Strategic Audit: Cubic Transportation Systems

Strategic Audit: Cubic Transportation Systems

Question

Strategic Audit: Cubic Transportation Systems

Answer Solution

Cubic Transportation Systems, Inc. (CTS) is a cutting-edge firm that develops and manufactures automated fare collection systems for public transportation administrations.

Access control, revenue control, fare payment, card vending, data communications, and information management are all included in the company’s integrated fare collection systems. The company also provides commercial and card services, such as hosting central systems and functions, financial settlement, card production, distribution, and marketing.

The company’s ticketing and payment systems for buses, trains, and ferries that use smartcards and mobile phones (Smartphones) are its area of expertise.

The company clearly provides a wide range of services, including software support, operations services, and customer support.

Despite its global reach, the company is attempting to enter the Middle East and North Africa to capitalize on these emerging markets and generate high revenues (Cubic Transportation Systems, 2013).

PEST Analysis of the External Environment Political:
To receive funding for capital projects, Cubic transportation Systems must primarily rely on the federal, state, and local governments.

In addition, the company will have to rely on the country’s government regulations to acquire or upgrade any systems in North Africa and the Middle East (opurum 2012).
In both countries, competitive bidding is a rigorous and time-consuming process that gives low-priced businesses a significant advantage.
Fair collection typically lasts between seven and ten years on buses and twelve to fifteen years on trains (multisystems, Inc., et al.). 2002).

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In both nations, the use of automated regional ticketing systems is on the rise.
Additionally, there is a growing trend in other systems to make smart cards more convenient in order to give final customers more value and incentives (Acumen Building Enterprise, Inc. et al.). 2006).
In the Middle East and North Africa, there are numerous economic opportunities for cutting-edge mass transit systems and services.

Ticketing systems’ ongoing operations and commercialization are increasingly being outsourced by nations.
According to Opurum (2012), the expanding market presents crucial opportunities for CTS to establish long-term relationships and increase its long-term profits.
Help with essay writing Socio-Cultural:
Due to the increasing number of tourists and business concerns in these regions, there is a significant increase in the demand for public transportation in North Africa and the Middle East.
According to Middleton (2003), this has resulted in a high demand for ticketing systems and other automated services in these potential markets.
Another significant factor is the shift in cultural perspectives regarding automated fare collection systems (multisystems, Inc., et al.). 2002).
Technological:
The company must provide highly advanced products and services to customers in newly emerging markets and maintain their constant attention due to global technological advancements.
The fact that advancements in communications, security, and networking technologies now permit the interoperability of multiple modes of transportation and multiple operators in a single networked arrangement is significant (Middleton, 2003).

Threat from New Entrants: Porter’s Five Forces Analysis The new emerging markets pose a significant threat to new entrants due to the fact that these markets are still in their infancy, prompting businesses to look for novel opportunities to boost revenue and profit margins.

However, Cubic Transportation has an advantage due to its innovative and high-quality products and services because these markets also present significant challenges for businesses.

Additionally, the threat is moderate due to the strict government regulations and competitive bidding process for public transportation (Ensign, 2013).
Conflict between Competitors: The company faces a lot of competition in both countries.

The fact that the automated fares industry has a high exit cost is significant. Thales, Scheidt & Bachmann, and ACS are the company’s primary foreign rivals.

However, Cubic is one of many businesses that provide automated fare collection systems and solutions to public transportation operators worldwide.
dissertation-help-by-students-assignment-help(2) Additionally, the company competes with a number of local businesses in the European, Middle Eastern, and Asian markets for large national tenders.

According to Cubic Transportation Systems (2013), fare collection organizations, computer service providers, telecom providers, and other similar businesses compete with one another.
Customers’ bargaining power: Customers are very willing to bargain because public transportation companies can hire anyone who bids the most competitively and charges the lowest price for offering their services.

