Restructuring / Turnaround Strategies Case Study

Case Title:

Swissair's 'Hunter' Strategy and the "Grounding": The Lessons

Abstract:
With Switzerland rejecting the membership to European Economic Area, Swissair encountered restriction to operate in other European countries. Swissair, known for its quality, reliability and innovations, adopted the 'Hunter strategy' to expand beyond its domestic market. Based on McKinsey's recommendations, Swissair expanded its operations by acquiring stakes in different airlines. However, the strategy failed with mounting debt and continuous losses resulting in liquidity crunch. Liquidity crisis finally led to the grounding of the Swissair fleet on October 2nd 2001. Based on the events on the last days of the airline, a movie named 'Grounding: Last days of Swissair' was made in Switzerland. The movie, which has brought alive the national disaster, not only raises the question about whose was responsible for the grounding of Swissair but has once again brought into the forefront the issue of corporate governance.

Pedagogical Objectives:

• To discuss Swissair's 'Hunter strategy' and its failure which resulted in the grounding of Swissair
• To discuss Swissair's restructuring efforts to revive its operations
• To discuss the corporate lessons to be learnt from the movie 'Grounding: Last days of Swissair'.

Keywords :  Switzerland; Deregulation; Restructuring / Turnaround Strategies Case Study; Aviation; Hunter strategy; Qualiflyer alliance; Grounding: Last days of Swissair; Mario Corti; Brand image; Corporate governance; Crisis management; Business ethics; Bankruptcy; Growth strategy; Restructuring