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Strategic Management: Scandinavian Airlines - Case Study Example

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This paper "Strategic Management: Scandinavian Airlines" presents Scandinavian Airlines (SAS) that had to deal with various issues and how the company recovered from the situation. It was in the year 1970s and 1980s; the company faced various challenges…
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Strategic Management: Scandinavian Airlines
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Download file to see previous pages The airline has around 90 destinations and operates with 176 aircraft (Nationsonline, n.d.). However, the central base is situated at the Copenhagen Airport (Beyman, n.d.).
The present study entails about the challenges faced by the company in the 1980s and also offers the solution by which the company surmounted the challenges. The company applied a vertical integration strategy in order to overcome the challenges. The threats mainly came from intense rivalry within the aviation industry. This has declined the sales volume as well as the profitability of the company. The new management found the only way to overcome the issue by carrying out an end-to-end restructuring of the company. It happened through successful vertical integration. The company was fully restructured and growth was witnessed. It vertically integrated with the other divisions such as the catering sector, credit card, hotel, and reservation within the aviation industry. The paper will, therefore, shed light and offers a critical on the vertical integration approach of SAS in reviving their situation.

TThe issues led to various disparities among the owners, staffs and the management. Furthermore, the stakeholders also did not agree on the reasons portrayed for the big loss and were also unsatisfied with the ways to be adopted for the revival of the company. Hence at this point in time, there was an urgent need for quick and firm decisions that will help them restrict or save the company from the verge of collapse.

At that moment of time, the management structure was changed and new executives came forward. In the year 1981 i.e. during the time, when the issue was at its peak, Jan Carlzon was appointed as the president of the SAS airline (Hendry and Eccles, 1999, p.359). As soon as the new management took charge, the improvement process started. The improvement or the changes are characterized by the management reputation and charismatic leadership of the new president.  ...Download file to see next pagesRead More
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