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35). Many factors contribute to this environment; fuel costs, labor costs, government regulations, national disasters, economic uncertainty and changing customer travel preferences (KPMG, 2013, p. 11). Since low cost carrier airlines face few entry or exit barriers, the core challenge for this industry and the lesson for other businesses is how to compete successfully when all of the competitors do not face the same structural forces of competition.
Synopsis of the Case
Since the deregulation of 1978, the airline industry weathered wave after wave of major challenges; recessions, labor issues, terrorist attacks and fluctuating crude oil prices. Thirty-five years later, legacy carriers, those carriers in business prior to 1978 utilizing a hub and spoke business model (Grahm & Vowles, 2006, p. 105), face nimble low cost competitors unfettered by union contracts, pension plans, older fleets or an established hub and spoke business model (Grahm & Vowles, 2006, p. 106). To survive and drive an overall industry profit, the legacy carriers must re-evaluate and address the competitive factors of their …show more content…
(2013, August 28). Edge Strategy: Tapping the Enormous Potential at the Edge of Your Core Business. Retrieved November 2, 2013, from L.E.K. Consulting: http://www.lek.com/sites/default/files/LEK_Edge_Strategy.pdf
Mertens, D. P., & Vowles, T. M. (2012, September). "Southwest Effect" - Decisions and Effects of Low Cost Carriers. Journal of Behavioral & Applied Management, 14(1), 53-69. Retrieved from http://web.ebscohost.com.pegleg.park.edu/ehost/pdfviewer/pdfviewer?sid=3d583cfd-7524-4374-994f-6438a58202d8%40sessionmgr113&vid=60&hid=127
Porter, M. E. (2008, January). The Five Competitive Forces That Shape Strategy. Harvard Business Review, 1-19. Retrieved November 2, 2013, from http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1
Rubin, R. M., & Justin, J. N. (2005, June). Where Are the Airlines Headed? Implications of Airline Industry Structure and Change for Consumers. Journal Of Consumer Affairs, 39(1), 215-228. Retrieved from http://web.ebscohost.com.pegleg.park.edu/ehost/pdfviewer/pdfviewer?sid=8daa2c00-cfe0-47d1-b1de-26e0cd430344%40sessionmgr11&vid=11&hid=127
Whitelegg, D. (2003). Touching Down: Labour, Globalisation and the Airline Industry. Antipode, 35(2), 244-263.
Synopsis of the Case
Since the deregulation of 1978, the airline industry weathered wave after wave of major challenges; recessions, labor issues, terrorist attacks and fluctuating crude oil prices. Thirty-five years later, legacy carriers, those carriers in business prior to 1978 utilizing a hub and spoke business model (Grahm & Vowles, 2006, p. 105), face nimble low cost competitors unfettered by union contracts, pension plans, older fleets or an established hub and spoke business model (Grahm & Vowles, 2006, p. 106). To survive and drive an overall industry profit, the legacy carriers must re-evaluate and address the competitive factors of their …show more content…
(2013, August 28). Edge Strategy: Tapping the Enormous Potential at the Edge of Your Core Business. Retrieved November 2, 2013, from L.E.K. Consulting: http://www.lek.com/sites/default/files/LEK_Edge_Strategy.pdf
Mertens, D. P., & Vowles, T. M. (2012, September). "Southwest Effect" - Decisions and Effects of Low Cost Carriers. Journal of Behavioral & Applied Management, 14(1), 53-69. Retrieved from http://web.ebscohost.com.pegleg.park.edu/ehost/pdfviewer/pdfviewer?sid=3d583cfd-7524-4374-994f-6438a58202d8%40sessionmgr113&vid=60&hid=127
Porter, M. E. (2008, January). The Five Competitive Forces That Shape Strategy. Harvard Business Review, 1-19. Retrieved November 2, 2013, from http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1
Rubin, R. M., & Justin, J. N. (2005, June). Where Are the Airlines Headed? Implications of Airline Industry Structure and Change for Consumers. Journal Of Consumer Affairs, 39(1), 215-228. Retrieved from http://web.ebscohost.com.pegleg.park.edu/ehost/pdfviewer/pdfviewer?sid=8daa2c00-cfe0-47d1-b1de-26e0cd430344%40sessionmgr11&vid=11&hid=127
Whitelegg, D. (2003). Touching Down: Labour, Globalisation and the Airline Industry. Antipode, 35(2), 244-263.