Determinants of strategic alliance formation : a case study of the airline industry in Asia

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Determinants of strategic alliance formation : a case study of the airline industry in Asia

 

Author: Yeung, James
Title: Determinants of strategic alliance formation : a case study of the airline industry in Asia
Year: 2004
Subject: Hong Kong Polytechnic University -- Dissertations
Airlines -- Asia
Strategic alliances (Business) -- Asia -- Case studies
Department: Graduate School of Business
Pages: xiii, 207 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1781048
URI: http://theses.lib.polyu.edu.hk/handle/200/2112
Abstract: In the late 1980s and through out the 1990s strategic alliances became the major tool for growth and globalization. There are many reasons for strategic alliances formation, such as for the extension of markets, for reducing risks in an uncertain business environment because of fast changing technologies, for cost reduction, for ensuring supply of scarce resources and for organization learning. The research first looks at the motivation for alliances, relates them to the airlines industry and see if there are any major differences between different industries. The airline alliance is somewhat different from traditional alliances. Code sharing is the most common form of airline alliance. This includes schedule alignment, through check in and acceptance of each other's frequent flyer programme. Airlines alliances are already popular in the Americas and in Europe. But in Asia, not so many airlines are joining alliances. This research looks at the motivations for some Asian carriers who join alliances and why some do not. Using a multiple case analysis, and a purposive sampling approach, the research looks at four Asian airlines, two belong to the Star Alliance, and one belongs to the One World Partners, while the fourth is non-aligned. While in general, the reasons for joining an alliance largely conform to traditional theories, each airline under research does have some secret agenda for joining an alliance. The research concludes that while joining an alliance is useful, it is not a panacea to all the problems facing the airline industry in the twenty-first century. Airlines must decide on the level of integration relative to their level of commitment. If not, the cost will be high and the results dubious. Airlines must clearly understand competition in multiple markets and the importance of action-response relative to alliance.

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