An Analysis of the Strategic Planning and Development of MTR Corporation

Abstract

The main aim and objective of this dissertation is to analysis the strategic planning and development of MTR Corporation by considering relevant data and research study. The core competence of its strategy dedicated to highest involvement in railway sector, consultancy service and property development. Though MTR holds the largest market share in Hong Kong, its mission and vision positioned it in numbered one pose. As a result, strategic analysis would provide the opportunity to find out the internal risk factors and it could be adopted in risk management system of organisation. The dissertation evaluates the strategies of MTR Corporation to increase its profits under the global recessionary economy and to do so the study would examine the external and internal environment of the company, organisational structure and challenges of the company.

Introduction

Introduction

This dissertation would explain the strategic planning and development of MTR Corporation with a detailed strategic analysis of the organisation based on its current position. This research paper would be considered in six major sections and these have been demonstrated as below:

• Problem Statement: First chapter describes the background of the topic, rationale for the research with hypothetical structure. The research question would be raised in this chapter and it explains the objectives, scope, and limitations of this research.
• Literature Review: This cheaper start with the relevant theoretical discussion on strategic planning supported with contemporary authors and researchers. Then it has delivered with an overview of MTR Corporation and to do this the mission and vision would be discussed. The chapter also considers the SWOT analysis, PESTEL analysis and porter five force of MTR Corporation to draw the key Recommendations based on theoretical discussion. It also finds out the challenges of MTR Corporation and its position in BCG Matrix.
• Methodology: This chapter provides the justification on how the current research would be conducted and it gives the process of data collection and interview process, limitation on data collection and importance of primary and secondary research.
• Main Findings: This segment of the dissertation states the collected data, explains the outcomes of the research and finds out appropriate level of strategy for MTR Corporation.
• Discussion: This section scrutinise the methodological hypothetic and summaries the implementation of existing strategic plan and current development of MTR Corporation.
• Conclusions: Chapter six of this dissertation would discuss the key recommendations and it constructs the findings in order to reach a conclusion.

Background of the problem

Skinner, S. J., & Ivancevich, J. M. (2003) argued that modern business organisations are well defined with their structure and strategy to achieve their vision statement with skill of the management and workforce. Organisations are much more aware to follow the corporate social responsibility as they integrated it as an essential part of their operation. Organisations are driving to the global operation after successful operation in local market. This Dissertation would analyse the strategic planning and development of MTR Corporation, its organisational structure, culture and environment.

Rationale for the Research

Skinner, S. J., & Ivancevich, J. M. (2003) mentioned that improvements and changes in organisations are always unpredictable, uncertain and turbulent business environment with comparing the source of competitive advantages. The study examines MTR Corporation’s structure because it has separate business management teams who operate its business in China and other European countries. The study scrutinises the growth after its merger with several international organisations as it brings the Corporation’s opportunities to increase market share and return the company to profitability. The research also explores that the greater part of profit comes from superstructures along the railway, which contributes to the Corporation’s overall return on investment.

In addition, this dissertation examines the MTR Corporation’s strategies, for instance, it considers business level strategy, international strategy, corporate level strategy and it also illustrates the importance of policy and procedures in implementing strategy, pricing methods, leading and execution process, relationship of strategy with ethics and social responsibility, merger & acquisition and restructuring the strategies. However, the annual report of MTR Corporation (2008) reported that in 2008, revenue from consultancy service has reduced 18.10% and the profit of property-development has also decreased 43.80% for global recession but its total revenue from consultancy-service was about HK$ 158.0 million in the fiscal year 2008.

MTR Corporation ltd., (2009) published its annual report showing that the net profit of MTR Corporation was HK$ 8.3 billion, turnover was HK$ 17.6 billion and Profit before taxation was HK& 9.027 billion, which has decreased about HK& 9.2 billion from 2007. Its net debt/equity ratio has declined about 6.4% from 2007 and the board has declared final dividend.

Research Question and Objectives

This dissertation has intended to answer the following research questions to support the topic. The main objective of this research is to analyse what is the relationship between the strategic planning and development and how strategic planning influences the development of MTR Corporation. Here four research questions have been raised and these are:

• How does theoretical framework of the strategic planning works on the development of MTR Corporation?
• How MTR Corporation designed their strategic planning to become a leader in international railway market?
• To what degree the implementations of existing policy can success its mission and vision.
• What extent do the MTR Corporation assessed on competitive advantage?
• To what extent it is possible for MTR Corporation to implement their strategy in global recession.

Scope and Limitations of the Study

The main objectives of this research are to evaluate the present corporation-wide strategy of MTR Corporation and recommend a new business strategic plan to sustain the competitive advantage and accomplish the profitability.

Preparation of this research work has accompanied and revealed a lot of opportunities and restrictive issues, such as:

Projected scopes:

• The subject matter of various assessments regarding the analysis of the strategic planning and development is one of the most popular issues in recent time.
• The study has been converged with many relevant political and social issues including culture, technology, politics and mostly economics, which make a sense of previewing the basic growth factor of a country.
• Discussion on Chinese aspect is also prospective in judging the core problems of the region along with some fruitful solutions.

Projected limitations:

• Lack of adequate information;
• Ambiguous and clutter of irrelevant data;
• Constraint of time;
• Limited scope for proper expression;

Literature Review

Mintzberg (1994) has pointed out that strategic planning is the process of describing where a firm has been aimed to place itself over the subsequent periods and deciding the ways to reach the desired destination as well as deciding the ways to evaluate the aspired performance. Liedtka, J. M., (2006, pp-91) added that it is usually done by focusing on the entire organisation. Liedtka, J. M., (2006, pp-91) further quoted Mintzberg (1994) to point out that in an uncertain environment, strategic planning is not able to perform astutely. Liedtka, J. M., (2006, pp-92) and Anthony (1965) stated that strategic planning is a peripheral fact driven ingenious and systematic process that reflects management decisions and judgements. Mintzberg (1987), and Proves P., (2006, pp-2) also argued that strategic planning as a combined result of sketch, manoeuvre, mould, site and standpoint. Philips J. C. and Peterson H. C. (1999, pp-4) exerted the benefits of strategic planning as following –

• It provides a firm with measurable objectives and allows to set benchmark for the performances of the firm;
• Usually, it helps to unify various objectives of the firm and works as a tool of motivation to attain desired goals. In addition, it further assists in evaluating the organisational functions with the set objectives.
• It also works to enhance psychological attachment with the organisation’s objectives. If the lower level employees have enough role in setting objectives of an organisation, it increases their psychological attachment and understanding of product-reward relationship;
• It also assists in marketing activities by describing strength, weaknesses, opportunities, and threats of an organisation. Therefore, the marketing division can easily identify better marketing program and product/service for its market segment. It further approaches to ascertain sustainable competitive advantage; and
• It also assists to analysis emergence situations to better deal with the recessionary state of affairs.

