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Prize winner
Case
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Reference no. 389-025-1
Authors: Sumantra Ghoshal
Published by: INSEAD
Published in: 1989
Length: 22 pages
Data source: Field research

Abstract

Between 1981 and 1987, SAS has undergone a remarkable transition under a new management team headed by Jan Carlzon. From being a loss-making, demoralised organisation that competed at the periphery of the airline industry, it has become a highly profitable and energetic company that is an important player in this rapidly changing global industry. The case describes the actions taken by the company to achieve such a remarkable turnaround, including the changes in its strategy, organisation, management processes, and corporate culture. The problems of the company are, nevertheless, not over. It still has to find a way of remaining a viable player in the increasingly deregulated and concentrated industry where most major players boast of size and resources considerably greater than those of SAS. Management now has to focus on this task of building a sustainable competitive advantage, the feasibility of which is far from obvious. The case is based on the recent experiences of SAS and can serve as a vehicle for discussing two sets of issues. The first refers to the management of turnaround situations and the second focuses on the tradeoffs between actions to achieve short-term financial turnaround and those required to develop sustainable competitive advantage in a rapidly changing industry. There is a Spanish translation of this case available.

Time period

The events covered by this case took place in 1988.

Geographical setting

Region:
World/global

Featured company

SAS
Industry:
Airline

About

Abstract

Between 1981 and 1987, SAS has undergone a remarkable transition under a new management team headed by Jan Carlzon. From being a loss-making, demoralised organisation that competed at the periphery of the airline industry, it has become a highly profitable and energetic company that is an important player in this rapidly changing global industry. The case describes the actions taken by the company to achieve such a remarkable turnaround, including the changes in its strategy, organisation, management processes, and corporate culture. The problems of the company are, nevertheless, not over. It still has to find a way of remaining a viable player in the increasingly deregulated and concentrated industry where most major players boast of size and resources considerably greater than those of SAS. Management now has to focus on this task of building a sustainable competitive advantage, the feasibility of which is far from obvious. The case is based on the recent experiences of SAS and can serve as a vehicle for discussing two sets of issues. The first refers to the management of turnaround situations and the second focuses on the tradeoffs between actions to achieve short-term financial turnaround and those required to develop sustainable competitive advantage in a rapidly changing industry. There is a Spanish translation of this case available.

Settings

Time period

The events covered by this case took place in 1988.

Geographical setting

Region:
World/global

Featured company

SAS
Industry:
Airline

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