Formed in 1997, Star Alliance was the first global airline network or constellation. Its aim was to shift the airline industry away from a network of loose bilateral agreements between individual airlines to a more comprehensive network of multilateral agreements between members. A wave of deregulation in the industry in the 1970s and 1980s, which opened free travel between countries, led to the creation of three major global constellations: Star Alliance, Oneworld, and SkyTeam. These networks conferred many benefits on their members, such as cost sharing, loyalty program management, and increased flight load. However, in early 2020, the outbreak of the COVID-19 pandemic had devastating effects on the airline industry. The focus of airline alliances thus shifted from greater connectivity between members to survival in the new global landscape. Would this strategy help airlines survive the COVID-19 crisis? Was group-based competition needed to thrive during a pandemic? Their main concern was whether or not the powerful frameworks they created would be able to help member airlines survive this crisis and regain their pre-pandemic financial stability.
In 2019, the global airline industry generated revenues of over US$880 billion. One year later, as the COVID-19 pandemic raged, demand had fallen to half of its previous level and airlines faced tough challenges. The COVID-19 pandemic was a new and severe crisis. The responses of airlines and their alliances depended on the fundamental economics and structure of the industry. To devise new strategies for their futures, global airlines had to consider the economics and market structure of their industry. Would the fundamental economics of the airline industry be forever affected? Would the industry return to a “new normal” at some point?
Formed in 1997, Star Alliance was the first global airline network or constellation. Its aim was to shift the airline industry away from a network of loose bilateral agreements between individual airlines to a more comprehensive network of multilateral agreements between members. A wave of deregulation in the industry in the 1970s and 1980s, which opened free travel between countries, led to the creation of three major global constellations: Star Alliance, Oneworld, and SkyTeam. These networks conferred many benefits on their members, such as cost sharing, loyalty program management, and increased flight load. However, in early 2020, the outbreak of the COVID-19 pandemic had devastating effects on the airline industry. The focus of airline alliances thus shifted from greater connectivity between members to survival in the new global landscape. Would this strategy help airlines survive the COVID-19 crisis? Was group-based competition needed to thrive during a pandemic? Their main concern was whether or not the powerful frameworks they created would be able to help member airlines survive this crisis and regain their pre-pandemic financial stability.
In 2019, the global airline industry generated revenues of over US$880 billion. One year later, as the COVID-19 pandemic raged, demand had fallen to half of its previous level and airlines faced tough challenges. The COVID-19 pandemic was a new and severe crisis. The responses of airlines and their alliances depended on the fundamental economics and structure of the industry. To devise new strategies for their futures, global airlines had to consider the economics and market structure of their industry. Would the fundamental economics of the airline industry be forever affected? Would the industry return to a "new normal" at some point?
Managing your company's goals in an alliance of 10 or more partners presents particular challenges. Managed properly, the constellation represents a real opportunity to win. Becoming part of an alliance constellation, like the airline industry's Star Alliance, can help a company compete and win. And while a constellation is, in some ways similar to a bi-lateral alliance, it also presents particular challenges. This author discusses these challenges, and some tactics that managers can use to make a constellation - and their own company's strategy - succeed.
Collaboration in business is no longer confined to conventional two-company alliances, such as joint ventures or marketing accords. Today groups of companies are linking together for a common purpose. Consequently, a new form of competition is spreading across global markets: group vs. group. Call them networks, clusters, constellations, or virtual corporations, these groups consist of companies joined together in a larger overarching relationship. The individual companies in any group differ in size and focus, but they fulfill specific roles within their group. Furthermore, within the network or group, companies may be linked to one another through various kinds of alliances, ranging from the formality of an equity joint venture to the informality of a loose collaboration.
Provides an overview of key issues on management of international alliances, including: 1) the logic of collaboration; 2) selecting partners; 3) structuring alliances; 4) alliance networks; 5) alliance dynamics; 6) limits to alliances; and 7) the role of governments.
Describes the evolution of international trade and global competition in computers. Focuses on the role of country factors, government policies, and firm strategies in shifting competitive advantage among regions of the world. Pays special attention to international alliances in this context. Allows integrated analysis of country, government, and firm advantage in high technology competition.
Describes the growth and development of Fuji Xerox, Xerox's joint venture in Japan, and the evolving relationship between Fuji Xerox and Xerox. Focuses on the technological development of Fuji Xerox, and on the contributions that Fuji Xerox has made to Xerox's competitive position worldwide. Presents a number of options for modifying the relationship between Xerox and Fuji Xerox in the future, when the two firms will face increasingly serious competition from global competitors. Fuji Xerox is a $4 billion company and arguably one of the most successful joint ventures ever between an American and Japanese firm. In some ways the evolution of Fuji Xerox has been a microcosm of the broader United States-Japan relationship.
Describes the U.S. market for chemicals following WW II to the present and the attention of the market for global chemical companies. Traces the involvement of Hoechst in this market up to the 1980s when minimum growth has been offered through Hoechst's U.S. subsidiary, American Hoechst and the company is seeking opportunities for expansion through acquisition. Calenese Corp., the tenth largest chemical company in the United States, stands out as the best opportunity. Students will evaluate the strength of the Celanese opportunity in light of Hoechst's position, objectives, and past strategies. May be used with Hoechst and the German Chemical Industry and Hoechst in the United States (B).
Describes the international business of Fusion Systems Corp., a small high technology American firm, and a five-year patent dispute the company has in Japan with Mitsubishi Electric. Also describes key features of the intellectual property systems in Japan and related patenting strategies of firms. Finally, describes Fusion's strategy to seek help from the U.S. government. Ends with a decision of how Fusion should respond to Mitsubishi's latest negotiating moves.
Describes the rise of the German chemical industry and the specific country-based factors that contributed to the rise. Focuses on the German firm Hoechst: its history, its position after World War II, and its subsequent internationalization. Set in 1986 when Hoechst was considering a multi-billion dollar acquisition of Celanese Corp. in the United States. In considering the merits of this acquisition, students will explore the extent to which Hoechst's competitive advantages still stemmed from its home base in Germany, or from other sources. May be used with Hoechst in the United States (A) and (B).
Describes Korea's efforts to improve its technological capability and learn to produce and export high technology goods. The roles of government policy, domestic firms, and foreign firms are explored. Special attention is paid to how technology flows across borders, what impact this has on competitiveness, and how government and firms manage these flows.