Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
12. Commercial Management Practices
and Strategy Development
12 Commercial Management Practices
and Strategy Development
This chapter introduces basic concepts and techniques in commercial railway
management that improve railway performance, including developing a business
strategy and management plans for investment, financial performance, marketing,
and human resources. Managing railways requires a sound business strategy
based on all of these elements.
12.1 Strategy Development
Developing a business strategy requires analyzing the basic purpose of the railway,
assessing its competitive and financial position, coming to agreement with
shareholders on the railways’ mission and objectives, and then developing a longterm
strategy to achieve those objectives (figure 12.1). Successful railways focus
their efforts on a few critical areas determined during the strategy analysis. Strategy
establishes a general direction that must be backed up by a detailed plan and
set of performance measures. The strategy will include market, cost structure,
investment, human resources, and finance components. Generally, these elements
must be addressed iteratively, using a range of potential alternatives to
develop a final strategy that will be reviewed with shareholders.
The World Bank Page 176