Liedtka, J. M., (2006) explained that it is a process of developing competitive strategies of any organisation by studying the entire organisation and incorporating external and internal data that is relevant to gain competitive advantage over competitors. Moreover, it includes developing strategies as the product. Liedtka, J. M., (2006, pp-91) also argued that it results malleability and change and to clarify more he stated that both cognitive and behavioural levels help to shape strategic planning in this purpose. The cognitive level works with strategic thinking whereas behavioural level works with developing new schedules and abilities to attain the best future possible. Darwin once said that the fittest creature is the one, which can easily adopt its environmental change; there is no influence of greater intelligence and gigantic nature. Thus, there must be changes for development. Here, the term ‘development’ can be connoted as strategic sustainable development since organisations are running after sustainable competitive advantages over others. By definition, strategic sustainable development is a systematic way of development based on strategies.

Mishra, S., (2007) explained that strategic planning is one of the most valuable processes and thereto changes are required for organisation’s development. By default, these two conditions are existent in MTR Corporation.

MTR Corporation, the Hong Kong giant, is a railway service provider along with other services such as development services. The revival, merger, and continuous development are the key reasons behind its giant figure.

HKMA (2008) stated that the organisation uses seven standalone long-term strategies for the better cooperation and alignment of corporation with wider efforts. It does the job through aligning strategic planning corporation wide. It further breaks down these objectives and then makes annual divisional and departmental goals and aims. In addition, it further breaks these strategies down into sectional objectives. The strategic planning also incorporates highly classy performance assessment system that appraises standard works and defines where further improvement is required.

MTR Sustainability Report (2008) the organisation changed its vision, mission drivers for sustainability such as customer focus, community engagement, company culture, sustainable investment return, continuous improvement, and extending core competencies and values that connoted the earlier description of strategic planning. To creating value, the firm has been considering continuous development in its strategies and therefore, cross organisation buy-in strategy would be resulting fruitfully.

HKMA (2008) also mentioned that the corporation has been organising periodic consumer surveys for better understanding the consumers’ latent needs and actual desires for further furnish its strategies. The customers’ service standards are kept aligned with customers’ expectations trends. By giving much importance on the needs of employees and by associating better remuneration, fair job appraisal system and their development through training, the organisation would be able to boost up employees’ endeavour along with calibre. The corporation also administers its efforts to align its process system to customer requirements. It comes as procedural instruction and the application of those are regularly monitored and measured for better performance.

Most importantly, the corporation set its goals by involving its senior management with considering external stakeholders. On the other hand, targets have been aliened by involving divisional executive directors and related all employees along with stakeholders consideration and regulatory compliance [MTR Sustainability Report 2008, pp- 29 (section 1)].

MTR Sustainability Report (2008) stated that the corporation has aimed to expand its business in global market such as China and European countries and its vision is to be a global leader in its business segments. Theis strategy has been identified as globalisation strategy. Globalisation strategy is the strategic managerial guide to go to abroad. The benefits of the strategy based on economies of scale, more customers, extension of product life cycle etc. The corporation has already opened its global business such as over ground rail operations in London, rail operations in Mainland of China etc. The main benefits that MTR may get from its global strategy are concession rights, more customers, transfer price advantage etc (Building on Strength: Summary Financial Report 2008, PP-02-03).

MTRCSR (2004) added that the corporation had been using benchmark for its social responsibility, environmental responsibility and economic responsibility to achieve state of art performance. The same also is a result of strategic planning as previously mentioned. The staff, customers, and community had been the focal point of performance for the organisation. For its international presence, the corporation also revised its strategic benchmarks to meet distinct community needs. The environment responsibility of the corporation adopted all the basic standards including country specific standards. To perform economic responsibility, the corporation follows best way out for rationale, a flexible approach as –

Since it is stated above that the strategic planning is to give sustainable development in the future, therefore, the sustainability time line of the corporation demands merit.

The strategic sustainable development of the corporation results several competitive advantages over competitors. These results again portrait the relevance of the strategic planning to strategic development for sustainability. The corporation has resulted 99.9% consumer service measured by on time journey. It also added 100% trouble free journeys measured by train trips on time. 65.9 car-km per labour hour (measure of staff efficiency), service costs 48.6 (measured as operating costs per car-km), profitability 100 (measured as total commercial revenue per operating cost [USD PPP]), Cost per journey 71.9 (measured as operating costs per passenger journey [USD PPP]), Safety ratio 100 (measured as fatality per billion passenger journeys) [MTR Sustainability Report 2008, PP- 43].

The above measurements show the actual strategic sustainable development achieved by the MTR Corporation. If other measures such as trend analysis of profitability index, growth rate etc. could be included, the sustainability would further be cleared. So far, from the above discussion, it is clear that strong strategic planning process along with flexibility to change to situational demands made the strategic sustainable development of MTR Corporation. The sustainable advantages are also far reaching for its competitors.

The Background of MTR Corporation (New Vision and Mission)

The MTR (Mass Transit Railway) Corporation has established in 1975 as a Hong Kong based state owned company dealing with construction of railway transport system. It is now a first privatised rail and metro company operating in more than 30 cities with many fields of operation including construction of building, railway planning & design management, system integration, consultancy service and implementing projects. Merger, joint venture and partnership with large multinational company enhance its expansion in global market with high aspiration. MTR Corporation (2008) argued that MTR Corporation has specific values such as excellent service, mutual respect, value creation, and enterprising spirit, which will ensure safe, efficient, and caring service to customer.

MRT (2008) expressed in its Summary Financial Report that except profit for the year 2008 turnover, total assets, fare revenue, and profit on property developments all are increasing in global economic downturn. The following figure shows that in 2004 the turnover was HK$ 8.4 billion and in 2008 it was HK$ 17.6 billion which was HK$ 7.1 billion greater than 2007. Here the figure no 2 demonstrates that in 2004 to 2008, its total assets was HK$ 106.7 billion, HK$ 106.7 billion HK$ 120.4 billion HK$ 113.7 billion HK$ 155.7 billion, HK$ 159.3 billion gradually.

Mission & Vision

• The aim of MTR Corporation is to improve customers’ quality of life and predict their needs;
• It is enthusiastically engage in communities;
• Promote the corporation culture that employees can learn, raise and acquire pride in;
• MTR Corporation must give sustainable returns to investors;
• It should achieve new standards by innovation and continuous development
• It has aim to enlarge its business in Hong Kong, Mainland of China and take chances in Europe by means of extending its core competencies.

Vision: MTR Corporation (2008) argued in its The Annual Report that its objectives to be an internationally recognised leader, which connects as well as grows communities with caring service.

