Harvard Case - Indore City Bus Transport Service (A)
"Indore City Bus Transport Service (A)" Harvard business case study is written by G. Raghuram, Satyam Shivam Sundaram. It deals with the challenges in the field of Service Management. The case study is 15 page(s) long and it was first published on : Jan 8, 2010
At Fern Fort University, we recommend that Indore City Bus Transport Service (ICBTS) implement a comprehensive strategy focused on service innovation, customer experience management, and operational efficiency to address the challenges of declining ridership and increasing competition. This strategy will involve a combination of service design, technology integration, and organizational change.
2. Background
Indore City Bus Transport Service (ICBTS) is a public transportation provider in Indore, India. The company faces declining ridership due to increased competition from private operators, poor service quality, and a lack of modern amenities. ICBTS is struggling to maintain its market share and profitability. The case study highlights the company's need to improve its service quality, customer experience, and operational efficiency to remain competitive.
The main protagonists in the case are:
- Mr. Sharma: The General Manager of ICBTS, responsible for overall operations and strategy.
- Mr. Singh: The Operations Manager, responsible for day-to-day operations and service delivery.
- Mr. Patel: The Marketing Manager, responsible for promoting ICBTS's services and attracting new customers.
3. Analysis of the Case Study
The analysis of the case study can be framed using the Service Profit Chain framework, which emphasizes the link between employee satisfaction, customer loyalty, and profitability.
Internal Service Quality: ICBTS suffers from low employee morale, inadequate training, and lack of motivation. This impacts the quality of service provided to customers.
Customer Satisfaction: The lack of modern amenities, unreliable service, and poor customer service are key factors contributing to customer dissatisfaction and a shift towards private operators.
Customer Loyalty: The absence of a robust customer loyalty program and a focus on customer retention strategies has resulted in a decline in customer loyalty.
Profitability: The declining ridership and the resulting revenue loss have negatively impacted ICBTS's profitability.
Competitive Landscape: The emergence of private operators offering better service quality and amenities has intensified competition, putting pressure on ICBTS to adapt and improve.
Other Key Issues:
- Lack of Technology Integration: ICBTS is lagging behind in utilizing technology for service improvement, such as mobile ticketing, real-time tracking, and customer feedback systems.
- Inefficient Operations: The company struggles with outdated infrastructure, inefficient route planning, and inadequate maintenance, leading to delays and breakdowns.
- Limited Marketing and Communication: ICBTS lacks a comprehensive marketing strategy to effectively communicate its services and attract new customers.
4. Recommendations
To address the challenges faced by ICBTS, we recommend the following:
1. Service Innovation and Customer Experience Management:
- Service Design: Implement a comprehensive service design process, leveraging service blueprinting to map out the customer journey and identify key touchpoints for improvement.
- Service Innovation: Introduce new services such as technology-enabled services like mobile ticketing, real-time bus tracking, and online booking systems.
- Customer Experience Management: Implement a customer relationship management (CRM) system to track customer feedback, preferences, and complaints. Utilize customer journey mapping to identify pain points and opportunities for improvement.
- Service Quality Improvement: Focus on improving service quality by implementing SERVQUAL model to measure and address service gaps.
- Service Recovery: Develop a robust service recovery system to address customer complaints and ensure prompt resolution.
- Branding: Develop a strong brand identity and marketing strategy to differentiate ICBTS from competitors.
2. Operational Efficiency and Technology Integration:
- Process Analysis: Conduct a thorough process analysis of existing operations to identify inefficiencies and areas for improvement.
- Technology Integration: Implement IT management solutions to optimize route planning, scheduling, and maintenance.
- Infrastructure Upgrade: Invest in upgrading existing infrastructure, including buses, terminals, and ticketing systems.
- Service Capacity Management: Optimize service capacity by adjusting routes, frequencies, and bus sizes based on demand.
- Service Productivity: Implement measures to improve service productivity, such as driver training programs and efficient maintenance schedules.
3. Organizational Change and Employee Empowerment:
- Organizational Culture: Foster a customer-centric organizational culture that values service excellence and employee empowerment.
- Employee Empowerment: Implement employee empowerment programs to encourage employee initiative and problem-solving.
- Employee Incentives: Introduce performance-based employee incentives to motivate employees and reward exceptional service.
- Hiring and Recruitment: Implement a robust hiring and recruitment process to attract and retain skilled and motivated employees.
- Training and Development: Provide comprehensive training and development programs for employees to enhance their skills and knowledge.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with ICBTS's core mission of providing affordable and reliable public transportation.
- External Customers and Internal Clients: The recommendations prioritize customer satisfaction and employee empowerment, addressing the needs of both external customers and internal clients.
- Competitors: The recommendations aim to differentiate ICBTS from competitors by offering innovative services, improved customer experience, and enhanced operational efficiency.
- Attractiveness: The recommendations are expected to improve ICBTS's profitability by attracting new customers, increasing ridership, and reducing operational costs.
6. Conclusion
By implementing these recommendations, ICBTS can transform itself into a customer-centric, technology-driven public transportation provider. This will allow the company to regain market share, improve profitability, and become a leader in the Indian public transportation sector.
7. Discussion
Alternative Options:
- Outsourcing: ICBTS could consider outsourcing certain operations, such as maintenance or ticketing, to focus on core competencies. However, this could lead to loss of control and potential quality issues.
- Merger or Acquisition: ICBTS could explore merging with or acquiring another transportation company to gain access to resources and expertise. This option could be expensive and complex.
Risks and Key Assumptions:
- Financial Investment: Implementing these recommendations requires significant financial investment, which may be challenging for ICBTS.
- Technology Adoption: The successful implementation of technology-enabled services relies on the company's ability to adopt and integrate new technologies effectively.
- Employee Resistance: Implementing organizational change may face resistance from employees, requiring effective communication and change management strategies.
8. Next Steps
- Develop a detailed implementation plan: This plan should outline specific actions, timelines, and resource requirements for each recommendation.
- Secure funding: ICBTS needs to secure funding for the necessary investments in technology, infrastructure, and training.
- Communicate the strategy: Communicate the strategy to employees, customers, and stakeholders to build support and ensure buy-in.
- Monitor progress and make adjustments: Regularly monitor the progress of the implementation and make adjustments as needed.
By taking these steps, ICBTS can successfully implement its transformation strategy and achieve its goals of regaining market share, improving profitability, and becoming a leading public transportation provider in Indore.
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Case Description
Towards the end of 90s, mounting losses forced Madhya Pradesh State Road Transport Corporation (MPSRTC), the sole provider of public transport in Madhya Pradesh, to suspend their urban services. As a consequence, organized public transport services ceased to exist in Indore, the largest metropolitan city of the state of Madhya Pradesh. This void was filled by Intermediate Public Transport (IPT) consisting of minibuses, tempos and auto rickshaws. As of January 2004, 300 private minibuses, 150 tempos, and 10,000 auto rickshaws were plying as IPT, but with poor service levels. Lack of public transport was a catalyst for rapid increase in personalized vehicles, and high level of pollution and accidents. Worried over the rapid growth of personalized vehicles, and high levels of pollution and accidents in Indore, policy makers and administrators had made several attempts of reviving the public transport system in the city. In 2005, the Collector and District Magistrate of Indore decided to make another attempt of reviving the public transport. The two cases, Indore City Bus Transport Service (A) and Indore City Bus Transport Service (B) discuss the complexity involved in the planning, rolling out, and running of public transport services in Indore on a sustainable basis.
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