SCANDINAVIAN AIRLINES SYSTEM

Scandinavian Airlines System

Scandinavian Airlines System

Q1. Explain the strategic choices made (WHAT strategies were chosen, and WHY?). Here, you should focus introduce some concepts and theories (i.e. vertical integration, horizontal Integration, alliances, or restructuring)?

Although Scandinavian Airline System has been performing pretty well in the recent past, but still it has faced several issues and threats, and the experts believed that it must address the issues for the betterment of the company in the long run. The problem, the airline system, was having is that of high cost, which was far higher than the other players of the industry. Moreover, the labor cost of the company was very high too which accounted for 35% of the total cost of the company. Senior Managers of the company were fully aware of the problems the company was facing, and it needed a strategic turnover to take the company to heights of achievement. Denmark, Norway and Sweden all wanted a connected airline that served all the three countries, by visiting important states and areas. They also wanted to establish an airline that effectively solves the problems of three countries. Initially they did not agree to any terms and condition to establish a conventional airline, however, in 1946, they agreed for having a typical airline with the name of Scandinavian Airlines System (J. Kao & Blome, 1993, pp. 5-18). Contribution from all three countries helped the airline system to establish a strong network and presence in Europe, even at the expense of other major players of Europe. It took some strategic moves that enhanced its competitive advantage. It started a flight for the route from Copenhagen to Los Angeles via Greenland. It also initiated transpolar service to Tokyo, significantly reducing the cost. All the initiatives had a significant impact on the ...