Cn Rail

Table of Contents

Executive Summary 2

Issues Identification 3

Environmental and Root Case Analysis 4

Alternative and Options 5

Recommendation 6

Implementation 7

Monitor and Control 8

Executive Summary

The Canadian National Railway Company (CN) was once a Crown corporation that was hindered by heavy regulation, rather than focus on the best business decision. Even since November 1995 when the Canadian government privatized CN, the once slow moving railway company has seen improvements in all financial metrics and as a result, has seen its market value increased substantially.

While the deregulation in the railway industry benefitted CN, it was not always easy; CN was faced with a long history of unprofitable lines and a bloated workforce. To become competitive meant making hard decision to reduce the head count through layoffs and selling unprofitable tracks.

At the present, CN is considering what needs to be done to ensure it remains competitive in the market. The recommendation is for CN to continue their NAFTA strategy as well as focus on the Latin American market.

Issues Identification

With many years of being a Crown Corporation and subject to heavy regulation, CN has a long history of inefficiencies that it needs to remove from the company.

The issues for CN include:

* Growth in NAFTA trade slowing

CN has built a large infrastructure of rail lines in North America to take advantage of the NAFTA trade lanes, but with that growth slowing, CN has the risk with a lot of fixed assets that are obsolete. With CN’s current infrastructure in place and its reliance on NAFTA trade (heavy focus on East-West and North-South movement), the railway company is a risk of losing its competitive advantage.

* Continue NAFTA Strategy or expand into Latin America

As explained above, CN is focused on NAFTA trade, which means its network travels primarily East-West in Canada and mostly only on the east coast of the USA. CN does not have a...