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Airline alliances: Mobilizing network resources
Abstract
Airline alliances represent examples of resource utilization across a network. This paper examines the need to distinguish between access to and mobilization of the resources held by allies. An ordinary least squares regression was applied to a sample from the Top International Airlines database. Our findings show that mobilization of the destinations of the partner companies through codeshare alliances has a positive and significant influence on the performance of airlines. Moreover, they suggest that the development of network resources mobilizing capability in increasingly dynamic and global environments will only generate an important source of competitive advantage when acted upon.
... Companies therefore participate in company networks in order to share assets and gain competitive advantages that lead to increased performance (Casanueva, Gallego, Castro, & Sancho, 2014;Lavie, 2006Lavie, , 2007. Such competitive advantages may be focused on harnessing the capacity to produce resources, producing economies of scale or saving on costs (Chen & Chen, 2003;Inoue, 2018;Yamakawa, Yang, & Lin, 2011). ...
... Similarly, the size of the alliance portfolio, reflecting the associative behaviour of the company, should have a positive effect on the volume of network resources that a company can mobilise (Casanueva et al., 2014). Network resources are a type of resource, that is generated by the relationships that make up an inter-organisational network, and can be combined with the internal resources of a company to improve its performance (De Martino et al., 2013;Lavie, 2006). ...
... The destinations that connect these routes can be considered the markets of the companies (Wassmer & Dussauge, 2012) and are directly linked to the performance obtained by the company. Finally, this industry has been used in previous studies on networks and strategic alliances (Casanueva et al., 2014;Cobeña et al., 2017;Cobeña, Gallego, & Casanueva, 2019;Gimeno, 2004;Hoehn-Weiss et al., 2017;Wassmer et al., 2017). ...
This study analyses the direct and indirect effect, through network resources, that the size of the alliance portfolio has on the company's performance, measured through productivity. In addition, two antecedents of the formation of alliance portfolios are studied: the firms' resource endowments and the participation of the focal firm in inter-organisational networks. One of the main contributions lies in the use of the network resources variable. The use of this variable gives empirical content to a concept widely analysed in the literature to explain the performance of interconnected companies. The study is carried out in the airline industry, a context in which firms display an intense cooperative activity establishing numerous exploiting alliances. The results show that the company's resource endowment and the participation in inter-organisational networks constitute a relevant factor in explaining the size of the alliance portfolio. Additionally, the results show a positive effect, but mediated by network resources, of the size of the alliance portfolio on the company's productivity. Finally, network resources are largely determined by the size of the alliance portfolio and significantly affect the company's productivity.
... These two areas of company activity should be jointly analyzed because associative behavior is a natural complement to the operational strategies developed by the airlines. The focal airline's network of routes and destinations is complemented by mobilizing the routes and destinations of its partners through codeshare agreements (Casanueva et al., 2014). This process reduces the number and percentage of routes directly operated by an airline and increases the number of routes operated by third parties, which increases the virtualization of the focal airline. ...
... Wassmer and Dussauge (2012, p. 874) note that "for an airline, one of the critical resources through which to achieve competitive advantage is its route network, that is, access to a wide range of city-pair markets." The mobilization of these partner destinations has led to a broad spectrum of collaborative arrangements, particularly codeshares (Casanueva et al., 2014). However, in addition to these advantages, the growth of this type of alliance raises important strategic questions for the companies, regarding the issue of whether there are some "core resources" that an airline should protect, in the sense of keeping those routes/ markets within its own portfolio (Kleymann, 2005). ...
... The second industry trend is an increase in the use of codeshare agreements, a common type of strategic alliance among airlines. A codeshare allows an airline to access the routes and destinations of its partners (Casanueva et al., 2014). Thus, this type of agreement provides numerous benefits linked to competition (Goetz and Shapiro, 2012;Lin, 2008), efficiency (Wan et al., 2009), and expansion of networks of routes, particularly international routes, thereby avoiding or overcoming legal and regulatory barriers (Oum et al., 2001). ...
This paper analyses the virtualization of the airline industry as a strategic response to competitive pressures.
