International Business Report: Airline Industry and Global Alliances

This report provides an in-depth analysis of international business practices within the airline industry, with a specific focus on global strategic alliances, particularly bilateral alliances. It examines how airlines utilize these alliances for foreign market expansion, increased profitability, and operational efficiency. The report reviews relevant literature, including the different types of strategic alliances such as joint ventures, equity alliances, and non-equity alliances. The analysis delves into the motivations behind forming these alliances, highlighting benefits like quick market access, brand strengthening, and the ability to compete effectively. The report also addresses challenges associated with these alliances, such as coordination difficulties and lack of independence. Furthermore, the report explores alternative market entry tactics, concluding with recommendations for the airline industry's strategic decision-making in a global context.

INTERNATIONAL BUSINESS

Table of Contents
EXECUTIVE SUMMARY.......................................................................................................................3
INTRODUCTION.....................................................................................................................................4
LITERATURE REVIEW.........................................................................................................................4
ANALYSIS AND DISCUSSION..............................................................................................................7
CONCLUSION........................................................................................................................................10
RECOMMENDATIONS........................................................................................................................10
REFERENCES........................................................................................................................................11

EXECUTIVE SUMMARY
International business term refers to procedure of conducting ventures related practices at
global level, by developing plan to enter into specific international market. It also defined as
circumstance where distribution and production of products or services may cross national
borders. The current assignment will be based on airline industry, which has taken initiatives of
expand business by using specific global strategic alliance and that is bilateral. From this study,
it has been determined that by setting clear aims, sector has driven their attention towards
entering into one of those nation or market where it has gained competitive edge, a lot of success
and continuous growth. Furthermore, by considering and developing plan to use alternative
strategic alliance, industry has gotten new ways through which it has grown even better than last
certain years. By taking right decision, management has obtained several benefits in term of
increased profitability, performance and operational efficiency more than other sectors that has
also efforts to grow but unable to due to certain reasons.

INTRODUCTION
International business refers to procedure of trading, which every company conduct into
ethical and systematic manner, in order to sell their items or services across home boundaries and
at transactional scale. It also considered as effective business activity that take a company
beyond their geographical boarders of a nation. This term encompasses transactions that are
carried and devised out across national limits to achieve strategic objectives of organizations, and
individuals. Each transaction may take on several types which often interconnected, with each
other. The current report will be based on airline sector, which known as the most profitable
industries in the UK. By offering quality services and products in term of meal to passengers,
industry may grow continually. The aim of this industry is to become the most accountable
airlines in the world, by offering satisfactory travel services to each passenger, by considering
their needs and health related concerns. The study will explain utilize of international strategic
alliances in foreign market expansion, and motivations behind formation of specific one.
furthermore, the report will clarify advantages and challenges of global strategic alliance to
venture partners and suitable alternative market entry tactic in term of justified suggestions in the
context of airline industry.
LITERATURE REVIEW
In the view of, Shijaku, Larraza-Kintana and Urtasun-Alonso, (2020) international
strategic alliances described as one of those partnership options that a company may use to enter
into foreign market in term of achieving set objectives and goals of business. A global strategic
alliance may usually develop and conduct practices related to it in practical manner when a firm
seek to edge into a new geographic market or related business, especially one where national or
international authority prohibits imports to prevent domestic sector. In the world of business,
there are several approaches in term of alliances exist that varied companies used to reach at
expected outcomes in effective and systematic manner. The best example of an alliance is joint
venture. This approach may use in way of forming partnership between companies with
complementary strengths. It utilizes as a legal contract that allow two firms to perform or work
together within new business market where specific one may already exist. It may enable a firm
to expand their venture within new market place by making interrelation with another company
that already operate under it. It permits both enterprises to combine their key assets in order to

