International Business: Strategic Alliances in Airline Industry Report

This individual academic report delves into the realm of international strategic alliances within the airline industry, focusing on market expansion strategies and competitive advantages. The report examines the motivations behind the development of these alliances, particularly bilateral agreements, and their impact on the airline industry's ability to enter profitable markets. The literature review explores the benefits of such alliances, including increased productivity and market share, while also acknowledging the challenges that may arise. The analysis and discussion section explores the different types of strategic alliances and their application in the context of the UK airline industry, emphasizing the importance of strategic decisions in foreign market expansion. The report further suggests alternative market entry tactics and concludes with recommendations for future strategies. This report provides a detailed overview of the topic, offering insights into the complexities and opportunities associated with international strategic alliances in the airline industry.

INDIVIDUAL ACADEMIC REPORT

Table of Contents
INTRODUCTION.....................................................................................................................................3
LITERATURE REVIEW.........................................................................................................................3
ANALYSIS AND DISCUSSION..............................................................................................................6
RECOMMENDATION.............................................................................................................................9
CONCLUSION..........................................................................................................................................9
REFERENCES........................................................................................................................................11

Executive summary-
In the world of business, the competition between each company is increased day by day
as they tent to obtain competitive edge. In term of strategies, they develop plan to enter into
foreign market. The current study is based on Airline industry that has utilized bilateral
international strategic alliance strategy or approach which made it capable to enter into profitable
nations where it has increased productivity and gained key advantages. Furthermore, from
current report it has been determined that by developing effective methods and considering
alternative options, management has overcome the challenges of global strategic alliance.

INTRODUCTION
International strategic alliance defined as effective collaborative contract that made
between companies main headquarter in varied nations. It helps to engage a firm into more than
one activity, which made it able to grow their business successfully and continually. It is one of
the most beneficial ways that organizations adopt and use as longer as they tend, in order to
increase profitability and gain market share. By using appropriate global strategic alliance, a firm
obtain several benefits. The current assignment will be based on Airline industry, which falls
under the category of top profitable and progressive industries in the world. Chosen sector put
several attempts to make their passengers happy and enhance their satisfactory level even better
than last visit or travel. It contributes to do so in term of providing better aviation services and
offering meals according to taste preferences and health concerns. It supports individual to reach
at one location to another destination. The study will explain use of and motivations behind
development of international strategic alliances in foreign market expansion. Furthermore, lastly
the report will justify challenges and advantages of global strategic alliance to partners included.
It will clarify appropriate alternative market entry tactic in suggestions.
LITERATURE REVIEW
According to, PARK, (2020) foreign market expansion is the biggest and most important
decisions that made by varied companies. It is a kind of procedure which drive the attention of
firms towards taking their ventures into new market, where they may earn a lot of profits and
gain unexpected advantages. In order to do so, international strategic alliances may utilize by
organizations, which is quite beneficial for them. It may successfully establish when individual
brand tends to benefit into a similar business or new geographic market, especially one where
national and local authority prohibits imports to prevent domestic sector. Each alliance may
usually form between two or more organizations which base on their home nations for a definite
duration of time. It may be distinguishing into numerous dimensions such as collaboration
activities, licensing, management service, joint venture, manufacturing and franchising. These
are the most common ways that a firm may select while taking decision and use in the context of
abroad expansion process and activity. In term of international alliance above tactics used by
companies in appropriate and systematic manners, for which management may take varied
initiatives such as proper planning, execution, managing and controlling plans.

Guo and et.al., (2020) stated that international strategic alliances refer to a form of
collaborative contract between companies, through which they may obtain key benefits recently
and further. It may categorize in term of bilateral and multilateral. These two tactics may use to
expand business into profitable market, where customers tend to purchase quality services and
products which may help to fulfil their needs and expectations. Bilateral agreement may permit
firms to enter into specific nations or marketers where they may obtain excellent benefits. It is a
step of formal relationship or contract by which a company make a legal deal with regard to
assure success. While multilateral is defined as a single collaborative contracts that may
encompasses three or more partner’s companies. It may resource races opposed to understanding
races that characterizing varied technology alliances. Multilateral alliance may use in term of
lensing network closure and structural holes. A structural hole may see chain ties as chance that
connect together separate network segments through weak ties. It can be said that in global
relations, multilateralism also refers to an alliance of varied firms pursuing a common aim. Just
like other international strategic alliances, it also provides benefits to users.
In the view of, Meurs and et.al., (2020) without forming an effective strategy,
organizations may not be able to take action regarding objective which they want to achieve.
There are several reasons exist behind formation of global strategic alliance. For example, many
brands develop this strategy, in order to enhance their organizational abilities and strengths
which made it capable to gain competitive edges, fulfill the expectations of stakeholders and
increase profitability that is the main priority of companies and due to which they may adopt
variety of effective approaches in term of making modifications or innovating new items or
services through that a company may enter into sustainable market or country. Each enterprise
whether it operate into airline or retail industry, may take initiatives to create and then use
international strategic alliance such as bilateral. Behind formation of any strategy, there is a main
motive exist that drive the efforts and focus of enterprises towards conducting it into practical
manner and obtain long term benefits from these. Bilateral strategic alliance may allow firms to
enhance their business competencies even better than last few years and successfully earn a lot of
profits in term of market share, revenue and branch openings.
On the other side, Drewniak and Karaszewski, (2020) contradict that companies in recent
time take initiatives enhance their customer’s satisfaction and build strong brand images, which

