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25. WP3 - Update
January 21st, 2008
Summary of Deliverable 3.2

Deliverable 3.2 reviewed several components of the RETRACK business plan that collectively may help the venture to establish a strong market position in international rail freight transfer.

Firstly, the strategic rationale for a non-equity alliance between the RETRACK partners was discussed. It emphasised the importance of long-term working relationships and formalization of the RETRACK collaboration.

Secondly, the creation of joint competitive advantage was addressed in order to enhance the RETRACK partnersí awareness about a plethora of competitive opportunities arising from collaborative bonding of individual expertise, market coverage and service production assets.

Thirdly, four elements of joint competitive advantage have been reviewed, with an aim to provide input to RETRACK partners for taking informed choices of competitive strategy and effective competition measures. These involved:

1. Four business models from which the RETRACK train operators may choose those that best define the customer-service segments they want to target, and solidify business relationships with clients shipping large and stable goods volumes.

2. A cost model that allows the RETRACK operators to estimate operational expenses and revenues from the sales of load carrying capacity at different stretches of corridors served.

3. A settlement code for cost-effective reimbursement of RETRACK partners for haulage provided to joint customers, and

4. The suitability of a legal vehicle of European Economic Interest Grouping for formalizing the RETRACK partnersí collaboration in the form of an unlimited liability company without any capital investment.

Although the subject matters discussed here are presented in sequential fashion, the attainment of the RETRACK strong competitive advantage will require several concurrent actions and decisions. This means that several issues which involve different spheres of alliance as a whole and individual partner operations have to be resolved simultaneously

One practical suggestion may involve the inclusion of a network integrator function into powers and responsibilities of the RETRACK EEIG manager so that this person may represent the RETRACK-interests vis-à-vis the actual and potential clients.

Another proposal may refer to defining as soon as possible the strategic and operational duties of the RETRACK Board of Directors as regards development of standardized service, its sales and marketing.

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