2.

6 Strategic Management
2) Carry out SWOT analysis of Indian Railways. Suggest measure to run it profitably.

A) SWOT analysis of Indian Railways:

Strengths in the SWOT analysis of IRCTC (Indian Railways):

1) Complete government support – This subsidiary of Indian Railways has complete back up of
government in terms of infrastructure and funds. Government support always acts as a strength for any
organization since they are able to take bold decisions.

2) Monopoly in rail tours and ticketing – Since there is no privatization in the railways in India. They
enjoy a monopoly in designing the rail tours and selling at profitable rates.

3) Availability of charter booking – Not only the option of charter booking is available, IRCTC also
provides the discounts on such bookings.

4) No competitors in online booking – There is no competition in online booking of tickets and services.
Yes, there are certain aggregator websites available but the final booking happens through IRCTC only.

5) The only player for catering in railways – In this segment as well, there is no competition as such
which establishes their monopoly.

6) Have been successful in establishing faith and good will even after being monopolistic – The
provided services are available at best prices even when there is no competition. This has established
faith and goodwill among people for IRCTC.

Weaknesses in the SWOT analysis of IRCTC :

1) Poor promotional activities – The promotional activities are done by IRCTC does not look very
attractive as such. They need to be better in their brand management to attract the next-gen customers
as well.

2) The high rate of failed transactions – This has always been a problem for IRCTC. Whenever there is
high traffic on the website, the rate of failed transactions starts to increase drastically for e.g. during
tatkal bookings.

3) Poor customer services – Another area to look for, customer service is not as good as it should be.
The attitude of customer care executives speaks a lot about the kind of service they want to provide.
IRCTC definitely to take some serious actions in this aspect.

4) Slow Implementation of decisions – Even if some decisions are made, the implementation has always
been slow in a huge organization like IRCTC. This becomes a major concern in a service industry where
people look for best services every time.

5) Quality of service is way below private operators – The different services that IRCTC provides have a
lot of scope for improvements. Railway department is not privatized yet but if we see similar tourism
services which are provided by private operators, they are of better quality then what IRCTC provides.
6) Lapses in technology – They are still struggling to get and implement the best technologies available
in the market. It makes the server not function to the desired levels.

Opportunities in the SWOT analysis of IRCTC :

1) Increase in the disposable incomes of people – The continuous increase in people’s disposable
incomes gives an opportunity in terms of launching new and better services as people will definitely be
interested in exploring such options if given.

2) Booming travel industry – The overall travel industry is on a boom these days, again, an opportunity
for IRCTC to widen its feathers to cover as many opportunities as possible.

3) Indian market is huge – They have a huge market like India at their disposal where multiple segments
are available to be targeted. They can easily tap this opportunity to provide customized services that
services that match a different set of customers.

4) There is no competition for IRCTC – The kind of competition-free environment that IRCTC enjoys
gives it unlimited opportunities of providing best-customized services to its customers.

5) Strategic tie-ups for improving performance – They can also think of creating some strategic tie-ups
with private operators for improving service performance at the required levels.

Threats in the SWOT analysis of IRCTC :

1) Privatization – If railways choose to privatize these services then it will be the biggest threat for IRCTC
as we all know the scope of improvement in the current services and private operators won’t leave any
stone unturned to make use of everything.

2) No support of government – Another threat is the situation if the government pulls back its support.
Since IRCTC is highly dependent on ministry for various activities, this can prove to be a fatal situation
for them.

3) Substitute services like low fare airlines – The constant increase in rail fare and availability of low-
cost airlines make it a lingering threat for IRCTC to lose some customer base.

4) Terrorist Attacks – There have been a lot of incidents in the past when railways became the target of
terrorists. These external factors are always a problem which needs a long-term permanent solution.

5) Non-functioning of trains in winters especially in the north and east India – Winters are a nightmare
for the functioning of railways in some parts of India. They become a huge interruption in the services of
railways. While there is not much that can be done on this yet a better planning can give some respite
from this problem.

Measures to run Indian Railways profitably:

1. Introducing metro station type entry and exit gates in stations... While it requires huge amount
of investment, it can be done in stage by stage process. First, try to cover important cities, their
entry stations. Next should be tier 2 and tier 3 cities. As most of the trains pass through or travel
between these important stations. And next should be other smaller stations.

2. Next step would be to increase the comfort level of passengers. By this is mean to say that
general bogies should be upgraded with seating arrangement (single seat for a passenger) . And
the reserved especially sleepers should replace with seats.. Out of 10 coaches of sleeper class 5
should be replaced with seats as in general coaches but should be reserved one. Those
remaining 5 sleeper coaches should be made available for senior citizens, PWDs and armed
forces etc. This must be made with simultaneous increase in train speed, As People can travel
for 10–12 hrs. in seating arrangement.

3. Reserved seating coaches should be replaced with double decker trains wherever possible. This
would accommodate more people. First AC and to possible extent 2nd AC should be replaced
with 3rd AC where less people travel with them.. I have seen passengers being upgraded to
these coaches who have booked for sleeper coaches.

4. The train speed must be increased. People can travel for 10–12 hrs. as I said earlier. The increase
in speed can be like this. If one is traveling for a distance of 500 -600km then the train should
cover this speed in 9- 9.30 hrs. And the trains travelling between tier 1 cities should be able to
cover that distance between them in 15 -18 hrs. with high speed trains made available.

5. All the above can be done with increase in fare of the ticket. A ticket for the sleeper coaches
between 2 cities with distance of 500–600km is generally at 350–400rs. And the general ticket
costs around 200–220rs. Train fare should adjusted as follows. General ticket should cost 50%
you the journey distance. For example. , IF distance is 500km then, ticket should be 250rs.
Likewise other coaches ticket should revised as it should be 75% of the distance for reserved
seating coaches, 85% for sleeper coach, 100% for 3rd AC, 125% FOR 2nd AC and 150% for the
1st AC.

6. This will follow with heavy debate in national media. But I think people will co-operate as you
are going to make their travel faster and with comfort.
3) Nowadays product diversification is a mandatory process in Indian Industry. Give an example of
success and failure. Give reasons for the success and failure.

A) Product diversification is a process by which businesses attempt to expand their market reach and
customer base by delivering products somewhat different than the ones for which they are known.
These new products can simply be extensions of existing brands or they may be entirely new. By
engaging in product diversification, a company can extend its business into new areas and markets,
thereby increasing their opportunities for profit. There are some potential pitfalls to this strategy,
including the possibility that a company might stretch itself too thin or that it might dilute its original
brand with the existence of the new product lines.

Product diversification is a strategy that many businesses use to grow and manage risk. It can involve
creating new products, adapting existing products to suit the needs of other market segments or
acquiring other businesses to tap into their product markets.

Many companies diversify to reach new customers and increase sales. However, there are several other
reasons to pursue a diversification strategy. It can help distribute risk within the company as it offers
other sources of income when one area of the business fails. Diversification can also help companies
acquire new skills, build strong brands and take advantage of economies of scale. Diversification can also
refocus a company in a different direction, help keep it secure against takeover maneuvers, or help it
acquire new assets.

Diversification can have downsides and may not be appropriate for all businesses, as reported in
Entrepreneur. It can eat away at existing sales because the new products may simply attract existing
customers and cause the old products to become obsolete. However, this effect may be useful for
businesses that are experiencing declining sales, as it can help bring back customer attention and phase
out poorly performing products or services.

Businesses should plan diversification carefully. They should focus on the needs of their customers and
new target customers and position new products in those target segments.