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National Passenger and Freight Railways Service: Market Analysis | Accenture helped this national passenger and freight railway service provider by conducting a detailed market analysis and improving its business processes. | | | | | | | Summary | | | |  
A national passenger and freight railway service provider needed to differentiate itself in the face of competition from low-cost airlines. Accenture conducted a detailed market analysis and helped the client improve its business processes and launch successful new services.
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To receive more Client Successes, sign up for My Outlook, your single e-mail source for all of Accenture's latest ideas and innovation, personalized specifically to your business interests and the industry issues you face. Next: Business Challenge |
| | | Business Challenge | The client—a provider of both national passenger and freight railway services—faced a growing competitive threat from the low-cost airlines. These airlines were making it possible for passengers to fly to destinations at fares that were perilously close to those of the client's fares. The innovative railway service took a two-pronged approach to the competitive threat. First, trim reservation costs and accelerate Internet penetration by launching a subsidiary, which would rely totally on Internet ticket sales. Secondly, it would win over targeted customers—primarily youth in the 12-25 year-old age bracket and the urban middle class—by offering new types of train services that airlines would be unable to match. Next: How We Helped |
| | | How We Helped | Working closely with the client, Accenture's team of Internet and business process specialists conducted a detailed market analysis of low-cost air carriers' fares, routes, traffic and frequency, then prepared a competitive business strategy for the client based on the company's existing infrastructure and trains. The business case also included an evaluation of the required investment in IT and marketing. As a result of its analysis, Accenture targeted specific routes for the new high-speed service and designated two zones for passenger seating—the "Zen" relaxation deck and the more social "Fun" activity deck. The team deployed a new pricing structure using Navitaire's revenue management system (RMS) software, which is the technology of choice for many low-fare airlines. To power its online bookings, the client selected Navitaire's Open Skies reservation system. Navitaire is a wholly owned Accenture subsidiary, so it was a natural choice to team with Accenture. Next: High Performance Delivered |
| | | High Performance Delivered | In late 2004, the client rolled out its new brand of high-speed passenger rail service just one year after the project's launch—the super-fast rollout mirrored the train's own rapid pace. After booking tickets online, the client's customers heading to the south of France de-stress with massages or enjoy tapas bars and portable DVD players—services they can't find on the airlines. And the railway's experiment is paying off. Distribution costs are down by 20 percent and revenue has increased. Customers have responded to the new, wider range of fares—the earlier they book, the cheaper the rate. They've also responded to the array of services that pamper them once on board. Although tickets must be booked online, the client's trains are carrying more passengers than their more traditional high-speed counterparts. By leveraging e-commerce, the railway has reduced costs and maximized revenue management efficiency. The new subsidiary, which expected to break even during 2006, now intends to reach that goal earlier—at the end of 2005. By all indications, the client is now solidly on the path to becoming a high-performance business. To receive more Client Successes, sign up for My Outlook, your single e-mail source for all of Accenture's latest ideas and innovation, personalized specifically to your business interests and the industry issues you face. Return to Summary |
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