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Analysis of Strategic Alliance as a Source of Competitive Ad.pdf

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TIACA – Juan Carlos Serna 1 Analysis of Strategic Alliances as a Source of Competitive Advantage in the Airline Cargo Business - Evaluation of SkyTeam Cargo™ and WOW™ Alliance. Juan Carlos Serna Velez TIACA Masters Scholarship Program Recipient 2006 Dissertation presented in partial fulfilment of the requirements for the International MBA Programme University of Greenwich Business School July 2007 TIACA – Juan Carlos Serna 2
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  TIACA – Juan Carlos Serna 1   Analysis of Strategic Alliances as a Source of Competitive Advantage in the Airline Cargo Business - Evaluation of SkyTeam Cargo™ and WOW™ Alliance. Juan Carlos Serna Velez TIACA Masters Scholarship Program Recipient 2006 Dissertation presented in partial fulfilment of the requirements for the International MBA Programme University of Greenwich Business School July 2007  TIACA – Juan Carlos Serna 2    Acknowledgements To Soly, my love and unconditional support during this long year. Thanks to you, a dream has come true. To my family, for their permanent support and love. To my friends at University of Greenwich, thanks for everything I have learned from you. To TIACA Education Committee for their support through the Master’s Scholarship Program.  TIACA – Juan Carlos Serna 3   Abstract Utilization of strategic alliances in the airline industry is not a new task. However, evolution in the air cargo side of the business came after the consolidation of major alliances in the passenger side. This document, intends to analyze the utilization of strategic alliances as a source of competitive advantage in the air cargo industry. Evaluation of specific cases, such as WOW Alliance and SkyTeam Cargo are included as examples of such type of partnership agreements in this sector. As part of the evaluation, a disaggregated model of activities conforming the Value Chain for a Cargo Airline is presented, being an important tool when analyzing possible strategic cooperation between airlines. Additionally, adapted implementation practices for strategic alliances are included as a point of reference for future partnership studies. This document suggests that strategic alliances have been a source of competitive advantage for the alliance members; however, recommends additional research on the perception and effects on customers of such type of cooperation.  TIACA – Juan Carlos Serna 4  Table of Contents INTRODUCTION.............................................................................................7   1.   COMPANY & INDUSTRY OVERVIEW..................................................10   1.1.   WOW ALLIANCE™............................................................................10   1.2.   SKYTEAM CARGO ALLIANCE™......................................................11   1.3.   STRUCTURAL ANALYSIS OF THE AIR CARGO INDUSTRY..........14   1.4.   AIR CARGO INDUSTRY OVERVIEW................................................17   1.5.   THE TOPIC, AIMS AND OBJECTIVES..............................................21   2.   LITERATURE REVIEW – STRATEGIC ALLIANCES IN AIR CARGO..23   2.1.   Previous Academic Studies on Strategic Alliances.....................................23   2.2.   Strategic Alliances: Definitions and challenges...........................................23   2.3.   Types of Strategic Alliances..........................................................................26   2.4.   Experiences of Strategic Alliances in Airlines.............................................27   2.5.   Why Strategic Alliances? – Reasons behind the decision..........................31   2.6.   Critical Success Factors in Alliance Formation..........................................36   2.7.   Are the current SA’s in the industry being a source of competitive advantage?..................................................................................................................38   2.8.   Are customers perceiving the benefits of the alliances?.............................40   2.9.   Implementation Practices for Strategic Alliances.......................................41   3.   METHODOLOGY AND LIMITATIONS OF THE PAPER.......................42   4.   VALUE CHAIN ANALYSIS FOR A CARGO AIRLINE ..........................45   4.1.1.   Inbound Logistics.......................................................................................46   4.1.2.   Operations Activities.................................................................................49   4.1.3.   Outbound Logistics....................................................................................51  
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