the essential guide for students. London: Sage Publications. If there are three authors or more, indicate this by giving the name of the first author only followed by the Latin phrase et al (meaning and others). Example: ENG, M et al. (1998) Global finance. 2 nd ed. Reading (Mass.): AddisonWesley. If the book is edited: Use the name of the editor(s) followed by (ed.) or (eds.) in place of the author. Example: EZRA, E. (ed.) (2004) European Cinema. Oxford: OUP. A chapter from an edited book: If you refer to a chapter in a book edited by someone other than the author of the chapter, you need to make this clear by using In (in italics and followed by a colon). The book title is in italics, NOT the title of the chapter. Example: GASKELL, G. (2003) Attitudes, social representations and beyond In : DEAUX, K. and PHILOGENE, G. Representations of the social. Oxford: Blackwell.

Corporate author When something is published by an organization or a company there will probably be no individual author whom you can identify. Example: BRITISH BROADCASTING CORPORATION (2004) Building public value: renewing the BBC for a digital world. London: BBC. Government Publication (Reports, Consultation Papers, etc.) 20

The relevant government department should be given as the author. The publisher is usually the Stationery Office (TSO) (formerly HMSO). Example: DEPARTMENT OF HEALTH (2004) Choosing health: making healthy choices easier. London: The Stationery Office. An article from a journal: Surname of the author(s) in capital letters, comma, initial(s), full stop. Year of publication in brackets Title of the ARTICLE, full stop. Title of the JOURNAL (in italics), comma. Volume number (in bold type) Issue or part number (in brackets), comma. First and last pages of the article separated by a hyphen and indicated by the abbreviation pp. Example: SMITH, A. and JACK, K. (2005) Reflective practice: a meaningful task for students. Nursing Standard, 19 (26), pp. 3337 An article from a newspaper: The same rules apply as for a journal reference, but details of volume and issue numbers are not required. You do need to indicate if your reference is from any particular section of the paper, however. Example: CURTIS, P. (2005) Ruth Kelly was here. The Guardian (Education Guardian) 20 September 2005: p.5. Taken and amended from: London South Bank University (2006) Help Sheet 30, How to do your referencing (1) An introduction to the Harvard System, http://www.lisa.lsbu.ac.uk/helpsheets/hs30.pdf, accessed on 25/07/2006

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