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
Would you classify airlines that seek to be both low cost and differentiation as being stuck in the middle? Why or why not?
What would be the means to avoid being stuck in the middle?
SWISS AIR: STUCK IN THE MIDDLE Historically, Swissair was one of the Swissair itself was a major European through a differentiation strategy, flagship international businesses carrier offering a differentiated serv- and aims to set new benchmarks in Switzerland, and the ice, but then the firm had sought to customer service and product quality airline Was known for excellent qual ity throughout nvest in bankrupt and troubled air. Swiss International Airlines operates a Europe. Swissair, however, filed for nes throughout Europe that were broad range of short and long-haul bankruptcy ly 2001 t had operating with low-cost strategies. As aircraft ear sought to be a global player but never a result, Swissair's mage became nability to identify Swissair's was able to reach the critical mass blurred. Was it a high-qua make decisions strong direction and airline needed to be successful n large part or a regional airline? Was it offering when faced with a crisis is reflected in these problems were rooted in the fact a differentiated product or a low-cost more than just the firm's bankruptcy. In product? that the airline never develo 1998, 229 people died in the crash of clear strategy. The firm The outcome of this confused strat. n the ate a Swissair flight from Europe to the 1980s sought to form an allianc stated earlier, bank United States. The pilots smelled smoke egy was OS with high-quality airlines in Europe ruptcy. At the time of the filing Swis- and requested that they be diverted to (AUA, KML, and SAS), a of which sair grounded its fleet stranding a nearby airport for an emergency followed a differentiation thousands of customers throughout strategy landing. The pilots then n accordance The a ance failed, however, because the world. The Swiss are known as with the rules when faced with smoke of t was never clear who was to lead the stoic people, but in response to the unknown origin, shut off the power Supr alliance. Swissair then sought to grounding, citizens demonstrated in ply to the cabin. But in this case, follow- expand into sma regional airlines. the streets n one of the largest dem- g the rules to the letter caused the For example, in 1995 the firm bought onstrations by the Swiss in recent circulation fans to shut down which 49.9 percent of Belgian Sabena Air. ith 10,000 participants memory caused the fire to spread back into the and later pursued a The on comparable corporate nesu major cockpit. Ultimately, the fire destroyed nvestment in the Polish Airline LOT n Switzerland occurred in situation the various control systems, and caused Swissair also bought a 7o percent the 1970s when the Swiss watch the plane to crash. This lack of creative industry collapsed However share n a low-cost regional that airline decision making is often cited as an named Crossair. These regional air- ndustry has been aided by an inno- example of when following the rules nes had significant problems, how- vative new watch enterprise, Swatch. can be the wrong decision. This deci- and Swissair did not have which created a major new position sion making will be covered n more for the Swiss in the watch industry: the expertise n restructuring airlines detai ater in the book was not even able to reorganize its differentiated fashion watch. Ho no new product ca tegory has own cost structure ever Bonsu, H. (2001). A nation in shock: Swis- yet been created for the Swiss airline n reviewing the airline's actions sair crisis. BBC News. http:// bbc.co. n the wake of the collapse o Swissair appeared to lack a clear ndustry. uk/1/hi/ rammes/crossing continents/ 1677085 strm Swissair, Swiss International Airlines strategy was attempting to use both the low-cost strategy and the dif was created from Crossair. Swiss ferentiation strategy at the same time International Airlines is currently posi- tioning itself as a premium airline investing in variou Online airlines www.WSI.com,