Global Business Strategy: SAS

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Table of Contents

Evaluation on the organization’s market penetration strategy
Evaluation of the organization’s consolidation’s strategy
Product development
Market Development
Diversification
References

Evaluation on the organization’s market penetration strategy

The company used Europe-wide computerized reservation service (CRS) which made it have most preferred services as compared to other competitors within Europe. Then there was the formation of inter-airline association which led to the reinforcement of technical and operational services through the establishment of the maintenance pool.

This strategy enabled the airline compete with major airlines due to their up-graded and updated services. The company resorted to resolve on their timing and became one of the most punctual airlines within Europe.

Also the company’s strategized connection of all its flights to European and Asian hubs which helped in the process of facilitating passenger flights, SAS connected its flights to most of the secondary hubs which gave them connection with smaller domestic services within countries of operation.

Evaluation of the organization’s consolidation’s strategy

The company enjoyed successive profitable years which were ultimately threatened by increased competition from low-cost operators. This led to the company making subsequent losses which could be attributed to conservative management style.

As a result of this, SAS resorted to downsizing whereby they opted to centralize bureaucracy and at the same time removed most of the employees’ responsibilities. The strategies focused on installing enlightened leadership while keeping the company at its competitive level. This move had an impact on the human resource management since it helped in reducing pressure experienced on costs and margins.

Product development

SAS resorted to service business through engaging their frequent flights in foreign markets. Business travellers were initially not attracted to SAS; this made the company to modify their services by improving the company’s business class passenger services. The other move focused on staff training and motivation enabled their workers to work smarter.

In the process of developing new products, SAS resorted to changing management style which saw the introduction of new management system. The process of installing computer terminal within the manager’s office was aimed at improving on the punctuality level of the flights. The older jets were replaced by new and modern state of the art equipments.

SAS acquired hovercraft which could operate in all weather since they were impervious to water, land and ice. In order to subsidize on the company’s profits, SAS adopted new service concepts which included operation of business hotels and destination services. This made work easier for the passengers since they could make reservations and organize for other services from a central place through phone calls.

Market Development

The operations of SAS extended from Copenhagen Airport to the port of Malmo owing to the acquisition of hovercraft. It further expanded its flights to Bangkok via Europe and Asia. Then new market was later found in Tokyo where flights were directed from Bangkok to Tokyo. SAS management decided to up-grade their planes to accommodate business class passenger travellers.

From its inception, SAS only operated within Europe meaning that most of its flights were for short distances. This led to frequent services which were viewed as potential factor leading to increased usage of airplanes. Due to overcapacity, the flights were extended as far as Thailand and other Far East countries.

Development of international market was facilitated by making Copenhagen and Bangkok as the main points from which to supply services to European and Asian hubs. The territories within the domestic market were expanded through Oslo’s Fornebu and Arlanda which acted as points of connections for all local flights.

Diversification

SAS agreed on the process of teaming up with other airlines from other countries, this would improve on their level of coordination for scheduled flights hence assisting in fair utilization of the highly competitive markets. SAS resorted to marketing their newly acquired products to customers within European and Asian hubs.

In-terms of related diversification SAS focused on expanding their services within the industry to enable accommodation of many customers. This had been done through improvement in punctuality and also offering hotel and destination related services.

In-terms of unrelated diversities, SAS operates a number of subsidiaries which are not related to airline industry. These include ownership of a tourism firm known as Vingresor and service partners dealing with catering with their first class hotels within Scandinavia and other countries. They operate insurance company and air cargo Company.

References

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Gordon, W., 2006. Out with the new, in with the old. International Journal of Market Research, 48(1), pp 1-30.

Grant, R., 1991. The resource-based theory of competitive advantage: implications For strategy formulation. California Management Review, 33 (5), pp. 114-35.

Grant, R.M., 2005. Contemporary Strategy Analysis. (5^th Ed). Boston, MA; Blackwell.

Hofmeyr, J., 1990. The Conversion Model – A new foundation for Strategic Planning In Marketing. New Ways in Marketing. Athens; ESOMAR conference.

Keegan, M. & Green, K., 2002. Global Marketing Management. NY: Prentice hall.

Kondrat A., 2010. One-on-one Marketing. Web.

Lusch R. F., & Ross R., 1985. The Nature of Power in a Marketing Channel. Journal of the Academy of Marketing Science, (7), pp. 39-56.

Ohmae, K., 2010. The Borderless World: Power and Strategy in the Interlinked Economy. Web.

QuickMBA, 2010. Global Strategic Management. Web.

Valentin, K., 2001. SWOT analysis from a resource-based view. Journal of Marketing Theory and Practice. 9 (2), pp. 54-68.

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