2.Mis Case Study Joy

Universidad de Sta. Isabel GRADUATE SCHOOL

City of Naga

Case Study on Greyhound/Laidlaw/Fi rst Group  JOY CAÑEBA CAÑEBA CHAVE CHAVE Ph.D. Student

Case !i"est #resented to !$% V&$G&'&A C% $EYES Professor

&n partial (ul)ll*ent o( the re+uire*ents in H!, -.A ,A'AGE,E'0 &'FO$,A0&O' SYS0E,

,ar1h 234 5.2

CASE S06!Y 0&0LE7 G$EYHO6'!/LA&!LA8/F&$S0 G$O6#

 Summary:

First group’s (a UK based company) main business was in the bus and rail divisions. It acquired the Laidlaw ompany (U! and anada based company) during "##$ which had a %ranchise called &rey 'ound a popular name in U! trips and tours. ith the purchased First&roup is the largest transportation provider in &reat *ritain and +orth ,merica with revenue o% over - billion a year. /he main drawbac0s o% &reyhounds was that it could not strategically locate and address its costumer wants and needs though it had enough potential and in%ormation about its customers. /he unwisely implementation o% I/ lead &rey 'ound to su%%er %rom ma1or de%icit over decades. /hough customers would pre%er services o%%ered &rey 'ound it made lots o%  wrong decisions during implementation o% its plan which lead it to su%%er loss. &reyhound is a di%%erent type o% business %rom the ones that First&roup currently operates in the U!. It provides  bus services directly to users and not through a contractual agreement. First&roup intends to conduct a 2strategic review3 o% &reyhound be%ore deciding whether to pursue the opportunity it o%%ers or to sell o%% the business.

Case Digest:

/he &reyhound case shows a lot o% management errors the combination o% which led to several declines in company’s operation. First thing done wrong in &reyhound was the lac0 o%  reaction to increasing automobile ownership and airlines as competitors. !econdly a%ter the company emerged %rom ban0ruptcy protection there were two persons at the helm o% it who were not transportation pro%essionals. /heir mista0e was that they were too sel%4con%ident and did not consult any e5pert in transportation sphere. /hirdly !chmieder and 6oyle o%ten made incorrect public announcements and in %act manipulated the stoc0 prices which added to &reyhound %inancial instability. ,lso !chmieder  and 6oyle were not interested in &reyhound growth and development7 their aim was to get %ast revenue using all possible methods. ost4cutting practice used by !chmieder and 6oyle was ine%%ective and the resulting short4time pro%it was not used %or company purposes7 it was  primarily used %or covering !chmieder and 6oyle’s e5penses. Firing people and hiring part4time wor0ers was another highly ine%%ective decision7 as a result employees received very low payment did not have any perspectives and were intolerable to the  passengers. ,ll these %actors have signi%icantly damaged the company’s image. 8ne more totally wrong decision was to reschedule routes and create schedules which could hardly be covered while driving at ma5imal speed. ,gain in the search o% short4time sources o% revenue the company has lost potential competitive advantage. Implementation o% the in%ormation system was a signi%icant error as well. /he requirements %or the system were not %ormulated correctly and the %irst system was a %ailure.

,lso the idea to select the %ramewor0 o% airline in%ormation system as the basis was erroneous in my opinion. /he actions and behavior o% 6oyle related to implementation o% in%ormation system also contributed to the %ault7 %irst he re1ected the requested delay and most probably destroyed /hompson’s documents concerning this issue. 9oreover public promises about the launch o% 2highly e%%icient in%ormation system3 were done while the engineers were not even sure it would wor0. /he actions o% the top management in &reyhound case were the source o% all ma1or errors. From the very start the attitude o% top managers was actually destroying previous advantaged o% &reyhound and public image o% the company. :ising stoc0s together with %alling in%ormation system led to %uture speedy decline o% company’s value. /he quic0 launch o% an improper system increased costs and caused negative reaction %rom the customers. 6oyle and !chmieder’s decision to sell their stoc0s was e%%icient %or them personally but was also erroneous %or the company. 'iring *radley 'arslem seemed to be a success%ul solution however in my opinion only a pro%essional dealing with ground4based transportation could be e%%icient in helping &reyhound get out o% the crisis situation. 'arslem’s decision to ma0e reservation system similar to the airlines’ was again an error because bus transportation nee ds a di%%erent approach.  Suggestions:    

'as potential opportunity %or growth in U! mar0et. /here is potential o% cost savings a%ter acquisition. It has to ma0e new strategies and new system merged in to parent company. , wise customer data4base is to be maintained and provide the service acco rdingly.