Blue Ocean Strategic Sequencing - Amtrak
Jorja Noel, Member
To get Amtrak to a blue ocean, I propose to make it a more family-friendly product with a kids’ car (similar to Disney’s kids’ activities on their cruise ships), and replacing the snack car with food franchise cars to allow for more healthy and varied food options.
My sequencing for Amtrak includes the four steps of buyer utility, price, cost and adoption hurdles (Kim & Mauborgne, 2005).
- The buyer utility for Amtrak first and foremost is that train travel contains fewer hassles than car and air travel. With the added features listed above as well as assigned seating on every trip, train travel could surpass air travel as the number one way customers travel in the country.
- The price of this service would be comparable with or slightly lower than commercial air travel; however, given the new Blue Ocean strategy, Amtrak should have no problems attracting and retaining customers.
- As for cost, Amtrak currently operates a snack or café car. With the removal of this service, the price of ordering, storing and shipping the food that is served from that car is eliminated, as is the need to pay someone to man the car. Instead, the food franchise cars will bear the responsibility of the food supply chain and staffing the cars. In addition to the franchise fee to the company, the franchise would pay either a percentage of the profits or an exclusivity fee to Amtrak. This eliminating of its own expenses while gaining revenue from the franchise should help Amtrak defray the costs of the kids’ car. The added bonus of customer satisfaction should assist in boosting revenue, thereby earning a healthy profit margin.
- The adoption hurdles associated with this plan are two-fold: buy-in from franchise companies and consumers. Franchises might not want their company associated with Amtrak. Consumers might not like the idea of a family-friendly train at all and might prefer to continue to fly.