Global Alliances

In: Business and Management

Submitted By pochos10
Words 2870
Pages 12
Airline Global Alliances

May 11, 2015

Table of Contents

Abstract 3

Introduction of Strategic Alliances in Airline Industry 4

Evaluation of Alliances in Airline Industry 4

Purposes of Alliance between Airlines 5

Disadvantage of Alliance between Airlines 6

Major Airline Alliances in the World 6

Alliances help Airlines to Achieve Comparative Advantage 7

Sky Team Alliance 8

Airline Alliances Enhance the CSR 9

Conclusion 10

References 12

Abstract

Now a days the term global alliance is widely used in every business, but its presence is more significant in airline industry. The strategic alliances in airline industry are global in nature. The past deregulation impacted on strategic alliances positively, industry is freer to set routes and cooperation’s, due to oil price hike the cooperation of airline firms was unavoidable. The alliances help generating traffic between an airline and other parties that are partner. The European alliances were threatened by US alliances; in such scenarios United Airlines and British Airlines came in contract to avoid threats from US airlines. The benefits of strategies alliances are to gain foothold in any country like many airlines did in Europe, while at the same time is to establish global presence. Strategic alliance and mergers of firms acts as marketing technique in airline industry. Many of the European airlines bought stakes from the Asian and US airlines by working on strategic alliances. In the airline industry there are three major alliances: One World, Star Alliance and Sky Team Alliance. The paper concludes that alliances are good to achieve betterment in things; the airlines may have better CSR responsibility and supplier’s behaviour under an alliance, moreover besides cost effectiveness much can achieve due to…...

Similar Documents

Strategic Alliance

... QUESTION 1 Which developments in the global airline industry made possible the creation of S.A. ? The creation of Star Alliance had first been considered to remedee a situation of radical change in the airline industry’s financing sources. For decades, world governments overpassed the consequences of a substantial cash investment in their National Airline. At the time, State incentives to possess its own flag carrier were numerous. It was question of national pride as well as a sign of economic prosperity and power. But times have changed. As State capital investment became the norm rather than the exception, most of the developped countries had been able to run their own Airline, making it the norm. If governments had been burying their hands in the sands up to this point, they suddenly started questioning the worthiness of the investment. By cuting subventions, they would let airline companies face the harsh reality of competition. Both the government-owned carriers and those who had long been operating under a situation of false profitability filled for bankrupcy (i. e. Sabena, Swissair). Other, more solid carriers (i. e. Lufthansa, United, British Airways, American) were left with no other choice but to form alliances. 2   In addition, the phenomenon of deregulation forced leading carriers to take strategic decisions in order to avoid significant loss in market share. With the signature of open skies agreements that liberalized the rules of the......

Words: 3793 - Pages: 16

Alliance in Motion Global, Inc. C24/7

...C24/7 Natura-Ceuticals • a breakthrough product from Nature's Way, and is exclusively distributed by AIM Global in Asia. • It has 16,000 Phyto-nutrients and a very high ORAC value. • approved as Halal by the Muslims and Kosher by the Jews. • It is 100% Excipient Free and the material used for encapsulating Complete is also made from Vegetables (Vegetarian Capsules or V-Caps) • C24/7 Natura-Ceuticals utilizes Nanotechnology , Phyto-Alkatech (for faster absorption) and Syner-tech (for a synergistic boost). C24/7 Contains: All Ingredients of Complete Phyto-Energizer: * 29 Vitamins and Minerals/Trace Minerals * 12 Whole Fruit Juice Blend * 12 Whole Vegatable Juice Blend * 12 Mushrooms * 12 Herbs/Specialty Nutrients * 12 Digestive Enzymes * 10 Essential Fatty Acids * 14 Green Foods/Spirulina Blend * 18 Amino Acids * Citrus Bioflovanoid Complex And 9 more ingredients: * Cysteine Hydrochloride - An amino acid known to detoxify the liver and counter the negative effect of alcohol (such as Liver Damage and Hangover) * Coenzyme Q-10 - Helps fight Cancer and Heart Diseases. Can give humans a longer lifespan * Green Tea EGCG (Epigallocatechin Gallate) - Fights Cancer and Heart Diseases. Prevents Blood Clots * Grape Skin Extract - An excellent source of Resveratrol * Corsitine - A very powerful anti-oxidant * Japanese Knotweed - An excellent source of Resveratrol * Premium Red Wine Extract - Lengthens human Lifespan * Grape Seed Extract -......