The industry has a high switching cost for customers, and because public transportation is typically managed by a single authority, there is a lot of bargaining power (Ali, 2009).
Supplier bargaining power: There are a lot of suppliers in the automated fare collection industry, which serves a small market. According to Cubic Transportation Systems (2013), fierce competition for supplying contracts has resulted from the long life expectancy of the products and the willingness of a small number of businesses to accept subpar products.

The danger of substituting products: The company faces threats from competing products in the new markets because these markets continue to use conventional public transportation ticketing systems, which presents some difficulties for the company.

Substitute products may suffer greatly from a lack of familiarity with automated systems and a high level of complexity (Acumen Building Enterprise, Inc. et al.). 2006).

Resources for Internal Environment Analysis:
The leading provider of integrated revenue management systems and solutions for the mass transit sector is Cubic Transportation.

The enormous quantity of both tangible and intangible resources available to the business will assist it in expanding into new markets.

The company’s prominent tangible resources include its high financial stability, innovative engineers, dedicated employees, technologically advanced machines, and highly automated business processes.
In addition, the company’s enormous intangible resources account for the brand name it has established in major international markets like Canada, Europe, the UK, and Australia, its devoted clientele, and the more than 400 projects it offers in 40 major markets (Cubic Transportation Systems, 2013).
Capabilities for sample assignment help services for students:
Cubic is able to provide fare payment infrastructure in the Middle East and North Africa that consists of gates, smart card readers, ticketing machines, and central solutions for dealing with and reporting any form of data and revenues thanks to the company’s exceptional resources.

The company is also able to provide innovative and advanced customer assistance, software assistance, and operation services.
Essential Skills:
Cubic Transportation’s ability to provide customers with comprehensive and extensive customer service is one of its major core competencies that helps it compete with market competitors.

The functions and upholding of the company’s fare infrastructure and revenue management are highly specialized.

The company’s experienced employees, dependable services, and quality-assured revenue infrastructure are core competencies that provide customers with unparalleled convenience and adaptability.

In addition, the company’s core competencies in this highly competitive market are its high standards of performance and its control over technology and innovation (Cubic Transportation Systems, 2013).

Research of the Automated Fare Collection (AFC) Industry It is important to note that the Automated Fare Industry is experiencing a rise in public transit right now due to the growing preference of people for technology-advanced services that are more flexible and convenient.

Buy High-Quality Essays and Assignments Written According To Your Specific University, High School, Or College Automated fare collection not only makes ticketing and fare collection less laborious, but it also makes it easy to collect money from customers through integrated ticketing systems while keeping their information private and secure.

Regarding public transportation, ticket vending machines, fare gates, ticket terminals, and other services are increasingly common in various nations. In addition, computers are communicating data using computers at depots and stations (Middleton, 2003).
The demand for AFC is increasing at an alarming rate as a result of the rapid expansion of rail transit construction. It’s important to keep in mind that the Middle East and North Africa’s accelerated subway and rapid rail investment and manufacturing will also accelerate the growth of the AFC systems market in these regions.

According to opurum (2012), the automated fare collection industry is booming because these systems improve the efficiency of public transportation by ensuring that passengers receive a valid ticket when they board buses, trains, and ferries, and pay the appropriate fare for their trip.
customer-assignment-help-services Automated fare collection systems, on the other hand, are making inroads into new markets because they automate the process of ticket accounting and selling while simultaneously providing comprehensive information on system usage that reduces staff and passengers’ deception in public transportation.

Smart cards are now used by automated fare collection machines in major cities to allow passengers to board public transportation.

Systems are also supported by a vast network of gates, transaction machines, and validators.

This not only makes it easier for passengers to purchase and renew their fare cards or tickets, but it also gives public transportation authorities the ability to speed up the process of boarding and collecting money (multisystems, Inc. et al.). 2002).

Strategic Responses of Cubic Transportation Systems (Recommended Strategy for New Markets) Based on research into the automated fare collection industry and the global ticketing environment, it is recommended that the company adopt a differentiation strategy.

In this context, the company should differentiate its offerings from those of competitors so that public transit authorities will approach the company and its innovative products and services (Berry, 2004).
Cubic should implement a low-cost smart ticket base in order to provide customers with a comprehensive smart card-based payment system in order to gain access to the markets of North Africa and the Middle East.

