About Greyhound Bus Corporate Strategy and Growth Potential
About Greyhound Bus' Corporate Strategy and Growth Potential
What were the critical incidents in Greyhound’s growth and development over time?
Greyhound was founded in 1914 and its first business was providing bus transportation for mine workers. After that the company continued to grow and expand its bus routes, by 1930 the name Greyhound Corporation was adopted and the running-dog logo ,its unique brand sign, was introduced. The next 20 years Greyhound continued to acquire bus interests in order to consolidate routes either by purchase, stock swaps or mergers. By 1960 the company had substantially achieved its objective of operating a bus system that could carry passengers to most destinations throughout the States. In 1962, however the company was facing the prospect of increasingly limited opportunities to expand its route systems. Since the successful bus operations were generating excess cash the board of directors to diversify into new operations. Over the year 1962 the company began to acquire other companies which turned the business into a conglomerate of different businesses. Greyhound diversified into transportation manufacturing as well as into equipment leasing and financial services. As a result by the end of 1963 Greyhound was operating in three major businesses: transportation, manufacturing and financial services. In 1966 Gerry Trautman was appointed CEO and he continued the strategy of diversification through expansion and growth.
From 1966 till 1970 Greyhound acquired more than thirty widely different companies and formed a new operating division, services: it specialized in managing transportation-related businesses such as duty free operations, building displays for exhibitions, aircraft servicing business, cruise ship lines, furniture moving, limousine service and the like. This diversification strategy was the basis for later on critical incidents which will be shown later. Trautmans aim was to create a company conglomerate, so that each individual business unit was recession proofed and all were enhancing the financial strength of the holding company. The first major critical incident occurred through a big acquisition of Armour&Co in 1970. This company was a large conglomerate holding interests in food and consumer products. Greyhound paid $400 million for a company which was operating primarily in the marginally profitable meat packing business. However, Armour also had interests also had interests in pharmaceuticals, cosmetics, and consumer products. After realizing he had overpaid for Armour Trautman, he sold a large part of the acquisition for $225 million and in 1977 he sold another piece which left over Armour`s...