- Title
- Examining competitive strategies for resilience to sudden crises in the airline industry
- Creator
- Komutanont, Warakorn Pom
- Resource Type
- thesis
- Date
- 2016
- Description
- Professional Doctorate - Doctor of Business Administration (DBA)
- Description
- This research aims to contribute to strategic management theory by providing a greater understanding of resilience approaches in the airline industry when facing a sudden crisis. Based on the evidence that crises are cyclical, and drawing on extensive secondary data and documental analysis relevant to the 2008 Global Financial Crisis (GFC), the study denounces the reactive nature of the strategies that were applied in response to the crisis, and advocates a need for a proactive approach to examining what strategies might be considered by airlines in the process of resilience creation to the next sudden crisis. The 2008 GFC has had a disruptive effect on many firms in the airline industry, denouncing a need for businesses to build resilience to crisis mechanisms, so as to avoid major threats to their financial and competitive performance, and ultimate sustainability. Distinct levels of preparedness, or resilience, to dealing with the effects of the GFC, and the different effects experienced in different regions, explain why different airlines adopted different crisis management strategies, highlighting the volatile nature of the global airline industry’s competitive environment. Hence, there is a need to examine airlines’ resilience at global and regional levels, with a view to building up predictive competencies to acquire resilience and to compete successfully in anticipation of a new sudden crisis. From a theoretical perspective, Porter’s Five Forces model and the Three Generic Strategies for competitive advantage provide the theoretical framework, being used to develop the research questions and propositions that guide this study. A cost leadership strategy involves actions such as maintaining a lean workforce and establishing/increasing the number of subsidiary companies to achieve economies of scale and scope at the lowest cost for profitability, suitably focused on market(s) where they compete. Airlines also may need to consider focus strategies, possibly involving network expansion strategies, by increasing the number of destinations they serve profitably, fleet size and capacity, as well as joining one of the global strategic alliances. Finally, while differentiation strategies through high quality service and brand image may not have a significant impact on airlines performance all of the time, they may help create effective competitive positions that may be the core of competitive advantage and resilience to crisis. From regional perspective, while regional differences generally have a significant influence on an airline’s revenue and cost, various competitive strategies were found to have different strong impact on airline’s performance in different regions. Consistent with an interpretative paradigm, a sequential mixed methods exploratory design is adopted as the strategy of inquiry for this study, involving qualitative document analysis research for the literature review and integration of results, and a quantitative method for examining the research questions. Document analysis is relevant and suited to this study, which discusses the different competitive strategies that airlines might adopt so as to build up resilience and to effectively manage situations of sudden crises, involving a historical design that looks at data about past crises, namely the 2008 GFC. Secondary information and data sources comprising qualitative and quantitative studies are used. Information is gathered from official public domain websites and the published reports of airlines, airline alliances and other reputable organizations. Operational and financial data is collected for 61 international network airlines, approximately 23% of membership of International Air Transport Association (IATA). The selected airlines come from each of the six global regions and the three global strategic alliances, including airlines independent of alliances, but excluding low cost airlines. Overall, airlines from all regions have common strategies that influence their performance. These include cost reduction strategies through reduction in staff costs, the establishment of subsidiary companies in order to benefit from economies of scale and scope, and the adoption of network expansion strategies for sustainability, through serving more destinations, large fleet size, capacity and strategic alliance membership. The research also revealed that airlines from different regions tended to adopt differently focused strategies for building resilience and to become sustainable. This research provides a significant contribution to good management of the aviation industry. The importance of a financially healthy airline industry for the global economic development and growth is unquestionable today and into the foreseeable future, clearly meriting scholarly attention. An understanding of how airlines performed during and post-2008’s GFC can provide a basis for insights into what companies might consider to prepare themselves as best as they can in going forward and perhaps learn from the past experiences.
- Subject
- competitive strategies; resilience; airline industry; global financial crisis
- Identifier
- http://hdl.handle.net/1959.13/1320422
- Identifier
- uon:24149
- Rights
- Copyright 2016 Warakorn Pom Komutanont
- Language
- eng
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | ATTACHMENT01 | Thesis | 8 MB | Adobe Acrobat PDF | View Details Download | ||
| View Details Download | ATTACHMENT02 | Abstract | 84 KB | Adobe Acrobat PDF | View Details Download |