Environmental or PESTEL analysis of MTR Corporation

The MTR Corporation’s environmental condition has required to analyse by PESTEL analysis, to decide whether their strategic plan would be effective for the MTR Corporation or not:

Political factors: The environment of business and the increase or decreases the business risk depends on political situation for example appointment of a directors or non-executives directors depends on government. Lowry, J. & Dignam, A., (2007) argued that if NED of remuneration committee influenced by the executives the corporate governance system will collapse. Hitt, M. A., Ireland, R. D., Hoskisson, R. E. (2008) stated that argued that investment, investment policy, operation and growth as well as network development materials can be an important topic of risk. The operation of MTR Corporation has considered the political issues such as over taxation, rate of exchange, and savings of personal intelligence, recession, difficulties of currencies, and the other political uncertainties.

Economic factors: According to the annual report 2008 of MTR Corporation, it can be found that in 2008, its operating profit had increased 57%, total revenue had increased 64.9%, and property development profits had increased about HK$ 1,036 million. This figure depicts that in 2007/2008 fiscal year the MTR Corporation had enjoyed more competitive advantages than the year 2008/2009.

Basic Chart of MTR Corporation shows that from 2005 to begging of 2008 its share price has increased gradually but from the second quarter of 2008, it was decreased. However, from 2009 its share price has been increasing so it can be said that it has now in stable economic position.

Socio-cultural factors: MTR Corporation Ltd (2006) reported that it will incessantly develop its workers’ professionalism and competence to accomplish corporate goals and it will furnish an enthusiastic empowered team of diverse person inspired in order to exceed the expectations of its customers as well as partners. The cultures of employees are different, as MTR Corporation has merged with KCRC so they fill up cultural gap following the slogan “One Company, One Team”. In Hong Kong, it had more than 14,134 employees in 2007 and they are getting facilities from MTR Provident Fund Scheme, MTR Retirement Scheme and Mandatory Provident Fund Schemes.

Technological factor: MTR Corporation (2008) stated that initially MTR Corporation operates Hong Kong’s commuter railway system so it has Information Technology Executive Management Committee to upgrade IT sector. Technological factors are most important for this organisation so most of the directors and employees are come from Science and Technology background. In 1997, it introduced smart card technology to collect the fare from customer and it has radio frequency identification (RFID) technology.

Environmental factors: MTR Corporation always concern in environmental issues so board was incorporated environmental risk management policy. To provide priority, in 2006, the MRTC has adopted the MTR Corporation Climate Change Policy, which was improved by UITP³. At the time of planning and construction a project, MTR Corporation had integrated life-cycle environmental issues in their planning in order to develop an environmental risk free railway system.

Legal factors: MTR Corporation has been governed by its own Code Provisions and they are bound to follow the Code Provisions though in 2008 they did not complied Code Provision A.4.1. Moreover, it had not appointed non-executive director (NED) for definite period but according to s.8 of The Mass Transit Railway Ordinance as well as Articles 87& 88 of its constitution, appointment of NED was a mandatory requirement, which they were violated.

Porter’s five-force Analysis for MTR Corporation:

Porter, M. E., (2004) pointed out that there are five forces that shape the competition within the industry. In the operation of MTR Corporation, the five forces analysis assists the company to differentiate as a ready for action environment. This analysis has correspondence with further apparatus for environmental audit as well as PESTEL analysis.

Here the figure no five demonstrates the factors are affecting industry competitors, as price is comparatively low- buyers bargaining power is average. Threats of substitute are high as market is more demanding in rail industry and bargaining power with supplier is average as they can switch towards in another way any time.

The threat of new entrants:

• The entry in the railway industry needed extremely large capital that negates the threat new entrants for MTR Corporation;
• For the recessionary impact, new corporations will be seriously injured with continuous losses;
• It would be difficult for new entrants to comply all rules and regulations of this industry.

Bargaining Power of buyers:

• The bargaining power of buyer is average as it take comparatively low fare from customer so buyer has power over the company
• The MTR Corporation has enough matured and have the possibility to drive in the high cost market like its competitors in international market

Threat of Substitute Products:

• The threat of new substitute products for MTR Corporation is high because for recession its share has not been fallen down and the operating cost is high so it has cost advantage;
• Like MTR Corporation, a number of local & international industries also provide available services for passengers and travellers to enhance the tourism sectors;

Bargaining Power of suppliers:

• Bargaining power capable, a buyer influences the production capability of the industry.
• MTR Corporation always takes environmental friendly products from customer so bargaining power of supplier is average.

Competition among the Industry:

• It has both national and international competition and in different sector, it has different competitors. In construction industry, Hutchison Whampoa and Jardine Matheson are the main competitors of MTR Corporation and New World Development is a national competitor.

SWOT Analysis of MTR Corporation

Thompson, A. et al (2007) stated that to form an appropriate business strategy, it is essential to analysis the strengths, weakness, opportunity and threats of the organisation. It should be incorporated two thinks to measure the external and internal environment by SWOT analysis and these are corporate risk management and global financial crisis. SWOT analysis of MTR Corporation could be ready to lend a hand to reach a new resolution, make new approach, and identify effective solution for the contemporary problems.

Strength:

• The Annual Report of MTR Corporation (2008) argued that the successful execution of the Rail Merger as well as the accomplishment of merger synergies facilitates MTR Corporation to make a strong platform for the future.
• In spite of challenging global financial crisis, MTR Corporation are maintaining its pursuit of prudent growth rooted in a strong balance-sheet, adequate liquidity along with stable recurrent income which comes from its core businesses.
• MTR Corporation has excellent brand awareness and quality image in construction sector as well as railway sectors. Therefore, its operation is not limited in Hong Kong, as it has been expanding its operation all over the world.
• In addition, MTR Corporation has advanced technological support as well as administrative control to save the company from global financial crisis. Its workers are efficient and they have experience & responsibility for internal controls within their side of accountability.
• It provides latest important information and most recent news in their websites, which play fundamental role to spread its operation. For example, Customer service has given the first priority of MTR Corporation and taking into account the customer satisfaction it fixes their fares and changes these fares considering competitors fares. For the excellence of its service, it was achieved many prestigious awards like ‘Best Metro Asia Pacific Award’ and the “2008 Hang Seng Pearl River Delta Environmental Award”.
• Transport Planning & Operation (2008) mentioned that MTR Corporation has experience of constructing as well as operating local light rail system and feeder bus service.

Weaknesses:

• MTR Corporation needed more cost effective solution for pricing and accessibility for all sorts of customers.
• It would be obliged to continue its control all over costs to sustain success in global rail market.

Opportunities:

• MTR International business (2008) reported that it has operated in thirty cities around the world, which demonstrates that it will be an imperative service provider in the international railway market.
• MTR Corporation has the opportunity to diversify their business as it has maintained the moderate to high-levels of diversification. However, 70% of revenue creates from dominant-business but here revenue of MTR Corporation has not depended on the single business so it can lunch new product or service in related market.
• It has strong financial capability to merger with high profile Corporation to augment the business of MTR Corporation.

Threats:

• Though it has strong liquidity but global financial down turns creates some uncertainty in future expenditure of the customer and government, which decreases its annual profits.
• International rules and regulations are the barrier for this company because it has to follow national regulation when the implement a project in international market.

