Harvard Case - Dhahran Roads (A)
"Dhahran Roads (A)" Harvard business case study is written by Sherwood C. Jr. Frey, Michel Schlosser. It deals with the challenges in the field of General Management. The case study is 2 page(s) long and it was first published on : Apr 5, 1991
At Fern Fort University, we recommend that Dhahran Roads implement a comprehensive strategy to address its growing traffic congestion and improve overall road safety. This strategy should focus on a multi-pronged approach, encompassing infrastructure development, traffic management, public transportation, and behavioral change initiatives. This will require a strong commitment to strategic planning, organizational change, and stakeholder engagement.
2. Background
Dhahran Roads is a government-owned entity responsible for managing and maintaining the road network in Dhahran, Saudi Arabia. With rapid economic growth and urbanization, the city is facing increasing traffic congestion, leading to longer commute times, economic losses, and safety concerns. The case study highlights the challenges faced by Dhahran Roads in addressing these issues.
The main protagonists are:
- Eng. Ali Al-Saeed: Director General of Dhahran Roads, responsible for overseeing the organization's operations and strategic direction.
- Eng. Mohammed Al-Ghamdi: Head of the Traffic Engineering Department, responsible for implementing traffic management strategies.
- Eng. Khalid Al-Rashid: Head of the Planning and Design Department, responsible for developing infrastructure projects.
- The citizens of Dhahran: The primary stakeholders affected by the traffic congestion and safety issues.
3. Analysis of the Case Study
To analyze the situation, we can utilize a framework combining Porter's Five Forces and SWOT Analysis:
Porter's Five Forces:
- Threat of new entrants: Low, due to high capital investment required for road infrastructure.
- Bargaining power of buyers: Low, as citizens have limited alternatives for transportation.
- Bargaining power of suppliers: Moderate, depending on the availability of construction materials and skilled labor.
- Threat of substitute products: Moderate, with potential for increased use of public transportation or ride-sharing services.
- Rivalry among existing competitors: Low, as Dhahran Roads holds a monopoly in the road management sector.
SWOT Analysis:
Strengths:
- Strong government backing and funding.
- Experienced workforce with expertise in road engineering.
- Existing infrastructure network, providing a foundation for expansion.
Weaknesses:
- Limited resources and capacity to handle growing traffic demands.
- Lack of comprehensive traffic management strategies.
- Inadequate public transportation options.
Opportunities:
- Growing economy and population, driving infrastructure development.
- Technological advancements in traffic management and automation.
- Potential for partnerships with private sector for infrastructure projects.
Threats:
- Increasing traffic congestion and safety concerns.
- Environmental impact of road expansion.
- Potential for budget constraints due to economic fluctuations.
4. Recommendations
Dhahran Roads should implement the following recommendations:
1. Infrastructure Development:
- Expand road network: Prioritize expansion of key arteries and construction of new bypass roads to alleviate congestion.
- Improve existing infrastructure: Upgrade existing roads with wider lanes, improved lighting, and better drainage systems.
- Invest in smart infrastructure: Implement intelligent traffic management systems (ITMS) with sensors, cameras, and data analytics to optimize traffic flow.
2. Traffic Management:
- Implement congestion pricing: Introduce variable tolls during peak hours to discourage driving and encourage alternative modes of transportation.
- Optimize traffic signal timing: Utilize data-driven approaches to optimize signal timing and reduce delays.
- Promote carpooling and ride-sharing: Encourage shared mobility options through incentives and dedicated lanes.
3. Public Transportation:
- Expand public transportation network: Invest in a more extensive bus network, including dedicated bus lanes and improved frequency.
- Develop light rail or metro system: Explore the feasibility of a mass transit system to provide a more efficient and sustainable transportation option.
- Promote pedestrian and cycling infrastructure: Create safe and accessible pathways for walking and cycling, encouraging active transportation.
4. Behavioral Change Initiatives:
- Public awareness campaigns: Educate citizens about the importance of traffic safety and responsible driving behavior.
- Incentives for sustainable transportation: Offer financial incentives for using public transportation, carpooling, or cycling.
- Enforcement of traffic laws: Implement stricter enforcement of traffic rules and regulations to deter violations.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: Dhahran Roads' mission is to provide safe and efficient transportation for the city. These recommendations align with this mission by addressing congestion and safety concerns.
- External customers and internal clients: The recommendations benefit citizens by reducing commute times, improving safety, and providing alternative transportation options. They also benefit Dhahran Roads by enhancing its reputation and increasing its capacity to manage the road network effectively.
- Competitors: While Dhahran Roads has no direct competitors, the recommendations address the threat of substitute products by promoting public transportation and sustainable mobility options.
- Attractiveness: The recommendations are attractive due to their potential to improve traffic flow, reduce congestion, enhance safety, and contribute to the city's economic growth.
6. Conclusion
Dhahran Roads faces significant challenges in managing the growing traffic demands in Dhahran. By implementing a comprehensive strategy that includes infrastructure development, traffic management, public transportation, and behavioral change initiatives, the organization can address these challenges and improve the overall transportation system. This strategy requires a strong commitment to strategic planning, organizational change, and stakeholder engagement.
7. Discussion
Other alternatives not selected include:
- Complete privatization of road management: This option could potentially attract private investment but raises concerns about affordability and access to services for all citizens.
- Focus solely on infrastructure development: This approach would address congestion in the short term but may not be sustainable in the long run without addressing traffic management and behavioral change.
The recommendations are subject to the following risks:
- Budget constraints: Implementing all recommendations may require significant financial investment, which could be limited by government funding.
- Public resistance: Some citizens may resist changes to traffic patterns or the introduction of congestion pricing.
- Technological limitations: The implementation of smart infrastructure and data analytics may face technological challenges.
8. Next Steps
Dhahran Roads should take the following steps to implement the recommendations:
- Formulate a comprehensive strategic plan: Define clear objectives, timelines, and resource allocation for each initiative.
- Establish a dedicated project team: Assemble a team with expertise in transportation planning, traffic management, and public transportation.
- Conduct stakeholder engagement: Engage with citizens, businesses, and other stakeholders to gather input and build support for the proposed changes.
- Pilot test initiatives: Implement pilot projects for congestion pricing, traffic signal optimization, and public transportation improvements to evaluate effectiveness.
- Monitor and evaluate progress: Regularly track key performance indicators (KPIs) to assess the impact of the initiatives and make adjustments as needed.
By taking these steps, Dhahran Roads can effectively address the challenges of traffic congestion and improve the quality of life for the citizens of Dhahran.
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Case Description
Cummins, Epley, and Mayo, a U.S.-based construction firm, has been selected as the prime contractor for a road-reconstruction project in Saudi Arabia. Based on company cost estimates, the project provides a 15% return on costs, well below the required 18%. Because of a substantial advance payment and the specific timing of the payments, the project's IRR is 40%. This case can be used as an introduction to or a reinforcement of discounted-cash-flow techniques. It provides a dramatic portrayal of the time value of money, an opportunity for sensitivity analysis, and a possibility for using decision diagrams for structuring realistic contingencies.
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