Monday, May 5, 2008

NYC- MTA Strategic Problems

Company slow to introduce new products in a fast changing environment:

Such a symptom can be very critical to a company's preservation, as unlike other symptoms, this one can be clearly visible to the consumers. These consumers, set in a shifting and unpredictable environment, are constantly looking for new, more efficient products. Therefore, a company that fails to provide its potential consumers what they are looking for, will find itself in a strategic problem in the future. When new products are introduced by a company, the consumer feels assured that the company is interested in the market and its willingness to provide a better product. Hence, a company that fails to do so, sends the opposite message to the market, and primarily to its consumers.

Too much debt:

Although debt can be a major source of money, companies must know how to manage their debt in a way that won’t harm them in the future. Too much debt can cause damage if it doesn’t repay itself faster than it grows. This debt will undoubtedly grow into a strategic problem as it will prevent the company from self developing, as well as improving future progress to its consumers. Furthermore, excess debt can prevent the development of much needed new products, and consequently dissatisfy a customer's needs. This can be clearly proven with any number of companies, even the New York City MTA.



The N.Y.C – MTA has suffered for several years from a large budget gap which will lead to a projected deficit of $1.46* billion in 2009 (*New York Times). As a daily commuter, I can see and feel this strategic problem in several ways. First of all, many of NYC subway station are filthy and not well maintained due to lack of financial resources. Second, the recent hike in fares has dragged many consumer complaints. And third, the delayed completion of the Second Ave subway line. These are only a minute fraction of the many strategic problems caused by the MTA's deficit and due to lack of good management and discipline budget.

9 comments:

Stradeego said...

I agree with the MTA exspecially witht he 2nd avenue train line which caused recently uptown in my neighborhood a loss of electricity. It is very dissapointing they raise the price of the trains yet they have yet to show for the reasons why. I feel like almost all the time time trains runner slower now when I expected more back to back trains and also with how this city is growing i expected more from the MTA because almost everyone rely's on them.

Vanessa Dispensa said...

I do agree with you that the NYC MTA does suffer from a large amount of debt, but I am not sure that it is because of poor management and poor budget control. The cost of bus and train maintenance, fuel, MTA bus and train operators and electricity to keep NYC transportation running 24 hours a day every day seems to be a huge burden to our city. Considering we only pat 2 dollars for train and bus rides and 5 dollars for express bus rides is a bargain for us. The actual cost for each ride is probably more than what we pay for. These low prices contribute to the MTA's debt. Unless we pay more, our transportation probably won't ever improve much due to lack of funding.

Yuan Li said...

Hi Eliran, I agree with you completely that MTA are facing many strategic problems. For the past few years, they are trying really hard to over come their financial problems. Metrocard price have increased for twice in 3 years. Raise fairs but fail to improving service will not provide a solution for them. I also agree with you that bad management can lead to company incurs too much debt and the consequence of carrying huge debt can be dangerous.

YONATAN KAPLAN said...

Eliran,
As a NYC resident, I also wish of the day that our transportation system will look/function more like the Tokyo system with clean accurate and efficient transportation.
In my travels around the word I have been in many Undergrounds/Metro/Subways and I think NYC is the cheapest around. Even though with the new price hike, I still think that the current price of a subway ride is still under priced. It is possible to travel all the way from downtown Brooklyn to the end of the Bronx for only $2. In other cities you will have to pay for the same ride at least 6 times more.
We all wish they will get their acts together and clean the subway stations, but I don’t think it will be in our lifetime.

NATALYA said...

I absolutely agree with you that NYC MTA is the slowest and the dirtiest subway in the world. The fares keep increasing, but quality and service never change.It shows serious mismanagement. Will they ever update subway system to European standarts.

Ami said...

Hi Eliran,
I like the company you picked; easy to tear apart, yet we must respect it for the position it has secured itself.

In your post you mentioned that it is dissatisfying to its customers if a company has much too (poorly managed) debt, but what choice does the consumer have in this situation? you obviousely have to still use them.

Your thought, kindly so...
Ami

Alex Martkovsky said...

I completely agree with you about the poor service of the MTA. I find myself having to wait longer and longer for the trains to arrive. With the recent increase in price I think consumers deserve more than what we received. Their projected increase in debt just shows the inablity of the MTA management to deal with costs effectively. Part of that is related to the MTA union which puts a lot of pressure on the MTA and ties their hands, but another part is just inefficient management. Increasing prices of gas will help the MTA and increase demand for their services and I think another price increase is not for away.

Tae Park said...

I really agree with the MTA problems like everyone agrees. you picked out a very perfect point. MTA doesn't seem to develope and fare keeps increasing. these problems been brought up many many years ago. and now the complaint are gonna get louder because there will be more and more people taking subways and buses due to increasing gas price. MTA really should give something back to people. the reality that MTA is the only NYC's subway company and people have no choice is so sad.

Tina Zheng said...

Hi Eliran, I think you did a great analysis on the MTA's strategic problems by relating to slow in introducing new products in fast changing environment and too much debt. You picked a common but interesting topic that commuters like us, the Baruch students, can easily understand and relate to. Without having to repeat other's comments, I would just like to make one point. Although I do agree that MTA should improve their business strategy, but it is definitely easier said than done. In order to improve the MTA's appearance, as well as maintaining it, is a long hard process. Many of us want to see an instant change due to the price increase, but we all know that it is not possible. Instead of focusing on the negatives, I do see the MTA's effort in trying to update its image. Many of us should've noticed of the new bus stops around the city. It is a good start to improving its image, and I just hope that they will do to the same to the subway stations!