International Strategic Alliances in the Aviation Industry

This report discusses the significance of international strategic alliances in the aviation industry, focusing on British Airways and its partnerships. It explores the benefits of alliances in improving services, expanding market reach, and achieving organizational goals. The report also highlights the challenges and complexities involved in implementing strategic alliances.

Business
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Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
LITERATURE REVIEW................................................................................................................4
Literature related to the use of international strategic alliances in foreign market expansion.4
Analysis and Discussion.........................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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EXECUTIVE SUMMARY
Regular challenges generate problems for international airlines to generate better and
expected results and also the value and level of services is reduced. The alliance related with
global airlines link towards formulation of better and effective factors through which United
Kingdom service is improved through implement of strategy for completion of operations in
most visible manner. The alliance member provides different benefits to the companies and it
results both companies or partners are able to accomplish their goals and objectives. International
strategic alliances are also complex to implement and this is because management indicates
towards formulation of economy related alliances and they refer towards accomplish of
ownership and decision-making between two organisations. Joint venture is an appropriate
strategy for two organisations that improve market size and it formulate on basis of mutual
agreements or contract and it is submitted by the organisations under government rules and
company act.
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INTRODUCTION
The term international organisations explicated as the situations in which business
performs production and distribution activities across local boundaries of a country. In simple
terms, international business encompasses the full range of exchange in cross-border activities,
product and service exchange and interchange of resource between more than two nations.
British Airways is selected as an organisation for this report and it is a flag carrier airline of
United Kingdom. The headquarters of British Airways is based on London, UK. Moreover,
report highlights on international alliance within airline sector and also on benefits of
international alliance to accomplish objective of both company and partner. British Airways was
established in the 1974 under the guidance of British government (Boddewyn, 2016).
Formulation of British Airways was done for align the British overseas corporation and British
European airways. British airways were the member of oneworld alliance that was launched in
1999 by the American airlines. The prime focus of alliance is to offer high or peak value in their
service. Also, this aids towards formulating better connection with more than 1000 countries. In
the last, strategic alliance of British Airways currently operates four joint business agreements
and it enable organisation to give more choice to customers.
LITERATURE REVIEW
Literature related to the use of international strategic alliances in foreign market expansion.
According to the Jose G. Vargas-Hemandez, 2014 International strategic alliance is
explained as the collaborative arrangement between more than two organisations and there
headquarters are situated in different countries. The partnership of firms dependence on the
formation of strategic alliances and their relationship which are relatively enduring for
organisations. Within foreign market strategic alliance can be divided into multiple dimensions.
From the perspective of UK airline industry, with formulation of effective strategic alliance
management consider towards engage of foreign partner to achieve high benefits (Boso, Hultman
and Oghazi, 2016). ISA (International strategic alliance) generate international company
cooperative arrangements. Moreover, according to the current market situations this considered
towards formulation of better cooperation between firms that are independent. International
strategic alliance drives about all theoretical perspective and it includes about all transactions
that are minimal for short-term cooperation. It results economic is interchange by organisation
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through exchanging the number of products. Moreover, potential significance of airline or
aviation industry increases the company position by completion of task according to potential
significance of organisation. Moreover, ISA generate traditional ventures and it helps countries
to complete task in a decided manner. More than two partners are formulated for managing task
and it helps for generating and managing work in an organised manner (Gomes, Carneiro and
Dib, 2018). Strategic formulation results to create longer results by incorporating the firms with
each other and it explain agreements are formulated under the guidance of top authorities and
board of directors. Dependent joint venture, dominant parent ventures and split-control venture
helps to share management ventures in proper manner.
From the perspective of Tom Boon, 2019 Minority equity alliance is similar to non-equity
and this explains about all those functions which are adopted by the one minority equity position
within number of orders. This determines passive minority equity alliance as well as multiple-
activity minority alliance generates to make long agreements between partners for managing task
in cooperate manner. Non-equity alliances generate agreement but they not formulates new
organisation and also not exchange the equity with each other. On the other side, when an
organisation explore new opportunities and this prefer all alliance formulate agreement to prefer
and manage equity alliance to maintain financial flexibility. All minority alliance helps in
completion of task with more efficiency specifically, with generating or exploring new
opportunities. This also prefers that all object related alliance varies from different phases like
national partners can work with same rules. But, international organisations perform work with
motive of managing task and value-added chain agreement. Research and Development
Department perform an important role and it helps in managing better results through understand
overall policies related with business and foreign expansion (Hollender, Zapkau and Schwens,
2017). In the context of aviation industry choice of partners is also selected by the research
department through match company goals with partner companies. International strategic
alliance performs an important role to develop the compliant or complementary results with firm.
Choice of country generate oriented results by emerging market and it also develop better results
by marketing different views to generate better investment alliances.