Increased competition has driven the associative behavior of airlines, fostered the development of global alliances and the use of codeshare agreements, substantially modifying the structure of the industry. These changes have resulted in greater efficiency and division of labor in the industry, and have caused airlines to significantly modify their operational strategies. The analysis of the evolution of operational and associative strategies in the
airline industry during the past decade (2005–2015) shows the growing virtualization of the sector, derived from the use of codeshare agreements and other alliances between companies. The results show that the associative behavior allows airlines to specialize their operational strategy and to focus their resources and capabilities on a certain type of routes or origin-destination (OD) markets, with a wide variety of strategic behaviors in the industry.
... Hence, the breadth of market-portfolio, which consists of various routes served by a company is viewed as strategic input used by airline companies (Casanueva et al., 2013;Prince & Simon, 2009). In addition to the breadth of market portfolio, another crucial factor that, to an extent, determines a company's success is the depth of market portfolio, which encompasses the number of flights operated on a specific route (Casanueva et al., 2014(Casanueva et al., , 2013Lu et al., 2012;Wei & Hansen, 2005). Furthermore, available seat miles (ASM) is another aspect of depth of market portfolio that also determines marketing outputs such as sales revenue (Wei & Hansen, 2005). ...
... These types of marketing resources might assist firms in attaining competitive advantage in the marketplace. In essence, an efficient combination of various types of co-specialized marketing resources and capabilities will engender a new marketing resource which will be rare, valuable, inimitable, and nonsubstitutable (VRIN), thereby creating a competitive advantage for the focal firm (Casanueva et al., 2014(Casanueva et al., , 2013Maritan & Peteraf, 2011;Nason & Wiklund, 2018). ...
... Optimum use of marketing inputs results in costsavings which, in turn, positively affect the financial performance. For instance, firms that are able to produce a certain level of marketing outputs such as sales revenue by utilizing less marketing inputs such as less promotional expenditure will attain cost benefits (Casanueva et al., 2014(Casanueva et al., , 2013Morgan et al., 2002;Sheth & Sisodia, 2002). Furthermore, firms with higher DMP will also benefit from revenue benefits. ...
Given increasing pressure from shareholders to demonstrate how productively marketing resources and expenditures are being managed, several theoretical and empirical studies have demonstrated how to measure marketing productivity in recent decades. However, no study thus far has provided any empirical evidence pertaining to the financial implications of marketing productivity. This study attempted to fill this conspicuous lacuna in the literature. Drawing propositions from the resource-based view (RBV) and dynamic capabilities theory, this research puts forward the notion of dynamic marketing productivity (DMP) and argues that dynamic marketing productivity (DMP) can be a source of competitive advantage, thereby positively affecting a firm's financial performance. Drawing samples from the US-based airlines industry, this study demonstrates that the level of a firm's dynamic marketing productivity positively affects a firm's intangible value as measured by Tobin's q and market value added (MVA). The results are robust to alternative measures of firm intangible value as well as alternative methods of estimations.
... hand, from a theoretical perspective, ties with insider partners are often seen as the source of resources and learning, but recent evidence has shown that ties also involve resources mobilisation and not just access, which provides benefits for performance (Casanueva et al. 2014;Chou 2016). It also holds true that, while the structural properties of an alliance network signify the creation of value for the firm, in terms of access to resources, information and opportunities (Iurkov and Benito 2018), the firm's ability to capture such value is essential through mobilisation for experimentation in foreign markets and thus also for learning for further growth (Casillas and Moreno-Menéndez 2014;Johanson 2003). ...
... In particular, network resources mobilisation has been defined as the organisational ability and willingness to capitalise on the opportunities offered by the firm's set of partners in an alliance network setting, which in this case translates into the utilisation of assets owned and controlled by partners in the net (Bolivar et al. 2021;Lavie 2009). This requires both the capability of the focal firm to grasp such resources and the willingness of the partner to admit the use of its resources and the focal firm's strategy (Casanueva et al. 2014;Lin 2003). ...
