Paragraphs highlighted in blue can be verbally communicated to the interviewee.
The following information could be provided to the interviewee if requested:
- The company is in a tight cash position
- Fuel is the major cost for any bus transport operator
- Due to insufficient monetary resources, the firm has not been able to upgrade to latest machines, infrastructure, etc
- The firm has substantially invested (real estate) in terminals
- Routes can be classfied into three types: short, medium or long. More than 50% of the revenue comes from long routes
- The last CEO focussed a lot on top line. For instance he started the "anywhere pickup" plan
The candidate should use the profitability framework and focus more on costs.
Costs can be classified as fixed and variable.
- Unprofitable routes should be identified and scrapped or scaled back
- Bus route fleet optimization could be performed to improve efficiency
- Fuel contracts for protection against fuel price fluctuations
- Lease new equipment to improve fuel efficiency and decrease maintenance costs, downtime
- Instead of "anywhere pickup", freeways could be utilized to improve schedules
Additionally, extra service offerings could be realigned with customer needs. For example, seats with extra legroom could be charged for.
III. Concluding Observations
The company should scrap the unprofitable routes, perform bus route fleet optimization and lease new equipments to improve fuel efficiency and to decrease maintenance costs.