1. Critically evaluate the success of Eurotunnels new operational strategies.

Eurotunnel has unique capabilities to exploit, speed (35minutes), all-weather serviceability and capacity, would be service attributes, but when compared to the ferries, eating and shopping opportunities require spending time at Eurotunnels terminals rather than being part of the journey. Students will have often experienced crossing the channel by different modes, so the strengths and weaknesses of the various modes could be discussed. Issues of better shuttle capacity management, pre-booking incentives, and variable yield management computerised pricing models should be surfaced as improvements brought about by the new strategy. While comparisons can be drawn with low-cost airline booking models, the problems of retro-fitting of such a strategy to systems and physical infrastructure installed in the early 1990s could be discussed

Q2. Understanding of how supposedly monolithic stakeholder groups e.g. Eurotunnels creditors, actually compromise subgroups with conflicting self-interest positions, and differing levels of power and influence over business decision making. Apart from the expected stakeholder groups, students should contrast as subgroups, the militant French shareholders and their desire for dividends, with the quiescent and small UK shareholder group whose main agenda appears to be the maintenance of their travel concessions. With creditors the senior creditors enjoy more powers of negotiation and security of debt...reflected in the valuation of senior debt and their treatment in the restructuring plan, than the junior bondholders. This presents Eurotunnel management with a greater complexity in negotiation...but equally weakens creditor influence. See stakeholder map below. Exhibit 1. 1UK shareholder market is small (200,000 individuals, 2004), often held for travel privileges, founder and (1987) shareholders enjoy free journeys, others enjoy 30% discount in fares.2French shareholder actionnaires market is large (1 million individuals, 2004) and growing (700,000 in2003), looking for return on investment and protection of capital. French shareholders also have a significant political impact on government policies.

Q3. What are the salient differences in national cultural perspective between the Anglo-Saxon and French views of the enterprise and its stakeholder responsibilities? Students should highlight that the French business cultural perspective favours the interests of the enterprise, its employees and shareholders above creditors, who would be expected to act as equity partners seeking solutions for the business rather than acting as debt recoverers as in the Anglo-Saxon concept of receivership or administration. In a mixed student group, a lively discussion of rights and responsibilities should ensue. Had the hedge-fund investors taken into account issues of French governance and political risk into their investment decisions when they bought second hand Eurotunnel debt at a highly discounted price?