gain strategic benefits. Furthermore, equity strategic alliance is another form of international
alliances that may use in the context of foreign market expansion in term of purchasing equity in
other or each venture purchases similar thing in each other. This method may form when one
company buy above stated item in another enterprise, thus offering partial ownership of their
venture.
On the other hand, Nguyen, (2020) stated that non-equity strategic alliance is the best
example of global strategic alliances that utilize effectively in international market expansion
process, in term of creating agreement by two companies, just to share useful resources without
developing a separate unity or sharing equity. It also included in category of strategic alliances
that bring several advantages for organizations who may utilize it with intention of entering into
the most suitable and productive market.
According to, Drewniak and Karaszewski, (2020) bilateral is one of those strategic
alliance that use in foreign market expansion by most of the companies in the world, through
which they may get opportunity to gain the attention of new customers who may able to grow
venture even better and make it more successful than ever, which is the great thing about it. The
may contribute to open possible and potential routes of services that increasing profitability and
enhancing performance of users. Along with these things, this strategy may also give an
organization chance to give tough competition to their rivals. The author also stated that
multilateral is also a form of strategic alliance that use in regard to expansion purpose in the way
of contract in which allied companies share similar venture objectives with other and coordinate
their profitable services to gain positive outcomes. It helps to achieve greater success and
progress in the future. This method allows gaining competitive edge and expanding venture into
successful market.
According to, Qi and et.al., (2020) formation of bilateral strategic alliance is quite
important for a company, because with this technique it may obtain strategic goals and that is the
main reason behind overall process. It is one of those global alliance approaches that companies
developed and take into their consideration for purpose of spreading ventures worldwide, which
may be their corporate aim. By doing this, they may make their dreams come true in term of
obtaining a lot of success and excellent growth within the world of business. Each company
while operating into specific sector may seek to spread their ventures into the whole world,

which is not that easy for them do so as it may require a lot of hard work, strategic plans and
techniques just like chosen one, that give them chance to achieve set mission and fulfill vision.
With the help of Bilateral alliance, management may open several branches of their ventures in
profitable market in term of making contract between other firms who may already gain
popularity in chosen geographical segment and have wide customer base.
On the other side, Rosca, Agarwal and Brem, (2020) contradict that increasing
profitability and productivity is a challenging activity that each firm may conduct and because of
this they may efforts to choose and develop beneficial strategy. So it can be said that behind
formation of Bilateral global strategic alliance method the main motive of every organization is
to increase their profits margin and generate excellent revenue, which may enable firm of take
better decisions in term of forming effective plans in the future, through that it may obtain
competitive advantages in new as well as existing market where management already establish
business and operate successfully.
As per, de Leaniz, Crespo and López, (2020) increasing customer base is the main reason
behind formation of global strategic alliance, as it gives them excellent opportunity to do so
systematically and effectively. By entering into new market firms may get chance to understand
new need and expectations of customers who tend to purchase their favorite items or services
from well-known and trustworthy brand. furthermore, in order to minimize risk of further
investment, management may also form bilateral alliance and use as require as possible.
Kumar Viswanathan and Neeraj Jha, (2020), highlights key advantages that organizations
may obtain by using global strategic alliances such as Bilateral. For example, it may provide
firms to get quick market access, which is quite challenging task for companies to do so in
effective and systematic manner. By obtaining market access, an organization may get more key
benefits currently and in the future. It may allow them to speed their entry into a new and
profitable market, where several success chances accessible in bulk. Furthermore, it may give the
benefits of exploiting new opportunities in the context of strengthen a brand position in a market
where management may have foothold. As per view of Goh, and Arenas, (2020) brand
strengthen is not an easy work, for manager to complete quickly. It may enable it to give tough
competition to main competitors that has already exist within selected market and obtain