is important to enhance for any company. For this purpose, they may choose Bilateral strategy as
international strategic alliance, through which management may obtain several advantages such
as profits margin, great popularity and potential customers who may tend to buy quality and
good quantity items or services from their favorite brands.
According to, Jafari-Sadeghi, (2020) business expansion is the main motive of varied
organization whether it is small or large. Just because of this reason, they may take initiative to
form and utilize bilateral agreements in term of global strategic alliance instead of using other
such as joint venture, franchising, business acquisition, etc. By using this approach, companies
may enter into their chosen market, where success and growth chances are even better than
earlier target markets within home nation. With the help of this method, management not may
only grab chance to enhance their consumer base, but also get opportunity to hire skilled people
that contribute to increase productivity and profitability so what firms may seek to get. It is one
of the simplest forms of approaches that may provide unexpected outcomes.
In opinion of, Aggarwal, (2020) international strategic alliance such as Bilateral may
provide several benefits to organizations and their key stakeholders as well, in term of providing
double profits and giving chance to maximize customer base. It may permit, a firm to gain the
attention of profitable investors who are interesting to invest their money in beneficial and
successful projects which in return may pay more than their investment. It allows them to trade
between two productive and developed nations, where success criteria are even better. In term of
key advantages, Bilateral global strategic alliance method may contribute to reduce trade barriers
such as import quotas. By choosing this strategy, partners may get benefits in term of
understanding new trend which it may adopt to satisfy customers whether it is existing or new.
The best part of this tactic is that it helps to enter into new geographic market area with a partner
that understand ropes in a particular boundary. It may help to create a new source of additional
profits which is quite important and beneficial for those who may use Bilateral technique. It is
one of those advantages that firms and their venture partners obtain.
While, Choi, (2020) stated that international strategic alliances such as Bilateral along
with providing important and useful benefits may bring certain challenges that business partners
may face, which put negative impact on their expectations, practices and further decisions
regarding business expansion or foreign market entry. Selection of wrong partner is the biggest

challenge that may damage brands image and affect their venture plans. Just because of this
issue, stakeholders may face terrible circumstance for which they take initiative to find out
appropriate method or way. According to, Galera‐Zarco and et.al., (2020) lack of independence
is the main challenge that business partners by using Bilateral global strategic alliance face and
deal with it for long run, when they do not find out effective approach. Without having freedom,
no one may perform productively and continually work with a brand or become their partners.
While collaborating with a company and working with it, individual person expects to take some
decisions, when it no so then they may do not prefer to retain with it. It may affect whole
productivity and profitability as well as organizational image in market. Independency is the
element of success and growth of ventures and partners.
ANALYSIS AND DISCUSSION
Airline industry in the UK is known as the third biggest aviation network and considered
as second largest aerospace production sector. In order to grow venture even better, its
management may take strategic decision in term of foreign market expansion and just because of
this reason they may choose suitable international strategic alliances that exist in the world of
corporate and utilized by many firms or individuals (Brinster and Tykvová, 2021). For example,
the most commonly utilized alliance is joint venture that establish when parent firms may
develop a new child enterprise (Zhou and et.al., 2020). It is a kind of business contract that use in
legal manner and follow as similar as that. Furthermore, equity strategic alliance is another form
of approach that create when one firm buy some equity share of other brand. When individual
firm purchase 40% of resource in other organization, it may drive their efforts to form equity
strategic alliance. Non-equity strategic alliance also included in category of global alliances that
allow companies to take initiative to enter into foreign market, where several advantages
accessible. This type of method, drive the attention of two or more enterprises to sign contractual
connection or contract to pool their key assets and capabilities together. Each global strategic
alliance may move an organization towards developing important judgment and that is
expansion. It may encompass certain stages and activities such as market entry tactic including
significant choices in the context of primary markets of concentration, and determination of
potential customers.

