Competition and competitiveness in the US airline industry. Issue 2 (16th March 2015)

• Record Type: Journal Article
• Authors: Hannigan, T.J.; Hamilton III, Robert D.; Mudambi, Ram
• Is Part Of: Competitiveness review. Volume 25:Issue 2(2015)
• Page Start: 134
• Page End: 155
• Publication Date: 2015-03-16
• Subjects: Operational efficiency -- Airline industry -- Bertrand competition; Competition -- Periodicals; Competition, International -- Periodicals; Competition -- United States -- Periodicals; United States -- Economic policy -- 1981- -- Periodicals; United States -- Commercial policy -- Periodicals; 338.604805
• DOI: 10.1108/CR-11-2014-0036
• Languages: English
• ISSNs: 1059-5422

Abstract

Abstract : Purpose: – This study aims to employ a resource-based lens to explore the competitive implications of firm strategies under conditions of market commonality and shared resource pools. Design/methodology/approach: – The firms' core capabilities in these environments may focus on operational efficiency, as firms seek to compete under significant resource heterogeneity constraints. Findings: – Using data from the USA airline industry from 1996-2011, we find that price has a positive relationship with firm performance, whereas quality has a negative relationship. Operational efficiency is a driver of both strategies. Research limitations/implications: – The study uses US data. Extending the findings to the global setting may require recognizing other competitive dimensions. Originality/value: – Firms that focus on non-core activities perform less well. The results offer insights into an industry that has interested strategy researchers for many years and may suggest an application to other industries with similar characteristics.