This Case Explores Issues Related To Entering A New Form

This case explores some issues related to entering a new foreign market and describes the strategies that one UK firm is using to find success in the North American market for medium-distance intercity transport

This case explores some issues related to entering a new foreign market and describes the strategies that one UK firm is using to find success in the North American market for medium-distance intercity transport. In no more than 2 pages of essay, you are required to develop well thought out responses to the following questions:

  1. As a late mover into the US intercity bus market, what advantages and disadvantages does Megabus have?
  2. Does Megabus have any overwhelming resources and capabilities?
  3. As a college student, among choices of private car, train, airplane, Greyhound, and Megabus between Houston and Columbus, which one would you choose and why?

Paper For Above instruction

The entry of Megabus into the North American intercity bus market exemplifies the dynamic strategies employed by late entrants seeking to establish a competitive foothold in a mature industry. Analyzing the advantages and disadvantages of Megabus’s late-mover position reveals significant insights into its operational strategies, resource capabilities, and consumer choices, which are pivotal in understanding its market success and challenges.

Advantages of Megabus as a Late Mover

One of the primary advantages of Megabus entering the US intercity bus market late is the ability to learn from competitors' experiences, avoiding pitfalls and adopting best practices. This stage of market entry allows Megabus to capitalize on existing infrastructure, market demand, and consumer awareness of intercity travel options without the need to develop a new market from scratch. Additionally, Megabus could exploit technological advancements and innovative business models—such as low-cost fare structures and online booking systems—that competitors may not have effectively implemented earlier. For example, the use of dynamic pricing and low-cost marketing campaigns allowed Megabus to rapidly attract price-sensitive travelers (Shaheen & Cohen, 2013). Furthermore, late entry provides the advantage of identifying underserved routes or customer segments that established players may have overlooked or neglected, enabling Megabus to target niche markets effectively (Roggenhofer & Vickerman, 2014).

Disadvantages of Megabus as a Late Mover

However, late entry also presents significant disadvantages. Megabus faces intense competition from incumbent providers such as Greyhound and other regional carriers, who possess established brand loyalty, extensive route networks, and entrenched customer relationships. These incumbent players benefit from economies of scale, which can translate into lower unit costs, and established operational efficiencies. Moreover, Megabus encounters the challenge of overcoming consumer inertia—many travelers may prefer familiar providers due to perceived reliability or convenience (Litman, 2019). Additionally, skepticism regarding the quality and safety of low-cost bus services could hamper market penetration. The late-mover must also contend with existing regulatory environments, access rights, and integration issues with existing transit infrastructure, which may hinder rapid deployment or expansion (Vickerman, 2013).

Resources and Capabilities of Megabus

Megabus's resources and capabilities play a crucial role in its strategic positioning within the market. Its core resources include a fleet of modern, environmentally friendly buses equipped with amenities catering to comfort and convenience, and its robust online booking platform which provides low-cost and flexible fare options. These technological capabilities allow Megabus to efficiently manage ticket sales and route logistics. Strategically, Megabus's low-cost business model, which leverages secondary routes and on-street bus stops, reduces operational costs significantly, granting it a competitive edge (Shaheen & Cohen, 2013). Furthermore, its branding as an affordable, accessible alternative to traditional transport providers enhances its appeal among student populations and budget-conscious travelers. Capabilities such as efficient route management, dynamic pricing strategies, and targeted marketing enable Megabus to adapt swiftly to market fluctuations and consumer preferences (Roggenhofer & Vickerman, 2014).

Personal Preference for Transportation Mode between Houston and Columbus

As a college student traveling between Houston and Columbus, I would select Megabus over private car, train, airplane, or Greyhound, primarily due to affordability, convenience, and environmental considerations. The cost-effectiveness of Megabus significantly outweighs that of flying or private car options, making it suitable for budget-conscious students. The availability of online booking and flexible scheduling offers added convenience, and the environmentally friendly nature of buses aligns with sustainable travel principles. While trains offer comfort, their timetable constraints or limited routes may not be as accommodating. Air travel, although faster, generally incurs higher costs and involves more complicated logistics, including airport transfers and security procedures. Greyhound, as a traditional competitor, often charges higher fares and might have less modern amenities compared to Megabus. Overall, Megabus offers an optimal blend of affordability, convenience, and eco-friendliness—factors critical for a student traveler (Litman, 2019).

Conclusion

Megabus’s strategic positioning as a late entrant into the US intercity bus market encapsulates both the opportunities and challenges of market entry at this stage. Its advantages—such as technological innovation, niche targeting, and cost leadership—have enabled it to carve a significant share despite stiff competition. Nevertheless, overcoming incumbent advantages and consumer perceptions remains a persistent challenge. The firm’s resource base, characterized by modern fleets and efficient online systems, supports its low-cost value proposition. For individual travelers, especially students, Megabus offers an attractive alternative that combines affordability, flexibility, and eco-friendliness, which are increasingly important in sustainable transportation choices. As the market evolves, Megabus's ability to leverage its resources and continually adapt to consumer preferences will determine its ongoing success.

References

  • Litman, T. (2019). Transportation and environmental sustainability. Journal of Transport Geography, 76, 1-11.
  • Roggenhofer, C., & Vickerman, R. (2014). Stakeholder perspectives on the effects of low-cost bus services in the UK. Transport Policy, 36, 117-125.
  • Shaheen, S., & Cohen, A. (2013). Innovative policies for shared mobility. Transportation Research Record: Journal of the Transportation Research Board, 239-247.
  • Vickerman, R. (2013). Transport infrastructure and economic development. Journal of Infrastructure Development, 5(2), 87-99.
  • Vogel, P., & van de Velde, D. (2014). Transportation policy in medium-distance intercity markets. Journal of Policy Analysis and Management, 33(1), 89-106.
  • Wardman, M., & Batley, R. (2011). Factors influencing acceptance of alternative mechanisms for paying for congestion. Transport Policy, 18(1), 156- Laval,
  • Givoni, M., & Banister, D. (2010). The urban design and planning implications of the shift towards low-emission mobility. Transport Reviews, 30(4), 367-385.
  • Shaheen, S., & Cohen, A. (2013). Innovative policies for shared mobility. Transportation Research Record: Journal of the Transportation Research Board, 239-247.
  • Hensher, D. A., & Li, Z. (2018). The future of transportation—low-cost carriers and new mobility services. Transportation Review, 105, 473-486.
  • Banister, D. (2011). Unsustainable transport: City mobility and the environment. Routledge.

Related Assignments