Words: 1083 - Pages: 5

Economic of Alliances

...FOM Fachhochschule für Oekonomie & Management Frankfurt University of Applied Sciences Master of Business Administration First Semester Module: Economics Assignment Two: Economics of Alliance Airlines Prof. Dr. Andreas Löhr Author: Boris Olarte Arque Student id: 252547 Frankfurt am Main, 16th July 2010 Table of Contents List of Abbreviations III List of Figures IV 1 Introduction 1 2 Capital Investment 2 2.1. The Airline Market 4 2.2 High Cash Flow 9 3 Liberalization 10 4 Conclusion 11 List of references 14 Internet Sources 14 Further Literature 14 Appendix 15 List of Abbreviations ASM: Available Seat Mile OAG: Official Airline Guide IATA International Air Transportation Association ICAO International Civil Aviation Organization List of Figures Figure 1: Demand Curve….………....…..................................................................3 Figure 2: Supply Curve……………………….………….........................................4 Figure 3: One World airline members ……………………......................................5 Figure 4: SkyTeam airline members ……………………........................................6 Figure 5: Star Alliance Statistics…………………………………………….……..7 Figure 6: Market Share of the Alliances…................................................................8 1 Introduction The airline industry is classified in the third economic sector the same as services because that is what is about. Airlines perform...

Words: 3538 - Pages: 15

Strategic Alliances

...CHAPTER 9. STRATEGIC ALLIANCES 1. One reason why firms might want to pursue a strategic alliance strategy is to exploit economics of scale. Exploiting economies of scale should reduce a firm’ costs. Does this mean that a firm pursuing an alliance strategy to exploit economies of scale is actually pursuing a cost leadership strategy? Why or why not? Yes, firm pursuing an alliance strategy to exploit economies of scale is actually pursuing a cost leadership strategy , according to the transactions Cost Theory, firms enter into strategic alliance in order to reduce their production and management cost. It is shown clearly that the movement collaboration between firms in industry is because there is a need to complement their short comings and weakness and to reinforce the competitive advantage of the collaborating companies and to promote in order to maintain a competitive market. They also need to reduce cost though the cooperation in different tasks and projects, to solve technical or financial shortcomings to be able to conduct the main task or project and to ensure large access to the market, export or enter in a new sector on which large investments are required. HAL dari internet 2. Consider the joint venture between GM and Toyota. General Motors have been interested in learning how to profitably manufacture high-quality small cars from its alliance with Toyota. Toyota has been interested in gaining access to GM’s U.S. distribution network and in reducing the......

Words: 1002 - Pages: 5

Building Global Alliances

...International Journal of Global Business, 7 (1), 77-94, June 2014 77 Building Global Strategic Alliances and Coalitions for Foreign Investment Opportunities Dr. Balarabe A. Jakada Department of Business Administration and Entrepreneurship Bayero University, Kano, Nigeria. bajakada@yahoo.com Abstract Global strategic alliance and coalition is a diffuse way of effective combination of strengths of companies aiming at entering new markets, exploring new technologies, bypassing government entry restrictions and to learn quickly from the leading firm in the partnership, all in an effort to exploit foreign investment opportunities. Strategic alliances are however, not easy to develop and support. They often fail because of technical errors made by management of member firms. To make it a success, a strong and efficient alliance agreement has to be in place to enable companies to gain in markets that would otherwise be uneconomical. Building alliances requires considerable time and energy from all parties involved with a detailed plan, expectations, limitations and scopes, and the likely benefits drivable from the project. Alliances take a number of forms and go by various labels. Alliances may be contracts, limited partnerships, general partnerships, or corporate joint ventures, or may take less formal forms, such as a referral network. The paper is aimed at exploring and educating prospective and allied businesses or firms the need and significance of across border coalition,......