Multinational Enterprises (MNEs) are often under pressure to expand at the highest possible speed in international markets. They therefore embed themselves in networks of alliances where they can access resources in the form of relational assets, information, and learning to facilitate swifter internationalisation whilst circumventing the risks of time-compression diseconomies. Hence, drawing from the network theory of international business and the perspective of structural embeddedness of interorganisational relationships, this study aims to determine the relationship between access to and mobilisation of network resources in relation to the speed of international expansion among MNEs. For this purpose, we assembled a sample of 131 global-reach MNEs from the airline industry and observed their international expansion activities over a 5-year period. Partial-Least-Squares Structural-Equation Modelling (PLS-SEM) was applied to capture the multidimensionality of internationalisation speed, under the commitment-breadth-intensity framework, as well as the multidimensionality of both embeddedness and mobilisation; similarly, we employ Necessary Condition Analysis (NCA) to identify the necessary antecedent variables in our research model. As a result, understanding was gained of the position of each firm within an international alliance network, in terms of how it creates value by obtaining access to resources for international expansion; furthermore, we learned that access is as necessary as mobilisation to increase internationalisation speed, and that, mobilisation is required to mediate the capture of network opportunities. Consequently, the study provided insights for managerial practice: MNEs should pursue centrality in their networks at the same time as planning their resources mobilisation strategies.
... Previous literature also acknowledged that contemporary studies on airline service are more about passenger travel satisfaction/dissatisfaction, service quality (Bubalo & Gaggero, 2015;Chen, 2008;Han & Hwang, 2017;Hussain, 2016;Kefallonitis, 2015;Lim & Tkaczynski, 2017;Park, Robertson, & Wu, 2006;Perçin, 2018), airline brand credibility, brand image, and/or brand personality (Cervera-Taulet, Schlesinger, & Yagüe-Guillen, 2013;Dirsehan & Kurtuluş, 2018;Jeng, 2016;Kotsi & Slak Valek, 2017), brand loyalty (Dolnicar, Grabler, Grün, & Kulnig, 2011;Hwang & Hyun, 2017;Šerić, & Matas Milković, 2017), airline alliances (Casanueva, Gallego, Castro, & https://doi.org/10.1016/j.jhtm.2018 Received 25 April 2018; Received in revised form 27 September 2018; Accepted 23 November 2018 Sancho, 2014;Chen & Ren, 2007;Douglas & Tan, 2017), and low-cost airline service (Akamavi, Mohamed, Pellmann, & Xu, 2015;Coles, Fenclova, & Dinan, 2011;Graham, 2013;Morrison & Mason, 2016;Soyk, Ringbeck, & Spinler, 2018). Although three studies are relevant to airline brand (see Chen & Chang, 2008;Chen & Tseng, 2010;Uslu et al., 2013), they seem to ignore the importance of direct service experience in their models. ...
The intense competition taking place in the airline sector requires a concurrently suitable branding strategy. Although contemporary brand equity models have been acknowledged and tested in the service branding context, they are not quite adaptable to the airline sector. These models are more appropriate for product-dominant brands, as they ignore the crucial roles of direct service experience and brand consistency in creating airline brand equity. Therefore, through a systematic and critical review of the literature, we propose a conceptualisation of consumer-based service brand equity (CBSBE) model by emphasising the importance of direct service experience and brand consistency that will equip airline marketing/brand managers to design effective branding strategies.
... Gardiner and Scott (2014) argue, in the case of Gold Coast in Australia, that an indi- vidual's skill and knowledge in strategic assessment adjusting to the context is important to build and maintain a successful network. Recent theory of network resource also confirms that each organization's skills and knowledge plays a key role in conditioning mobilizing network means to change and sustain network (Casanueva, Gallego, Castro, & Sancho, 2014). ...
... Gardiner & Scott (2014) argue, in the case of Gold Coast in Australia, that an individual's skill and knowledge in strategic assessment adjusting to the context is important to build and maintain a successful network. Recent theory of network resource also confirms that each organization's skills and knowledge plays a key role in conditioning mobilizing network means to change and sustain network (Casanueva, Gallego, Castro & Sancho, 2014). ...
