Scandinavian Airlines: The Green Engine Decision

Scandinavian Airlines: The Green Engine Decision Description

Scandinavian Airlines (SAS) is an innovator of strategic environmental management in the airline industry. Being a first-mover can have both its advantages and disadvantages. This case looks at the airline's decision of whether they should invest in the best available environmental technology for a fleet of new aircraft that would serve them for the next 25 years. While the technology for these low-emission engines had been around since the 1970s, it had never really been commercialized. SAS was feeling pressure from the regulatory authorities with regards to potential new charges and taxes that could affect the future operating costs of the fleet. Despite these anticipated future costs, at the time of the decision, the director of aircraft and engine analysis for SAS could not make an economic case for the more expensive engines. The challenge was for the fleet development team to try to convince the SAS management team to spend the extra kr5 million (Swedish Kronor) per aircraft for the dual combustor engine. Given that corporations are faced with increasing pressure with regards to greenhouse gas emissions and climate change, this case study presents an opportunity for discussion and analysis of various environmental concepts including strategic environmental management, adoption of best available environmental technologies, the role of internal environmental leadership in a large corporation and the effect of market-based mechanisms to improve a sector's environmental performance. The case illustrates the complexities of environmental decisions in striking a balance between meeting ambitious commitments and dealing with real capabilities of companies and external pressures.

Case Description Scandinavian Airlines: The Green Engine Decision

Strategic Managment Tools Used in Case Study Analysis of Scandinavian Airlines: The Green Engine Decision

STEP 1. Problem Identification in Scandinavian Airlines: The Green Engine Decision case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of Scandinavian Airlines: The Green Engine Decision case study

STEP 3. Industry Specific / Porter Five Forces Analysis of Scandinavian Airlines: The Green Engine Decision case study

STEP 4. Evaluating Alternatives / SWOT Analysis of Scandinavian Airlines: The Green Engine Decision case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis Scandinavian Airlines: The Green Engine Decision case study

STEP 6. Recommendations Scandinavian Airlines: The Green Engine Decision case study

STEP 7. Basis of Recommendations for Scandinavian Airlines: The Green Engine Decision case study

Case Analysis of Scandinavian Airlines: The Green Engine Decision

Scandinavian Airlines: The Green Engine Decision is a Harvard Business (HBR) Case Study on Organizational Development , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Scandinavian Airlines: The Green Engine Decision is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Scandinavian Airlines: The Green Engine Decision case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Scandinavian Airlines: The Green Engine Decision will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Scandinavian Airlines: The Green Engine Decision case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Organizational Development, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Scandinavian Airlines: The Green Engine Decision, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Scandinavian Airlines: The Green Engine Decision case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Organizational Development Solutions

In the Texas Business School, Scandinavian Airlines: The Green Engine Decision case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Scandinavian Airlines: The Green Engine Decision

Step 1 – Problem Identification of Scandinavian Airlines: The Green Engine Decision - Harvard Business School Case Study

The first step to solve HBR Scandinavian Airlines: The Green Engine Decision case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Environmental Sas is facing right now. Even though the problem statement is essentially – “Organizational Development” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Environmental Sas, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Scandinavian Airlines: The Green Engine Decision.

The external environment analysis of Scandinavian Airlines: The Green Engine Decision will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Scandinavian Airlines: The Green Engine Decision case study. PESTEL analysis of " Scandinavian Airlines: The Green Engine Decision" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Scandinavian Airlines: The Green Engine Decision macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Scandinavian Airlines: The Green Engine Decision

To do comprehensive PESTEL analysis of case study – Scandinavian Airlines: The Green Engine Decision , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Scandinavian Airlines: The Green Engine Decision

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on Scandinavian Airlines: The Green Engine Decision

Government policies have significant impact on the business environment of any country. The firm in “ Scandinavian Airlines: The Green Engine Decision ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Environmental Sas is operating, firms are required to store customer data within the premises of the country. Environmental Sas needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Scandinavian Airlines: The Green Engine Decision has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Environmental Sas in case study Scandinavian Airlines: The Green Engine Decision" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Environmental Sas in case study “ Scandinavian Airlines: The Green Engine Decision ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Environmental Sas in case study “ Scandinavian Airlines: The Green Engine Decision ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on Scandinavian Airlines: The Green Engine Decision

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Scandinavian Airlines: The Green Engine Decision ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Environmental Sas can compete against other competitors.

Government Scheme & Subsidies Impact on Scandinavian Airlines: The Green Engine Decision

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Scandinavian Airlines: The Green Engine Decision case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on Scandinavian Airlines: The Green Engine Decision

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Environmental Sas needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Scandinavian Airlines: The Green Engine Decision

Social Factors that Impact Scandinavian Airlines: The Green Engine Decision

Technological Factors that Impact Scandinavian Airlines: The Green Engine Decision

Environmental Factors that Impact Scandinavian Airlines: The Green Engine Decision

Legal Factors that Impact Scandinavian Airlines: The Green Engine Decision

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Scandinavian Airlines: The Green Engine Decision case study. PESTEL analysis of " Scandinavian Airlines: The Green Engine Decision" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: Scandinavian Airlines: The Green Engine Decision case study solution