1.
Project
focus
:
Norwegian
Air
Shuttle
Mélanie
SANZ
Danke
Muryango
Business
Strategy
2
U n i v e r s i t y
o f
S o u t h
o f
D e n m a r k ,
C a m p u s
S l a g e l s e
E x c h a n g e
S t u d e n t s
S p r i n g
2 0 1 4

2. 2
Summary:
I. The Business Strategy of Norwegian Air Shuttle ASA
a) Blue Ocean Strategy and Norwegian Air Shuttle ASA
b) Business Model and Norwegian Air Shuttle ASA
c) Costs consideration into the law cost model
II. Innovation presentation
a) The vision and values of Norwegian Air Shuttle ASA
b) The objectives of Norwegian Air Shuttle ASA
c) The innovations result as missions from the vision and objectives.
III. IT Strategy
a) IT used to achieve our innovations
b) One Business Process
c) A special focus on the Customer Relationship Management (CRM) and the
Supply Chain Management (SCM)

3. 3
Introduction
“Norwegian Air Shuttle ASA has managed to become a highly successful company
and is today the second largest airline in Scandinavia and third largest European low-
cost carrier, transporting 17.7 million people in 2012.”
Despite their success Norwegian Air Shuttle ASA in this recent decade is part of a
highly dynamic industry characterized by fierce competition, low profit margins,
unpredictable events, and emerging challenges, which continuously keep changing
the competitive environment.
The development of the homepage has been an important player in this game, and
more and more customers are now using the homepage for mobile phones.
A recent survey in the Danish newspaper Politiken has evaluated the mobile
homepage to 3 out of 6 points, where both British Airways and KLM have got 5 out of
6. This has started a big concern among the top managers, and they have decided to
establish a fast running project to come up with suggestions of how to raise the
quality of the homepage.
The management has special focus on the kind of surveys that was done by Politiken
and wants to be sure, that a new survey would evaluate Norwegian among the best
on the market.
Thus, the question we have to ask ourselves is how can we improve the brand value
of Norwegian Air Shuttle ASA through a better. As previously mentioned the trend is
moving towards mobile phone usage, has been growing, and therefore a suitable
solution to this question would be to focus our efforts on the Norwegian app.
Sub-questions
-How can we create a more user-friendly interface?
-What are the new developments, which we will introduce within the app?
-How will all these new developments benefit Norwegian?
To answer these sub questions we will go through 3 topics namely Norwegians
Business Strategy focusing on the BOS (blue ocean strategy) as well as tools such
as the value innovation curve and the business model. Furthermore, the novelty of
our app will be discussed where we will discuss our objective, the main idea and the
IT consequences. Lastly, we will talk about the IT strategy, which will cover what
technology we used as well as the business PROCESS Strategy that was utilized
and incorporated within the application.

4. 4
I. The Business Strategy of Norwegian Air Shuttle ASA
Before talking about the Business Strategy of Norwegian Air Shuttle ASA, it would be
wise to explain what a Business Strategy is in general, therefore we offer a definition
below.
A Business Strategy is a long-term plan that shows the direction to take towards the
future, to ensure success and to realize the full potential of any business model.
There is one Business Strategy mostly used nowadays, the Blue Ocean Strategy.
But what is it we refer to when we mention the blue ocean strategy?
a) Blue Ocean Strategy and Norwegian Air Shuttle ASA
Definition of Blue Ocean Strategy:
In order to explain the theoretical definition of the strategy it’s important to define a
blue ocean and the other side of the coin namely the red ocean:
- A Blue Ocean is a new market place where competitors join the creators of this new
market, to fight and become a Red Ocean. So the logic thing to do would be to
introduce a new product or service in Blue Oceans by.
- A Red Ocean is a marketplace where companies are fighting amongst each other.
We are now ready to try to expose the definition of the Blue Ocean Strategy:
The Blue Ocean Strategy is the simultaneous pursuit of differentiation and low cost.
The aim of the Blue Ocean Strategy is to create an uncontested market space (the
blue ocean) thereby making the competition irrelevant, bringing a value innovation,
attracting non-customers, creating and capturing new demand.
The Blue Ocean Strategy uses different tools, and the most used is the value curve
that is also calls the strategy canvas.
A strategy canvas:
The value curve allows evaluating the value of the supply that a company offer to the
customer in function of different industry variables.
We will try to create the Norwegian Air Shuttle ASA curve below.

