Case study : Grey hound/laidlaw/First group

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Greyhound Case Study

IntroductionFounded in 1914 by a Swedish immigrant Carl Eric Wickman, Greyhound Lines Inc., today, is the largest provider of intercity bus transportation, serving more than 3,800 destinations across North America with a modern, environmentally friendly fleet. It has become an American icon, providing safe, enjoyable and affordable travel to nearly 18 million passengers each year in the United States and Canada. Greyhound is currently owned by FirstGroup plc, the leading transport operator in the United Kingdom and North America.History Greyhound Lines, Inc.,American corporation that has provided the majorintercity bustransportation in theUnited StatesandCanada. Greyhounds headquarters are in Dallas,Texas.The intercity bus operators Eric Wickman and Orville S. Caesar joined forces, acquired financing, and merged severalbuscompanies into the Motor Transit Management. A network of lines quickly spread across the country, through purchase of existing companies and inauguration of new lines. In 1930 Motor Transit officially became Greyhound Corporation, with the running dog as its trademark. By 1933 Greyhound had 40,000 route miles (65,000 km). In 1961, however, a policy decision was made to diversify, and in the succeeding decades the company became a conglomerate, expanding into several new products and services, Greyhounds business operations became international.In the early 1980s deregulation of the bus transit industry caused Greyhound Corporation to drop many of its local bus routes, isolating many small towns in rural United States. In 1987 the Greyhound Corporation (which was later renamed Greyhound Dial Corporation), based inPhoenix, Arizona, sold its historic bus operations. Greyhound Lines, Inc., based in Dallas, became an independent corporation devoted entirely to intercity bus transportation. In 1999 Greyhound merged with the Canadian bus company Laidlaw, Inc., which was subsequently purchased in 2007 by the British transit operator FirstGroup PLC.

Problems identifiedThe following major problems have been identified after analysing the case study: Lesser demand for bus travelOver the years, the usage of buses for travelling has reduced owing to increase in automobile ownership and decreased airline fares. From 1960 to 1994, the industrys share of interstate travel dropped from 30% to approximately 6% of the traffic. BankruptcyGreyhound had filed for bankruptcy protection in 1991 as it was suffering from high debts since 1987. This was augmented by two violent strikes in 1989 wherein some bus drivers were shot dead. Poor HR policiesWhen Schmieder and Doyle took over Greyhound in 1991, they came up with a plan which called for significant cost cutting by dropping routes, reducing the fleet and even firing the employees. Also they spent a lot of money for non-value adding activities such as decorating the office interiors, first class travel & expensive resorts, hiring consultants & executive search firms, etc. As a result of such poor policies, Greyhound had to bear the consequences in the future. Gloomy customer serviceAs part of the cost cutting measures undertaken by Schmieder and Doyle, many employees were fired while many others left the organization due to poor HR policies. The bus terminals were thus staffed with part-time workers and customer service associates. These part-time associates were not taking work seriously, had lack of knowledge about the processes and at times even made fun of the customers. Thus the overall customer service became pretty gloomy. Weak financial performanceGreyhound had negative stockholders equity in 2002 and 2003. This clearly showed how weak the financial position of the company was. Incorrect strategyUntil the early 1990s, Greyhound tried to be more like an airline by offering reservation systems and capacity-fixed travel. But the consumers thoroughly rejected such concepts and brought the company to the brink of bankruptcy. Improper IT implementationGreyhounds IT based reservation system called Trips was developed & deployed in very stringent timelines. As a result, the quality of the system got sacrificed. The system worked very slowly, had disorganised user interfaces, confusing navigation paths and also crashed many times. Because of such issues in the reservation system, passengers had to wait for long for getting their tickets and at times were even manual tickets. This led to passengers missing their connections and competitors luring them. Poor backend IT infrastructureFor many years, the Trips IT reservation system made use of outdated technology servers and network infrastructure. Also the system was deployed across only 22% of the locations. Improper segmentation & targetingGreyhound was not able to properly segment and target its customer base. As a result, it began losing out customers to its rivals.

Proposed solutionsBased on the above problems identified, the following solutions are proposed: Create demand for bus travelGreyhound should introduce quality service to its passenger at reasonable rates as compared to its competitors and the airlines industry. Promotional strategiesGreyhound should offer different promotional schemes in different geographies and different customer segments after doing proper data mining & analysis. Better human relationsThe organization should develop good human relations with its employees. It should try to retain talent and reward its employees based on merit. Customer focusCustomer should be the prime focus of any company. If customers are satisfied & happy with the services of the company, then only can the business sustain its operations. Thorough financial analysisThe company management should base their decision or any plan of action only after conducting a thorough financial study of the matter in hand. IT implementation and change managementGreyhound should have implemented its IT systems after conducting a proper analysis of the technology & the software provided by the vendors. Also it should have defined proper Service Level Agreements (SLA) with its IT solution service provider. These measures would have ensured the quality of the implementation as well as optimized the costing of the project. Strong IT infrastructureGreyhound should completely automate its reservation system rather than providing computer based reservation at some places and manual at others. It should have setup strong IT infrastructure to handle the business transactions load. Proper segmentation & targetingThe management should have analyzed the passenger data thoroughly using data analytics. Subsequently they should have properly segmented the customers based on various segmentation variables like geography, demographics, etc. and then targeted the appropriate customer segments.

ConclusionWhile implementing IT system check whether the customer is ready for it and wants it.In short never lose customer focus.Also financial prudence is of atmost importance while taking any decision.Referenceshttps://www.greyhound.com/