Case analysis Scandinavian Airline Systems in 1988 (on vertical Essay

Case analysis Scandinavian Airline Systems in 1988 (on vertical integration) - Essay Example .. 6 2.4 Evaluation of SAS’s Strategies ................................................................ 7 3.0 Conclusion .................................................................................................... 8 Reference List .................................................................................................... 9 Scandinavian Airline Systems in 1988 1.0 Introduction The case study under consideration is pertaining to the airline industry. The quintessential aspects of the airline sector are that since the times of its genesis, it has always been profit driven, innovation dependent, service oriented, capital intensive and cyclical (Morrison & Winston 1995). In fact, it is a sector that has witnessed dramatic changes since 70s (Morrison & Winston 1995). Therefore, the airline that constitutes the focus of this case study, which is Scandinavian Airlines System, is not much different. Like most of what one may call successful airlines, SAS has also gone through altering phases of restructuring and consolidation. The period being discussed in this case study is the one spanning from early 70s to the late 80s. Over the years, SAS has metamorphosed from being a small yet innovative airline catering to a limited and localized customer base, to the one that has evolved into being an important international player. This journey for SAS group has not been sans challenges and difficulties that required strategic thinking and leadership pertaining to all the aspects of this business. In its quest for sustenance, SAS resorted to varied permutations and combinations of restructuring, alliances, vertical and horizontal integration. Aided with an all knowing hind sight, it will be really easy to analyze the decisions taken by the SAS leadership. Yes, it would not change SAS’s past. Still, such an analysis extends an important academic opportunity for learning and practical application of strategic management. 2.0 Analysis and Evaluation 2.1 External Environment and Internal Strategic Capabilities of SAS For the purpose of carrying out the SWOT analysis of SAS, it is imperative to have a desirable objective (Barney & Hesterly 2008). The stated objective is to assure the long term viability of the company in the altered external environment, as it existed in 1988. The major strength of SAS is its strong position in Europe and its global route network (Ghoshal et al. 1988). Right from its conception, the organization had an innovative and aggressive approach towards business (Ghoshal et al. 1988). The airline has a history of striking successful alliances in areas of technology, business processes, product distribution and reservation, an approach which so far has consolidated its position (Ghoshal et al. 1988). SAS has a firm financial footing as compared to its competitors (Ghoshal et al. 1988). It has successfully managed to horizontally restructure itself through employee education and empowerment (Ghoshal et al. 1988). The airline has a strong hold over the business traveller segment (Ghoshal et al. 1988). It has a positive reputation for efficiency, service quality and punctuality (Ghoshal et al. 1988). Through forward vertical integration it has developed into an â€Å"A to Z† airline in terms of product differentiation, product distribution and reservation (Ghoshal et al. 1988; Capon 2008). The organization has besides the airline, four other independent business units, which are profit earning and are