Cn Rail Essay

1616 words - 6 pages

Executive SummarySince CN has been privatized and deregulated from the Canadian government CN has seen tremendous growth in sales, operations, and the investment market. CN has worked hard to turn the company around and become a successful rail company over the years. Some changes have included lowering operating costs, lowering debt, expansion into the U.S, being more competitive and cost conscious with a profit oriented mindset, as well as increasing capital investments in equipment and infrastructure.CN is now working on ways to help grow the company and continue growing its revenues. In order to do this CN has identified three main issues; these issues include the current CN-NAFTA strategy, Surface Transportation Board (STB), and expansion to new markets.After reviewing some of CN's options for growth, it is determined that CN should take advantage of the emerging market in Asia and open up Freight Forwarding firms. By opening up the Freight Forwarding firms CN will have the opportunity to expand its business model, take advantage of economic growth, increase revenues and improve customer service.CN will need to ensure that educated reliable personnel are found for their new freight forwarding firms, and starting looking to secure office space as well as employees. Below we will take an in-depth look into CN's current business strategies and how there is room for growth and improvement.Issue IdentificationCN is faced with many different challenges due to deregulation of the rail industry and privatization. New strategies are required in order for CN to remain successful and have continued growth in revenue as well as in the company. Some of the issues that CN has been able to overcome are:High operating costsCrippling debtGrowth demand from north-south traffic flowsBorder security.Although CN has overcome many obstacles and challenges there are still current issues to deal with in order to continue revenue growth, being competitive in the market and offering superior customer service to its customers. Currently the main issues are:CN-NAFTA StrategySurface Transportation Board (STB)Expansion to new marketsEnvironmental Root Cause AnalysisEnvironmentCN is currently experiencing increased revenues from a combination of different strategies. Currently revenues have increased to 56 percent in 2004, compared to 37 percent in 1994. This is largely due to the transborder trade with the United States, and the CN-NAFTA strategy currently in place. Although CN's revenues have annual compounded growth of approximately 6 percent, there are opportunities to improve the business strategies should the NAFTA trade start to decline.CN has also reduced the operating ratio from 89 percent in 1995 to 67 percent in 2004, which has resulted in a 20 percent average annual compounded growth rate. Stock prices have also quintupled since 1995 and the overall market value of CN is 10 times more then what it was when privatized.The main issue CN is currently facing is...

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