This study utilizes network analysis to trace the evolution in the organizations of tourism development during South Korea's transition from a developing to a developed country spanning the period from 1945 to 1999. This is studied by examining changes within a network of organizations as their means and objectives evolve. Data are drawn from news articles that deal with tourism and development from 1945 to 1999, and coded into organizations, development-related means, and objectives. Two-mode and a one-mode metric network analysis and correspondence analysis of coded data were undertaken. The results show the dynamic nature of networks interacting among organizations along with their means and objectives. Furthermore, this study states that the "social embeddedness" of the tourism network became stronger over time, leading to further development opportunities.
... Despite being relatively similar and comparable, these studies have produced mixed results , which may be attributable to the construction of the portfolios in the various studies. It is therefore possible to identify studies that use portfolios that only include alliances of a particular legal nature (Andrevsky et al., 2016;Reuer and Ragozzino, 2006;Vassolo et al., 2004); or that correspond to a certain area or function of the company (Andrevsky et al., 2016;Caner and Tyler, 2013;Faems et al., 2010;Frankort et al., 2012;George et al., 2001;Kim and Choi, 2014;Lahiri and Narayanan, 2013;Lavie, 2007;Rogbeer et al., 2014;Schilke and Goerzen, 2010;Swaminathan and Moorman, 2009); or that involve connections with certain external actors (Bruyaka and Durand, 2012;Casanueva et al., 2013Casanueva et al., , 2014George et al., 2001;Lavie, 2007;Wassmer and Dussauge, 2012;Wassmer et al., 2017;Wuyts and Dutta, 2014;Wuyts et al., 2004). This has led to a broad and general definition that is used to describe a wide range of portfolios in empirical analysis, which hinders the comparison of studies and may lead to a misguided or biased view of the phenomenon . ...
Purpose
The purpose of this article is to propose and discuss a systematic theoretical classification of alliance portfolios that allows to elucidate and develop the concept.
Design/methodology/approach
The study applies a conceptual approach. A review of the literature was carried out to support the conclusions of this paper.
Findings
The results of the classification identify three types of alliance portfolio, according to the level of management that each of them requires: additive, strategic and managed and strategic. These portfolio typologies are analyzed in an evolutionary perspective.
Practical implications
This article is of interest to managers as it emphasizes the management of the alliance portfolio, highlighting the elements or characteristics that determine the transition from one type of portfolio to another.
Originality/value
This paper contributes to the consolidation and reorientation of the extensive research into alliance portfolios and proposes a systematic classification that can help to interpret the results of research and guide future studies.
... The number of flights, member airlines, and destinations are crucial factors that affect the emergence of international airline collaborations. Such collaborations attempt to enhance the regional impact of the airlines involved by increasing the number of flights in the region; more specifically, the airlines can adopt code-share flights to win customers on both sides of the collaboration [33]. We find that Star Alliance has the highest level of collaboration among its member airlines, followed by Oneworld and SkyTeam [34,35]. ...
An airline alliance is a group of member airlines that seek to achieve the same goals through routes and airports. Hence, airports’ connectivity plays an essential role in understanding the linkage between different markets, especially the impact of neighboring airports on focal airports. An airline alliance airport network (AAAN) comprises airports as nodes and routes as edges. It could reflect a clear collaborative proportion within AAAN and competitive routes between AAANs. Recent studies adopted an airport- or route-centric perspective to evaluate the relationship between airline alliances and their member airlines; meanwhile, they mentioned that an airport community could provide valuable air transportation information because it considers the entire network structure, including the impacts of the direct and indirect routes. The objectives are to identify spatial patterns of market region in an airline alliance and characterize the differences among airline alliances (Oneworld, Star Alliance, and SkyTeam), including regions of collaboration, competition, and dominance. Our results show that Star Alliance has the highest collaboration and international market dominance among three airline alliances. The most competitive regions are Asia-Pacific, West Asia, Europe, and North and Central America. The network approach we proposed identifies market characteristics, highlights the region of market advantages in the airline alliance, and also provides more insights for airline and airline alliances to extend their market share or service areas.
