Hi,
It is a good case. Even though we need more context and information about the client and the business, I elaborated this framework.
1- Understand the market
A- Market size in terms of tons of cargo to transport and projected growth of this market to check if there is enough demand
B- Analyze the customers and their needs (retailers, manufacturers, utilities -> segmentation) , you might need this information later if you want to acquire new customers
C- Analyze current competitors and their market share to better understand our positioning and our competitive advantage vs competitors
2- Evaluate the impact of this new entrant:
Herein you can do a matrix to compare between our client and the new entrant (try to quantify). I would compare them based on:
Pricing strategy and level : how does our client charge the service ? Is it tons-based pricing? Wagon-based? Contract-based? What about the new entrant ? Is he going to price cheaper ?
Offerings: What does our client offer as a service? Rail service only or rail + distribution to the warehouse of his customers? Speed of service ? (look for competitive advantages and compare it with the new entrant)
Clients: who are the clients ? Is it possible to retain these clients ? is the new entrant targeting our clients ?
Distribution: How does our client vs new entrant sell their service ? Online ? tenders ? How would our client find other ways to sell his service ?
Marketing : compare strategies of marketing
This part will enable you to discover to which extent the new entrant is threating our client’s business. Based on this you can find out what strategy to adopt to remain competitive.
3- Find out the strategy:
A- Block this new entrant by creating entry barriers:
increase for instance penalties if a client switches to this new entrant, block access to suppliers of wagons etc, lobbying to create legal barriers if the new entrant is a foreign operator for instance
B- Protect our clients:
try to retain our clients by offering discounts on the price or offer new services (for instance more rapid transport, comprehensive insurance in case if the freight is damaged …)
C- Acquire new clients :
Strong advertising, target niche clients, new routes etc
Thank you Clara, I appreciate your response
Thank you Clara, I appreciate your response