For purpose of global expansion, Bilateral and multilateral strategies may use by
numerous firms which made them capable to enter into profitable and successful market in new
nation, where each factor may in favor of their success and continues progress (Zielinski, 2020).
Bilateral contract is a wide term that may utilize to cover contracts between two parties for
conducting similar practices together. While Multilateral is one of those ways that help three or
more organizations to perform together for gaining profits and performing successfully and
ethically (Göv, 2020). It is the best technique to handle negative impact of factors that may
emerge and will occur in the future suddenly just like COVID-19. It supports to grab valuable
advantages and strengthen firms within airline industry to satisfy customers and retain them
forever, which is quite significant for management to do so.
Behind formation of Bilateral there may varied motivations in term of reasons exist, for
example airline industry may develop this technique to gain competitive edge, which is one of
the most common purposes for developing and using it in term of legal agreement between two
or more similar companies or sectors like chosen one to enter into foreign market that may
provide benefits to both partners in form of achieving their strategic aims (Zhang and et.al.,
2020). It is quite essential to obtain this kind of objective which several sector may tend to do so
in effective and appropriate manner. Gaining competitive edges and become a competitor within
the world of business is not so easy task for airline industry as it may attempt a lot of hard work
and conduct practices after developing plan in which formation of specific international strategic
alliance may include and that is Bilateral. In additional to this, strengthening brand abilities and
increasing operational efficiencies is an another motivation in the context of formation of chosen
tactic, because is bring these benefits for user who may grab by behaving and conducting
practices ethically, without breaking rules and policies that may covers under agreement
(Dzhengiz, 2020). It is quite difficult and challenge for airline industry to build strong venture
image in the market where several travel lovers may exist and tend to begin their travelling
journey by taking excellent air travel experience, which is possible when airline may establish
and run its business into these kinds of market.
In term of motivations, profitability maximization is the key purpose of sector for which
it may take initiative to develop effective and beneficial strategies like chosen one that in turn
may increase revenue and sales much better than the last year (Paul, 2020). With this technique

firm may improve their business performance and reach at those people who may seek to get its
services, but unable to do so because of no existence of airline sector within it. The profits
margin of any sector may increase when its management may satisfy target market and fulfill
their expectations. Furthermore, foreign expansion is one of those ways that allow airline
industry to do this and obtain excellent advantages for which it may form selected international
strategic alliance. Bilateral as strategic alliance enables manager and other stakeholders to enter
into chosen market which may in return maximize market penetration among other sectors and
enhance competitiveness in global market, which is essential and beneficial in term of improving
operational effectiveness and organizational performance (Seo, 2020). Strategic alliance is
formed to gain market share and generate more than other industries. This main motive drive
efforts of airline industry towards global business expansion which allow them to gain
continuous benefits like building strong and productive workforce by hiring new candidates from
pool of talent within new nation.
International strategic alliance like Bilateral may permit airline industry and its partners
in term of stakeholders to take pleasure of using it in the way to developing plan to enter into
new country. This approach in return cater unpredicted advantages to each stakeholder for
example, they may gain the attention of more profitable investors. These investors are capable to
invest in successful projects or suitable sector after considering their continuous growth and
success within market place just like airline industry may have. Chosen sector by forming and
utilizing specific global alliance method among existing may successfully gain a new passenger
base who may enable it to grow even better in term of increasing sales, profits margin and
building excellent image of sector. Partners may enjoy the pleasure of growing venture in term of
obtaining key benefits after forming a Bilateral alliance and using it ethical manner. The new
business territory may give them chance, to level up their services and qualities according to
taste and preferences of customers.
Along with taking pleasure regarding formation of chosen global strategic alliance, key
stakeholders of airline industry may face varied challenges which may hamper growth and
success of business. The most common challenge that every industry may face when they enter
into foreign market and perform with other partner brands is lack of independency (Taamneh and
Alqdha, 2020). It is the valuable component that contribute to retain potential and productive

