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Business Management

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INTERNATIONAL BUSINESS
Title: SAS Scandinavian airline
Teacher: Neil Coade Student: KhucThiNhung ID: 0201ndnd1109 Deadline: 21/10/2013

Table of Contents
1. INTRODUCTION ............................................................................................................. 3 2. LEADERSHIP .................................................................................................................. 4 3. ENVIROMENT ................................................................................................................. 5 4. STRATEGIC BUSINESS DEVELOPMENT IN THE FUTURE ......................... 6
4.1 A bright future with new airbus fleet. ......................................................................... 6 4.2 A long line fleet efficiency and modern ..................................................................... 6 4.3 Regarding fleet renewal plan long ............................................................................... 7

5. ORGANIZATION............................................................................................................. 7 6. MARKET ENTRY STRATEGY ................................................................................... 8
6.1 Strategic alliances .............................................................................................................. 8 6.1.1 Environment that can help the alliance strategy success .................................... 9 6.1.2 Environment having problems............................................................................................ 9 6.2 The product differentiation and vertical integration ............................................ 9 6.2.1 Why strategies were chosen ............................................................................................ 10 6.2.2 Implementation strategy ..................................................................................................... 10 6.2.3 Some brief factors SAS should consider ................................................................... 11

7. CONCLUSION .............................................................................................................. 11 8. REFERENCE ................................................................................................................ 12 9. APPENDICES ............................................................................................................... 13 CASE STUDY .................................................................................................................... 13

1. INTRODUCTION
The world has a lot of businesses that have developed in the global market by their own strategies. One of them comes to airline Scandinavian. Scandinavian Airline abbreviated SAS. This is a multi-national airline of Sweden, Denmark and Norway.It based in Stockholm and operating three primary hubs at Copenhagen-Kastrup, Stockholm-Arlandaand Oslo

Gardermoen Airports 1. It was founded in 1946 as a consortium by DDL, SILA and DNL(Capa, 2012).Airlines and companies active cooperation formally incorporated in the SAS Group in 1951. The company's majority shareholder: SAS Norge (28.6%), SAS Sverige (42.8%) and SAS Denmark (28.6%) respectively. All investors accounted for the remaining 50% stake (Star alliance, 2013).The layout of this report will be divided into 6 parts. First, the profile structure of the leadership team and staff, the decisions they have made to the development company. Second, to use the PESTLE analysis of environmental issues. Third is the strategy to promote and maintain a competitive advantage for the company. The next section will mention about the structure of operations of the organization. Finally, and as the focus of the report, the difficulty that companies face during operation. The report will be analyzed based on the information and evidence which help you understand more about global company SAS.

2. LEADERSHIP
Current Chairman of SAS is Rickard Gustafson. He is a talented executive with extensive experience. With many years of previous experience as President, European Business, vice president of global strategy ... he believes he can better take his current position. As of 2011, SAS pilots in 1034, 2528 and the implementation of union members and owns 138 aircraft. SAS has a huge number of tourists reached 22.9 million at 60 points with the revenue to SEK 36.7 billions ( Eturbonews, 2013). Airline SAS is a pioneer in many fields. In early 1960 SAS was the first airline flight over the Arctic and the media receive the Nobel prize in 1962. It also pioneered the introduction of tourism classes in 1952, reduced fares for passengers with certain conditions. This received positive feedback and led to the behind of many other airlines. SAS wanted to open up a new mechanism based on positive outlined in 2011: a class mechanism for higher standards. Since 2008, SAS has reduced unit costs by 23% and is one of the airlines get more satisfaction from customers in the past 11 years. Moreover, SAS also confirmed his name on the European market through the always on time. SAS founded in the spirit of international cooperation and development since May 1997 with other airlines such as Air Canada, Thai Airways International, United Airlines and Lufthansa. This helps international route network operation and development more convenient. SAS also offers many packages cheap tickets to middle east, Asia, Europe from Scandinavia (Star alliance, 2013).

3. ENVIROMENT
External factors affecting the company's main objectives for Pestle analysis include: Political, Economic, Social, Technological, Environmental and Legal (G,K,R 2009). However, based on the analysis of the airline industry (Appendix 1) only 5 factors were analyzed to clarify the environmental problems of the airline SAS POLICY: After the Second World War, German prohibition enforcement established airlines. This opens up a great opportunity for SAS to develop its road network in the world. Concurrently, it also confirmed its name in the European market (case study). ECONOMY In 1970, many businesses faced with the situation of the global economic downturn. SAS is also on the brink difficult because the economic downturn. Costs, low profits, the problem of fuel costs, competitive were difficulty. All this was done in SAS reducing in marketshare (G,K,R 2009). SOCIAL To achieve maximum profits, SAS had to change planes than the required load. This does not get many good reviews from customers who have regular schedules (case study). TECHNOLOGY In 1970, in response to customer Legal: There is a fierce competition between airlines in Europe due to deregulation law, entail costs go down (case study). DEMAND

SAS has changed the new engine and new aircraft to serve customer needs. SAS also equipped with information systems more flexible and faster to access still time-consuming (case study).