advantages by offering appropriate services according to needs of customers. Firms may take all
these advantages and benefits through each forever successfully and appropriately.
In view of, Tower, Hewett and Saboo, (2021) usage and selection of Bilateral strategic
alliance along with providing benefits, may bring challenges for companies that use it. Lack of
coordination, between two companies is the main challenge that partners may face while using it.
It may lead to create issue to collaborate and coordinate with other partner company, who may
establish in chosen market across home town. Coordination between both firms is quite
beneficial and important, which is not possible for partners to do as there is gap between both of
them on the basis of head offices.
He and et.al., (2020) contradict that lack of independency is the key issue that business
partners may face and deal with it, which is not appropriate for each. It brings several challenges
along with current one that affect existing management practices in negative manner and may
lead to decrease trust that is not so good for brands.
ANALYSIS AND DISCUSSION
International strategic alliance is one of those beneficial and essential elements that help
organizations to achieve their set objectives and key goals (Bakir and et.al., 2020). This element
may have categorized into several forms such as joint venture, equity and non-equity approaches
that use in the context foreign business or market expansion as global strategic alliances. For
example, non-equity alliance is utilizing in regard to two companies that sign a legal agreement
or contractual relation systematically in order to pool their beneficial and helpful resources to
gain profitability, and other things as desire outcomes. Airline industry is the one who may use
this method to enter into specific market or profitable geographical segment, which contribute to
increase its sales even better than other industries from last many years. Chosen sector may take
varied initiatives to enhance the satisfactory level of each passenger, which is the main propriety
and accountability of manager that they fulfill by making a lot of efforts. Through contract,
airlines while operating under this sector may efforts to share their resources with each other
such as cabin crew members, risk and benefits as well equally and ethically, which is important
for them to so as it may cover under terms & conditions that stated in contract.

Furthermore, there are more examples of global strategic alliance accessible in the
corporate world that airline industry may utilize in foreign market expansion procedure, which
drive their concentration towards making relationship with similar sector that may operate under
different nation by using their key assets excellently and may have strength of benefits other
when a company may collaborate with it (Thendu, 2020). For instance, equity strategic alliance
as an example of this term may drive they attention of management within airline industry to
conduct cross equity transactions activity, which is beneficial for business for longer and allow
them take pleasure of this method. Joint venture is similar approach which sector may use and
enter into specific segment or market, where growth chances may exist in bulk.
In additional to, international strategic alliances that utilize in foreign market expansion
as an initiative of several organizations are distinguish into many forms and that are multilateral
or bilateral. These has been utilized in term of agreement in which allied airline industry may
share common aims and coordinate on the basis of sharing their services in new market which
made each sectors capable to obtain desire outcomes (Butigan and Benić, 2017). It may allow
sectors to identify possible routes in the context of passenger services and situations of capability
as well as frequency offer to each passenger. It may consider as collaborative business practices
that permit one company to coordinate with other that may establish in new market.
Airline industry in order to enhance passenger’s satisfaction, improve business
performance, increase profitability and enhance operational effectiveness, may take initiatives to
develop particular and suitable global strategic alliance and that is Bilateral, which allow
administration to achieve its important goals in effective manner. Each above mention intention
may define as an example of motivations that drive efforts of sector towards formation of chosen
strategy that it may utilize currently and in the future to gain more benefits along with existing
(Kiraci, 2019). Bilateral agreement between two or more airlines may allow airline industry to
enter into new and productive market where individual person is able to buy a ticket and travel
all those places where they tend to visit with friends or family members.
In term of motivation, airline industry may efforts to form chosen international strategic
alliance which made it capable to get market access where it may also gain competitive edge
even better in way as compare to existing market. It helps to obtain access of market where
sector in return of its investment may get wide and profitable customer base that have able to