... Se ha calculado el resultado operativo de forma similar a la utilizada por Casanueva et al. (2014), es decir, basándonos en indicadores relacionados con el volumen de actividad de cada compañía analizada expresada en términos monetarios o físicos. Así pues, se han calculado los siguientes indicadores: 1) Pasajeros: número de pasajeros que ha transportado una compañía en el período indicado. ...
... Economies of scale and brand recognition ensure certain comfort, but becoming more competitive requires further efforts in terms of organisational learning and operational efficiency (Min and Joo, 2016). This conclusion has been reconfirmed by Casanueva, Gallego, Castro and Sancho (2014), who published an empirical research of airline alliances, aiming to estimate partners' access to each other and their resources, and the actual mobilisation and effective utilisation of network assets. Regarding customer reactions, some empirical research reveals that despite being aware of alliances, customers perceive an airline's brand as dominant because it is the airline that provides the service, not the alliance (Chung and Feng, 2016), which diminishes most of the expected marketing effects. ...
The aim of current research monograph is to provide a deeper view of the complex relationship between the air transport and tourism industries. The adopted point of view – a destination perspective – enables one to go into a more detailed exploration of the topic and to consider issues that usually remain invisible at the strategic managers’ level. The elaborated destination analysis framework and the identification of common points between aviation and tourism set the groundwork for further examination of the air transport-tourism nexus. Therefore, the book would be useful both for students and researchers in the field of tourism, hospitality and destination management, and for practitioners and destination management representatives who may find interesting insights and ideas for improvement. The monograph would be suitable also for managers and representatives from the air transport industry by providing them with the other point of view – that of the local tourist destination – to consider in their strategic growth and negotiation process.
... v. 12, n. 1, January-February 2021ISSN: 2236-269X DOI: 10.14807/ijmp.v12i1.1261Kleymann, 2005Gaggero & Bartolini, 2012), network connectivity and productivity (Hsu;Shih, 2008), access to resources and mobilization of resources (Casanueva et al., 2014), the benefits of alliances (Morrish & Hamilton, 2002;Iatrou & Alamdari, 2005;Weber 2005;Goetz & Shapiro, 2012), the effect on the airline profitability (Zou & Chen, 2017;Douglas & Tan, 2017;Oum & Zhang, 2001), comparative performance analysis (Min & Joo, 2016), current situations and the future (Oum & Park, 1997). ...
Airline companies has been incorporated various cooperation forms to handle risky situations arising from high competition level and to gain sustainable competitive advantages. The aim of this research is to reveal the transformation that strategic airline alliances and airline joint ventures have, with their current situation. In this research, which adopted the qualitative research design, semi-structured interviews were held with top executives of five traditional airline companies affiliated to strategic airline alliances and airline joint ventures. The most significant finding obtained as a result of the research is that airline companies affiliated with strategic airline alliances are beginning to question alliances’ structures though airlines accept that alliances are still valuable to them. Another remarkable finding is that airlines have begun to move out of classical form with newly launched form of joint venture.
... The main research findings showed that airline alliances have positive effects on airlines' performances (Evans, 2001), while passengers found alliances to be of lesser importance (Weber, 2005). Analysis of airline alliance scenarios was undertaken (Morley, 2003b), while more recent studies investigate CSRs (Cowper-Smith & de Grosbois, 2010), network resources, and partnership within alliances' members (Casanueva, Gallego, Castro, & Sancho, 2014;Casanueva, Gallego, & Sancho, 2013). Most papers use secondary data, and only two papers use qualitative research, in particular, semi-structured interviews with both industry managers and passengers (Morley, 2003b;Weber, 2005). ...
This paper reviews the literature at the intersection between air transport and tourism research. While air transport and tourism are mutually dependent sectors, there is little research on their interaction. A systematic literature review method was used to select and analyse relevant journal articles published in 54 Australian Business Dean Council (ABDC) A*, A, or B-ranked journals from 2000 to 2014. Research themes, leading researchers, their institutions, and geographical locations are discussed. An extended framework for classification of the literature is developed through the content and thematic analysis. Among the identified research themes, ‘environment’, ‘passengers’, and ‘airlines’ are found to be the most common. The use of a systematic review has identified gaps in the literature and directions for future studies. Some of the identified areas that are showing a growing interest in the interrelationship between aviation and tourism include air route/service development; passenger experiences; low-cost carriers and their impact on tourism; implications of new direct long-haul flights; and carbon offsets.