4. STRATEGIC BUSINESS DEVELOPMENT IN THE FUTURE
SAS is trying to build a brand leading aircraft. Therefore, in the future it focuses primarily on investing in equipment and the most advanced technology

4.1 A bright future with new airbus fleet.
Airbus SAS and signed to give birth to eight new A350 XWB -900 aircraft and four A330-300 improvements. Also, to make the experience enjoyable for modern flight, SAS has launched 65 short-haul aircraft fleet with comprehensive customer support. And it also plans to add a fleet of long haul According to Mr. Rickard Gustafson, CEO and President of SAS Group SAS is said SAS succeed in the basic steps to become a leading airline world for the benefit of customers, shareholders and staff (Cisionnews, 2013).

4.2 A long line fleet efficiency and modern
Anticipated to start in 2015 and the A350-900 was born in 2018. When the lease expires, the pair first aircraft A330-300 will be upgraded and improved from the A340. This can ultimately save fuel costs, reduce emissions, and moreover it will bring comfort to our customers. This will bring highly competitive. SAS now time to improve the fleet's cabin.

4.3 Regarding fleet renewal plan long
SAS plans to buy eight A350 aircraft to replace the A340 -900. The A350 aircraft with new materials uses aerodynamic technology systems available. Thus, it reduces fuel consumption per passenger is 30% technology. Compared to the A340, it also has a higher passenger capacity by 20%. In addition, aircraft noise, the cabin windows and create greater comfort for passengers. It expected to have four A330-300 improvements and enhanced in 2015. The cabin upgrade and high-definition entertainment system on the plane is expected to be complete in 2015 (Cisionnews, 2013).

5. ORGANIZATION
Since 2008, SAS business activities in three main areas including: SAS Scandinavian airline, aviation services, SAS brand products. To penetrate Click on the Nordic market, organizational structure changed significantly. This is also part of the strategy "Core SAS." Today, SAS includes SAS and SAS Core individuals. Companies are in the process acts as a core part of the core SAS is under the management of SAS individuals. As mentioned in the first section, SAS airlines including four companies: International and Sweden, Denmark, Norway in March 2009. But then four companies merged into one company Scandinavian Airline as part of the core SAS strategy. With a total of 148 aircraft and 21.9 million passengers in 2009, serves more than 100 destinations in 30 countries, SAS worthy largest airline in the Nordic market. But this is the focus of the SAS region but Asia, America and the Middle East also achieved a considerable figure.

Round 2009, SAS uses 14.438 ns and is also the largest of the three business segments accounted for 88.5% of total revenue. To meet the increasing demand of customers, SAS focuses on building entertainment, business travel and also to expand the market, try the different areas. Specifically: SAS technology, SAS and SAS Cargo service land. SAS Cargo focuses on the sale of air transport to other firms in the group. SAS expensive specialized services, the services sector, including the ground plane and the luggage. It also topped the field in the Nordic region. SAS uses an efficient solution that is the wisdom of passengers boarding and check-in. In addition, SAS tech role maintenance and fault detection techniques mainly in Scandinavia

6. MARKET ENTRY STRATEGY
SAS was originally only a small airline undeveloped. But from 1946 to 1980, SAS has entered the European market and growing more. SAS is mainly based on three main strategies including special products, strategic alliances and vertical integration.

6.1 Strategic alliances
Looking at the exhibition we can see that in order to open up new routes SAS International has been operating as a corporation in the DNL, Sila and DDL. As Barney and Hesterly (2012) said, "the partnership to sell products and services, production, development among independent organizations is a strategic alliance lieen" The revenue estimates are often larger than the original in agreement with the partnership between SAS and Swissair Thai

Airways. The resulting average annual revenue was $15 million in the 1960s and 1970s and $20 million between 1969 and 1975(case study).

6.1.1 Environment that can help the alliance strategy success However, from 1979 to 1981, the company fell into a loss after 17 consecutive years of profitability. Thus, the new strategy also helps to improve the situation of the organization. Due to seize the opportunity after the Second World War, German prohibition established airlines. Therefore, strategic alliances have been very successful in making the alliance policy. Obviously, SAS does not take a lot of time and money to build a new market that still has a foothold (case study). 6.1.2 Environment having problems More drips of problems such as economic recession, costs and higher interest rates, pressure from competition after deregulation SAS (case study). It's not always easy companies operating in this field. For example, the company operating costs in the industry is 35% wage will get more difficult for this strategy.