Temel Caner Ustaomer, 2015 define, Internationalisation process is defined according to
different ways and this is because there are various methods approaches related with studying
enterprises. This also define firms decide strategic alliance according to the market conditions
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and government rules. From perspective of airline industry a few number of organisations are
engaged in industry. There are internationalisation strategies that includes, exporting, alliances
and foreign direct investment. Mutually, all such strategies pursue better results and it explains
reasons related with business helps an organisation for generate mutual agreements in an
organisation. This consider that strategies are focused towards pursue of better results with
develop of an internationalisation process (Kodongo, Natto and Biekpe, 2015). Services offered
by organisation work with more efficiency but both organisation must mutually agree on their
policies. On the other side, all reasons such as expansion of business, enter in global market, etc.
relates with internationalisation process of strategic alliance consider company which perform
operations or business in service industry generate connection between the goal and mode. This
is because if organisation only engaged in trading than the enterprise generates domestic
production to manage work in foreign market. For this management generate external
arrangements and joint venture with third parties. Similarly, when service industry is considered
toward expansion of markets than they are focused for implementing strategy related with
foreign direct investments. This aids to perform all work in an organised manner by selecting the
right number of alliances to complete task with better decision-making.
Motivation of global vital partnerships has been talked about broadly in the government
supervision. The main inspiration is to get to assets or information that joining forces firms in
any case would not approach. As a global vital collusion is shaped between firms from various
nations, the significant job of institutional and social contrasts between joining forces firms has
been underscored (Löfgren, 2014). Reports that, for unfamiliar created market firms, the run of
the mill inspirations are, through nearby accomplices, to access neighbourhood markets,
information about neighbourhood institutional conditions (counting society) and nearby clients,
associations with neighbourhood government, and authenticity. For neighbourhood developing
business sector firms, the inspirations incorporate gets to cutting edge administrative and
innovative information, monetary assets, and freedoms to find out about global business sectors.
This show that have nations' lawful climate can influence firms' accomplice segment for their
global vital collusions and proposes that organizations' assessment of planned accomplices'
social and mechanical worth really shifts with their public institutional designs on corporatism.
The subsequent inspiration is to accomplish the economy of scale by taking part in level
coalitions as well as getting input supplies; the third inspiration is to share dangers and costs
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implied in global venture into new or potentially insecure geographic business sectors. One of
the early articles expressly talking about the rivalry ramifications of global key partnerships
through scaling; stresses comparative advantages of scaling and hazard sharing through
worldwide vital unions. The fourth inspiration is to shape the rivalry scene in the worldwide
market. Contend that cutthroat power between two opponent worldwide endeavours at the
worldwide level can really influence the probability of them framing global key unions in any
host country. Firms regularly have simultaneous inspirations while tightening global key
collusions as a component of their worldwide development/activity. Contingent upon the
inspiration, accomplice choice rules for global key unions shift (Park and Chung, 2019). The
current examination stresses the significance of reciprocal assets for accomplice determination;
the exemplary article recommends the accentuation of various accomplice choice standards is
dependent upon firm-explicit and nearby market factors.
The political and market conditions of UK are changing with rapid speed and this define
there are various factors relates with all organisation and industry. Most of them face problems
for completion of all organisational tasks in an organised manner. The airline industry also
identified changes that are mandatory to amendment in the organisation. This also defines
various factors that relates with business factors are considered for performing all task in a
coordinated manner. International strategic foreign alliance defines about different factors and
they work for completion of task in a well-trust manner. One of the most common factors which
is easy to understand by each individual and stakeholder who engage in aviation industry is to
learn and proceed the globalisation action and methods. It governs as an international airline the
demand of service to travel from air traffic is increased and this is happened due to effective
strategic alliances which are formulated among airlines. This results now airlines services are
more affordable. Also, the living standard of the world population is improved so they are able
for pay average amount to airlines with purpose of travelling from one place to another.
Analysis and Discussion
With the analyses of current situations and market conditions this is identified that
International strategic alliances are crucial for an organisation and they relates with current
market conditions (Pattnaik, Singh and Gaur, 2020). This refers most of the business houses are
performing their role in the international market. Globalisation is the current factor that impacts
on current market conditions and it also consider that small business such as local airlines face
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problems to perform their operations at a large level. Therefore, strategic alliance performs an
important role for maximise and improve current market conditions in proper manner through
engage of company operations with international or other organisation. Moreover, to achieve all
goals and objectives in an organised manner management considered towards formulation of
long term strategy and match them with objectives of organisation. This also defines about
methods and objectives by which both of the partnership firms are able to achieve their goals.
From the perspective of aviation or airline industry this is considered that different operational
services such as travel services for passenger, transportation of products, fright and many more
are offered by airlines whether, they are small or large. In the present scenario, persons or
individual also started to travel and perform operations beyond their local boundaries. So
different changes related with management are considered for completion of task in an accurate
manner. It governs current organisation induce and adopt some essential amendments and this
helps for performing work as per current situations (Pehrsson and Pehrsson, 2014). Similarly,
British airways management consider for organise and arrange all tasks in a systematic manner
so both organisations are able to achieve their goals. Similarly, the main motive of business is to
define work towards arrangements of various functions and operations in a selective method.
