strategic-management

CASE 15 • NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK) — 2009 157
Founded in 1914, Greyhound Lines, Inc. is the largest provider of intercity bus transportation,
serving more than 2,300 destinations with 13,000 daily departures across North
America. It has become an American icon, providing safe, enjoyable, and affordable travel
to nearly 25 million passengers each year. The Greyhound running dog is one of the most
recognized brands in the world.
Although Greyhound is well known for its regularly scheduled passenger service, the
company also provides a number of other services for its customers. Greyhound
PackageXpress service offers value-priced same-day and early-next-day package delivery to
thousands of destinations. And the company’s Greyhound Travel Services unit offers charter
packages for businesses, conventions, schools, and other groups at competitive rates.
It is also important to note that Greyhound is not only a competitor to Amtrak; it is also
a partner. Amtrak passengers use Greyhound to make connections to cities not served by rail
on Amtrak Thruway service, by purchasing a ticket for the bus connection from Amtrak in
conjunction with the purchase of their rail ticket. Passengers can also purchase tickets
directly from Greyhound.
AIRLINES In mid-to-late 2009, airline ticket prices have dropped dramatically, eroding
substantially Amtrak’s business. The major drawback to traveling by train of course is the
amount of time that it takes to go from the origination point to the destination. Because
time tends to be a major consideration for travelers, airlines provide an alternative to travel
by car, bus, and train; the drawback, of course, is that they are more expensive. Airlines
provide passengers with a faster travel alternative.
Southwest Airlines, for example, flies over 100 million passengers a year to 65 great
cities all across the country. Southwest consistently leads the entire airline industry with
the lowest ratio of complaints per passengers boarded. Many airlines have tried to copy
Southwest’s business model, and the culture of Southwest is admired and emulated by
corporations and organizations in all walks of life. Always the innovator, Southwest
pioneered Senior Fares, a same-day air freight delivery service, and Ticketless Travel.
Southwest led the way with the first airline Web page, southwest.com; DING! the firstever
direct link to customers’ computer desktops that delivers live updates on the hottest
deals; and the first airline corporate blog, Nuts About Southwest.
Conclusion
Amtrak today faces obstacles that include uncertainty of government funding, competition,
fuel prices, the regulatory environment in which they operate, and creating a leadership
development program. Only time will tell if Amtrak’s CEO, Joseph Boardman, will
be able to deliver on his promise to help the company “work through its challenges and
capitalize on the opportunities we have to build a safer, greener, healthier Amtrak that connects
America coast-to-coast and border-to-border.” 5 Amtrak needs a clear strategic plan
for the future.
Endnotes
1. Adapted from Amtrak, Annual Report (2008).
2. T. Ramstack, “Amtrak CEO Kummant Resigns,” Washington Times (November
15, 2008). Accessed at http://www.washingtontimes.com/news/2008/nov/15/
amtrak-ceo-kummant-resigns/.
3. From the Passenger Rail Investment and Improvement Act of 2008.
4. Amtrak, Annual Report (2008).
5. Amtrak, Annual Report (2008), p. 5.