individual who may support to enhance sector and organizations productivity as well as
profitability that operate within chosen industry (Amankwah-Amoah, 2020). Wrong partner
selection is another issue that airline sector may face and it may lead to decrease its performance
level. It may also negatively influence strategic management activities and practices in term of
increasing risk related to data privacy.
RECOMMENDATION
 It recent time, within the world of airline competition between each organization may
increase continually, which drive their attention towards developing effective techniques
and using the best approaches. Some of them may take initiatives to grow their ventures,
for which specific and suitable market entry tactic selection is required (Cohen, 2020).
Along with current attempts, airline industry and its companies can choose effective
market entry mode or strategy. It recommended to Airline industry in the UK to accept
and use Joint venture entry tactic, because this made them capable to enter into the most
profitable market to expand venture through existing company that may already had
builds its strong brand image in the market, to get profitable more than other aviation
brands in airline industry.
 It is one of the most suitable market entry technique that many organizations have been
utilized to obtain several advantages and tend to get more in the future. Equity and non-
equity and other as strategic alliances exist in the market, but still chose one it appropriate
because it consist less risk of stakeholder’s perspective clashes, which is the most
common issue that an organization and other members may face while being taking
decision regarding anything relate to business.
CONCLUSION
From above discussion, it has been concluded that international strategic alliances have
contributed companies to enter into foreign market place in term of expanding ventures that in
returned has increased profitability and productivity. By using specific global strategic alliance
such as Bilateral, users have successfully entered into profitable market. Furthermore, it has been
identified that through chosen approach airline sector has gained competitive advantages as it
helped to enhanced its profits margin and generated greater revenue more than earlier process of
business success. It has strengthened its capabilities to maximize customer base and enhanced

their satisfaction level that is important to enhance for each brand that has operated under airline
and other industry. Moreover, by summing up above analysis, it has been identified that by
obtaining valuable benefits, management has grown even better in term of taking strategic
decisions that are profitable for their business partners. By taking appropriate methods and
techniques organizations within airline industry has overcome the challenges that is essential do
to so. It helped sector and companies that operated under it has achieved strategic objectives and
set goals. It has successfully and appropriately expanded venture into new markets that open new
ways for it regarding unpredicted success.

REFERENCES
Book and Journals
Aggarwal, V.A., 2020. Resource congestion in alliance networks: How a firm's partners’ partners
influence the benefits of collaboration. Strategic Management Journal. 41(4). pp.627-655.
Amankwah-Amoah, J., 2020. Stepping up and stepping out of COVID-19: New challenges for
environmental sustainability policies in the global airline industry. Journal of Cleaner
Production, 271, p.123000.
Brinster, L. and Tykvová, T., 2021. Connected VCs and strategic alliances: Evidence from
biotech companies. Journal of Corporate Finance. 66. p.101835.
Choi, J., 2020. Mitigating the challenges of partner knowledge diversity while enhancing
Research & Development (R&D) alliance performance: the role of alliance governance
mechanisms. Journal of Product Innovation Management. 37(1). pp.26-47.
Cohen, M.D., 2020. Political Parties, Australia and the US Alliance: 1976-2016. Asian Security.
16(3). pp.323-342.
Drewniak, R. and Karaszewski, R., 2020. Diffusion of knowledge in strategic alliance: empirical
evidence. International Entrepreneurship and Management Journal. 16(2). pp.387-416.
Dzhengiz, T., 2020. A literature review of inter-organizational sustainability learning.
Sustainability. 12(12). p.4876.
Galera‐Zarco, C. and et.al., 2020. Digitalization and the inception of concentric strategic
alliances: A case study in the retailing sector. Strategic Change. 29(2). pp.165-177.
Göv, S.A., 2020. Strategic Alliances in Airline Business: Comparision of Skyteam, Oneworld,
Star Alliance Groups. Yönetim Bilimleri Dergisi. 18(38). pp.815-837.
Guo, W. and et.al., 2020. Knowledge sharing and knowledge protection in strategic alliances: the
effects of trust and formal contracts. Technology Analysis & Strategic Management.
32(11). pp.1366-1378.
Jafari-Sadeghi, V., 2020. The motivational factors of business venturing: opportunity versus
necessity? A gendered perspective on European countries. Journal of Business Research.
113. pp.279-289.
Meurs, H. and et.al., 2020. Organizing integrated services in mobility-as-a-service systems:
Principles of alliance formation applied to a MaaS-pilot in the Netherlands.
Transportation Research Part A: Policy and Practice. 131. pp.178-195.
Nguyen, N.T., 2020. Performance evaluation in strategic alliances: A case of Vietnamese
construction industry. Global Journal of Flexible Systems Management. 21(1). pp.85-99.
PARK, Y.E., 2020. Saudi Aramco's Global Expansion Strategy: Evidence from Korea. Journal
of Distribution Science. 18(5). pp.71-81.