BCG Growth Share Matrix of MTR Corporation

According to BCG matrix, the market growth of Cash cow has low but relative market share is high which point outs that for expansion of its businesses, it should require less investment to sustain in market but MTR Corporation demonstrates opposite market growth.

From the position of Dog, it can be said that the market growth and relative market share both are low so it requires high investment to expand their business. Dog’s business situation is opposite from the condition of MTR Corporation’s market growth and relative market share.

On the other hand, Question marks indicate high growth and low-shared firms so they need abundant resources of cash to transmit on their share, and move alone boost them.

The most significant part of this figure is MTR Corporation, which situated in the left hand side of this figure. It indicates that it is now in highest position in the matrix and it shows that relative market share and market growth rate both are in high position as they occupy the larger market share with a better growth rate than many of its competitors. As a result, it should need low investment than others and it has well setup to furnish their business arrangement.

The Growth and Expansion Strategies of MTR Corporation in Hong Kong and International Market

Moreover, Asset and risk management are the important tools for business sustainability, as a result MTR Corporation has own Asset Management Model. The following figure shows that MTR Corporation has clear vision, idea about demand, maintenance capability, and investment planning and service life prediction for proper utilization of its property.

The annual report of MTR Corporation (2008) stated that post-merger growth strategy of MTR Corporation has focused on important recent rail development in Hong Kong as well as it has been expanded into the Mainland of China and overseas from 2004. It has also added that the Government’s has approved several projects for planning and design that project such as Shatin to Central Link and Shenzhen Line 4, Hangzhou, Beijing Metro Line 4 are the on going projects of MTR Corporation.

The merger between MTR Corporation and KCR Corporation, which was approved by shareholders of the MTR Corporation, has been enhancing the area of property development. As a result, government of Hong Kong has approved five new big projects and the annual report (2008) of this company stated that it is the largest expansion project, which will joint West-Island Line & South-Island Line. Thus, MTR Corporation is the market leader who adopts the growth and expansion strategies successfully in Hong Kong market.

It has also major share in overseas market for example to control over European market it has European Business Unit. Its target market expanded from Mainland of China to London and MTR Corporation has already starts two projects (Shenzhen Line 4 & Beijing Metro Line 4) in China but among these projects, Beijing Line 4 is more challenging. It should have 12 sets of trains in 24 stations and 23 stations are structurally complete with in 2009.

Joint venture (50:50) with LOROL⁴ brought steady developments to the London Overground (LO) which provides service in West, East, and North London and will offer an important link for the 2012 Olympic Games. According to the annual report of MTR Corporation (2008), from this year MTR Corporation has started its operation in Swedish market as it was awarded the concession rights in order to operate for 8 years the Stockholm-Metro concession.

The challenges/competition faced by MTR Corporation in Hong Kong

Competitor like Guangshen Railway Company Limited has been developing their business by taking appropriate steps considering economic environment. Guangshen Railway Company Limited, (2009) reported that GRCL⁵ was established in 1996 and during that year, it was a listed company in Hong Kong Stock Exchange and NYSE. However, it was sole operator of Guangshen Railway but resolve the pressure of long distance passenger service it was getting cooperation from MTR Corporation. It also added that 2009 as a challenging year but these challenge creates many opportunities. In order to protect GRCL from challenges, it would be leveraged its geographic as well as competitive advantages, reinforce production security, improve and amalgamate resources.

Besides challenge from competitor, it has many corporate challenges in this industry. Corporate strategies are important factor to implement large project and MTR Corporation is competent to handle these challenges easily as it utilize its resources and capabilities according to the growth and expansion strategies. Currently in Hong Kong MTR Corporation is a leader of railway transport sector so it is not necessary to more innovative but they should adopt new technologies. Moreover, it wants to be a global market leader so it should more concentrate on merger with large company and it should set the objectives for proper use of its resources and capabilities.

MTR Corporation assesses the market risk, analyse their competition capability and evaluate their industry position. By adopting team-learning theory and coordinating the efforts of employees can avoid corporate challenges at an earlier stage as well as craft the modes of recover these challenges.

A new corporation strategy to sustain the competitive advantages and achieve the profitability

Kotler, P. & Keller, K. L., (2006) explained that the competitive advantage and industry analysis is a complex practice. Drummond, G., Ensor, J. & Ashford, R., (2001) has identified industry boundary, select target market and in first step of the competitive advantage analysis to sketch the boundaries of the industry. According to Dobson, P., Starkey K., & Richards J., (2004) the competitive strategies have been used to gain competitive advantage over competitors i.e., providing superior customer services. Dobson, P., Starkey K., & Richards J., (2004) further added that such superior-value comes either from offering customers’ generic products or service at lower costs than that of the rivals or from some how differentiating the corporation. According to the Porter, M., (1985) to create competitive advantages a firm has to rely on generic competitive strategies. Porter also argued that an organisation could only rely on any one of the three strategies and these strategies are cost leadership, differentiation and focus strategy.

Before sets its specific strategies, MTR Corporation might set their specific objectives to meet these goals for example, increasing market share, decreasing service failures, cutting costs by certain percentage etc. After analysing the environment of the company it can be said that MTR Corporation is a market leader of Hong Kong and its mission to be a leader of overseas market so cost leadership strategy will be effective for this company. As a first step of implementation of strategy, MTR Corporation can control the costs and it can provides low cost services to the customers. However, cost leadership can be maintaining by reducing operating costs.

However, according to Porter, M., (2004) differentiation strategy means the organisation’s approach to differentiate itself from its competitors so that it can raise price for its products more than that of the differentiating costs to become profitable. On the other hand, focus strategy means targeting any particular segment of the market and applying either cost leadership or differentiation strategy in the said segment.

What are the core competencies and competitive advantage of MTR Corporation which description in this dissertation?

Core competencies of MTR Corporation: In the market of enlightened competitive nature, MTR has a ubiquitous presence with lot of bright and authentic tools to get competencies over the market and to attain some good market share. The core competencies are thus point out to measure the potentials with its financial and corporate competencies along with its basic advantages over the strong competitors. The competencies are:

• Global fame of operating the mass transit railway service has established with reliability standards and safe service with efficiency to transfer not only passengers but also the cargos.
• Highest levels of inductive customer service have designed and driven to gain highest customer satisfaction, which brings the customer’s dependency on the MTR Corporation.
• Reliable and continuous development in the technologies used in the service delivery and practical performance measurement system designed to help the new development and strategic planning.

Competitive advantages: Competition in such a market is not only possessive but also a matter of future betterment of the company, which ensures the sustainability, recoverability, and attractiveness of a service. To ensure control over the market MTR Corporation has to have some key competitive advantages. It has some featured competitive advantages like:

• Profit oriented financial operations and revenue getting business, which ensures strong financial position in the market.
• Indigenous brand value and prosperity that brings the loyalty of the customers;
• Having huge amount of assets facilitating the business need whenever arise and to ensure survival in any inhospitable situation like downturn on economy.