6.2 The product differentiation and vertical integration
The new strategy with business class fares senior should make it different from other companies. As Johnson, Scholes and Whittington (2009) 11 says that "to get competitors and selling point, it is necessary to have special strategies for providing products and services with distinct benefits for customers."At the same time, SAS also provides vertical integration strategy in travel packages for tourist business model”(Johnson, Scholes, Wittington,

2009). Specifically, the construction of the hotel chain, cafeteria management

system, concierge, land ... All packages will be served to customers when purchasing airline tickets. This is one of the recovery strategy and significant contribution to the organization. 6.2.1 Why strategies were chosen
A question arises as to why this was the chosen strategy? In the airline industry, the stability of the market segment is considered the business pays the full travel. However, in the context of the current economic recession, joining senior class customers often do not want to pay any costs Category. Thus, the opening of this strategy will provide a powerful competitive advantage. Specifically, SAS has launched a new product "Euroclass" with lower prices, higher quality (Sharp, 2009).

6.2.2 Implementation strategy
In the strategy of "differentiated products" SAS launched "Euroclass" to serve the business and regularly participate fully paid. Only 20% higher fares customers can get more services, such as check in, seat comfort, quality food, free drinks, higher air quality. For example, the 4 aircraft such as Boeing and Airbus aircraft will be replaced by Air McDonnel - Douglas DC -9. Furthermore, employees are given the power to make their own decisions as well as customer satisfaction.

SAS launched a new service package in 2013 including airfare and hotels, transport. Customers only with a phone call had plane tickets, hotel rooms and transportation. In particular, this service pack on Special incentives for customers to pay full fare will be selected limousine or plane slip ups (case study). The thoughtful services such as check in at the airport, waiting rooms and car rentals at the airport were a surprise to customers than expected. This competition also led to hardships for this significant difference. According

to the European airline in Sweden found that only three of the eight airlines have no incentive services such as check in, seat, free drinks. However, SAS has an advantage over accounted for more reasonable prices than the economy. Moreover, an important strategy in the campaign's distribution company is self-generating system of credit. And SAS has acquired Diners Club credit system Norse. This is a very wise strategy. SAS constantly recreated organizational structure to create a working environment most effectively: airlines, SAS Service Partner, SAS entertainment distribution SAS, SAS International Hotels (case study) 6.2.3 Some brief factors SAS should consider In fact, the strategy does not give as successful. On vertical integration strategy that SAS is applied based on the ability to assess and guide the company's leading experts on the consideration of benefits and costs will be spent. Therefore, the development of theory (Liebeskind, 1996) and transaction cost theory (Williamson, 1975).

7. CONCLUSION
In summary, SAS is a typical example of an enterprise has overcome many difficulties and challenges to penetrate the global market. Taking everything into consideration, it can be seen that the SAS has operated very positive, timely decision making and long-term strategy is to be sure to research the company is in bankruptcy and difficult. With face many strategic product differentiation and vertical integration has turned SAS became one of the

three companies have topped sales in 1980 (Ghoshal, Lefebure, Jorgensen, and Staniforth, 1988). In fact, the launch of new products (Euroclass) will not except the potential to cause the risk of bankruptcy due to the amount of money to support the project costs increase. However, the 20% premium over the economy to business class fare is given the important decisions contributed to the success of SAS. Moreover, vertical integration strategies including full fare, hotel systems, communication ... as a strategy for long-term goals and provide the high availability.

8. REFERENCE
Barney, J.B and Hesterly, W.S (2012) “Strategic Management and Competitive Advantages” 4th edition, London: Pearson. ISBN: 0132560453.

Capa, (2012) “Profiles of SAS”. Available at: (Accessed 17/10/2013)

Cision News (2013) “SAS signs with Airbus: Total renewal of long haul fleet”. Available at: , (Accessed on 18/10/2013).

EturboNews, (2010) “Insurance man appointed new CEO of troubled SAS airline”. Available at:

Johnson,G. Scholes, K and Whittington, R. (2009) Fundamentals of Strategy, 1st edition : Prentice Hall, p. 26

Liebeskind, J.P. (1996), “Knowledge, Strategy, and the theory of the film”, Strategic Management Journal, Special Issue, Vol.17, pp 93-107

Ghoshal, S. Lefebure, R. Jorgensen, J and Staniforth, D. (1998) “Vertical Integration: Scandinavian Airlines Systems in 1988”, INSEAD-CEDEP

Sharp, B (1991), “Competitive Marketing Strategy: Porter Revisited” Marketing Intelligence & Planning, Vol.9 Iss: 1pp. 4-10

Star alliance, (2013) “Scandinavian airlines”. (Available at: (Accessed 18/10/2013)

Williamson, O.E. (1975), Markets and Hierarchies. Analysis and Antitrust Implications, Free Press, New York, NY.

9. APPENDICES
CASE STUDY…...

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