Cn Railway

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Cons: CN may need to invest in systems to calculate which routes are the most cost efficient versus which routes are the most efficient in terms of delivery time.

Continuation of NAFTA Strategy versus Expansion into Latin America

With the changing of the Canadian-to-US dollar exchange rate, it is now less costly to purchase and source from the U.S. relative to a few years ago. Thus, there may be more shipments from the U.S. into Canada, and CN can leverage this and obtain and/or retain more business by continuing the NAFTA strategy.

Pros: CN can generate more revenue from the West half of the U.S.

Cons: It may be risky to invest heavily within the U.S. Should the U.S. economy not do so well or crash, or there is less trading between Canada and the U.S. due to the Canadian dollar not being as strong in relation to the U.S., then CN's railway tracks may be dormant. This would mean that costs would increase to maintain the dormant tracks while revenues would decrease as a result of dormant tracks.

CN may also choose to expand into Latin America, which includes Chile, Peru, Colombia and Mexico and these four Latin American nations have a Free Trade Agreement with the United States. Thus, CN can also leverage these relationships.

Taking Advantage of Economic Growth in Asia and Emerging Markets

With the increase in trading with low-cost countries, such as China and India, and emerging markets, such as Brazil, CN may want to take this opportunity to create more links to facilitate shipments from those countries. A lot of revenue could be generated from transporting shipments from China, India, Vietnam and Brazil.

Expanding Overseas

With the increase in trading overseas, CN may consider expanding overseas and applying its operational effectiveness and efficiency to rail companies and other modes of transportation within those countries. This would lead to decreased delivery and lead times and ultimately satisfied customers.

Recommendations and Implementation

Slowing Growth in NAFTA Trade

Much of CN’s success was contributed to CN growing its revenue and productivity by increasing capital investments in equipment and infrastructure, automating a series of operational functions by using the latest technology, reducing the size of their workforce, etc. Thus, to sustain and maintain their competitive advantage, CN needs to implement ideas to continue growing its revenues while maintaining if not improving its productivity.

Continuation of NAFTA Strategy versus Expansion into Latin America

With the changing of the Canadian-to-US dollar exchange rate, it is now less costly to purchase and source from the U.S. relative to a few years ago. Thus, there may be more shipments from the U.S. into Canada, and CN can leverage this and obtain and/or retain more business by continuing the NAFTA strategy.

CN may also choose to expand into Latin America, which includes Chile, Peru, Colombia and Mexico and these four Latin American nations have a Free Trade Agreement with the United States. Thus, CN can also leverage these relationships.

Taking Advantage of Economic Growth in Asia and Emerging Markets

With the increase in trading with low-cost countries, such as China and India, and emerging markets, such as Brazil, CN may want to take this opportunity to create more links to facilitate shipments from those countries. A lot of revenue could be generated from transporting shipments from China, India, Vietnam and Brazil.

Expanding Overseas

With the increase in trading overseas, CN may consider expanding overseas and applying its operational effectiveness and efficiency to rail companies and other modes of transportation within those countries. This would lead to decreased delivery and lead times and ultimately satisfied customers.

Monitor and Control

A complete quality monitoring program, either conducted by a third party or the buyers, is essential to ensuring that the product shipped meets all of the specifications and performance criteria that are agreed to. A local presence is needed, where the buyers can inspect the factories on a regular basis.

In addition, the buyers should arrange quarterly (or monthly, if necessary) status meetings with each supplier or vendor, which can take form in conference calls. This is to identify any issues or concerns parties are experiencing and taking appropriate measures to resolve those issues or concerns.

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Cna Case

Canadian National Railway

CN is currently single transcontinental railway company which spans Canada from the Atlantic coast in Nova Scotia to the Pacific coast in British Columbia. Also after purchase of Illinois Central and several others small railway companies in US, CN gained trackage in central US from Great Lakes to the Gulf of Mexico. The company was established in 1918 and has grown into largest company in transportation railroad industry in the country with almost 22 000 employees in US and Canada and market capitalization of 32 billion dollars. Based on results at the end of 2010 CN has one of the lowest operating ratio of 63.6%.

Canadian National Railway s offers to its customers shipping services of cargo loads across North America. Clients are able to ship just about any kind of load such as automobiles, coal, metals, hazardous materials, petroleum products, alternative energy, and oversized or overweight. The networks of railroads and logistics parks are strategically located in the heart of economic centers of North America in order to get loads faster to the destination and at significantly lower cost. Another factor which lets decrease cost of shipping, is that size of load what can carry three trucks can fit on single railcar. Also CN provides additional alternative shipping services for those clients, who are located away from rail lines or ship large amounts.

There are two markets which could apply for such company as CN. First one is transportation industry in general and specifically railway transportation. In a market if railroad transportation CN is a natural monopoly. First characteristic is very big barriers for entry into railroad business. The reason for that is that in order to be in