Methodology

General Notions

The present chapter of the dissertation has been dedicated to the describing of the main ways and methods used by the researcher for the exclusive aim of reaching the objectives set prior for this research. To provide for the most adequate and comprehensive consideration of the research objectives, the two methodologies are traditionally considered the best. These methodologies are qualitative and quantitative research methods with the help of which it would be possible to get the comprehensive picture of any phenomenon studied. The qualitative research method allows inquiring about the causes and effects of a certain phenomenon, while the quantitative research method provides the researcher with the objective numeric data on the same topic. Combining these two research methodologies, the researcher would be able to get the full picture of a phenomenon in its development through both subjective questionnaire data and objective statistics.

Qualitative Method Validity

The use of the specific methodology for this very dissertation has predetermined by the topic of the latter. As far as ‘An analysis of the Strategic Planning and Development of MTR Corporation’ is a rather analytical topic requiring much effort in finding out the reasons for this or that trends in planning and development of the company, the qualitative method is the most fitting one. Being a rather subjective method, the qualitative research does not forbid critical thinking and analysis to be carried out by the researcher, and such an opportunity is the greatest advantage of the qualitative research.

Approach Planned and Data Collection Techniques

The approach chosen for the conduct of this research should be put in accordance with the primary objectives of the dissertation and with the chosen research methodology. Thus, suggestive approach and technique of inductive and deductive thinking would be used by the researcher in order to find out what the strategic planning and development initiatives have been taken by MTR. What the causes of these initiatives’ appearance are, what the current state of strategic planning and development initiatives is, and what improvements, if any, are to be taken by MTR.

To start the meaningful and proper research, it is necessary to design the research instruments, among which the research questionnaire will be the dominant one. The very questionnaire has designed in a simple manner that allows both easy understanding of the questions by the respondents, and the opportunity to retrieve the necessary information from the respondents’ simple answers to the questionnaire’s simple questions. Moreover, the questionnaire has also designed to match the teamwork focus and group analysis orientation of the research. In other words, the answers of individual respondents will be analyzed and grouped in order to see the comprehensive picture of the strategic planning and development initiatives in MTR.

Thus, the above research approach and questionnaire design provide for the adequate highlighting of the processes that take place in MTR. The use of the qualitative method of research allows the researcher to ensure the absence of biases in research data, especially in the questionnaire results. This has been achieved through the alleged subjectivity of the qualitative research, which in this case allows every respondent to express his or her subjective opinion and does not allow the researcher to influence it in any way. Thus, the quality and objectivity of research results are ensured by the allegedly subjective nature of the chosen research method.

Moreover, the comprehensive nature of the qualitative research method allows for the consideration of every single issue in the topic from all aspects possible. In other words, inductive thinking allows generalizing based on specific single occurrences, while the deductive one provides for the opportunity to check these generalizations by carrying out their deduction to the stage of single occurrences again. It is also possible to use these thinking techniques in the inverted order and after this provide respective recommendations on the issues observed in MTR.

Interviews Reliability and Validity

The reliability and validity of the information used in the current research is a question of prominent importance. To ensure that the information is adequate, the main sources of the research data will be primary sources that include the official web site of the MTR Company and the results of the interviews with the top ranking officials of the company in Europe. Such an approach will provide for the highest levels of data trustworthiness, and transparency. Any other way of data collection will not provide the needed level of adequacy and ensure that the research operates with only the latest information.

The applicability of the interview technique to the qualitative research has long been studied by scholars like Mishra (2007), Stoner, Freeman, & Gilbert (2006), etc. who consider the interview to be the most reliable way of retrieving the necessary information from a simple discussion of a certain phenomenon. The conclusion that these scholars arrive at is that the properly structured questionnaire interview, or a simple semi-structured interview, can prove to be more effective than study of previous research works in respect of getting the most updated information on any topic. Therefore, the research of the current developments of MTR will benefit from the use of the interview greatly.

Plan B

In case if the above presented research methodology and approach prove to be failing, the research should have the so-called Plan B, I. E. another set of research techniques that would allow carrying out the same amount of research work and get the same amount of results as planned but within the shorter time frame. Observational study can be of help in this issue as it allows saving the time spent for restructuring of the research and establishing the new methodology.

Secondary Data Sources

The current research will resort to the use of both secondary and primary sources. Starting with the former, the research will focus on the published research works, books, magazine and newspaper articles on the topic of MTR development and strategic planning. Previous research work on strategic planning and development on the whole and MTR development in particular will also be considered as the part of the secondary research. This will allow seeing the areas that have not been sufficiently studied by scholars and demand attention.

Primary Research Sources and Major Focus Areas

The source of data for the primary research is the set of answers obtained from the MTR Company’s top managers after distributing the questionnaire among them. Drawing from the preliminary results of the questionnaire analysis the following areas of research will be of critical importance:

• Discussion of the necessity of any economic restructuring of the company
• Consideration of the adequacy of MTR strategic plan and the company’s objectives
• Examination of the future developmental trends for the company
• Careful analysis of the strong and weak points in the strategic planning and development initiatives has taken by MTR.

Results / Findings

Current Strategies of MTR Corporation

Business Level Strategy

This strategy give the opportunity to find the MTR Corporation’s industry situation in relation with other competitors as it has been indicated as one of the largest railway operating industry in Hong Kong focusing on high growth rate annually, particularly, it has been continuing to drive-growth by expanding its activities in local markets as well as global railway operating projects.

Porter, M., (2004) argued that to achieve competitive advantage, an organisation needs to follow any one of the three generic strategies, therefore, the MTR Corporation can generate this view in business operation, for example:

Business Level Strategy of MTR Corporation

In this strategy, MTR Corporation has to integrate and communicate the settled commitments and actions to attain competitive advantages in specific markets. For this reason, MTR Corporation has to determine:

• Target Customers: More than 3.7 million customers every weekend,
• Need of Customers: From the railway services of MTR Corporation, the customers can be satisfied with high speed, reliability, cost effectiveness, and safety.
• Fulfill need of customers: MTR Corporation can develop competitive advantages through building customer relationship, and enhance value of railway service towards them.

There are five generic strategies, can be developed by MTR Corporation, which are:

• Cost Leadership Strategy: By this strategy, MTR Corporation can deliver its service with possible low costs, but providing same services relative to competitors’ railway services. The cost effectiveness can be developed by controlling production costs, minimizing costs of delivering services, simplifying costs of service processes etc.
• Differentiation Strategy: If MTR Corporation wants to develop this strategy, and then it has to provide different service level than others with a high premium price and to exceed the level of customers’ expectations with prestigious services and rapid innovation in technological development.
• Focused Business Level Strategy: In this strategy, MTR has to focus on specific customers’ group, like International customers to adapt cultural, environmental, and competitive changes in the different markets
• Integrated Business Level Strategy: Integrated strategy can be developed, if MTR wants to focus on both cost leadership and differentiation strategy.
• Corporate Level Strategy: In corporate level strategy, MTR Corporation can take advantages through different service markets.

