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. List all of the things that Greyhound did wrong.
The Greyhound case shows a lot of management errors, the combination of which led to several declines in company’s operation. First thing done wrong in Greyhound was the lack of reaction to increasing automobile ownership and airlines as competitors. Secondly, after the company emerged from bankruptcy protection, there were two persons at the helm of it who were not transportation professionals. Their mistake was that they were too self-confident, and did not consult any expert in transportation sphere.
Thirdly, Schmieder and Doyle often made incorrect public announcements and in fact manipulated the stock prices, which added to Greyhound financial instability. Also, Schmieder and Doyle were not interested in Greyhound growth and development: their aim was to get fast revenue using all possible methods. Cost-cutting practice used by Schmieder and Doyle was ineffective, and the resulting short-time profit was not used for company purposes: it was primarily used for covering Schmieder and Doyle’s expenses.
Firing people and hiring part-time workers was another highly ineffective decision: as a result, employees received very low payment, did not have any perspectives, and were intolerable to the passengers. All these factors have significantly damaged the company’s image. One more totally wrong decision was to reschedule routes and create schedules which could hardly be covered while driving at maximal speed. Again, in the search of short-time sources of revenue the company has lost potential competitive advantage.
Implementation of the information system was a significant error, as well. The requirements for the system were not formulated correctly, and the first system was a failure. Also, the idea to select the framework of airline information system as the basis was erroneous, in my opinion.
The actions and behavior of Doyle related to implementation of information system also contributed to the fault: first, he rejected the requested delay, and most probably, destroyed Thompson’s documents concerning this issue. Moreover, public promises about the launch of “highly efficient information system” were done, while the engineers were not even sure it would work. The actions of the top management in Greyhound case were the source of all major errors. From the very start, the attitude of top managers was actually destroying previous advantaged of Greyhound and public image of the company.
Rising stocks together with falling information system led to future speedy decline of company’s value. The quick launch of an improper (or partly working) system increased costs and caused negative reaction from the customers. Doyle and Schmieder’s decision to sell their stocks was efficient for them personally, but was also erroneous for the company.
Hiring Bradley Harslem seemed to be a successful solution, however, in my opinion, only a professional dealing with ground-based transportation could be efficient in helping Greyhound get out of the crisis situation. Harslem’s decision to make reservation system similar to the airlines’ (Greyhound Case Study) was again an error, because bus transportation needs a different approach.
Among business operation errors, in my opinion, it is possible to determine inefficient use of rural traffic (most of the passengers were from large cities) and improper use of information system (only 22% of all terminals were in fact using it) (Greyhound Case Study). This led to loss of competitive advantage and to increased servicing and software costs as well as additional employees hired to answer calls and print tickets. Also, the company’s management failed to address the competitors’ offers and prices, which also contributed to loss of revenues and to poor position of Greyhound in transportation industry to the end of 2004.

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2. What were the primary causes of the problems?
Primary causes of the problems were:
 Top managements with no transportation experience and with no vision for developing the company
 Inconsistency between public announcements and actual state of affairs
 Improper choice of base information system
 Hasty decisions aimed at short-term profits
 Increased competition and failure to address competitive threats timely.
3. If you were running Greyhound, what could you have done differently to prevent or minimize the problems?
First of all, I would hire several transportation experts and suggest to provide a SWOT analysis, to understand current market position. I would cut the networking costs (as Harslem did) and adopt a simpler information system compliant with bus transportation features. In case of a stock rise, it would be useful to sell certain percent of stocks and invest the revenue into refining the system and studying customers’ needs.
Also, I would make a detailed analysis of transportation flows and study the portrait and needs of a typical customer. It would help to develop a flexible policy attracting more customers. The use of rural routes could be increased.
4. Because no one can change the past, what would you suggest Greyhound do now to solve its problems?
To the end of 2004, Greyhound experienced significant problems. One of the solutions could be to cut network and communication costs by introducing a web-based order system and by replacing the calls system by automated order system. Trips system should be implemented at maximal number of terminals, since it proved it could be partly functional. The costs saved by certain automation of call and order process should be invested into maintaining existing market niche.
Some part of the costs would be allocated to study competitors’ methods of providing such low costs. Vehicles with decreased fuel consumption could be used, especially in terms of projected Greyhound size reducing. Also, hiring drivers with own transportation means to cover existing routes would be useful. Since the company cannot offer high salaries currently, it would be useful to offer part of shares to each worker. This would help to increase motivation and could also attract some investment. Also, it would be efficient to create a tolerant and ethical corporate culture, and gradually spread it within the company.
These measures are likely to help to get Greyhound out of crisis state. Future actions would be to make a detailed analysis of transportation costs and flows, and optimization of schedule and routes in order to get maximal revenue. Bus schedule should be synchronized internally, with airlines and with competing companies, so that passengers could travel. Also, different variants of buses with additional features (TV, Wi-Fi) could be implemented in future.
5. Write a report to management that describes the primary cause of the problems, a detailed plan to solve them, and show
Summary
To the end of 2004, Greyhound financial position has deteriorated due to several reasons. The actions of top management were aimed at short-time revenue. There was practically no analysis of transportation flows and customer preferences. The information system model was taken from airlines, and this determined its inconsistency, high cost and low usage rates. Existing system of calls and ordering tickets is costly and inefficient since it is mostly human-processed. Competitors’ offers were not analyzed and addressed, and this led to flow-out of customers. Employee culture deteriorated as well due to low salaries and high turnover. The company is about to abandon its major routes and shift to short-term transportation.
Action plan
In order to let Greyhound get out of financial recession and improve its development, it is necessary to:
 Integrate the existing information system in its working form to all terminals where it is possible
 Reduce costs of human-processed orders by implementing automated online and phone order system
 Invest into analysis of customers’ preferences and passenger flows in rural areas and between major cities
 Increase workers’ motivation by offering them Greyhound shares and adjusting the payment with the company’s revenues
 Hiring more drivers with personal transport to cover the abandoned routes
 Analyze costs of fuel and opt for vehicles with minimal fuel consumption
 Launching several lines of buses with increased comfort: TV, Wi-Fi services etc.
 Optimize schedule and routes for maximal revenue
 Provide possible synchronization with other means of transportation in order to attract the customers
 Provide advance order discounts and programs for loyal customers
 Implement corporate culture of politeness and respect

Reference
Greyhound Case Study.