Global Integrated Marketing Communications
PGBM16 Global Corporate Strategy
Key Strategic Issues Relating to the Global Airline Industry
Used Air France-KLM as a study case
Name: TANG QING
Student ID: 129098339
Tutor’s Name: Ian Evans
Abstract
This report uses Air France-KLM as a case to answer three research questions associated with global corporate strategies: 1) how core competences and dynamic capabilities used by the Group to achieve and maintain competitive advantage in the worldwide airline industry; 2) how strategic alliance and mergers & acquisitions have enabled the Group to maximise corporate profitability; and 3) how the Group achieved corporate profitability and CSR objectives at the same time.
Based on both literature review and secondary research, it could be found that at first, both core competencies and dynamic capabilities are major sources for establishing Air France-KLM’s competitive advantages in global airline industry. Specifically, the Group’s core competences include: 1) consistently investing in modern fleet; and 2) continuously developing powerful and balanced network. Likewise, the Group’s dynamic capacity lies in the company’s long-term engagement into improving products and services through the investment of technology and innovation. Secondly, SAs and M&As brought the company’s significant benefits, such as cost reduction, network increase, and multiple hub structure development; whilst it also brought the Group several challenges and uncertainties, such as the operational difficulties for integration, and unpredictable risks on business and financial performance if partners in alliance not to fully participate in or to withdraw. And at last, since both the issues of profitability and responsibility are important for business success, Air France-KLM needs to take both issues into mind before developing strategies. In last nine years, the Group balanced corporate profitability and corporate social responsibility
Key Strategic Issues Relating to the Global Airline Industry
Used Air France-KLM as a study case
Name: TANG QING
Student ID: 129098339
Tutor’s Name: Ian Evans
Abstract
This report uses Air France-KLM as a case to answer three research questions associated with global corporate strategies: 1) how core competences and dynamic capabilities used by the Group to achieve and maintain competitive advantage in the worldwide airline industry; 2) how strategic alliance and mergers & acquisitions have enabled the Group to maximise corporate profitability; and 3) how the Group achieved corporate profitability and CSR objectives at the same time.
Based on both literature review and secondary research, it could be found that at first, both core competencies and dynamic capabilities are major sources for establishing Air France-KLM’s competitive advantages in global airline industry. Specifically, the Group’s core competences include: 1) consistently investing in modern fleet; and 2) continuously developing powerful and balanced network. Likewise, the Group’s dynamic capacity lies in the company’s long-term engagement into improving products and services through the investment of technology and innovation. Secondly, SAs and M&As brought the company’s significant benefits, such as cost reduction, network increase, and multiple hub structure development; whilst it also brought the Group several challenges and uncertainties, such as the operational difficulties for integration, and unpredictable risks on business and financial performance if partners in alliance not to fully participate in or to withdraw. And at last, since both the issues of profitability and responsibility are important for business success, Air France-KLM needs to take both issues into mind before developing strategies. In last nine years, the Group balanced corporate profitability and corporate social responsibility