5. 5
However as we explain before, the Business Strategy is trying to realize the full
potential of any business model. But what is a business model?
b) Business Model and Norwegian Air Shuttle ASA
Definition and example of a business model : canvas model
We could define a Business Model as something that describes how our business
plans will succeed and the business’s intentions.
“A Business Model describes the rationale of creates, delivers and captures value”
(Business Model Generation written by Alexander Osterwalder & Yves Pigneur)
Norwegian Air Shuttle ASA business model:
According to Wensveen and Leick (2009), we already know that Norwegian Air
Shuttle ASA, is using a “low cost carrier business model”.
http://aviationweek.com/awin/norwegian-bases-long-haul-plan-787
The low-cost model
The low cost carriers can offer cheap flights by paying attention to every single dollar
that they invest back to the customer. For example there is practically no free service
on board.
http://www.lboro.ac.uk/gawc/rb/rb174.html
The ‘low-cost carrier’ business design is defined by three key elements:
- Simple product: ask for extra if people want more than just be sit for a fly.
- Positioning: The customer is Mr everybody, where Mr everybody is mostly a tourist
- Low operating costs: All the costs have to be low, to create the cheapest flight
possible

6. 6
Source: MERCER Management Consulting, 2002
According to O'connell (2005) and Williams (2001) the low cost carrier can be define
through these categories:
Brand: One brand, low price
Price: Simple price structure
Distribution: Internet, direct booking
Check in : no ticket
Airport : Mostly secondary
Network : Point-to-point
Classes : One class
During flight : Unbundling (pay for 'extras')
Aircraft usage: Very intensive
Aircraft type: one type
Turnaround times: 25 minutes
Product: One product
Secondary revenue : Advertisement, onboard selling
Seating : Tight, no reservations
Customer service : Overall bad
Operational activities : Outsourcing (focused on flying)
Target group : Mostly tourists
http://www.jvdz.net/index2.html?/lcc-def.html&frameMain
Our goal is now to include some considerations about transaction cost, agency cost
and productions cost to the low-cost model.
c) Costs consideration into the low cost model
Today the importance of the Information Technologies is so huge that we have to
take innovation into consideration. This is leading to some consequences.

7. 7
These consequences are transaction costs, agency costs and production costs. We
will try to define these different costs and furthermore elaborate to what extent these
consequences affect or apply to NWA,
Agency costs
Definition: These costs are incurred when buying process that you can’t perform
yourself, and as a result getting bigger as a company.
As previously mentioned agency costs includes obtaining business process that you
can't perform yourself. Thus, in our case this would imply all the IT-systems.
Productions cost
Definition: Includes optimizing and creating a lean resistant to changing business, for
example JIT (just in time)
NWA is utilizing a low cost model, one of this models features is focussed on low
operating costs, this entails that NWA emphasises its efforts on innovating and
optimizing their operations and therefore NWA won't be gravely affected by the
change.
Transaction costs
Definition: Entails getting bigger and as a result spending more on management.
Since NWA has been investing substantial amounts on adaptability, to the fast
changing airline market, this change, which will expand its services, won’t
dramatically increase its cost.

8. 8
II. Innovation presentation
In order to find one or several small innovations to make the difference, we need to
refer to the vision and the objectives of Norwegian Air Shuttle ASA. But what is a
vision or objectives?
a) The vision and values of Norwegian Air Shuttle ASA:
Vision
The definition of a corporate vision:
A corporate vision is a visualisation of the desirable state of the company in the
future.
Norwegian Air Shuttle ASA vision:
“Norwegian’s vision is that “Everyone should afford to fly”. The business idea of
Norwegian Air Shuttle ASA is to give everybody the opportunity to travel by air,
attracting customers by offering competitive, low fares and a high-quality travel
experience based on operational excellence and helpful, friendly service.”
Values
The definition of corporate values:
Corporate values are the ethical and moral statement that guiding the decision
making of a company.
Norwegian Air Shuttle ASA values:
NWA has 3 main values, the simplicity, the directness and the relevance.
Operational Priorities
Moreover through their web page we also found the operational priorities of
Norwegian Air Shuttle ASA. Indeed, NWA mostly pay attention to the safety, the
service and the simplicity.
These operational priorities can be used to build some objectives for Norwegian Air
Shuttle ASA.
b) The objectives of Norwegian Air Shuttle ASA:
One definition of objectives:
From the corporate vision we can derive objectives to achieve thanks to the plan,
model. It’s an expected result. All the objectives have to be S.M.A.R.T.
- Specific:
To be clearly detailed, that we can understand what has to be done.
- Measurable:
To be measurable during the process that will gauge effective performance
- Achievable:
To be sure that it is achievable, the objective should describe a result

