Europe Rail Tunnel

Solved 400+ times

Problem Definition

The airlines covering the Cologne to London route are facing a competitive threat from a new rail tunnel connecting Britain and Germany by train.

Which all factors do you think the airlines should consider before reacting to this threat?


Short Solution

The carriers should look at service differentiation, convenience, price and cost and capacity/operations before responding to the threat.

Detailed Solution

Paragraphs highlighted in orange indicate hints for you how to guide the interviewee through the case.

The airlines should evaluate the following factors -

I. Service Differentiation

Along with looking at the journey duration, the carriers should also evaluate passenger's comfort in both means of transportation and the frequency of trains/airplanes to have.

II. Customer Convenience

Factors such as ease of reaching station/airport, boarding should be considered. The airlines should also analyze how much would different customer segments be affected by this new rail tunnel.

III. Price &Cost

It is important to analyze the price sensitivity of different customer segments and the price advantage of one form of transport over another.

Implications of a price war should also be analyzed.

IV. Operations efficiency

The airlines should also focus on the efficiency of their operations. (Example - Would the firm be able to shift to a smaller airplane in case the market share decreases?)

A great answer would also include the following factors:

  • Relationship marketing or customer loyalty
  • Europe regulatory structure
  • Effects of change in fuel prices

Difficult Questions

If the interviewee solves the case very quickly, you can come up with more challenging questions.

Related consulting question(s)
Best answer so far:
Ex-Accenture Strategy Consultant, Career Coach (5yrs)

Hi, In consulting, especially strategy consulting - there are a few basic frameworks that you use and then build on. For example when looking at process improvement you need to show you understand... (more)

Here is my take on this: 1) Market size can be calculated by breaking it down into two: Households and Commercial application. We will concentrate on households: Number of households in Europe (... (more)

Related BootCamp article(s)

Competitive Response

In a competitive response case study, your job is either to analyze what your client should do in response to a move performed by a major competitor or to anticipate what competitors will do in response to a move performed by the client

0 Comment(s)

The Value Chain

The Value Chain - as e.g. by Porter - is a classic framework to structure the activities of a business and add value to products by transforming resources.

3 Comment(s)
4.4 (5 ratings)
4.4 5 5
Case exhibits

No case exhibits yet