SmoothAir is a no- frills airline that services the Midwest. Its mission is to be the Itsmis-sionistobethe only short- haul, low- fare, high- frequency, point- to- point carrier in the Midwest. However, there are several large commercial carriers offering air transportation, and SmoothAir knows that it cannot compete with them based on the services those carriers provide. SmoothAir has chosen to reduce costs by not offering many in flight services, such as food and entertainment options. Instead, the company is dedicated to providing the highest quality transportation at the lowest fare. Smooth Air€™s balanced scorecard measures (and actual results) for 2012 follow:

Required
1. What is SmoothAir€™s strategy? Was SmoothAir successful in implementing its strategy in 2012? Explain your answer.
2. Based on the strategy identified in requirement 1 above, what role does the price- recovery component play in explaining the success of SmoothAir?
3. Would you have included customer- service measures in the customer perspective? Why or why not? Explain briefly.
4. Would you have included some measure of employee satisfaction and employee training in the learning-and- growth perspective? Would you consider this objective critical to SmoothAir for implementing its strat-egy? Why or why not? Explainbriefly.

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Target Performance Actual Performance Objectives Measures Financial Perspective Increase shareholder value Operating-income changes from productivity Operating-income changes from price recovery Operating-income changes from growth $1,200,000 $450,000 $500,000 $1,400,000 $600,000 $660,000 Customer Perspective Increase the number of on-time arrivals Internal-Business-Process Perspective Reduce turnaround time Learning-and-Growth Perspective Align ground crews FAA on-time arrival ranking On-ground time % of ground crew stockholders 1st in industry 25 minutes 70% 2nd in industry 30 minutes 68%