... Likewise, some authors pointed out that the portfolio coordination dimension is related with alliance portfolio value (Sarkar et al. 2009;Schilke, Goerzen 2010). Accordingly, it would be logical to imagine that the coordination and mobilization of valuable network resources (Casanueva et al. 2014;Sluyts et al. 2011) will raise the likelihood of an increase in alliance portfolio value. Based on this logic and on previous research, we hypothesize as follows: ...
The objective of the present work consists in testing whether the strategic involvement of boards of directors has a positive influence on the development of alliance portfolio management capability and on the value that the alliance portfolio generates. A variance-based structural equation modelling (Partial Least Squares) has been applied to a sample constituted by 139 top Spanish companies. Our analysis shows that the strategic involvement of the board of directors has a positive and influence on the management of alliance portfolios, thereby influencing the value of that portfolio in an indirect way. Unlike previous literature, this study links the functions of the board of directors to organizational capabilities, connecting the literature on corporate governance and on management of alliance portfolios.
... In the paper by Fageda et al. [ 10 ] a unified framework to analyse a continuum of hybrid cooperation agreements in dimensions of revenue sharing degree and cost sharing degree was developed (alliances and joint ventures, respectively). Within alliances optimal resource utilization across a network is extremely important [ 11 ]. Other interesting optimization solutions were investigated in [ 12,13 ]. ...
... Por otra parte, también hemos demostrado que la experiencia en la gestión de alianzas estratégicas influye de forma directa sobre el resultado obtenido por la empresa. Tal y como indican Casanueva et al. (2014) y Wassmer (2007 la experiencia es un factor determinante en el rendimiento que se obtiene de la alianza, y, por ende, en el resultado global de la compañía. Dicha experiencia permite aprovechar todas las oportunidades de colaboración entre dos empresas sin desperdiciar recursos. ...
Purpose
The purpose of this paper is to conceptualize how information technology (IT) enables supply chain (SC) network capabilities, which is to capitalize on SC’s existing set of resources and, at the same time, manage new combinations of SC resources to meet future market needs. The paper also develops SCM framework associated with IT-enabled SC network capabilities.
Design/methodology/approach
Through a case study of a leading Taiwanese petrochemical corporation, qualitative data were gathered on the IT-related SC management practices, in terms of network resource mobilizing and adaptive co-management arrangements to enable SC network capability. This research is based primarily on the interviews of the case company, supplemented by archived documents, published books, and in-depth observations.
Findings
Based on the evidence from the case, this study inductively develops a model that includes the operating processes with IT-enabled activities to achieve ambidextrous SC network capability, and the relevant framework functions in network resources and co-management activities include information co-governance, information interoperability, community engagement strategy, cyber-physical dexterity, and control enactment, which lead the SC alliances improvements for dynamic environmental changes.
Practical implications
Practitioners may derive strategies and tactics from the current findings to help them implement innovative information technologies and setup SC framework, during SC network capability development, to achieve SC’s sustainable competence in a dynamic market.
Originality/value
Researchers and practitioners may obtain a more complete view of IT-enabled SC network capability development. The proposed model reveals that developing IT-enabled SC network capabilities is a dynamic process whereby an organization’s major SC managerial activities are divided into specific network resource mobilizing and adaptive co-management arrangements.
This research paper focuses on coopetition among small and medium tourism enterprises (SMEs), and has two objectives. First it makes a theoretical contribution by establishing a model of variables that induce coopetition, the degrees to which coopetition exists and the relationship between those variables and firm performance. Second, it tests the modeling in the context of the tourism industry in Naples and Sorrento, Italy. The former comprises a sample of 149 accommodation providers and the latter 169. Building on survey data and local linkages between accommodation providers and SMEs in tourism it is found that coopetition improves performance but a key determinant is not only numbers of links but also acquired trust between partners.
