1) Summarize the case and your understanding of it 2) What are the factors in a

Question

1) Summarize the case and your understanding of it

2) What are the factors in a firm`s culture that may keep it from clearly choosing a strategy and also allow structured decision making similar to that which led to the crash of Swiss Flight 111

3) Would you classify airlines that seek to be both low cost and differentiation as being stuck in the middle? Why or why not?

4) What would be the means to avoid being stuck in the middle?

SWISSAIR: STUCK IN THE MIDDLE Historically, Swissair was one of the Swissair itself was amoror European through diferentiation strategy flagship international businesses in carrier offering o differentiated serv and aims to set new benchmarks in Switzerland, and the airline was ce but then the firm had sought to customer service and product quality known for excellent quality throughoutnst in bankrupt and troubled Swiss International Airlines operates a Europe. Swissair, however, Filed forlnes throughout Europe that werebroad range of shert and long haul bankruptcy in early 2001. had operating with lowcost sought to be a global player but neverresult, Swissair's image was able to reach the criticalmblrred. Was it a high-quality airlinestrong direction and make decisions needed to be successful. I large part or o regional oiline? was it offering when faced with crisis is reflected in these problems were rooted in the facta differentiated product or a low-costmore than just the firm's bankruptcy. In that the airline never developed 1 produc clear strategy The firm, in the late 1980s, sought to form an ellianceegy was, as stated earlier, bankUnited Stales. The pilots smeled smoke with high-quality airlines in Europeruply A the time of the filing Swisand requested that they be diverted to (AUA, KML, and SASI, all of whichsa grounded its leet, stranding a followed a differentiation strategy thousands of customers throughout landing. The pilots then, in accordance The elliance failed, however, because the world. The Swiss are known as with the rules when foced with smoke of 1998, 229 people died in the crash of The oulcome of this eonfused strat a Swissair light from Europe to the nearby airport for an emergency origin, shut off the power sup it was never clear whe was to lead thestoie people, but in response to the unknown alliance. Swissair then sought to grounding, citizens demonstrated in expand into srnall regional airlines. the streets, in ona of the largesi dom- For example, in 1995 the firm bought onstrations by the Swiss in recent 49.9 percent of Belgian Sabena Airmemory, with 10,000 participants lines, and later pursued a major ply to the cabin. But in this case, follow Swissair also bought a 70 percentthe 1970s when the Swiss watch share in a low cost regional airlineindustry collapsed. However, tho named Crossair. These regional air. industry lines had significant problems, howvative new watch enterprise, Swatch, ever, and Swissair did no have which created a major new position expertise in restructuring airlinesor the Swiss in the watch industry: theSon was not even able to rearganize its differentiated fashion watch. How own cost structure has been aided by an in exmple of when following the rules decision. This deci making will be covered in more can be the wrong detail later in the book ever, no new product categors H has Bonsu, H. (2001), A nation in shock: Swis In reviewing the airline's octions, Swissair appeared to lack a clear yet been created for the Swiss airline r crisis. BeC Naws. hp://news.bbe.co. I industry In the wake of the collapse of strategy-it was attempting to use Swissair, Swiss International Airlines both the low cost shrategy and the dif.was created from Crossair. Swiss uk/1hi me time International Airlines is current by investing in various airlines. tioning itself as a premium airline Online. www.wsj.com. Ganka, M. 12002, April 4 When global strategies go wwong entiation stratagy at t

Explanation / Answer

Summarize the case and your understanding of it

The case is about Swissair, an international airline from Switzerland which filed bankruptcy in 2001. The case discusses the reason and various dubious decisions, taken by the airline in its pursuit to become a global player. Swissair got into this situation as it did not have a clear strategy. This can be seen as in 1980, Swissair sought form alliances with high quality airlines, all of which followed a differentiation strategy. The alliance failed due to the fact that it wasn’t clear who would lead the alliance. Later in mid 1990s the airline bought stakes in low-cost regional airlines like, Belgian Sabena airline and polish airline following a low cost strategy. Swissair tried to follow low-cost and differentiation strategies at the same time hence it failed. There was lack of clear strategy.

While it filed for bankruptcy all the flights were grounded and the passengers were stranded. Later, there was protest on streets of Switzerland where 10000 of protestors, demonstrated against the airline, something which hasn’t happened there since 1970(collapsing of watch industry).

Case also provides a reference when Swissair flight crashed killing 229 people, in 1999. Where following the rules was a bad decision and there was lack of creative decision making All the examples given in the case pointed to one fact that there is no strong direction and decision making in the airline which led to its bankruptcy.

What are the factors in a firm`s culture that may keep it from clearly choosing a strategy and also allow structured decision making similar to that which led to the crash of Swiss Flight 11

There can be many factors which can keep an organization from clearly choosing a strategy:

Would you classify airlines that seek to be both low cost and differentiation as being stuck in the middle? Why or why not?

Yes, the airline is stuck in the middle. There is no clear strategy and it just creates confusion in the organization as well as in the minds of the consumer. Due to this, consumer doesn’t know what to expect of the firm. A firma should have a clear strategy and it should on the either side. Sailing on two boats becomes a difficult situation many a times

What would be the means to avoid being stuck in the middle?

Avoiding being stuck in the middle means that having a clear strategy. A well-defined direction is necessary for a firm to grow and succeed. As, in the case Swissair lost the track by trying to pursue both differentiation and low-cost strategy. Instead, it should have chosen one of it and then should have completely focused on it. This would have given company a strong direction and would have avoided a lot of confusion.

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