Words: 7937 - Pages: 32

Alliance

...and services or working in bringing people from the other country into your country as tourists.  Thus it becomes advantageous to for strategic alliances with people and businesses in all the countries in which you hope to operate.  What is a strategic alliance? A strategic alliance is a merging or working together of businesses for mutual gain.  It goes all the way back in history to when government started signing treaties to protect their borders and interests, a good example is during World War 2 when there were the Allied powers and the Axis Powers.  Those were military strategic alliances for getting rid of the opposition and strengthening your borders while decreasing your expenses.  When conducting business across borders a strategic alliance can help open international markets.  How? One way is that the businesses with which you ally yourself should better understand the people in the country, and that will make it easier to sell your product and protect your interests.  For instance names and words have power, especially in marketing.  A lawyer advertising in England would never say something like "Let us help you get out of that bum rap" as bum there means Ass"  Selling products can mean you need to shift names and phrases, a strategic alliance will help with this. Your new partner, and that is really what a strategic alliance is, developing beneficial partnerships, will have connections and understand the legal ins and outs.  This can be a big advantage! ......

Words: 393 - Pages: 2

Fundamental Anaylysis of Alliance Global Group

...FUNDAMENTAL ANAYLYSIS OF ALLIANCE GLOBAL GROUP, INC. ____________________________________ Submitted to: Prof. Cruz ____________________________________ Submitted by: REMORIN, Dominique D. ____________________________________ March 2015 Table of Contents A. Economic Analysis * Philippines’ economic forecast……………………………………………………..1 B.Industry Analysis - Background - Porter’s Five Forces of Competitive Strategy C. Company Analysis - Company Background - Board of Directors - Low cost or Differentiation? - SWOT Analysis - Financial Statement D.Recommendation and Conclusion - Conclusions - Recommendations - Buy or do not buy? E. References Economic Analysis Philippines’ Economic Forecast In the Philippines, recovery in exports and expanded private consumption and investment generated gross domestic product (GDP) growth of 6.0% in the first half of 2014. Government expenditure decelerated sharply and public construction fell, partly reflecting cautious spending by government agencies amid concerns over the misuse of government funds.Slightly stronger economic growth is projected through the rest of this year and in 2015 on expectations that post-typhoon reconstruction accelerates, government fiscal disbursement improves, and exports benefit from brighter prospects in the major......

Words: 1575 - Pages: 7

Hp Alliance

...The HP-Cisco Alliance In early 1997, the first HP-Cisco alliance was first formed. HP was Cisco’s first publicly announced strategic alliance partner. The agreement between the two companies focused on technology collaboration, product integration, professional services, and customer support. The first contract lasted until February of 2002, when both HP and Cisco decided to further formalize and expand their alliance by signing a new contract. Shortly afterwards in March of 2002, HP merged with Compaq Computer, Inc. This temporarily slowed alliance activities between HP and Cisco. The “new HP” needed a few months to reorganize with the addition of Compaq. A few months later, in August of 2002, the alliance activities began to move forward once again. The alliance was a win-win for both HP and Cisco. Both companies were widely respected global technology companies. At the time, Bill Russell and Jim Heal of HP and Steven Steinhilber and Mike Thomas of Cisco Systems were at the forefront of the management teams responsible for forging a stronger, more formal alliance between the two companies. The original mission of the alliance formed in 1997 was to provide co-marketing enterprise networking solutions to HP and Cisco’s join customers. Through this alliance, HP and Cisco developed and sold four joint solutions – IP telephony, service and network management, mobility/wireless, and Utility Data Center. All four of these ventures were successful. Revenues......

