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Effective management of any business is a fundamental goal in achievement of the organizational goals. Following economic principles, the success of any organization depends on the effectiveness of management’s decision-making processes. This is based on the fact that resources are limited competing against boundless needs and requirements. Therefore, organizations have to engage themselves into research, forecasting, planning and coordination of services to achieve these goals. An effective usage of resources differentiates a successful organization from those who faced with development constrains. This is because it gives a firm the high competitive power over other firms operating in the same industry. Virgin Trains has not been left behind in ensuring that they remain a relevant company in the field of transport service. The company has embarked, on vigorous technological transformation to enhance their management performance and in improvement in the service delivery. The technological enhancement has lead to improved management efficiency in services processes, human service and resource allocation. As a result, Virgin Trains has realized significant business growth; thus, heightening the competitive potential of the company in transport industry. However, the concern of this paper is to explain how effective management of service processes, human service and resource allocation leads to tremendous growth of company’s profitability (Virgin Trains, 2012).
Virgin Trains has marked a significant transformation in transport industry due to their enhanced service processes. The company has quality transport services compared to their competitors in the industry. This has lead to a significant growth in their market share in transport industry. This is the best one which is explained by the following reasons.
Investment in the modern technology is a major reason for the rapid growth of the company’s profit. This is because modern technology development has increased the speed of service delivery. For instance, the investment in the electric trains by management enhanced the delivery speed of the transport services. As a result, more customers preferred the Company’s services to their competitors. In addition, enhanced delivery speed provided with an opportunity for the company to make maximum use of the travel times, which increased the number of the company staff trips have being made in the specified travelling route. Consequently, the number of customers grew up to the leading of increased revenues (Adegoke, 21).
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The management decision to enhance the technological position of the company was essential in terms of the market demands of clients and in keeping the pace of the dynamic nature of the economy. Thus, the step which helped the company to remain competitive in the travelling industry. Before management considers embarking on the complete overhaul of the technology, there is a need to make proper timing to ensure that enough resources are set aside for facilitation of smooth transition from the current technology to a modern technology (Fitzsimmons & Fitzsimmons, 20).
However, the investing in new technologies posed a great challenge because of the initial capital requirements. Furthermore, introduction of new technologies leads to disruption of the normal operations of the services delivery. Thus, before a company embraces on the new technology it should be done in the most efficient way. This ensures that there is less friction between upgrading of the new system and smooth delivery of consumer services (International Labour Office, 28).
The profitability of the Virgin Trains Company is caused by the enhancement of customer service. For example, the company engaged provision of the comfortable transport conditions such as modern seats facilities, enhanced booking services, and provision of clean transport environment is the main cause of rising the demands for the company’s services. As a result, consumers express high satisfaction with the company’s service over the competitors. Therefore, enhanced comfort in the service delivery is the main reason for the enhanced market sharing of the company in the transport industry (Johnston & Clark, 38).
The management team of the Virgin Train is very committed to the ensuring that the company’s services are greatly differentiated from the needs of customers and from the difference creating between the services offered by them and competitors. Thus, the increase of customer service is essential in creating competitive advantage and in seeking for new customers that consume the company products (Peppard & Looy, 28).
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On the other hand, high level of service differentiation creates confusion on the company’s decision of cost minimization. High degree of services differentiation may lead to increased cost per service charged. This is because the company might fail in realising the full benefits of economies by scales. As a result, the company may end up pricing their services above the leading value at the market to the weak competitive power. So, to ensure that consumer services differentiation meets the company’s purpose, the deep attention must be paid on the modalities on how the differentiation exercise is implemented (Virgin Trains 2012).
The achievements of the Virgin Trains are centred on investment in human capital. The company’s management team had invested heavily in the human capital by employing experienced personnel that is responsible for making key organizational decisions. In an effort to attract qualified personnel to the service industry, the management fixed a higher reservation wage for these employees. As a result, the up-to-date company has a high level of human capital stock. Hence, the investment in qualified personnel has made it possible for the company to record tremendous growth in productivity. This is because of improved capital labour ratio made it optimal for the efficient interaction of these factors of production leading to high output. In addition, the management has invested in human capital improvement by setting funds aside to enhance further training of their personnel (Peppard & Looy, 26).
The main purpose of increasing the human capital stock in the organization is to expand the productivity of individual work. This helps in reduction of the cost associated with the inefficient practices of the workers. As a result, the organization achieves maximum returns for the cost paid per worker. Therefore, an individual who is responsible for delivering services to the clients must be trained properly. This enhances the marginal productivity of labours; thus, reduces the cost involved in the travelling services production (Virgin Trains 2012).
Although the Virgin Trains Company has invested at a great cost in the enhancement of the transport industry, cost consideration should be taken into account. This is because investing in human capital development may be very costly, especially in the case of high rate of the employee turnover. Thus, in the future the company should ensure that there are adequate human resources policing. This will be helpful in reducing risks and losses related to high employee turnover (Peppard & Looy, 26).
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The Virgin Trains Company tends to contain various resources that assist in the success of its endeavors. Efficient allocation of resources guaranties maximum utilization, thus minimizing the cost of production. Among the things that might facilitate the effective allocation of resources, the technology and economies of learning may be included . Effective resource allocation with the assistance of the management helps in assigning the available resources in the economic way. The Virgin Trains applies these strategies to facilitate the production of effective services to clients. The potential of the workforce is combined together with the available resources have given an adequate outcome (Adegoke, 31).