Deregulation of public bus services in Hong Kong : a study of its strategic implications on the public bus service industry

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Deregulation of public bus services in Hong Kong : a study of its strategic implications on the public bus service industry

 

Author: Leung, Yin-fun Fanny
Title: Deregulation of public bus services in Hong Kong : a study of its strategic implications on the public bus service industry
Degree: M.B.A.
Year: 1993
Subject: Bus lines -- China -- Hong Kong -- Deregulation
Buses -- China -- Hong Kong
Transportation -- China -- Hong Kong -- Deregulation
Hong Kong Polytechnic -- Dissertations
Department: Dept. of Management
Pages: viii, 96 leaves ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1150962
URI: http://theses.lib.polyu.edu.hk/handle/200/2070
Abstract: The objective of this study is to identify and examine the strategic implications of deregulation on the public bus services industry in Hong Kong with the aim of identifying the critical success factors in meeting the new business challenges brought by deregulation. By not renewing the franchises for almost one third of China Motor Bus Co. Ltd. 's existing routes and placing them out for public tender, the government has lifted the monopoly protection enjoyed by the existing franchised operators for over 60 years. It is found that the pressures pushing for the change in government policy to introduce more competition came primarily from the mounting public grievances over the monopoly protection. The protection was said to have led to the poor performance and frequent fare increases by the existing operators. It is hoped that competition will force the operators to exercise self-discipline in ensuring quality services and competitive fare charges. Deregulation, by bringing in rival competitors within the bus services, is expected to effect a structural change of the industry. The study has indicated that deregulation will further intensify all the competitive pressures underlying the industry structure of the bus services. Even before deregulation, the business environment of the bus services has grown hostile with heavy substitute pressure from the mass transits and an acute labour shortage. With deregulation, pressure from substitutes is expected to persist while the entry of rival competitors will further squeeze the market share of the existing bus operators. The existence of more bus operators thus enabling greater mobility of workers will further aggravate the labour shortage problem. On the other hand, not only will the bus operators lose the protection of a permitted return, they will be facing tightened control from the government and greater influences from customers who will become more organized and forceful with coordination by pressure groups. To meet the challenges in the new business environment, the management, especially that of the existing operators, will need to have a strategic vision over the business. With profitability now tied to performance, success will lie in satisfying customers' needs through the provision of quality services at the most competitive price. The old fashioned product oriented approach should give way to a market oriented approach. This strategic vision has to be communicated and accepted across the whole organization. It is suggested that the management value of 'service breakthrough - raising of customer satisfaction by performing higher than customers' expectation' be installed. This will require the operators' commitment to quality. A total quality programme supported by all employees will be useful for putting the management value into action. Given the large employee size, the staff shortage problem, and the special job nature of the frontline staff (high work pressure, monotonous, but with limited prospect for career advancement), human resources management in motivating and building the competence of the staff to work towards a customer-oriented service is a major strategic focus for the operators.

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