Words: 1193 - Pages: 5

Managing Alliance

...1. A strategic alliance is not only confined by raw materials and components but it also deal with technology and management approach. For example, company “A” manufactures a product in Bangladesh and desire to sell their products in the United States. And company “B” has worldwide distribution channel and want to expand the same product that the company “A” made. That means companies “A” and “B” establish together a strategic alliance to expand their production. Strategic alliance known as two and more companies join the work force, resources, and core competences to achieve a common objective. Firms set up a common insight, collaboration among the firms such as complementary technologies, risk sharing, cost reduction, and market development through a strategic alliance to produce better outcomes. 2. As stated by this article only 50% is the rate of success of joint ventures. Moreover, authors mentioned that “according to a recent study by McKinsey & Company, which found that only half of all joint ventures yield returns to each partner above the cost of capital.” The explanation of collapse of alliance is mention as follow. First, the most significant explanation is that the alliance manager are “traditionally organized and managed.” Diverse business structure and culture trigger alteration in manager approach among the company leader. Second, if the operational performance benchmarks turn out to be outdated that will have an effect on top manager’s resolution. For......

Words: 812 - Pages: 4

Therapeutic Alliance

...C O U N S E L L I N G P A P E R * T H E R A P E U T I C A L L I A N C E - Research Paper by KANTHAROUP Term. Establishing an efficient relationship between client and counsellor is one of the key aspect in counselling. Every therapeutic session starts with the process of building up a therapeutic alliance. Bob Shebib defines the therapeutic alliance as a time limited period of consultation between a counsellor and one or more clients for assisting the client in achieving a defined goal (Shebib, 2014). However, to achieve successful results, a partnership that primarily focuses on the clients’ needs and goals is required. The therapist must be eager to help the clients with care and compassion while the patient also need to perceive and understand their own mental state. Interactions between both sides should be done with trust and respect to ensure the safest environment possible for the client. As therapeutic alliance is the heart in counselling processes, it is significant to acknowledge some of the key components that leads to a successful therapeutic session. This paper will demonstrate how a successful relationship is constructed. It will first explore the emotional and affective component highlighting the bonding of both therapists and client. Agreement on goals between both sides be examined in a detailed method. To finalize the paper, numerous principles will be shown to illustrate the ways therapists should cope if a therapeutic rupture interferes. ...

Words: 2334 - Pages: 10

Managing Alliance

...for forging strategic alliance Despite the inherent risks, it is often necessary for firms, because of their lack of necessary resources, to forge strategic alliances with other firms for acquiring complementary skills. Before establishing a formal relationship with other enterprises, an enterprise must realize its motivations and priorities. four motivations with different orientations: 1. Strategy-oriented. Enterprises forge alliance for strategic objectives such as maximizing the profit and possible cooperation. Tactic practices are increasing the market share, stepping up the pace of employee exchange, shortening the time for technological development and new products to enter market, and preventing vicious competition from competitors. 2. Cost-oriented. Another motivation behind forging an alliance is to reduce cost. To share the cost for developing a technology and avoid duplicating investment, to reduce the cost for searching the necessary information, to reduce the risk of R&D, and to cooperate with governmental organizations for tax policy are the common considerations for this motivation. 3. Resource-oriented. The availability of critical resources is the third motivation for establishing an alliance. To exchange the critical equipment and technologies with the alliance partner for reducing the risk of R&D, and to make use of the marketing channels of the partner will bring benefits to the participants of the alliance. 4.......

Words: 1107 - Pages: 5

The Nokia-Microsoft Alliance in the Global Smartphone Industry (Circa 2011)

...The Nokia-Microsoft strategic alliance was announced in early 2011 to cooperate in the development of smartphones. The Wall Street Journal wrote: "Nokia calls Microsoft for help." 1 The Financial Times observed: "Elop jumps into the arms of former boss."2 The alliance was specifically initiated by Stephen Elop, an ex-Microsoft executive who had worked with Steve Ballmer, CEO of Microsoft. No wonder Nokia hired Elop to become its CEO in 2010. This was a calculated move by Nokia to grow in an industry that carried good prospects for the future. In addition, Elop's expertise was in the software sector, where Nokia wanted to venture into the future. Both companies needed a partner to expand in an industry that was in a growth mode. Besides this, Nokia was particularly vulnerable because of its losing market share and because Apple's iPhone was growing in the U.S. and global markets. Microsoft was interested in Nokia because of its long-term interest regarding introducing Windows phone technology/software. Since Nokia continued to be a global player in the cell phone industry, it made sense to create a corporate tie-up that aimed at global expansion for both companies. Success of Apple's iPhone was another factor in seeking a long-term alliance in a market that has grown multifold in the global mobile phone market. In 2012, Nokia was the largest manufacturer of mobile phones and other telecom gear in the world with revenues of $55 billion and a market......

