Business Strategy Transformation due to Changing Market Environment

Abstract

This thesis aims to investigate the connection between a strategy transformation and the changing market environment with an emphasis on the Nordic aviation industry. The thesis identifies major reasons and megatrends, such as energy transition, behind the changing market environment and how these changes are forcing companies to re-evaluate their strategies to maintain long-term profitability. The thesis makes concrete suggestions on how to implement the discussed topics as part of a new strategy and how a company may benefit from proactive value analysis and strategic planning. A thorough research for previous literature is conducted to provide an academic base for the thesis. The research is supplemented with an interview to provide concrete data to be discussed and analysed to create a solid understanding of the reasons causing changes in the market environment and how these changes may be included in the strategic evaluations and decisions. The interview provides valuable data concerning the concepts of energy transition and sustainability in the Nordic aviation industry. Finnair is used as an example of a Nordic company massively impacted by the changing market environment and how the company has been able to transform its strategy in response to the changes and to maintain profitability. The findings illustrate the significance of careful strategic re-evaluation due to changing market environment. Based on this research, an effective, proactive, and long-term strategic planning, including consideration of the related megatrends and an analysis of the core values, can significantly affect a company’s long-term profitability and a successful strategy implementation.