Business model
The business model of DB Group will change as a result of the sale of DB Schenker. In future, we will be focusing our strategy on our core business: our passenger transport activities in Germany, our rail freight transport activities and the rail infrastructure companies. DB Group’s logistics activities, which are bundled at DB Schenker, are thus no longer described in the business model. The main effects that the completion of the planned sale of DB Schenker will have on DB Group are presented in the following chapters: green transformation, employees and business development.
DB Group aims to offer attractive, customer-oriented and environmentally friendly mobility and freight transport solutions from a single source. To this end, we want to make targeted use of the potential of digital technologies to improve our operational and administrative processes, continually develop our services for customers, integrate new services and achieve simplifications. We want to successively develop our business portfolio in respect of mobility and freight transport to better satisfy customer needs and meet new market requirements.
- Our passenger transport activities have a broad base. Bus and rail services are supplemented by intelligent networking with other means of transport such as cars and bicycles, but also with new forms of mobility that enable door-to-door mobility in addition to the core business. We offer long-distance rail passenger transport within Germany and into neighboring countries. In bus transport, we focus on the German market. We also offer our supplementary mobility solutions for regional public transport in European countries outside Germany.
- Our business activities in the freight transport market were placed on an international platform at an early stage. DB Cargo operates in the business-to-business segment. In European rail freight transport, we offer our customers industry-specific solutions.
As an operator of networks and provider of services in passenger transport, freight transport and track infrastructure, our economic success is also influenced by the general economic environment and developments on the relevant markets:
- Demand for passenger transport is driven first and foremost by the size of the population, growth of major cities, number of people in employment and real disposable incomes. Competitiveness relative to car transport is heavily influenced by the trend in fuel prices.
- In the area of freight transport, we are particularly dependent on economic developments. Due to our Europe-wide networks, we monitor the development of gross domestic product (GDP) in Europe and European trade. Customary early-warning indicators of the business climate and of the expectations of purchasing managers are an integral part of our monitoring system.
The market environment of DB Cargo is heavily influenced by industrial production. Furthermore, the cross-border movement of goods within Europe is growing in importance.
Development of the economic and early-warning indicators, as presented above, influences how we manage our market activities and resources. This is aimed at identifying opportunities and risks at an early stage, so that short-term management activities and long-term positioning can be aligned accordingly. In addition, we are striving to systematically optimize our operating value drivers.
Operating transport networks is normally characterized by high capital commitment, long capital expenditure cycles and high fixed costs. In this respect, achieving optimal capacity utilization of the networks and systematically developing, integrating and cost-effectively operating these networks with the efficient use of resources are important to DB Group’s economic development. Ensuring and improving service quality is at the heart of our activities. By expanding what we offer our customers, particularly digital services and customer loyalty programs, and integrating new forms of mobility and intelligently linking these with other means of transport, we intend to gain additional customers to realize increasing volumes and economies of scale.
We generally use operating performance data to measure capacity utilization in our networks and our market shares. To determine a relative return, we calculate ratios comparing performance data with the generated revenues (specific revenues).
With our national and international subsidiaries, we operate as DB Group in freight transport. Our comprehensive service portfolio enables us to offer our customers services combined from a single source.
At DB Regional, the order book in the form of long-term transport contracts concluded with the contracting organizations of Germany’s Federal states is of great importance for business development.
Development of DB Group is largely driven by five success factors that are key components of our business model.
- Corporate social responsibility: As a state-owned provider of mobility and freight transport solutions, DB Group bears great responsibility for the future of our country. As the basis of climate-friendly and networked mobility and the freight transport of tomorrow, rail should fulfill a key function for Germany: it should help to achieve climate protection targets, promote participation and quality of life for people and strengthen the business location as well as people and the economy. In brief: society should benefit from strong rail system. We aim to align our business activities on the realization of Strong Rail in the long-term.
- Powerful organization: Our goal is to ensure DB Group’s effectiveness by establishing a modern and efficient organization and anchoring a value-oriented corporate management.
- Integrated Group: As a system integrator in Germany, we want to optimize the wheel-rail system as a whole and fulfill an important role as a technological pioneer. This is aimed at realizing positive synergies through the integrated Group structure and facilitating the infrastructure so that it is aligned with efficiency, market requirements and profitability. We are committed to developing and implementing the digitalization of rail within the integrated Group structure. Our customers can also benefit from the integrated Group. By linking different modes of transport in an economically, ecologically and technologically intelligent way, we aim to offer our customers door-to-door mobility and transport solutions from a single source.
- Europe as the field of action: As the geographical and economic heart of Europe, Germany has a special responsibility for the future of the continent. Due to the importance of Strong Rail for Europe, Europe remains our field of action in freight transport and cross-border passenger transport.
- Digitalization: We want to use the technologies and methods of digitalization to offer attractive products. This means that, on the one hand, we want to integrate new transport services such as on-demand mobility into our product portfolio and establish platforms for our customer interfaces. On the other hand, we strive to support our internal processes with technologies such as artificial intelligence (AI) to continue to offer customers an appropriate price level with efficient processes. We also intend to make freight transport by rail more attractive through automation and digitalization, for example through Digital Automatic Coupling (DAK).