Identifying Strategic Groups in the U.S. Airline Industry: An Application of the Porter Model Author: JAMES A. KLING and KEN A, SMITH 學生 : 魏國凱 指導老師 : 任維廉教授 1
Agenda 2 Background Porter’s generic strategic Data Methodology Groupings and validation of results Conclusion Discussion
Background 3 Deregulation(1978) Some airlines have disappeared Financial nosedive into oblivion Temporary Equilibrium (1991~1994) The nine major U.S. passenger air carrier Southwest, Northwest, USAir, American, TWA, Continental, America West, Delta, United These airlines account for 90%
Background 4 It is valuable to classify airlines based on their competitive strategies. This type of identification can suggest future strategic directions for airline managers to target or avoid. We first group the nine major airlines by competitive strategy, using Porter's typology of generic strategies. Then assess financial performance to validate the appropriateness of the initial strategic groupings. Finally, discuss the implications.
PORTER'S GENERIC STRATEGIES 5 Cost leadership Produce goods or services at a lowest cost Differentiation Being unique and for which buyers are willing to pay a premium price Focus Serve the needs of specific customer group or market segment Stuck in the middle No basis for competitive advantages
Data 6 Cents per Available seat mile (ASM) Cost / ASM (X-axis) Cost to fly one seat one mile Airline quality rating (AQR) (Y-axis) Weighted by nineteen factors
Domestic sector financial and operating data 7
Methodology 8 Quality (AQR) (III) Cost Leadership (IV) Stuck in the middle Cost Per ASM (Mean of 8.8) (I) Differentiation (II) Focus
Groupings and validation of results 9
Conclusion 10 (I)Differentiation: American, United, and Delta Intense competition (II)Focus: Southwest Short and high density routes Low cost and high quality (III)Cost Leadership: America West
Conclusion 11 The suggestion to “stuck in the middle” firms Continental Improve quality to follow Southwest TWA and USAir Hard to survive
Conclusion 12 Northwest Better financial than other stuck firms May focus on market segment which doesn’t have severe competition Porter’s U-shaped relationship Stuck in the middle-3.57 USAir-4.28 Northwest0.43 Continental-3.85 TWA-6.60
Discussion 13 本文在最後提到 Porter 的 U 型曲線有點突兀 這樣的群組分析在台灣則無法進行，因為台灣航空公 司少，且資料也不容易取得 為何西南航空的指標會比其他家大型航空公司的服務 品質指標要高？ 散佈圖為何再針對載客旅程做成本方向之調整？調整 幅度？作者並未明確說明。
14 Thank you for your listening