1. BSC CASE AIRLINE INC Next slides describe the situation
It closely resembles a situation where Air Botnia (= nowadays Blue1) found itself before Scandinavian Airlines acquired it
At the end of this document you find more instructions

2. WHY AIRLINE CASE
Everyone of us knows something about the business, we all make choices concerning airlines
Competitive industry, far less regulation today as before
Airline business is simple to understand, yet difficult to manage -

3. STARTING POINT FOR AIRLINE INC
Small Finnish domestic airline company
Not making big money
Markets dominated by one big competitor
Changes in regulation -

4. FIRST EXECUTIVE BOARD MEETING
Airline Inc management team gathered together to discuss the challenges of de-regulation
The aim of the company as a whole was discussed as well
As a result, the aim of the company was defined as to maximize owners wealth, or shareholder value -

5. FIRST BOARD MEETING Cont.
Growth of the company was seen essential
Management team decided to hire consultants to do some background work
The strengths and weaknesses of the main competitor
Customer needs and expectations
Possible partners or co-operators
A proposal for vision and growth strategy -

6. CONSULTING REPORT Strengths of the competitor Excessive fleet
Frequent flyer program
Good routing and schedules
Weaknesses of the competitor
Some customers not satisfied to the level of service
Reliability problems caused by rather old fleet and problems with employees -

7. CONSULTING REPORT
Customers value security, routing and timeliness, frequent flyer program, clean and comfortable fleet and friendly service
A major Scandinavian airline company as a potential partner
Success possible through partnership -

8. SECOND BOARD MEETING Encouraged by the consulting survey:
A decision to look for a partnership
A vision for the company:
“Airline Inc will be the leading provider of business services for passengers in the domestic market area by the year 2023” -

9. STRATEGIC MOVES
Partnership established with major Scandinavian company
A hub for transfer flights in order to attract business customers heading for international flights
New fleet for more reliable and comfortable service
A frequent flyer system together with partner -

10. A BUSINESS STRATEGY
After the successful completion of big strategic steps, management board gathered together to decide, how to ultimately reach the vision
They defined a value proposition, or a strategy for business operations:
Provide service that exceeds the service of competitors
Focus on offering a range of services to a specified target group of business customers
Reliability must be much higher than that of competitors -

11. THE NEXT STEP - BSC
To make sure that the strategy translates into action, management team decided to apply Balanced Scorecard -

12. EXERCISE 1: Specify Strategy Further
Define a strategy for Airline Inc. which helps it to win customers to fly with it
Following questions may help you in this assignment. (There is no need to hand in answers to these questions)
Should BSC reflect strategic choices made, strategy for operations, or both?
What type of strategies might provide sustainable competitive advantage?
Note: you may not change the basic strategy adopted by the firm, i.e. to become e.g. a low cost carrier is not an option here
Present your specified strategy in one page / slide -

13. EXERCISE 2: Create strategy map and define measures
Create strategy map based on your strategy
Define measures for BSC based on your strategy and strategy map
Picture your strategy map and related measures to one slide
Hint: It may be useful to think what would be the indicators for KPI scorecard and what would be the indicators for strategy scorecard, which is our focus here -

14. GRADING
I will assess 1) whether the suggested measurement system is in line with your specified strategy and 2) can those measures be used in setting targets for the organization
Please hand in two pieces of paper (A4), one containing specified strategy and other containing strategy map and measures.
You are allowed (and encouraged) to submit also max two pages of justifications.