The Scandinavian Airline System Case Study

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The Scandinavian Airlines System Case

Scandinavian Airlines System 

 

Type of Industry

Aviation 

Headquarters

SAS Frösundavik Office Building in Solna, Sweden

Sales/Revenue

SEK 44,718 million

Area Served

Worldwide

Number of Stores

NA

Competition

1. Norwegian Airlines
2.Air France
3. Ryan air

USP

Flexible travel  

Target Group

People of all ages

Products

flights

Website

www.flysas.com

The Scandinavian Airline System Case Study Introduction

The Scandinavian Airline System is one of the world’s largest airline services. The Company is the flag carrier of Denmark, Norway and Sweden. The Scandinavian Airline System is a thorough success story since its inception as a conglomeration of three specific airlines. Since its inception, the Scandinavian Airline System (SAS) has continued to cater to the aviation needs of millions of individuals around the world and primarily it has succeeded in operating efficiently in the Scandinavian region. The Scandinavian Airline System Case is essential to conduct in order to ascertain how the concerned Company has succeeded to sustain its market hold and profitability over the years. A SWOT and PESTLE analysis is necessary to add to the strength of the Scandinavian Airline System case.

The Scandinavian Airline System SWOT Analysis

Strengths

The Scandinavian Airline System case reveals that the primary strength of the SAS is its market leadership in terms of sustaining its hold over the domestic airlines market. The Scandinavian Airline System case also reveals that it is owing to sustaining a strong hold in the domestic market that SAS has succeeded in maintaining its profitability throughout the financial years. Moreover, it has been observed that punctuality is yet another strength of SAS. Besides, it should be noted that the reliable and flexible air travel provided by SAS has also added to its business strength. The services provided by the SAS in terms of intercontinental travel have also enhanced its business strength over the years. Furthermore, it has to be noted that its strong links and networks through the Star Alliance, and its bilateral relationship with other airlines like Lufthansa have also strengthened its operational capabilities.

Weaknesses

The Scandinavian Airlines System case reveals that the primary weakness of SAS is the lack of online presence, specifically in the context of social media and social networking platforms. Such lack of presence has rendered its business weakness that can become a serious threat in the future. The Scandinavian Airlines System case reveals that as the operations of SAS are more focused towards the domestic market, the chances of expanding the business has become limited. Moreover, the lack of growth of SAS in the international market should also be considered a primary weakness of SAS. Besides, due to lack of international presence, SAS suffers from the weakness of not being able to supply to the demand of customers for leisure destination air travel.

Opportunities

The Scandinavian Airlines System case reveals that SAS has the opportunity to enhance its international market presence by sponsoring major sport events. Moreover, it has been observed that SAS has the opportunity to obtain the competitive advantage through establishing more alliances with international airlines that operate inside and outside Europe. Besides, it has been observed that SAS has the opportunity to enhance its market share and market hold by lowering the operating cost through the process of employing one type of aircraft. Furthermore, SAS has the opportunity to enhance its customer base by targeting customer segments other than business travelers.

Threats

The Scandinavian Airlines System case reveals that frequent critical reviews of the SAS through press releases pose serious threat to its business owing to the fact that such bad press releases can eventually diminish SAS’s market reputation and this can negatively impact on customer perceptions of the SAS. Besides, the small size of the Danish market can also pose a serious threat to the business of SAS, limiting the same to domestic confinements in the long run. Moreover, it has been observed that the rise in the amount of foreign airlines in the domestic market has posed serious threat to the domestic business of SAS in a thorough manner.

The Scandinavian Airline System PESTLE Analysis

Political Environment

Political environment plays a crucial role in determining the success or failure of a business. This holds true for SAS too. The Scandinavian Airline System case reveals that the relative political stabilities in the countries of operation have allowed SAS to grow substantially in the domestic markets of Denmark, Norway and Sweden. The stringent aviation policies implemented by the governments of the three concerned countries have also safeguarded the business interests of SAS, and this has provided opportunities to SAS to expand its business domestically. It should also be noted that such strong domestic market base has added to the financial strength of SAS in a thorough and explicit manner.

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Economic Environment

The economic environment plays a decisive role in determining the fate of a business and in this regard SAS is no exception. The Scandinavian Airline System case reveals that the recent economic turmoil and dilemmas enshrouding the European Union (EU) can pose serious threats to the business of SAS. It has been observed that the deteriorating economic relationship between different European countries also has limited the chances of SAS to expand its market internationally, especially in Europe. Moreover, it has been observed that economically the aviation industry has taken a major hit owing to global economic instability, and this has affected the business of SAS in a thorough manner.

Social/Socio-Cultural Environment

The feeling of nationalism which is strongly embodied in the socio-cultural outlook of the Scandinavian population has provided opportunities to SAS to establish itself as an airlines company representing cultural values. This has provided ample chances to SAS to maintain its strong domestic market hold in Scandinavia. The Scandinavian Airline System case reveals the ageing population of Scandinavia has allowed SAS to explore the opportunities to develop a specific marketing strategy that will cater to the needs of the younger passenger segments. Besides, the changing choice of the domestic customers in terms of paying lower airfares has also compelled SAS to revisit its existing marketing strategies.

Technological Environment

The Scandinavian Airline System case reveals the enthusiasm of SAS to remain technology-oriented in terms of providing customer services. In this respect it should be noted that SAS was the first Airline to introduce biometric boarding for passenger check-in, and this pioneer effort did allow SAS to sustain its reputation as a technologically advanced Airline. Moreover, the growth and development of the Internet technology has provided opportunities to SAS to enhance its online services like online booking through its dedicated websites. This has again added to the business strength of SAS.

Legal Environment

Stringent aviation regulations prevalent in the Scandinavian region and stricter aviation policies of the EU have, on the one hand, provided opportunities to SAS to operate smoothly, and, on the other hand, have limited the chances for SAS to expand its business internationally.

Environmental Factors

The growing movements worldwide for protecting the environment has compelled SAS to promote its carbon neutrality policies, and this has helped the Airline to establish itself as an environmental-friendly business entity in the domestic market.

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