Corporate Level Strategy

MTR Corporation has maintained the moderate to very high-levels of diversification because the revenue of this company may not depend on the single-product business that means less than 70% of its revenue creates from dominant-business. According to this theory, it executes mass transit railway system, fare service, consultancy service, feeder services, freight services, for instance containers, general cargo and so on but it has generates highest profits from railway sector [ MTR Corporation (2008), Summary Financial Report 2008].

International Strategy

Stoner, J. A. F., Freeman, R. E., & Gilbert, D. R., (2006) argued that international strategy is a means of dissemination and adjustment of a company’s internal acquaintance and expertise in the overseas markets. MTR Corporation is a multinational corporation but its construction and operation of a MTR⁶ system is mainly based on in Hong Kong, China and few other European countries. As a result, specific international strategies are required to being successful in each of those regions. Significant considerations are:

MTR Corporation, (2008) Summary Financial Report 2008 reported that it has strong financial capability to expand their business rapidly; therefore, its services are not limited in Asian and European market but its vision to be world market leader. At the same time, as geographic diversity assists to minimise the operation management risks and MTR Corporation has subjected to risks linked with international operations, including changes in exchange-rates for foreign currencies, rules and regulation of foreign countries, contractual barriers or conditions, which may have adverse effect on project management process.

Developing international cost leadership strategy will facilitate it to achieve the economies of scale with vast demand, for instance- third world countries as delivered by MTR Corporation. It should point out that to apply corporate- level strategy MTR Corporation could go for multi- domestic plan for decentralization of operations in a single country for project implementation. On the other hand, by adopting international strategy, it can develop standardized services regardless competition and demand.

Cooperative Strategies

However, MTR Corporation has already merged with KERC but it has a number of strategic options regarding these strategies such as:

• According to the method of strategic alliances, MTR Corporation can formulate partnership with similar large corporation through a mutual interest of resources and capabilities from designing to implementation level. In 2009, MTR Corporation has entered in to a contract with HMG⁷ for implementation of the PPP⁸ Project and it entered partnership contract with HMGC⁹ Ltd for investment, construction as well as operation Hangzhou Metro Line 1 project. In addition, it has partnership agreement with DB Regio and Beijing Infrastructure Investment Co. Ltd [MTR Corporation, (2008) Summary Financial Report 2008].
• By means of a joint venture, MTR Corporation can promote a new venture with other by amalgamation of their resources for example it has 50:50 joint venture agreement with London Overground Rail Operations Limited[MTR Corporation, (2008) Summary Financial Report 2008].

Management Structure of MTR Corporation

• The Executive Committee: MTR Corporations management structure for home has been composed with an Executive Committee. This committee has been authorised to accept or reject any reviews, approves or eliminate any proposal submitted by any business units or other companies regarding any investment, business expansion. The Executive Committee also received the right for budgetary approval expenditure control for all segment of the company’s Business [MTR Corporation, 2006, Management Directives for Growth Business].
• The Investment Committee: The Investment Committee of MTR Corporations reviews and accepts or rejects investment proposals reliable with the MTR’s investment approach and policies. It identifies and formulates confidence by investigating all necessary information those are easy to get for making investment decision as well as the cost effectiveness before submitting to the Executive Committee for final approval. The Investment Committee formed with Terms of Reference guided by CGI 249 of MTR Corporations [MTR Corporation, 2006, Management Directives for Growth Business].
• The China Business Executive Committee: This committee has concerned with development implementing and administering the domestic projects with associated business goal.
• Consultancy Services Management Committee: This committee argues for funding the strategy, keep an eye on its implementation and efficiency as well as guarantee that the strategy’s accomplishment has embarked on in an approach dependable with relevant regulatory issues.
• European Business Executive Committee: This committee provides a complete management framework to hold up the corporation’s business in Europe. It provides directives for enlargement of business in European region for make certain that system has been exercised to hold up the dealings and operations of EBU¹⁰. MTR Corporations has the necessities and come close to distinct Manual for the whole corporation that has anticipated to enhanced support the understanding of its business goals of EBU. It also works with instructions are on hand to explain the method in which the corporation drives according to the requirements of its principles that are in practices [MTR Corporation, 2006, Management Directives for Growth Business].

Corporate governance of MTR Corporation

MTR Corporation ltd., (2009) stated that corporate governance is the foundation of a well-organised corporation so MTR Corporation has committed to operate the business by imposing the Code on Corporate Governance Practices and listed rule of The Stock Exchange of Hong Kong Ltd. In current recessionary period many large business corporation has collapsed for not to complied the measures designed for expense of remuneration paid to the directors’ guided in the listing rules or Companies Acts, as a result corporate governance is crucial part for MTR Corporation.

Role of the Board of directors

MTR Corporation ltd., (2009) stated that the Board comprises ten directors among them nine are NEDs¹¹ and one CEO¹². According to listing rules of The Stock Exchange of Hong Kong Limited five NED must be appointed as an independent director. Generally, the nine NED will be appointed by the CEO and they are bound to follow the listing rules. According to the annual report of MTR Corporation (2008), there will be no family relationships between the directors or directors may not be benefited from others organisations, or they should not have any cross-directorships. In addition, NED should not be special creditors or an important shareholder or staff of any rivals or financial & business relationships.

MTR Corporation ltd., (2009) also added that the core duty of the board of MTR Corporation has to appoint independent non-executive directors if any one resign or retire from the NED post but in 2008 they did not follow this requirement. Appointment, re-election, as well as removal of members of the board are the main duty of the boards and they are responsible for preparing the accounts of MTR Corporation.

Stoner, J. A. F., Freeman, R. E., Gilbert, D. R. (2006) added that the international companies in terms of multinational companies’ are encouraged to treat their employees in same way regardless to the race colour or ethic. Therefore, the role of the boards has to remove all kinds of racism from MTR Corporation, they should follow the code of business ethics, and they should provide equal opportunity.

Board Committees

As the recommendation of the various reports and the Hong Kong Stock exchange a majority of the directors and NED should be independent of the company, five NEDs of MTR Corporation are independent and their exists four committees such as Audit, Remuneration, Nominations Committee and Corporate Responsibility Committee. Audit and Remuneration Committee consist of three NEDs and among them, two are independent, Nominations Committee consists of seven NEDs where four are independent NED. In order to regulate the corporation and strengthen the provision of accountability, these committees have provided several reports.

MTR Corporation ltd., (2009) expressed that the principal responsibility of the Remuneration Committee has to determine director’s remuneration as Director’s remuneration is a most energetic issue in the today’s business world. MTR Corporation should be designed for attracting and deriving the talent human resource for successful strategic implementation that focuses on base rate of pay, competitive compensation package over time, balance of gifts and so on.