Another analysis relates with internationalisation process and it define about all three
perspective that supports organisation for maximise the market. The British airway is one of the
largest airline services providers whose planes travel among all over world. So International
strategic alliance believe that by performing all work together more number of partners is
engaged with the organisation across the aviation world. It defines about all task British Airways
and their members generate long term alliance before entering into the market. In the present
scenario, British airways generate world related factors and it explains about all airlines that
affiliates better work together by engage of more number of resources. This result British
airways and partner organisation are able to perform and deliver better value as compare to their
own results. Joint business enables the parties for completion of work according to analyse of
cooperate areas and it aid for complete of task by formulation of networking, pricing and sharing
about overall values. An example of British Airways, alliance relates with Iberia and American
airlines (Perri and Peruffo, 2016). Also, the entered revenue relates with formulation of task and
it explains about all alliance to manage flights between European and North America. The
process and engage of international process considered towards improvement of customer
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convenience system. It also increases the number of values and the task that helps for engage of
significant results and choices because it helps for bring high values in consumer roles.
Moreover, the internationalisation process generates or brings high value through which task are
completed by engage of efficiency and for this management complete their task according to the
decided rules and regulations. Alliance also improves the number of participants and number of
revenue sharing by coordinating all actions (Pongelli, Caroli and Cucculelli, 2016). The positive
factor which is related with British airways is that marketing, advertising, sales and distribution
considered longer results because now they are improved by small organisation. It also team
about better results and it define global network offer better results as the number of choices is
increased for buyer to buy the services.
The analysis of Motivation and discussion also perform an important role and this defines
about all factors through which British airways is able to take advantage of all factors that
improve number of company efficiency. Commercial factors perform an important role and it
considered towards completion of task by adoption of international air transport factors. This
govern that international carrier is improved through adopting the number of task and
agreements through which work are managed in a sustainable manner. Existence of bilateral
contract for managing overall routes is networked towards analysis of all those factors which
motivate staff to perform their role with more efficiency. The competition system generates
better results and this helps for increase in the number of airlines and markets through focusing
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on all areas that work to manage overall services by assigning overall values and it importance
for perform the number of operations in a decided manner specifically, to complete task
according to their approaches. Globalisation is one of the crucial factors and this is related with
privatisation of airlines within Europe. US airlines market considered towards formulation of
task and areas that are used in improve of company efficiency and for this management
maximise the number of routes. But the privatisation generate barrier for organisation to manage
task in proper manner. Therefore, strategic alliance performs an important role and it define that
work is completed through adopting task by adoption of strategic alliances (Santacreu-Vasut,
Shenkar and Shoham, 2017). This implement the results by which the focus of both organisation
is to manage task as per decided projects.
Benefits related with international strategic alliance- Client base is increased by maximising the
number of partners and it also aids towards completion of task through adoption of organisation
skills set. This also refers towards formulation of skills set help British Airways for completion
of task according to analyse of overall characteristic of business. Entrance in New business
territories is another advantage and it results British Airways enter in new geographical
marketplace by partnering with organisation which holds large market area within a particular
territory. With seeking an alliance model this is easy for supplier to engage the skills set and this
helps to gain competitive edge in market. Another major advantage that is related with
International strategic alliance is that this enhances and maximise the income by using all
resources that are compiled for completion of task with include of non-alliance partner.
Challenges related with strategic alliance- On the other side, industry size is increasing
with rapid speed and it results competition among market is too intense (Sinkovics and et. al.,
2014). The example of organisation considered towards adoption of task by which equity stakes
in international airlines. So the challenges related with management and it defines about
company values through which task impact due to the involvement of government among the
organisation. This refers government is focused towards analyse of shareholding of an
international ownership airlines within their domestic holdings airlines. So the challenge of
international alliance is loose of market share in the business. Although the example, British
airways partner those firms that are considered towards implement of complete task according to
country regulations and rules. Airline strategic alliance provides different benefits to passengers
and the prime focus of them relate with scale effects and line effects. DISTRIBUTION OF
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POWER is another challenge due to which British Airways management face problems to
complete the work in a strategic manner. Moreover, different is automation system of company
airlines is another problem or challenge due to which competitive firms are not interested to
enter in strategic alliances.
CONCLUSION
With the analyses of above report it is concluded that international strategic alliance plays
a crucial role to improve the organisation performance and it support management for increase
their market size in international market. Motivation for international strategic alliance depends
on various levels such as to access neighbourhood market area, increase in different sectors of
organisation. The analyses of current market conditions and organisation supports for maximise
operational efficiency with monitoring and controlling routine operations. Joint venture is
recommended as an international strategic alliance to the respective airline organisation because
it completed their task with shared investment. Each company contributes a small or certain
amount of capital to perform project. Another, advantage of Joint venture is to enter in the new
market. British Airways generate there operations from a common head-office for take important
decisions in minimum time-period and also, it take concern of both organisation to complete the
project.
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REFERENCES
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