Conduct Comprehensive Analysis on the Organization
Continue With Current Strategy
Separate Business Units
Decide on One Business Unit and Sell Off the Remainder
Move Into New Area
This paper presents a study into Greyhound, a company that initially found success in the bus transportation industry but has since diversified into a wide range of industries. At the current time, Greyhound is encountering problems with the obvious symptoms being ineffective integration and management of diverse business units and a responsive instead of a proactive approach to changes in the environment. Behind these symptoms three base problems can be identified: a problematic corporate culture, unclear goals and a lack of competitive advantage.
After analyzing the problems, several alternative solutions and future scenarios, it is recommended that Greyhound conduct a full analysis into both its internal environment and its external environment. It is also recommended that Greyhound reduce its assets and focus on developing in one specific area, namely healthcare, diversifying by increasing its product line and increasing its global markets, rather than diversifying into various industries. It is recommended that the analysis be carried out so that Greyhound has full knowledge of itself and its environment and is able to produce an effective plan for its expansion exclusively into healthcare. It is also recommended that this analysis be used to determine a specific mission, backed up by a suitable culture that will allow Greyhound to effectively work towards its new goals.
As companies grow they expand, with this expansion intended to improve the situation of the company. Greyhound is an example of a company that was initially successful and has since used its success to expand into diverse markets. This expansion, though, has not been successful for Greyhound. The main problem we see is how to integrate and effectively manage many different functions that have little relationship to each other. With Greyhound, we also see an example of a company that has not responded to the environment, but has maintained a culture and goals that may have been successful in its beginnings in the 1930's but are not successful in the current environment. We see a company that has no clear mission, has a corporate culture that does not match the current environment and is based on finding markets where there is no competition, rather than finding ways to compete. Essentially, Greyhound is a company that has not changed as the environment has changed. The reality is though, that the current environment is very competitive and is likely to only increase in competitiveness. There is a need then for Greyhound to reassess its position and use its assets to move in new directions.
Five main problems have been identified. The problems have also been prioritized. The priorities have been assigned based on how important the problem is and whether the problem impacts on other problems.
The five problems noted and justification of their priorities are:
1. Corporate Culture Problematic - this problem is ranked first because it impacts on all other problems, corporate culture is at the heart of the problem. Fixing other problems without being aware of the problems of corporate culture will not allow the other solutions to remain effective.
2. Goals of the Business Unclear - this problem is ranked second because the goals of the business must first be understood before any actions can be taken to reach them.
3. Lack of Competitive Advantage - before deciding what action Greyhound should take there is a need to understand itself, this involves knowing what competitive advantage Greyhound has so it can make fulls use of its competitive assets.
4. Integration of Businesses Ineffective - this is one of the major problems. It is ranked fourth because the first three problems all impact on this area and so looking at this problem without looking at the others first would be ineffective.
5. Responsive not Proactive Approach - this is another of the problems but is symptomatic of the other problems, rather than being a base cause. This ranking does not mean that it is unimportant, but it is expected that looking at the other problems will largely solve this problem.
The five problems will now be described and discussed in turn.
1. Corporate Culture Problematic
Greyhound developed as a company in the bus transportation industry and enjoyed quick success since they were the only ones in the market. This led to cash excesses which the company used to expand into other areas. Greyhound became a leader in this industry, but now no longer operate in this sector. There is evidence thought, that Greyhound retains the same culture from this time. Firstly, the idea is evident that Greyhound are seeking a high cash-flow source, just as their bus network once provided. In the changing environment though, it must be recognized that this is not a feasible goal. Greyhound also operated in a market with little competition and moved out of the market when deregulation brought in competition. We also see that Greyhound continue to seek easy markets with little competition. It appears that the culture persists, with Greyhound being unable to cope with competition in the market. For Greyhound to be effective, they must become better able to cope with the modern environment where competition will be a factor. They must also become better aware of the reality of modern business and seek profitable businesses but not excessively profitable businesses requiring little input. In the beginning of Greyhound's history these businesses may have been available but in the current environment they are not. Overall, there is evidence that Greyhound continues to strive for what it once had in the bus transportation industry, high income and no competition. This is likely contributing to the managers seeking quick fixes rather than taking action to better their businesses. It is suggested that for Greyhound to develop and be successful, this culture will need to evolve.
2. Goals of the Business Unclear
The goals of the business are variable and appear not to be very well understood. The only goals appear to be profit. While this may be a reasonable goal, it gives no direction to the organization.
It is not clear what the overall goals of Greyhound are, or that this has been fully considered. They appear to change depending on who is the manager and the current environment. Before the other issues can be dealt with there is a need to define what the company wishes to achieve. This information can then be used to tailor organizational function to achieve these goals. The first thing this would require is definition of the mission of the company. This mission would then give direction to the company in allowing it to define its purpose and its values. Vision also becomes important. With a highly competitive and rapidly changing business environment there is a need to always look forward. Few companies can afford to reach their goal and then stop, they must constantly adapt to the marketplace. Greyhound shows that it is willing to adapt but does this by reacting, not by striving towards its own goals. The vision can give the company direction in striving forward. In combination with knowledge of the market and the consumer it can ensure that the company remains competitive as the market changes. It should also be noted that the companies intentions are of use to consumers. As a marketing tool, a companies intention can be important. Company missions are rarely used only inside a company, they are also communicated externally. This gives the general public and the consumer an image of the company. For example, the company may make use of the current trend of environmental friendliness and target their product as such. The intentions are therefore important in designing the company, in relations with partners and in relations with consumers and the general public.
3. Lack of Competitive Advantage
The majority of successful organizations base their continued success on something that gives them a competitive advantage over the rest. For example, 3M focuses on continued innovation in developing new products, Microsoft focuses on their technology. Greyhound however, is not basing their operations on anything that they do better than the rest. This leaves them open to competition. We saw this in the example where the large healthcare companies were able to eat into Greyhound's profits by creating rival products at lower prices and by creating effective marketing campaigns. Faced with this competition, Greyhound has nothing that they do better than the competition to secure their position. Greyhound recognize this and prevent problems by focusing on niche markets where competitors will not react strongly. With the increasing competitiveness of the business environment, this is not likely to be an effective strategy in the future.
4. Integration of Businesses Ineffective
Greyhound now consists of a range of businesses that have little…