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(Revised from original 1994 version)
RailTex, Inc. (A)
By 1992, RailTex, Inc., had acquired and was operating 23 geographically separate short-line railroads (feeder lines for larger railroads) in Mexico, Canada, and primarily in the United States. Founded in 1977 with $500,000 of capital as a railcar leasing company, the company began buying and operating short-line railroads in 1984. Since 1988, revenues have increased an average of 35% per year, up to $39 million in 1992, a growth rate far outstripping that of the old, mature railroad industry as a whole. Bruce Flohr, the founder, believed the company's success was due largely to his decentralized management system and emphasis on cost controls and marketing.
Growth and Development;
Growth and Development Strategy;
Risk and Uncertainty;
Berg, Norman A., and James Weber. "RailTex, Inc. (A)." Harvard Business School Case 395-033, March 1995. (Revised from original September 1994 version.)