Words: 870 - Pages: 4

Strategic Alliances

...Learning in Strategic Alliances Strategic alliances that bring organizations together promise unique opportunities for partners. The reality is often otherwise. Successful strategic alliances manage the partnership, not just the agreement, for collaborative advantage. Above all, they also pay attention to learning priorities in alliance evolution. The resource-based view of the firm that gained currency in the mid-1980s considered that the competitive advantage of an organization rests on the application of the strategic resources1 at its disposal. These days, orthodoxy recognizes the merits of the dynamic, knowledge-based capabilities2 underpinning the positions organizations occupy in a sector or market. Strategic alliances—meaning cooperative agreements between two or more organizations—are a means to enhance strategic resources: self-sufficiency is becoming increasingly difficult in a complex, uncertain, and discontinuous external environment that calls for focus and flexibility in equal measure. Everywhere, organizations are discovering that they cannot “go” it alone and must now often turn to others to survive.3 Preamble 1 2 3 The resources that the theory deemed of strategic importance were valuable, rare, inimitable, and nonsubstitutable (leading to charges of tautology). Importantly, the list of what constitutes a resource was expanded in the 1990s with the refinement that the encompassing construct previously called resources should be segregated......

Words: 4230 - Pages: 17

Types of Alliances

...Joint venture is a strategic alliance in which two or more cooperating companies (the ‘parents’) create a legally independent company in which they invest and from which they share any profits created. Joint ventures allow companies to establish long-term relationships and transfer tacit knowledge. Many joint ventures have 50–50 ownership and control; however, there is no need for an equal partnership. More important that the partners specify certain aspects of the alliance that are most interested in, and the issue of the respective ownership becomes less critical. Equity alliance is an alliance in which one or more partners assume a greater ownership interest in either the alliance or another partner. Is an alliance in which one or more partners assume a greater ownership interest in either the alliance or another partner? Equity investments increase the stake for companies involved in the alliance. Because one partner has invested in the equity of another as part of the alliance, this company is not likely to cheat on the joint-venture partner. If it does, then its equity in the joint venture partner loses value. Equity arrangements are very common among Japanese companies. These cross holdings (the network is called a keiretsu) reduce the chances for one company to cheat the other for short-term gains. By investing in a separate equity, both companies — parents (or alliance partners) — have a financial interest in the joint venture. If one cheats the other, the......

Words: 447 - Pages: 2

Global Alliance Management

...Managing global alliance Name: Professor: Institution: Course: Date: INTRODUCTION The field over which businesses compete is becoming globalized. More firms are becoming multinationals by forming alliances with other firm in other countries. Global competition is now becoming a driving force in organizations throughout the world. Companies are trying to attain competitive advantage, which is easily accessible through international alliance. This form of none equity alliance between firms is increasingly becoming a popular way of doing business on a global scale. Reasons for the occurrence of such alliance have been identified, and include; increased globalization of the world economy brought about by intensified global competition, technology proliferation, and shortening of product lifecycle (Snyder, 1997. pg 45-50). This paper review is about management of the global alliance. MANAGEMENT OF GLOBAL ALLIANCES. "Globalization mandates alliances and makes them unconditionally necessary". (Ohmae,1982 . pg 67). Kenichi Ohmae's point of view, that globalization necessitates alliance as a vehicle for customer oriented value, with four issues facing today’s companies. These issues include; convergence of customers needs technology dispersion and ease of accessibility, importance of fixed cost and danger of equity. Ohmae concludes his argument with the "logic of entente". Here, there are two main points: shift from return on investment to sales return. He......

Words: 1151 - Pages: 5