9. 9
- Realistic:
To be possible to attain
- Time (in):
To be defined in a period
One example of Norwegian objectives
For example one of their objectives is to “establish a fast running project to come up
with suggestions of how to raise the quality of the homepage”. So we will try to help
them to improve their brand value through a better application”.
Furthermore to achieve this objective, the company will have to follow the company
mission that will result in this case in our innovation project.
c) The innovations result in missions from the vision and objectives
Definition of a corporate mission statement:
“A corporate mission statement defines what the corporation does, who it serves, and
how it serves (creates value for) its clients. It is designed to provide clarity, focus and
direction for those in the company and answers the questions of who we serve and
how. It also creates clarity of value for those outside the company and answers the
question of whether this company can be of value to me and/or my company.”
http://www.bellevuechamber.org/links/pdf/mission_vision_and_values_template.pdf
Norwegian Air Shuttle ASA mission:
1- Improving the business process relating to the SCM (supply chain
management) by using an IT system that can monitor luggage.
- RFID follows the luggage: Someone loses his/her luggage? Just check the
matching RFID, you will win time and money.
2- Improving the business process relates to the departure (in time) through an
IT system that can try to get people on time to their gate.
- RFID follows the customer, his/her fly ticket: Are you lost? Just follow the
map
- Alarm included on our app: be on time at your gate
3- Improving the business process relates to the CRM (customer relationship
management) through an IT system that can try to get more customers,
making them loyal to our company.
- RFID: Where is your luggage? Check your app and follow
- RFID: You lost your luggage? (Get on the app and follow the customer
service) - easier, faster and aware-
- eBeacoin: Checking the fastest way to get to their gate on the app
- Touch Point: Check and follow your to-do-list that you can modify on the
app

10. 10
III. IT Strategy
In developing an IT strategy, we have to “include relevant considerations from e-
commerce according to ubiquity, global reach, universal standards, richness,
interactivity, personalization, social technology and information density” and “ also
consider international aspects of using IT”
a) IT used to achieve our innovations
In our case, we are using three IT systems to achieve our missions, the RFID, touch
point and the iBeacon.
What is an RIFD?
There are RFID tags in various shapes and sizes. They can be read-only or read /
write.
RFID tags can be active or passive semi-active/semi-passive. Active RFID tags have
a battery and can be read and written with a "remote transceiver " also called "
reader " which transmits and receives radio waves using an antenna. They can
transmit a signal over a greater distance (around 100 meters to even a few
kilometres) they usually transmit at an interval from their ID.
Semi - active tags have a battery but transmit only in response to a received signal.
Passive tags do not have their own power source: they exploit the electromagnetic
field of a reader to induce a spiral, which feeds the chip. This limits the response
signal to travel a long distance (from a few centimetres up to about five meters).
There are also so-called "chip -less tags”, which are used for easy identification, such
as theft. These are not RFID tags strictly speaking because they don’t contain unique
identification numbers. They are composed of a tuned resonant circuit that absorbs
energy at a specific frequency.
RFID tags are also distinguished by the frequency used. In general the higher the
frequency, the further the read ranges. However, higher frequencies have more
difficulty to read through metal and moisture. Listed below are frequently used
frequencies and their names:
• 125 kHz (low frequency, LF)
• 13.56 MHz (high frequency, HF)
• 860 to 950 MHz (Ultra High Frequency, UHF)
• 2.45 GHz (Microwave, MW).
With all this said, we thought of ways to apply this technology to Norwegian Air
Shuttle ASA, several ideas came to pass and then we came across a Lost Airline
luggage merchant Article which stressed the fact that by introducing RFID technology
within airlines and airports, they can cut cost and increase efficiency, such as quicker
luggage drops minus the lengthy lines which are frequently seen at busy airlines.
http://www.businessweek.com/articles/2013-11-01/airline-lost-your-luggage-let-
your-phone-find-it

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What is a Touch Point?
“A Touchpoint is a place, artefact or interface where a person experiences a brand.”
http://www.brandexperience.info/definitions/
“The overall impact of the brand on the market is the sum of the impacts of each
brand’s touch points that he/she activated.”
“Today the Touchpoint model is the most holistic response to the central question of
marketing effectiveness.”
http://www.strategicresearch.fr/ce-que-nous-faisons/un-marketing-plus-
efficace/mesurer-le-roi-de-ses-touch-points/
What is an iBeacon?
An iBeacon is technology of micro-geolocation, launched by Apple.
This is a tag transmitter that can communicate here with a recent smartphone via
Bluetooth "low energy" (BLE, formerly Wibree) within 30 to 50 meters with an
accuracy of one centimetre.
http://www.20minutes.fr/high-tech/apple/1260247-20131206-ibeacon-apple-va-
rendre-smartphone-bien-plus-intelligent/
These IT Systems and e-commerce’s considerations:
All of these IT Systems are following some consideration from the e-commerce.
Indeed, all of them are considering an ubiquity (technology accessible everywhere)
and a global reach (catch everyone in the world) but only at the airport and an
universal standard (this stimulates innovation and has an easiest communication
there are using the small standard used everywhere). The Touch Point is considering
richness (not only number or text data, but also video, sound, pictures, … data). And
finally The Touch Point and the iBeacon are considering the interaction (you are not
passive and you can interact).
In using IT, innovation becomes easier for the company thanks to all of this
consideration from the e-commerce. Actually the airport is for us the most important
place where the international aspect has to be taken into account. Thanks to the
international aspect the IT system, everybody can take part the innovation.
b) One Business Process
We will start by define what a business process is then we will try to build BPMN
(Business Process Management Notation diagram).
A Business Process is a sequence of activities to accomplish business function
A Business Process needs to use resources where resources are necessary items to
accomplish an activity.
The data are the keys to the Business Process.
According to the software we are following Business Processes made by hardware
and run by human.
To document a Business Process we are using a BPMN diagram where we insert
different swimming lanes, which could be departmentalized into departments,
functions, roles or even names.

