Strategy
Analysis of environmental, competition, customer needs and one’s own strengths and weaknesses leading to a plan or course of action that determines the allocation of SAS’s scarce recourses, over time, to reach the determined goals. They are service orientated and spend a lot of attention to customers needs with a great variety of services.
Systems
Procedural reports and the routine processes. On the intangible side, includes routine processes such as meeting formats and norms of conflict management. The main thing that had to be accomplished at SAS was the cooperation of all levels of organization. In today’s world it is very important for a company to be as computerized as possible. Out of this characteristic they have to upgrade their databases, which can help them with their marketing. As well they had to produce a system where it was easy to access to information.
Style
Description of behavioral patterns on common traits of key managers and the organization as a whole. The purpose of this segment in SAS was to keep a small distance between the top management and the employees. This would prove to be an efficient way towards optimizing the company’s performance on the market.
Staff
The staff is characterizations of the major grouping of people within SAS by education, functional discipline or working background. After the reorganization of the company most of the employees where highly motivated. They had a common goal and work well as a team, which only helped the company to achieve their goals.
Skills
The one or two distinctive capabilities of the organization that authentically differentiate it from the competition. At SAS they tried to implement these skills towards understanding the market and how it works. The main perspective at what they aimed a lot of skills was understanding the customers needs or in other words doing more to satisfy customers with high quality of services and friendly, helpful employees at the front line. By making the staff do more things they found there self with new ideas.
Shared values
The significant meanings or central belief that SAS imbues in its members (“To became the world’s best airline for business traveler”). These overarching values act as a “tie breakers”. It dictates the organization’s orientation toward quality, financial objectives, employees, services, social situation etc
- How did he go about implementing his strategy? What obstacles did he have to overcome and how did he overcome them?
When Jan Carlzon took over SAS, he had to deal with several problems.
First of all, he changed the structure of the employees. With this, he improved the motivation of each person in the company. They called it “Typical Carlzon” he manages to create a psychological impact to his employees with a new way of working. He spread more responsibility among his employees in the organization.
Carlzon realized that the most important people in his airline business at certain points in time were his receptionists and telephonists who were at the interface with customers. Indeed, the most important thing for the customers is the first five minutes so when they are in contact with those people . However if the traditional pyramid structure were to be believed then they were the least important in the meritocracy stakes!
After this , the main objective was to reoriente the company toward the needs of the market it serves. He will set up a new business strategy :
- Take a clear picture of the outside world and of SAS’s position within it.
- Create a new slogan in order to communicate to the customer what they should expect.
- Establish SAS as “the worlds best airline in term of passengers service”.
- Identify clearly the target market and keep always concentrate on it.
- Streamline administrative resources toward a more profit oriented approach.
- Set up a strategic plan focus on service (the most important is to understand customers expectations and make sure that employees understand it and will respond to the customer’s needs ). Carlzon will install also employee training.
When a customer comes into contact with a service provider, it is often referred to as a moment of truth. Carlzon was unsure how he would begin to manage all of the critical aspects of the airline when he first became President; he decided every point of customer contact was a “moment of truth” that could cause SAS to either retain or lose the customer. Carlzon believed that if he managed SAS’s moments of truth successfully that the desired effects on profitability, safety, quality, etc. would result. One popular alternate term for moment of truth is “the service encounter.”
- Apply Carlzon’s strategy to a business or organization of your own choosing. What are the major obstacles you would face in implementing such a strategy and how would you attempt to overcome them?
The organization I took to apply Carzon’s strategy on is a complex of hotels called Bernardin in Slovenia. It is located in Portoroz Slovenia, by the Adriatic coast. The complex has three hotels with the total of 1353 hotels. Grand hotel Emona is a five star hotel with a modern congress center build in 1995. Hotel Historian is a totally renewed hotel with water Laguna and has four stars. The smallest hotel is Vile Park and is a combination of apartments with two-four stars. The organizational structure of these hotels is like SAS decentralized.
The main strategy is connected with the hotels such as hotel, restaurant services. In addition to that they have a widespread congress and water amusement tourism. When talking about Jan Carzlon’s SAS I have to mention, that they are very close to reaching an agreement to be a partner of the Radison SAS chain of hotels, but it is still didn’t go through since they had a recent change of ownership. Before the complex was owned by the state restructuring agency and now the owners are a major Slovenian bank and some other big Slovenian companies. Since they still didn’t sign the contract with Radison SAS, their main area that they implement towards are the guests from Central European markets.
The guests come usually in different ways. Here are some alternative ways of coming to Bernardin hotels.
And this is where we can compare Jan Carlzon’s strategy with the one used in my case. The guests arrive in Portoroz and their first contact is the front office or the reception desk. This has to be very customer orientated and has to contain high skilled and suitable personal. In the year 2001 they had some actions aiming towards providing better customer service such as better control of the employees, suitable organization of work and efficient internal economy. They find a disadvantage in the hotel with 5 stars in the high demanding skilled personal, since there is a lack of them on the market. In the other two hotels they have to achieve the best service that they can with their employees to suit the hotels good name.
They are now going through a restructuring phase due to the hotel politics in providing the best service possible. Their aim is to reduce the amount of full meal guests and increase the bed and breakfast ones. With providing better quality the price is increasing, so the structure of guests is changing. Guest from their main target markets, Slovenia, Germany, Italy and Austria take 80% of their accommodations. Some guests such as Belgium’s can’t cope with the increasing prices, but they predict a higher percentage of Russian and Ukrainian guests.
I think that this example is quite similar to Jan Carlzon’s SAS. The Bernardin hotels found there self in a similar situation when loosing their guests due to the war in Yugoslavia. They changed their main strategy of just providing hotel services and introduced new parts of tourism such with a big congress center and modern indoor swimming facility, so that each quest can achieve their expectation. They are becoming one of the best hotels in that part of Europe.
