Universidad de Sta.

Isabel
GRADUATE SCHOOL
City of Naga

Case Study on
Greyhound/Laidlaw/Fi
rst Group
JOY CAEBA CHAVEZ
Ph.D. Student

Case Digest Presented to

DR. VIRGINIA C. REYES

Professor

In partial fulfillment of the requirements in

HDM 307A
MANAGEMENT INFORMATION SYSTEM

March 15, 2017

CASE STUDY TITLE: GREYHOUND/LAIDLAW/FIRST GROUP
Summary:

First groups (a UK based company) main business was in the bus and rail divisions. It
acquired the Laidlaw Company (US and Canada based company) during 2007 which had a
franchise called Grey Hound, a popular name in US trips and tours. With the purchased,
FirstGroup is the largest transportation provider in Great Britain and North America with revenue
of over 6 billion a year.

The main drawbacks of Greyhounds was that it could not strategically locate and address
its costumer wants and needs though it had enough potential and information about its
customers. The unwisely implementation of IT lead Grey Hound to suffer from major deficit
over decades. Though customers would prefer services offered Grey Hound, it made lots of
wrong decisions during implementation of its plan which lead it to suffer loss. Greyhound is a
different type of business from the ones that FirstGroup currently operates in the US. It provides
bus services directly to users and not through a contractual agreement. FirstGroup intends to
conduct a strategic review of Greyhound before deciding whether to pursue the opportunity it
offers or to sell off the business.

Case Digest:

The Greyhound case shows a lot of management errors, the combination of which led to
several declines in companys 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 Doyles 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 companys 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 Thompsons 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 companys value. The quick launch of an
improper system increased costs and caused negative reaction from the customers. Doyle and
Schmieders 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. Harslems decision to make reservation system
similar to the airlines was again an error, because bus transportation needs a different approach.

Suggestions:

Has potential opportunity for growth in US market.

There is potential of cost savings after acquisition.
It has to make new strategies and new system merged in to parent company.
A wise customer data-base is to be maintained and provide the service accordingly.