Tendering for Bus Transport: A Bumpy Ride for PCL
In September 2015, CEO of Pavlovich Coachlines Ltd (PCL), Bernard Pavlovich, needed to make some significant decisions regarding his company’s future. The business had taken an evolutionary growth path over the past 75 years. It began with a small bus fleet covering rural school runs, moved into luxury coaches and now was focused primarily on government tendered central city bus services. These developments were accompanied by changes in vehicle types, from a 12-seater truck to quality European coaches, to smaller Asian buses. PCL had also changed its revenue model, from securing government-tendered school routes with low-cost vehicles to international tourism packages with a quality fleet and image, to winning large local and regional government tender rounds. The market had changed; affordability and economic sustainability had become key innovation drivers. Bernard needed an efficient and flexible business model, that had little margin for error. How should he proceed?