HomeResearch & Knowledgeback to HomeStrategyback to Research & KnowledgeLufthansa: Going global, but how to manage complexity?back to Strategy

Case Study

Lufthansa: Going global, but how to manage complexity?

By Ulrich Steger and Simon Tywuschik

16 pages

December 2006

Order this case study

Reference: IMD-3-1746

This case addresses the development of Lufthansa’s business within the cyclical and global airline environment. First, we discuss the main features of globalization, its interrelatedness with complexity and the consequences for the airline industry. Then we analyze how Lufthansa has managed to remain one of the few profitable airline companies in the past by touching on issues such as extraordinary events, low-cost competition, governance structures, financial constraints and culture. For this, we consider passenger transportation data over time on a corporate and industry level. Also, we analyze the trend of flag carriers to cooperate within airline alliances such as Star Alliance, One World and Sky Team on the background of its management implications. Further, we present the evolution of the organisational structure of Lufthansa and the current organisation of Star Alliance. Given that the airline business will remain complex and cyclical, we finally ask if the current strategy of Lufthansa is sufficient to maintain its status as one of the few profitable airlines worldwide in the future.

Learning Objective

1. To get an idea about the interrelationship between globalization and complexity2. To understand how to manage complexity and to develop a successful business strategy in a highly volatile business environment 3. To discuss on how to survive as a flag carrier in the global airline industry

Keywords

Globalization, Complexity, Business Strategy, Airline

Settings

Germany
Lufthansa, Travel and Leisure, Airlines and Aviation
1980-2006

Type

Published Sources

Available Languages

English

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Keep reading

Case Study

Should Unilever pivot from being purpose-led?

The case study delves into strategic transformation and leadership transitions at Unilever since 2009. Unilever has been an industry leader of busi...

Strategy Marketing Purpose Sustainability Diversity and Equity and Inclusion

By Goutam Challagalla and Samaja Penumaka

Article

Strategic planning in volatility: The dance between agility and core strengths

Understanding your organizational capacity for agility and responding to events accordingly is the key to success in the new business environment, ...

How to navigate our future world order - Maha Hosain Aziz

In a post-pandemic era shaped by wars, climate change, and new technologies, Maha Hosain Aziz outlines the main risks and shock events that could d...

Case Study

How Boeing lost altitude

The case study examines recent aviation safety concerns at Boeing, focusing on manufacturing issues, leadership decisions and regulatory oversight....

Board Corporate Governance Leadership Strategy

By Goutam Challagalla, Patrick Reinmoeller and Samaja Penumaka

Case Study

Metalshub: A steely approach to launching a B2B metal trading platform

Few Business to Business (B2B) marketplaces have succeeded. Metalshub has successfully combined a software platform as a service, with a marketplac...

Business to Business Digital Disruption Economics Operations Strategy

By Didier Bonnet, Geoffrey G. Parker, Charles E. Hutchinson and Lisa Simone Duke

Case Study

Contabilizei: Freeing entrepreneurs from Brazil’s tax complexity

The case focuses on Contabilizei, a Brazilian startup providing online accounting services for small and medium-sized enterprises (SMEs). The case ...

Entrepreneurship Business to Business Digital Strategy

By Benoit F. Leleux, Diego Dias, Ariella Pfenninger, Daniel Töller and Thomas Villiger

Article

Ipsen: Leveraging an encompassing strategy to accelerate growth in pharma

IMD's Niccolò Pisani examines how a combination of clear-eyed analysis and a strong sense of purpose allowed the French biopharma to change course.

Leadership Strategy Decision Making

By Niccolò Pisani

in I by IMD

11 June 2024

Article

Engineer your own luck

Companies that modularize and externalize their best capabilities are in a strong position to seize unexpected opportunities. Prediction is hard. T...

Organizational Change Disruption Strategy Innovation

By Mark J. Greeven, Howard H. Yu and Jialu Shan

in MIT Sloan Management Review

Summer 2024, vol. 65, no. 4

Article

Euro 2024 Sponsorship - Chinese Brands

Leading Chinese companies are preparing to take advantage of exposure and opportunities as top sponsors and suppliers to the UEFA EURO 2024 Men’s S...

Competitiveness Innovation Strategy China Future Readiness Marketing

By Mark J. Greeven and Howard H. Yu

in I by IMD

5 June 2024

Should Unilever pivot from being purpose-led?

By Goutam Challagalla and Samaja Penumaka
Case reference: IMD-7-2578 ©2024

Summary

The case study delves into strategic transformation and leadership transitions at Unilever since 2009. Unilever has been an industry leader of business sustainability. Paul Polman was a pioneer who introduced the idea that, by addressing social and environmental problems, a company can unlock new growth opportunities. Polman launched a 10-year Sustainable Living Plan with three objectives: to enhance health and well-being, livelihoods and environmental sustainability. Alan Jope followed in Polman’s path and launched a novel plan for the new decade called The Unilever Compass, focused on sustainability. Unilever took a strategic turn during Jope’s tenure and asked the brands to use their products to solve social issues. He called this “purpose-led branding,” which confused investors. They believed social branding would take the company’s focus away from growth. Tensions were high at Unilever and resulted in a change in leadership. The company wants to focus on growth, which raises questions about the future of corporate sustainability at Unilever.

