Corporate Strategies in the Airline Industry

Introduction

The airline industry is a specific service industry having high competitive tensions. According to Hitt, a strategy is “an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage” (Hitt et al., 2020: 4). David (2011) classified fundamental strategies into four categories in large firms and three categories in small enterprises:

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  Corporate Strategies (Corporate Level) - CEO level

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  Business Management (Competition) Strategies (Business Level)

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  Functional Strategies (Functional Level)

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  Operational Strategies (Operational Level)

Organizations gain strategic competitiveness by designing and executing a value creation strategy (Hitt et al., 2020: 4). Corporate strategies are the highest level strategies of a business and answer what the business wants to do and in which sector it wants to operate. According to Michael Porter, corporate strategy is concerned with two specific questions: what companies the corporation should be involved in and how the corporate management should oversee the many business divisions (Porter, 1987). Corporate strategy is the leading strategic tool as it helps a company focus its various resources on one goal. When corporate strategy is absent or unclear, companies cannot focus on their core objectives. At the same time, corporate strategy is an element that provides support to companies in measuring their success. But measuring the success of the company will not be easy if the strategy is uncertain. If the corporate strategy is well planned, it is a tool that is likely to provide growth opportunities for the company in good and bad economic conditions. In this respect, the identification and implementation of successful airline corporate strategies are essential for an airline to survive. The main objective of this chapter is to develop a new perspective by examining corporate strategies in the dimension of airline companies. For this reason, we will first explain the corporate strategies and After examining basic corporate-level strategies in general, the chapter will focus on to sample and analyze them specifically for airline companies.

Corporate Level Strategies In The Airline Industry

Corporate strategy is mainly concerned with the field in which the business will operate and how the subunits of the business will be formed. Corporate strategy creates synergy by bringing business sub-units together. It ensures that all sub-units and employees of the business unite in a common goal (Porter, 1987:1). It enables the business to reach its goals by considering the business as a whole, by explaining its structure, core values ​​and goals, by determining the products and services to be offered within the framework of the goals and core values ​​of the business (Flouris & Oswald, 2016: 99). The corporate strategy of a company with more than one business (multi-business) within its structure primarily seeks to answer the fields in which it wants to work. From this, it can be concluded that corporate strategy entails entering some business areas, withdrawing from some businesses and maintaining some existing business (Spulber, 2007: 141).

The corporate strategy should address the business's problems if it decides to enter or exit an industry (Carpenter & Sanders, 2014: 220). Corporate strategies are the strategies put forward by senior managers in businesses and determine the area where activities will be carried out to gain superiority over competitors in the long run (Ülgen & Mirze, 2020: 211). Senior managers make decisions to increase the long-term performance of the business and can change their decisions according to environmental factors (Özer, 2015: 77). The success of corporate strategies determined by the top management depends on the adoption and implementation of these strategies by managers at all levels.