Strategy development of two merged airlines
After the merger of two European airlines, Arthur D. Little helped the newly formed company to redesign its strategy
Following the merger, the next steps were to identify a new strategy, develop a business plan and implement this new strategy for the newly formed company. In this context, the client asked Arthur D. Little to:
- Support the chairman of the management board with the definition of a new strategy and the elaboration of his business plan
- Support the implementation of this new strategy in line with the business plan
To support the identification of the strategy, Arthur D. Little developed a 4-step approach:
- Conduct a current situation analysis by analysing the environment, consult stakeholders and align the executive committee on the market, the companies’ market positioning and the sustainability of their current business models
- Develop strategic options by proposing industry scenarios, setting strategic goals and developing strategic options with key parameters
- Assess strategic options by conducting a risk and feasibility assessment, select and detail the new proposed strategy together with the board of directors
- Build a detailed financial model and outline a final business plan
After approval of the strategy and business plan, Arthur D. Little developed a detailed implementation plan. In order to follow the implementation, Arthur D. Little set up three parallel workflows. An integration office was set up to coordinate the efforts. The three workflows comprised:
- The implementation of the new business model: different project teams were set up to work on the implementation of a part of the new business model (ex. network, product, fleet)
- The identification of the new organisational structure and integration / co-ordination opportunities of the main processes between both entities: Arthur D. Little developed and assessed optimal future business processes and the most suited organization to support these processes, and also identified and modeled synergies, resource needs and transition costs
- Following the change aspects, i.e. resistance to change, change management, team building sessions, etc.
The business plan that Arthur D. Little worked through together with the client outlined the strategic options available for the new company with clear recommendations as to which road the company should take. The strategy and business plan were later approved by the board of directors.