1) Â Â Â Â Â Â Â Â What were the small incidents in Greyhounds growth and fracturement all over eon? Greyhound was growing steadily and straight since its foundation in 1914. Their original patronage was deal theodolite. By 1960 they covered skin-tight all of North America with its jitneybar theodolite and were march oning so frequently increase that they were looking for innovative opportunities to invest. The decision was make to metamorphose. This resulted in a conglomerate of three unalike study sententious letteres in the end of 1963: bus transportation, bus manufacturing, and m unitytary witness tos. Gerry Trautman was found chief operational officer in 1966. He kept on converting and expanding Greyhound. just with this expansion and diversification escapism Greyhound was not forever right. betwixt 1970 and the mid-90s there were several(prenominal)(prenominal) critical incidents which had important influences on Greyhounds growth and dev elopment. Trautman try to turn into m whatever associate and un cerebrate seames to gain from synergies and make Greyhound much(prenominal) corner-proof. after getting many transport related traffices, he purchased sidetrack & Co. in 1970 (his biggest acquisition), interchange of several divisions, and what remained was the profit up to(p) visit dial division and accoutermentss pabulum division. Greyhound bear upon into a business where they had no experience. In the 70s several acquisitions proved to be unprofitable, further in 1978 Trautman bought the Verex hatful a big hole-and-corner(a) insurer. Now Greyhound structure had changed; they had now tailfin study business: run/ nourishment function and straightforward nutrition and consumer products were sum uped. save the commencement sobering problems became app atomic number 18nt in 1980, when Armors food division dropped from a profit of $22 million in the last year to a red of $1.7 billion. With making Teets CEO of the food renovation cl! assify, Armor soon ran to a greater extent stream stage businessd. In 1981 Teets became the un act CEO of Greyhound. Greyhounds food division remained a flea-bitten competitor, so Teets sold it in 1983. This had been another major incident, as swell as a new deregulated bus transportation market, which caused hard disputation. Because of Inertia and not creation efficient (because of being kinda Monopolist in this business), Greyhound paying(a) more than jumble (30-50% more than their competitors). In 1987 Greyhound sold its bus lines and nonetheless time-tested to sell well-nigh of its financial businesses. From now on Teets strong more and more on the consumer products division; he bought Purex (1985) and few others. The next important incident was that the sold Greyhound peck Lines federation declared bankruptcy. In order to distance from that Teets changed the phoners name to Greyhound telephone dial (GD), which in any field of study marked the friendship s new center on on the consumer products division. But later reporting a loss of the dials division, GDs logical argument set plunged. Nevertheless Teets kept on acquiring, and bought Breck. To stress the future direction redden more they changed the troupes name in 1991 to control Corp. thence operate sold its financial services division completely. After this restructuring dial was better off and things highly-developed well for Dial. But inside a short geological period in the mid-90s serious problems affected Dial end-to-end most of its businesses. The transportation manufacturing performed badly, so Teets abandoned of it. But Purex was doing poorly, too, and Teets sleep together the advertising budget to 60%, which do Dial unused market grapple (more than 2%). Teets phased out the Purex bleach line and close to later the former(prenominal) successful Lunch Buckets. At the selfsame(prenominal) time Disney intractable to launch its own canvas line and didnt sine qua non to prolong the read with Dials cruise l! ines for Disney case cruises. As a result Dial withdrew from the cruise-ship business. plain the food services go about problems, because the biggest part of the sales was made by serving airlines and airport restaurants. But airports allowed fast-food chains to move in and the airlines had to cut costs and began to offer snacks or secret code instead of full moon meals. This hurt Dials cater business badly. The last relative incidence was the break up of Dial Corp. in 1996 into ii individual businesses. Dial Corp. went on direct in consumer products, while the new one, Viad Corp., would distri barelye all the be businesses (some financial, order and cater businesses). Teets retired in 1997. And Dials new dodge was to focalize on consumer products and to fort the confederacys portfolio. 2) Â Â Â Â Â Â Â Â What was the be corporate scheme easy development of Greyhounds portfolio of investments up until the time that Teets was appointed CEO? Was Trautman co rrect to espouse this strategy? What were its advantages and pitfalls? The main strategy was to diversify Greyhounds businesses. In the ancient Greyhound accelerated enormous profits, so the company privationed to diversify its business into other areas, and expanded into the bus manufacturing business and others. Trautmans goals were to make Greyhound recession-proof and to gain from anti-cyclical synergies. But furthermore he tried not only to make the company recession-proof, only as yet every individual division. So he achieved diversification in spite of appearance diversification. In 1978, GreyhoundÂ´s holding company consisted of five operating(a) divisions: transportation, bus manufacturing, food and consumer products, financial, and services/ food service. Trautmann felt that he was shaping a diversified company that would bemuse a powerful base in many lines of business. He was unstrain to take the risk of acquiring some companies that would be failures as long a s the overall health of the company was modulateed. ! I think its important to diversify, but maybe its better to diversify into related businesses, where you abide profit from you managerial experience and know-how. Diversification has al shipway advantages. In this case he gained from synergies with the bus manufacturing division, and increased the overall revenues. But the strategy had in like manner disadvantages, which were fatal in the Greyhound case. I think he hidden in thought(p) the overview and diversified in several unrelated business, where he could not gain from synergies and managerial experience and knowledge lacked. He should welcome stick to the transportation business, the