Discussion

Competitive Rivals

Jack S, (2007), pointed out that the technological innovation and time worthy measures of to integrate information technology in all levels of the organisation has played a central role for MTR Corporation to gaining competitive advantage than its in competitors. By utilising the information technology and knowledge-based services have generated a greater for the benefit for the customer and stakeholders. The incorporation of these advanced technologies into the organisational structural improvement and service development initiatives additionally supported and respected the capabilities of MTR Corporation to meet up and exceed customer expectations.

MTR Corporation (2009) has stated that MTR Corporation Limited is the biggest company in Hong Kong on condition that franchised public transport market in terms of market share. Its geographic coverage of services by integrating the China’s west and east railway networks at the end of 2007. However, MTR thinks that there are many opportunities for further expansion as well as challenges to sustain largely management efficiency of the organisation.

MTR Corporation (2008) argued that when MTR has gained the Top Corporate Governance Disclosure Awards 2007 organised by the Hong Kong Institute of CPAs¹³, MTR has strong competitors both in local China market as well as in overseas. Guangshen Railway Company Limited (GSH), Kowloon-Canton Railway Corporation, NWS¹⁴ Holdings Limited, and Transport International Holdings Limited are the major competitors of MTR Corporation. Among the local competitors, MTR has placed it at the top that covers 67% of the local franchised public transport market. In the overseas, Jardine Matheson is the foremost rival of MTR Corporation.

MTR Corporation, (2008) pointed out that its large franchised public transport market share has been increased 42.7% in 2008 which was 41.6% in the previous year. Cross-harbour traffic of MTR Corporation market share has been raised 63.6%, which was 62.5% in the previous year. At the same time its market shares of airport traffic has been lift up to 24% which was noted 23% in last year though in the previous year its overall market share has been turn down to 0.8% due to persistent of well-built competition.

According to Jardine Matheson Limited, (2009), a China based multinational company Jardine Matheson Holding is a strong competitor of MTR Corporation. Jardine Matheson is diversified business group with successful record of accomplishment in the franchised public transport market, heavy engineering, and construction. Jardine Matheson Ltd, (2009) mentioned that it also incorporated in Bermuda with primary share listed in LSE¹⁵ and secondary listings in NASQD and Singapore stock exchange. For Jardine Matheson Symbol of Singapore Stock Exchange is JARD.SI, when MTR Corporation Ltd Symbol of Singapore Stock Exchange is 0066.HK.

Yahoo! Southeast Asia Pte Ltd., (2009) expressed that under the Singapore Stock Exchange both the company’s share price has been compared from January 2005 to January 2009 for five years.

The excellence of MTR Corporation’s management, service performance levels and technological materialisation has been recognised by the evidence of gaining numerous awards such as Best Metro Asia Pacific Award in 2008. MTR Corporation also achieved Metro Rail Award in 2008. For its corporate social responsibility and environmental awareness it has get the Hang Seng Pearl River Delta Environmental Award in the same year. In 2007 Hang Seng Bank, by FHKI¹⁶ and HKACE¹⁷ has honoured MTR Corporation by the Bronze award for its Customer Service Excellence.

Effect of Global Financial Crisis on MTR Corporation Ltd:

The Financial Times (2009) reported that four business sectors where MTR Corporation has been operating its successful drives like railway transport franchising operations, rail project consultancy services, property development and other project management has still significantly strong performance though the global financial crisis has seriously impact on the global economy. Though there is different analysis on China about the impact of US credit crush. Zheng, M., (2009) pointed out that the impact on Chinese crisis is an economic crisis rather than global financial crisis. Zhao, Y. (2008) explained that China may not has expected to face the similar financial crisis of USA because the country is fighting with diverse set of challenges like to control over inflation whilst foreign capital is overflowing and the foreign investors putting money on the Yuan. It would be raised but how the would sustain its robust exporting segment as soon as rest of the world has affected with downturn. Meanwhile the Chinese Sub-prime mortgage market has still bright prospect rather than USA due to strong governmental support for the property market and may not face a similar crisis as the country has congested financial system with a strapping foreign currency reserve of $1.8 trillion. However, the threat for China concerned with the holding US dollar as foreign reserve and US Treasury Bonds.

Due to the Chinese exposure of the global financial crisis has limited possibility to upsetting all industry sectors; MTR Corporation has exclusively limiting to handle projects in domestic and foreign market. MTR Corporation is considering closures of a few new projects operations within China, but they are also keeping closed look to the emerging businesses sectors affected by the financial downturn. Considering the optimum business model of MTR Corporation to achieve success under the recessionary economy companies it has driven for local market penetration aggressively with existing consumer network and brands

Although the impact of financial downturn at MTR Corporation may be excruciating, emerge that diagonally the board, the crisis possibly would not the effect in wider aspect those are predicted in numerous news media. MTR considers in many segments of its investment remained well built and businesses steadfast as well. The cash flow of MTR still looks healthy, notwithstanding a little battered it is still eager to have serious project challenges in anywhere.

Zhao, Y. (2008) stated that though the China government allowing bailout and the economy is stimulating package with center of attention to the infrastructural and construction sector, MTR would be prime position to be benefited by these initiatives.

Risk Management Strategy of MTR Corporation Ltd

MTR Corporation, (2006) argued that in order to minimise the corporate risk and to save the corporation from the global financial crisis, the board of MTR Corporation has applied few risk management strategies and policies such as it has adopted construction & finance risk, treasury, safety and environmental risk management policy. To hold a strong position in global industry, effective risk management strategy and their practice are necessary. An organisation needs to take action at three levels for instance project level, business strategy and at corporate level for their risk management. From the business management structure of this company, it can be found that the international market has been operated by the EBU or Investment Company who are also involve to improving its specific business management system based in the Figure no 16.

MTR Corporation, (2006) mentioned that the corporate world is in serious threat to keep upheld internal control so the objective of improving and applying a management-system has to ensure practices are in appropriate area; furthermore, sufficient controls will be exercised in order to manage risks and maintain the successful operation of EBU or investment companies.

• In order to establish policies, goals and procedures it should require delivering results according to the strategies of the MTR Corporation and the business-unit/investment corporation.
• To apply, evaluate and examine procedures against strategies, goals and requirements in order to ensure reasonable business performance.