12. 12
We want to focus on one process. For that we choose the luggage process, that
allow to know where is the customer luggage.
We will try to build a general BPMN diagram on this statement.
This BPMN diagram is relatively simple to follow and it is not showing
completely the value of the innovation. That is why we would focus on the last part on
two areas that valuable on this process, the CRM and the SCM.

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c) A special focus on the Customer Relationship Management (CRM) and the
Supply Chain Management (SCM)
Let’s have a look on the BPMN diagram focus on the SCM.
In the SCM, we are looking for reducing operational cost link to the loss of luggage.

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Let’s now have a look on the BPMN diagram focus on the CRM.
In the CRM, we are looking for increasing the revenue sale link to the improving of
the service.

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Conclusion
In conclusion, this project has discussed 3 main subjects. Firstly ‘The Business
Strategy of Norwegian Air Shuttle ASA’ where we elaborated and emphasized the
importance of creating a uncontested market space through the use of BOS (Blue
Ocean Strategy) which leads to a competition irrelevancy. This part also mentioned
the fact that NWA utilizes a low cost model, by paying attention to every single dollar
that they invest back to the customer. The last subtopic we discussed in this section
was the Cost consideration into the low cost model which included transaction costs,
agency costs and production costs. Thereby concluding that NWA’s consequences
won’t be severe but NWA will have to obtain IT-systems to align with the new
developments.
The second subject that was touched upon is “Innovation presentation” where we
discussed the vision and values of NWA, namely “Everyone should afford to fly” this
value is in connection with NWA low cost model. Additionally, we discovered 3 main
operational priorities namely safety, the service and the simplicity. These priorities
are the building blocks of the objectives where one of their objectives is to raise the
quality of NWA’s homepage. In order to accomplish this goal the company will have
to follow the company mission. Moreover, the mission includes the improving of the
business process relating to the SCM, departure (in time), CRM.
Lastly IT Strategy was discussed and in particular the IT utilized to achieve our
mission specifically RFID, touch point and the iBeacon. Since we consider the RFID
luggage process as the most innovative and groundbreaking novel idea, we
emphasized this process through the use of a BPMN diagrsam. Moreover, the
luggage scheme takes us back to a model that was highlighted in a previous section
namely the canvas model since we increase revenue sales and simultaneously
decreases the operational cost. Furthermore in the case of CRM, this will be seen
though less baggage losses so a client who will appreciate the service and choose
NWA as a company next time and in the case of SCM, this will save a substantial
amount by the avoidance of baggage losses and by making the process of
repatriation of luggage much more faster.
All in all we can conclude that the introduction of the main idea namely the luggage
RFID scheme, and also the additional idea’s which include the app, touchpoint and
the iBeacon will help to build one of the best if not the best NWA app (homepage)
imaginable, and this will result in a new survey evaluating Norwegian among the
best on the market.

16. 16
Observation
Inductive approach:
Like in maths, where we like to check our result, we thought that we could use an
inductive approach to check the character of our innovation and conclude that the
main mission is an innovation that will have good chance to work in reality.
Through the project we try to put forward one mission; use of the RFID (IT system) to
follow the luggage. This mission is following 2 out of 3 criteria from the operational
priorities of NWA. Indeed it’s offering a new service to the customer simple of use
with a Smartphone. We can conclude that improve the CRM process, so by default
increasing the buyer value.
However this project of using RFID for luggage is not only for the customer. Indeed
it’s also improving the SCM process by finding the luggage faster and then make less
lost. We can go further and even imagine that an internal application will check that
the entire luggages are in the suitcase of the plane at the departure moment. So, by
default we can conclude that the operational cost will decrease (with less money to
spend for loss of luggage)
With this analyze we are directly thinking about the value innovation, one of the BOS
tool.
Schema below:
We can conclude that the mission is well and truly an innovation that could bring to a
Blue Ocean, according the Blue Ocean Strategy.

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Annex
Welcome to the app.
We want to give you a global view of the application service through these models of
screen.

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