This is because smart ticket systems and vending machines are getting a lot of attention because they are convenient and accurate (Hanson, et al.). 2011).
Additionally, the company ought to provide a comprehensive set of card-enabled parking systems that can be incorporated into regional systems.

It is significant that the growing number of tourists and businesspeople using public transportation in the Middle East and North Africa has necessitated the implementation of such systems.

This business strategy will help the region serve new markets effectively (Davidson, 2006).
Cubic Transportation Systems must conduct feasibility studies and determine the most effective method of entry into these new markets as a strategic response to the issues that the global ticketing business environment faces now and in the future.

The company ought to make an effort to determine the likelihood of strategic alliances, joint ventures, and acquisitions in these new markets so that it can choose the best course of action and increase the success of its entry.

According to Hamel and Prahalad (1994), a company’s business-level strategy should aim for better customer service through customer-focused systems and lower risk offerings through innovation and advancement.
do-my-assignment The main risks that Cubic would face if it started a business in the Middle East and North Africa:
Due to the stringent legal policies in Middle Eastern nations, which pose a greater social and political risk to businesses just starting out, the company will face a risk from the region’s legal framework.

The company will face significant cultural differences between the Middle East and other foreign nations, posing a threat as it must adapt its strategies to the country’s business environment and cultural requirements (abdallah, 2001).
It will be difficult for a foreign company to survive in the region because the country’s tax policy and structure are more focused on domestic growth and development.

It is likely that some customers will not be aware of the automated fare collection systems because they are new to the area. As a result, there is a high risk that customers will be unaware of the systems’ benefits (Ali, 2009).

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Flexible prices that fit everyone’s budget.
Numerous studies assert that North Africa is not yet ready for significant investments, and the region’s business image is still in a state of turmoil.

The fact that the region has suffered significant economic losses as a result of numerous upheavals and the movement of foreign capital is significant. Social unrest is rife in the area, and as a result, Investors typically prefer to avoid it.

According to Ensign (2013), Cubic must establish sufficient connections in North Africa to ensure long-term viability and minimize risks.

Evaluation of Cubic’s Capability to Successfully Implement the Strategies in New Markets Despite the Potential Dangers These Markets Pose, Cubic is Able to Successfully Implement the Strategies in New Markets This is because Cubic has the most effective management team, highly dedicated employees, and innovative engineers, which are the company’s main strengths and enable it to establish itself in all new markets.
homework-help-services In addition, Cubic Transportation Systems has a thorough understanding of the revenue management industry and is able to automate fare collection services, allowing it to meet a variety of customer demands and tailor products and services to meet those requirements. According to Lei and Slocum (2005), Cubic has the appropriate combination of resources and skills to carry out the business level strategy and enter new markets.

Because Cubic provides customers with a comprehensive, low-risk, and exceptionally one-of-a-kind system solution, its success in these markets is highly likely.

Cubic’s integrated solutions enable the government to operate the entire organization or just a specific system or service.

Businesses will be able to cut costs and make more money as a result of the company’s constant focus on innovation in designing and providing their systems and maintenance services.

According to Hamel and Prahalad (1990), Cubic is certain to be able to successfully implement its strategies in the new market thanks to all of these capabilities.

Conclusion Based on the preceding discussion, Cubic Transportation Systems produces ticketing systems, vending machines, support systems, and services for buses, trains, and other public transportation to use technology, smartcards, and mobile phones to make payments and purchase tickets.

The company is headquartered in the United States and provides integrated revenue management solutions and offerings to the public transit industry.
The Middle East and North Africa are merging markets for automated fare collection systems, so the company is trying to expand there.

This will help the company make more money.

The discussion presents the company’s internal and external analysis by focusing on its extensive resources and exceptional core competencies.

The company has since received strategic recommendations in the form of differentiation and targeted customer behavior in order to establish its presence in these new markets and maximize profits.