Conclusions

Recommendation

• From the annual report of MTR Corporation (2008), it can be found that it has taken many initiatives to face the challenge of global recession because the global economic downturn continually spread-out. According to MTR Corporation’s new financial strategy, it wants to hold strong liquidity position, for example, in 2008 it has raised a total of HK$ 1.75 billion from its debt issuance programme and from reflecting investors’ who strengthen the confidence of the corporation. Moreover, it has large operating cash surplus as well as maintaining substantial indrawn dedicated banking facilities to protect the company from global financial crisis but it has few drawbacks. This dissertation recommended that it should not reduce its main financing activities as it may affect its core business operation.
• In order to resolve the broader challenges, the MTR Corporation should remove the recent dilemmas of its competitive advantages. It should execute the tasks in a sequence, for example, it should start one task to recover any challenge, then it is important and smart decision to finish it properly and hence start to do another. Recently, it has few projects, which are in under construction and it has to finish the entire project within 2016.
• MTR Corporation should give more emphasis on European market as it is Hong Kong based company and it has implemented several projects in Asian market. On the other hand, it has operation on European market, since 2005, the MTR Corporation participated in bids for eight franchises, and to enlarge its profits, it should try to contract with these companies in long-term basis.
• It should follow the recommendation of ICD¹⁸ because it provides professional and consultancy services in the planning, construction, operation, maintenance as well as up-grading of railways, in addition, property improvement in order to help railway groups attain their objectives of better performance, cost effectiveness as well as proficient project implementation (MTR Consultancy Service (2008).
• Partnership and joint venture with prominent companies will assist to implement a large project out side of Asian market.
• Besides railway projects, it has construction business as it builds many largest shopping centres and banks. Therefore, it should also consider the risk factors such as for global financial crisis it would lose its investors. Because of the imperfect valuation of risks in construction industry, many banks have not sufficient capital; as a result, the numbers of investment banks are being insolvent. Consequently many investors have a propensity to invest in risk free government treasury bills as well as negative balance of mortgage, construction industry has been extreme shortage of liquidity and now such complexity has been spread out from the investment banks to mutual, hedge funds as well as commercial banks, which increase the risk of MTR corporation [MTR Corporation (2008)].
• Zhao, Y. (2008) stated that job cuts become a tradition to improve the company form recession but it should not cut the job of employees as a system of cost savings. MTR Corporation required efficient employees, so, it should consider team-learning concept.
• Taking into account the US recession and its impact on the global market, MTR Corporation should expand its budget for R & D;
• It should enhance the accountability of board of directors as they are the core decision maker and they execute their decisions in all sectors of its function.
• Burke, R. (2003) added that project planning and resource management are an efficient and effective line of working with managing projects, where efficiently implies performing the work well, and effectiveness implies performing the right work considering support other team members. Elonen, S & Arttok, A. K., (2002) argued that a multi project planning should have six stage (work breakdown structure), which would be pointed out the sub-projects and this type of planning must include the complicated hypothesis such as critical path analysis (CPM) in the stage 4-6. MTR Corporation should properly use there resources to success their projects and it should comply all the requirements of multi-projects [MTR Corporation (2008)].
• It should increase its budget for research work such as privatization and merger & acquisition should subject of long-term research. At the end of 2007, MTR Corporation merged with KCR¹⁹ Corporation, which will enhance the territory’s transport system more resourceful but initially KCRC moved against the merger with MTRCL. Here it has been demonstrated that the business prospect and development of KCR Corporation is less dynamics than MTRC Ltd. But KCR Corporation will get one-time upfront payment of HK $ 4250 million and it also received HK$ 750.0 million as permanent annual-payment and MTR Corporation provides more $7.790 billion for the acquisition-of-property; however, the merger agreement enhance its profit because it can use the strategy and property in their operation. It should research the improvement after the merger with KCRC and if it finds out that merger is effective for this company then it should continue for long time instead of 50 years [MTR Corporation ltd., (2009)].

Conclusion

The entire dissertation has addressed the critical problems and drawn attention on the MTR Corporation’s recent position in the international market, its strengths, weaknesses, major competitors, along with several opportunities and threats. The research aimed to analyse the strategic planning and development of MTR Corporation, and to do this, a number of aspects such as environment, resource and capabilities, structure of MTR Corporation and global financial crisis have discussed carefully. The literature review of this paper has also recognized that MTR Corporation’s major missions and visions are maximised profit by developing new growth strategies. In long run, the MTR Corporation would be triumphant with its strategic management for customer satisfaction by implementing proper plans and it would be recognized as an enhanced adopter of strategic functions. The chapter four of this dissertation has considered the strategies of MTR Corporation, corporate governance and its management structure. Finally, the study examines the MTR Corporation’s risk management strategies, current position in global financial crisis and the competitive rivals to recommend the corporation. MTR Corporation has some corporate social responsibility, so, this dissertation has considered the corporate governance system for example it has considered the board’s responsibility, necessities of independent non-executive directors, accountability of audit committee, and function of remuneration committee.

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List of Figures

• Figure 1:- Activities of MTR Corporation
• Figure 2: – Turnover of MTR Corporation
• Figure 3: – Total assets of MTR Corporation
• Figure 4: – Mission, vision & Values analysis of MTR Corporation
• Figure 5: – Basic Chart of MTR Corporation
• Figure 6: – Porter’s five forces for MTR Corporation
• Figure 7: – SWOT analysis of MTR Corporation
• Figure 8: – BCG Matrix of MTR Corporation
• Figure 9: – MTR Corporation Asset Management Model
• Figure 10: – Four generic strategies of MTR Corporation
• Figure 11: – Factors of international strategy
• Figure 12: Management Structure of China & International Business
• Figure 13: – Risk management system
• Figure 14: Comparison Basic Chart

Appendix 1

Performance Measures

The present literature does not make available with a suitable instrument to asses the impact of strategic planning on the functional model of the Railway transport market. Thus, a suitable appliance has been developed to enumerate this assessment. The questionnaire has been developed in an attitude that has conserved its internal cohesiveness; special care has been provided to ensure that each question focuses on one exacting issue. Likert Scales (1-7) affords the evaluation method for the various aspects:

Table-01: Questionnaire

Here feature that would be quantified through this questionnaire, scale quantifies the consequence of the various issues, which has been raised by this questionnaire, when 1 being the least important and 7 would be the most important in this measure. The Likert’s scale has been extensively used to quantifying the opinions of the respondents.

All answers have been specified on a scale of 1 to 7 with 1 being the least important and 7 being the most important.

Table 02

Appendix 2

Footnotes

• 1-Political, Economic, Socio- cultural and Technological environment
• 2-uk.finance.yahoo.com
• 3-UITP Stand for “Union international des transports publics” it is the French name of the International Association of Public Transport
• 4-London Over-ground Rail Operations Limited
• 5-Guangshen Railway Company Limited,
• 6-mass transit railway
• 7-Hangzhou Municipal Government
• 8-Public-Private Partnership
• 9-Hangzhou Metro Group Company Limited
• 10-European Business Unit
• 11-Non-executive Directors
• 12-the Chief Executive Officer
• 13-Certified Public Accountants
• 14-New World Services
• 15-London stock exchange
• 16-Federation of Hong Kong Industries
• 17-Hong Kong Association for Customer Service Excellence Limited
• 18-The International Consultancy Department
• 19-Kowloon-Canton Railway