generate a lot of revenue of a brand. It is the main motive of each company or sector to build
strong and wide consumer base, and this reason may drive their efforts towards forming or
developing effective techniques just like chosen one.
It strengthens industry to expand its venture into those geographical segments where
everything is in favor of productivity, increase performance level and profitability. It helps
speeding business procedures continually achieving benefits of scale in global market, which is
an amazing achievement that management may gain by forming Bilateral strategic alliance and
use it for achieving more beneficial outcomes in positive manner.
In additional to this, developing diverse workforce is the most important and prioritize
efforts of airline industry which may consider as motivate of management that drive their
attention towards forming particular strategic alliance like current (Lin and Chen, 2020). Within
new market, sector may get opportunity to hire new or skilled people who may contribute to
increase productivity of industry by using their skills and knowledge level and performing
according to the directions of leaders and manager. By doing this a company that operate under it
may get benefits to diverse workforce at workplace by offering services according to passenger’s
expectations towards a brand.
In term of benefit, by using Bilateral strategic global alliance approach airline industry
partners may obtain profitable market access where they may tend to enter and expand current
business in profitable and productive manner. It permits management and other stakeholders to
get benefit with this method in term of strengthen sector which edge to gain competitive edge in
cost and customers. It may also contribute to improve cash flow that also important and useful
way to get sector successfully for long run. By using approach, sector may give chance to each
company in term of making their venture power. Not only these, but partners also enjoy the low
risk of their investment with other airline in new market which drives its sales at top and foster
brands productivity, much better than past durations. It can be said that Bilateral strategic
alliance may have potential to achieve and provide diverse advantages from a close coordinative
and collaborative between airlines. It may emerge as new revenue sources that reduce risk of
losses and key issues that an airline may individually face.
Not only benefits, Bilateral alliance may consist of disadvantages that create challenges
for airline industry, which its partners face as it may negatively influence their business

productivity and performance level as well as strategic management efforts. With this approach,
stakeholders may lose power to take any decision independently which is the main challenge that
they deal with and efforts to overcome by choosing appropriate solutions. It can be said that in an
any alliance, both companies may loss control over their own resources that create issue to
perform in term of collaboration. This situation partners may face till when they complete
agreement and coordinate with other brand in airline industry. Furthermore, lack of coordination
because of long run distance is another challenge that partner may face and make discussion with
other member to handle it appropriately (ISIK, 2020). Lack of independency and this issue may
lead to decrease operational efficiency of each airline in sector and hinder their performance
level which is not beneficial for long term success.
CONCLUSION
By summing up above discussion, it has been summarized that joint venture, equity and
non-equity as well as multilateral and bilateral are one of those strategic alliances that enabled
airlines to enhanced their business capabilities and successfully entered into beneficial markets
by expanding ventures. By choosing specific approach for foreign market expansion and other
purposes, sector has gained its competitive edges and increased profitability. Furthermore, from
this study it has been determined that airline industry has maximized and builds wide base of
potential and profitable customers as passengers that contributed sector to grow unconditionally
and continually, without taking too much efforts when it not require to do so. It has been
analyzed that by considering suitable alternative market entry tactic as suggestion, industry and
its companies has obtained their desire outcomes and achieved set goals which they tend to
achieve from so long and efforts to reach at expected results. Management has successfully
enhanced satisfaction and experiences extent of each passenger and retained them along with
new forever with purchase of airline tickets that they afford. Strategic alliance method has
strengthened image of airlines and airline industry and generate awareness about their success in
new market or country.
RECOMMENDATIONS
 Along with above benefits in term of advantages and valuable opportunities in the
context of business growth, airline industry and its partners can take alternative options of
international strategic alliance or market entry modes into their considerations.

 It recommended to sector that they can use Joint venture as market entry tactic that is
beneficial for it in each aspect. It can contribute to scale up airlines limited capacity in
term of giving market access. With this method, companies can save their money and
efforts as well in term of making less attempts to promote venture as they may do to by
using popularity and existing marketing sources that a new company may have.
 Furthermore, it can save their time because of existing base of customers that an airline
already has and build successfully by taking actions to satisfy everyone. By choosing and
using alternative market entry option, airline and its airlines in the UK can obtain benefits
while operation out of national limit.
 It can gain the attention of profitable investor who may able to invest their money on
successful and profitable brands or sectors like current one, which may open new ways
for further success.

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