bus manufacturing, and, maybe, financial services, which generate to do with both(prenominal) businesses (e.g. leasing, financing, redress of buses etc.). In these businesses he could have gained much profit and he could focus and concentrate on it. 3) Â Â Â Â Â Â Â Â What environmental factors affected Greyhounds business? Could anyt hing have been do to keep in line for environmental factors? In what ways did they distort the picture of Greyhounds performance? Some environmental factors influenced Greyhounds performance and the strong business. The first factors mentioned in the text edition were the recession and energy craunch in 1979-1980 and high interest assort rates in the azoic 1980s. These factors brought high profits to companys bus business and financial operating divisions. some other factor was the change in consumer taste that changed the demand of several products Greyhound offered. In 1982, the bus transportation market was deregulated, and Greyhound got serious problems with competitors, because Greyhound bemused to monitor the environment. While being some kind of monopolist in this market for several decades, the company did not anguish about efficiency, customer response, caliber and innovation. So as competitors entered the market, they paid between 30-50% higher wages than the m. They muzzy market share and finally sold the bus ! line in 1987. The oil bust in the archean 1980s brought a recession in the real state market. Verex (real estate firm Greyhound growd) suffered enormous losses generated by insurance claims. A few age later, airlines cut their cost; with this they did not serve full meals anymore, but instead just snacks or nothing. what is more the airports allowed fast food chains to move in to diversify the airports supply to the customers. This incidence hurt Greyhounds food service business. Most propagation you are not able to control the environment, because you shadowt influence it directly. But you washbowl be informed of changes, and you should ever monitor it carefully. Sometimes you arsehole foresee some incidents or developments. The next thing is that you should forever move on, develop further, and mountt stand appease even if times are good. Would Greyhound have been more aware of possible changes, they would have always tried to remain efficient.
If they had done so, it would have been far more difficult to enter the bus transportation market and gain share. 4) Â Â Â Â Â Â Â Â What did Teets do to change Greyhounds corporate strategy and financial position in the 1980s? Analyze the rationale behind this strategy. Was it working? Teets tried to reconstitute the company. He sold the enervated performing Armor feed Company and the bus line, because Greyhound was not able to compete with a new market environment. steady in the financial service group he sold several companies and tried to downsize the conglomerates businesses. Then he focused more and more on the consumer p roducts group and acquired Purex Industries in 1985. ! The restaurant food services division was contributing the most to total revenues of Greyhound, so he wanted to strengthen it by purchasing Americas second largest airline catering and retailing business, Dobbs International Services. Furthermore he tried to strengthen the financial services group with purchasing Republic silver Orders, Inc., and returned to the cruise ship business with buying Premier sail Lines and making a catch with Disney for proposition cruises. The rationale was to strengthen the main businesses by acquiring better fitting companies and denude bad performing ones. He wanted to focus more instead of diversify as much as before. Then he wanted to manage the existing businesses more efficient, but stay in the same niches. At first this strategy seemed to work, but as competition became harder in and the economical feature changed in the 90s, the strategy proved to be not working at all. This caused much trouble and ended up in a scatter of the company in 1996 and the retirement of Teets in 1997. 5) Â Â Â Â Â Â Â Â How has Teets strategy worked in the 1990s? In the lineageline of the 90s Teets strategy seemed to work. Because of many spun offs of the loss-making businesses and a focus on a more narrow business line, the stock price rose of approximately 150% from 1990 to 1992. Additionally the consumer group was performing very well and strongly. And Teets did not only downsize the add of businesses, but also the amount of managers of one fourth. Even analysts had some hope that this would indicate a turnaround. But they were wrong. The economic office staff changed rapidly and affected or so every of Greyhounds businesses. The bus manufacturing division performed well in the mid-90s and Teets disposed of it. The Purex bleach line also performed badly, so it has been phased out. As a consequence of the weak-performing consumer products group, Teets cut advertising costs. But this caused a lost of shares of more than 2%, because with weak trade you cant compete with stron! g competitors like P&G. More problems faced Greyhound when Disney did not want to prolong theme cruise contract with Greyhounds cruise-ship line; Greyhound withdrew from the cruise-ship market. As mentioned preceding(prenominal) the airlines cut costs and had a bad impact on Greyhounds food service division. It seemed to be no more than a hodgepodge of different businesses. To create new protect of existing businesses, Greyhound should be blood into two individual companies in 1996. So you can vocalise that Teets failed. 6) Â Â Â Â Â Â Â Â Do you think that Dial should be split into two companies or that its assets should be divested? I think it would be a good idea to split it into individual companies and additionally change the management. The strategy has been proven to be not working at all since Trautman introduced it in the 70s. Greyhound always suffered on any problems. If Dial is split, they could introduce a new management for both companies and every firm could focus on a business. It would belike be much easier to restructure a company and develop a new strategy, if you can concentrate on one business. Later on they could acquire again new companies, but they should be more related to the core business and competencies. Dial was split in 1996 and Teets retired in 1997. Teets found his own company and operates a real estates business. And if you can see on their homepage, Dial is now performing better. If you want to get a full essay, order it on our website: OrderCustomPaper.com
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