Reference IMD-7-2578

Organization Unilever

Industry Consumer Goods

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Strategy

Marketing

Purpose

Sustainability

Diversity and Equity and Inclusion

Browse all topics

How Boeing lost altitude

By Goutam Challagalla Patrick Reinmoeller and Samaja Penumaka
Case reference: IMD-7-2588 ©2024

Summary

The case study examines recent aviation safety concerns at Boeing, focusing on manufacturing issues, leadership decisions and regulatory oversight. It traces Boeing’s trajectory since the McDonnell Douglas merger in 1997, highlighting the changes in the engineering culture and outsourcing strategy that affected the production quality of the 787 Dreamliner and the 737 MAX aircraft. The case also explores how leadership decisions prioritized cost-cutting over quality, leading to inconsistencies and delays. Then the case discusses the 737 MAX, which was grounded after two major crashes in 2018 and 2019. Investigations by the Federal Aviation Administration (FAA), the Department of Justice and a Senate Committee found defects in the MCAS flight control system and flaws in the safety certification. The case study explores the leadership actions of CEOs McNerney, Muilenburg and Calhoun, who decisively shaped the nature of the company.

Reference IMD-7-2588

Organization Boeing

Industry Travel and Leisure, Airlines and Aviation

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Board

Corporate Governance

Leadership

Strategy

Browse all topics

UrbanLuxe Cosmetics: Embracing S&OP/IBP

By Ralf W. Seifert and Richard Markoff
Case reference: IMD-7-2572 ©2024

Summary

The case is seen through the eyes of the newly appointed supply chain director at a cosmetics company based in Berlin. The general manager has tasked the new supply chain director to provide bold process recommendations to improve the poor service, high inventory and rampant use of overtime. To understand the issues at play, the supply chain director meets with the CFO, the factory manager, the chief procurement officer and chief revenue officer and their feedback constitutes the body of the case. Each individual offers a different perspective, though none take any responsibility. The CFO is unhappy with the high inventory levels. The factory manager feels helpless in the situation. The chief procurement officer is proud of the savings he has generated by shifting to Asia. The chief revenue officer appears altogether disinterested and not concerned by the problem. The supply chain director must integrate this feedback and propose a new process that will address the performance shortcomings, define the roles and responsibilities of each, along with KPIs to monitor progress.

Reference IMD-7-2572

Organization UrbanLuxe Cosmetics (Invented name)

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Operations

Strategy

Browse all topics

Metalshub: A steely approach to launching a B2B metal trading platform

By Didier Bonnet Geoffrey G. Parker Charles E. Hutchinson and Lisa Simone Duke
Case reference: IMD-7-2457 ©2024

Summary

Few Business to Business (B2B) marketplaces have succeeded. Metalshub has successfully combined a software platform as a service, with a marketplace matching supply and demand for raw materials used in the Metals and Mining industries. Through innovative pricing and business models, the company has managed to scale its operations in a short timeframe.

Reference IMD-7-2457

Organization Metalshub

Industry Materials, Metals and Mining

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Business to Business

Digital

Disruption

Economics

Operations

Strategy

Browse all topics

Contabilizei: Freeing entrepreneurs from Brazil’s tax complexity

By Benoit F. Leleux Diego Dias Ariella Pfenninger Daniel Töller and Thomas Villiger
Case reference: IMD-7-2546 ©2024

Summary

The case focuses on Contabilizei, a Brazilian startup providing online accounting services for small and medium-sized enterprises (SMEs). The case study delves into the challenges faced by the company’s founder and CEO, Vitor Torres, as he navigated Brazil’s complex social and economic landscape. Issues such as Brazil’s byzantine tax system, disparate educational quality and accessibility, and the high cost of doing business in the country are explored. Despite these barriers, Contabilizei demonstrated impressive growth, transforming digital innovation into standardized services. However, the rise of competitors and persistent profitability concerns prompt Torres to thoroughly explore future strategies to maintain market leadership and improve financial performance. The case provides an in-depth analysis of Brazil’s entrepreneurial ecosystem, examining its business, educational, legal and infrastructural realities and their implications for startups as well as the difficult step for startups to become established companies.

Reference IMD-7-2546

Organization Contabilizei

Industry Finance and Insurance, Financial Services

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Entrepreneurship

Business to Business

Digital

Strategy

Browse all topics

Ipsen: Leveraging an encompassing strategy to accelerate growth in pharma

By Niccolò Pisani
in I by IMD 11 June 2024

Summary

IMD's Niccolò Pisani examines how a combination of clear-eyed analysis and a strong sense of purpose allowed the French biopharma to change course.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Leadership

Strategy

Decision Making

Browse all topics

Engineer your own luck

By Mark J. Greeven Howard H. Yu and Jialu Shan
in MIT Sloan Management Review Summer 2024, vol. 65, no. 4

Summary

Companies that modularize and externalize their best capabilities are in a strong position to seize unexpected opportunities. Prediction is hard. T...

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Organizational Change

Disruption

Strategy

Innovation

Browse all topics

Euro 2024 Sponsorship - Chinese Brands

By Mark J. Greeven and Howard H. Yu
in I by IMD 5 June 2024

Summary

Leading Chinese companies are preparing to take advantage of exposure and opportunities as top sponsors and suppliers to the UEFA EURO 2024 Men’s S...

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Competitiveness

Innovation

Strategy

China

Future Readiness

Marketing

Browse all topics