STRATEGIC ALLIANCE

Strategic Alliance

Executive Summary

Throughout many years there has been increase of formation of strategic alliance in airline industry in order to avoid uncertainty of market and share combine judgment and skills. The strategic alliance also plays an effective role in industry of Airline. This report is explained that how the strategic alliance in Airline Industry gain synergies and economies of scale. The deregulation is one of the key factor that has opened the major competition that sand further agreements such as open skies, the agreements allows the airlines to serving their consumer in appropriate manner by offering them attractive packages for both domestic and international flights. Through alliance Airlines are capable to create the economies of scale through dynamic network with the usage of technological advancement. Both consumer and companies are enjoying benefits from it. Airline industry also receives benefits from the utilization of intangible resources such as reputation, technology and culture of corporate by maximized their physical assets. Oligopolization is one major factor that creates cartel danger and occurs as potential disadvantage from airline as well as consumer point.Strategic Alliance

Introduction

Strategic alliance is now become very useful for nay industry. There is preference and considered as the optimum choice especially in the airline industry. Since the time of deregulation in year 1978 (Ray, 1992), the industry of the airline has brought changes in the route of see as the function of this industry. This paper has an aim to attempts the strategic alliance development that has occurred in the industry of air line since the time of deregulation. There are different and potentially form so the strategic alliance that differs widely in scope and there would no consensus on the found of its classification. In the middle of the paper, I will discuss the organizational fit between the two parties that are existing in strategic alliance. In later part of this paper potential gain and potential risk with respect to the airline industry is also been discussed. This is felt that the airline industry is increasingly concentrated. There is no such conclusive remarks can be made about the consumer welfare is describing.

Discussion

The issues are much more important to discuss the phenomena that guide this industry towards the strategic alliance. Oum et.al, (1993) argues that the airline industry will be going to marked by the strategic alliance and such alliances will be mostly based on the global in nature altogether. The motivational factors will be not just once, there are several factors that include the information of scarcity or resources, blocs, bilateral agreement limitation and the several guiding factors are involved. These are the major factors that are part of an alliance and latterly become a necessity for an alliance of the airline industry in the future.

The transportation of air passenger has been considered ad the major drives that behind the globalization of the all over the business world and there are also some consequences of shortening the distance of the planet Earth (Crandall and Ellig, ...