Strategic Management and Competitive Advantage Essay

Strategic Management and Competitive Advantage - Essay Example In the business environment of the air industry there are various challenges to be faced in order to achieve a positive mark. This paper is analyses Case of Scandinavian Airline System. 1. Briefly analyze external environment of and internal strategic capabilities of the company. The knowledge of business external environment is important because it influences entry approach into the market. Scandinavian Airline System external environment consisted of competitors from other airline companies. These competitors were a threat to SAS because they competed for the same segment of customers. SAS had customers scattered in various locations making its operation very costly. Political system favored business environment for SAS because SAS could easily conduct its operation in America and European countries. This enabled the business to expand its market share. SAS realized that it had to redefine its strategic capabilities if it had to meet the needs of its customers in these locations. T he airlines decided to integrate its customers’ needs as a means of serving their interest. It followed that the business had to define its product refinement, process innovation, and service delivery. The arrival of new technology in the airline industry acted as an opportunity for the business to increase its profit. Currier services in Europe led to the introduction of SAS cargo air, which enhanced market grip of the airlines. Internal strategic reformatting of the company included reorganization of the company by decentralizing responsibility. Fragmentation helps in reducing cost while enhancing business performance. When a business becomes very large the management becomes a problem. In this case, Scandinavian Air System decided to decentralize its management body, thus reducing risks that occur due to centralized management system. The decentralization of management was to reduce cost of operation, which was a great threat to the success of the business. Operating cost of the airliner was a threat to its success because high operation cost reduces profit margin. 2. Describe the strategic choices made. SAS divided its market into various zones such as Europe, Latin America and Scandinavian countries. This strategy took into consideration factors such as cultural trends, economic trends, legal conditions, technological changes, demographic trends, and specific international events. SAS developed relationship with other airlines such as KLM and Swissair and strengthened technological cooperation in this industry. Business analysts believe that external growth strategy in business tends to root for horizontal integratio

Strategic Models Essay Example | Topics and Well Written Essays - 2500 words

Strategic Models - Essay Example The balanced scorecard includes qualitative insights in addition to quantitative measures like financial statements to give the decision makers a bird's eye view of the past health and also the future course of action of the company. While financial measures like Return on Investment, sales and profit values, continue to be critical, new units like quality measures (warrantee/replacement/return/refund costs), employee skill and satisfaction measures (attrition/training/redeployment cost), future growth measures (R&D costs) are also taken into account. Wells Fargo and company is a diversified financial services company based at San Francisco, California and offers a range of financial products. The company has been termed as one of the safest banks in the world. (The World's Safest Banks 2007, October 2007) Wells Fargo bank used Balanced Score Card to identify its future growth path. Within 3 years of implementing the insights it got from a BSC, it was voted as the best online bank. As a result of the BSC, it increased its customer base by 4.5 times, and also decreased its cost per customer by as much as 22%. Additionally, it was able to add over 750,000 online customers over a 2 year period. (Beiman I. and Johnson J.C., n.d.) The conventional manufacturing strategy model states that there i... (San Francisco, February2001) Wells Fargo bank used Balanced Score Card to identify its future growth path. Within 3 years of implementing the insights it got from a BSC, it was voted as the best online bank. As a result of the BSC, it increased its customer base by 4.5 times, and also decreased its cost per customer by as much as 22%. Additionally, it was able to add over 750,000 online customers over a 2 year period. (Beiman I. and Johnson J.C., n.d.) Strategic Models - 2 Sand Cone Model: (Ferdows & De Meyer) Introduction The conventional manufacturing strategy model states that there is a trade-off among the four basic manufacturing capabilities- Quality, Dependability, Speed and Cost, unless there is slack in any one of the capabilities. However, the Sand Cone model proposed by Ferdows and De Meyer suggests that there is a hierarchical relationship amongst the four given capabilities. While from a short term perspective, advance in one of the capabilities may require the decision maker to trade off any one or more of the capabilities, it is indeed possible to achieve excellence in all the four capabilities in an hierarchical, staged manner. In order to create a long term manufacturing capability, the decision makers should aim to enhance quality of the manufactured items. Once this drive has achieved a set of milestones, the dependability of the manufacturing system has to be taken care of. Once these two capabilities have been assimilated, the next capability requiring attention would be flexibility, or reaction speed. Finally, once these three capabilities have been fixed, the decision makers should strive to achieve cost reduction. If this flow is maintained, it is possible for a