The purpose of this study was to identify and prioritize the key competitiveness indicators and drivers of full-service airlines. To achieve this, the study used a two-phase, sequential exploratory mixed methods research that was initiated with a qualitative phase (Delphi technique), and followed by a quantitative phase (Analytic Hierarchy Process technique). The results of the qualitative phase revealed that full-service airlines need to pay attention to the 12 key indicators and 15 key drivers to evaluate and improve their competitiveness status, respectively. The key identified indicators include quality, safety, price, connectivity, timeliness, flight frequency, profitability, productivity, cost, market share, customer loyalty, and revenue growth, and the key identified drivers are including bargaining power of customers, bargaining power of suppliers, rivalry among existing competitors, government policies, physical resources, financial resources, human resources, technological resources, reputational resources, flight operations capabilities, engineering and maintenance capabilities, marketing and services capabilities, finance and property capabilities, personnel capabilities, and strategic alliances. Further, the results of the quantitative phase demonstrated that profitability is the most important key competitiveness indicator, closely followed by productivity. It was also found that generally bargaining power of customers is the most powerful key competitiveness driver, and followed by financial resources. However, the results revealed that the ranking of the key competitiveness drivers with respect to each indicator differs significantly. The findings of this research provide important implications for the evaluation and improvement of the competitiveness status of full-service airlines.
During the last few decades, a growing body of literature has been produced on various aspects of interorganizational relations (IOR) in tourism. This paper provides a review of that literature. The findings are based on a review of 269 empirical papers published in 37 tourism journals between 1989 and the first quarter of 2017. The review identifies six main research themes relating to relationship formation, structure and activities, governance, maintenance, outcomes, and evolution. Based on the insights from this review, an organizing framework for research on IOR in tourism is developed and four opportunities for advancing research on IOR in tourism are proposed relating to the pursuit of causal inference, supply networks as a unit of analysis, quantifying outcomes of IOR in tourism, and addressing marginalized topics.
This study was carried out to suggest new indicators to be used at airports. Generally, passengers and cargo will be handled at the airport, and the airport will achieve revenues through them. However, all airports can not have the same distribution of passenger and cargo throughput. When comparing and analyzing several airports, a uniform result can be expected only if a unit airport throughput indicator is applied. The 'Work Load Unit' is an indicator that integrates passengers and cargo into one, and assumes that the value of one passenger is equivalent to the cargo volume of 100kg. The existing WLU was set up based on the experience at the airport rather than being established through reasonable grounds or analysis, so there was a lot of controversy. The purpose of this study is to overcome these limitations and to suggest new index. In this study, we applied a method to compare the relative value of cargo and passenger to airport revenue. In order to analyze cargo value and passenger value, airport revenues are classified into aircraft operation related revenues, passenger handling related revenues, and commercial revenues. A total of 50 airports were selected, including 14 airports in Asia, 18 airports in Europe and 18 airports in North America. According to the final analysis results, it is concluded that the cargo is equivalent to 280kg of cargo based on the contribution of one passenger averagely. This is higher than the value of 100Kg cargo per passenger.
Purpose
– This paper aims to advance a model that will explain how hotel firms access and mobilize external resources. Hotel operators and firms need to complement their internal resources with external resources, which they can access through their personal and organizational ties, so as to compete and to achieve success.
Design/methodology/approach
– A framework is proposed, on the basis of the resource-based view and network theory, to explain the process of access and mobilization of available external resources thanks to the professional and social ties of the managers of hotel firms.
Findings
– This framework distinguishes between access to network resources and their mobilization. This paper introduces network resource mobilization capability as an adaptive capability of managers and employees that can improve hotel firm performance. Previous experience and contextual factors such as the type of property and the management style all influence the nature of this capability.
Practical implications
– This work proposes a repertory of relevant resources in hotels and the preparation of an instrument to measure access to those resources and their mobilization through social capital. It also proposes the need to develop a new dynamic capability: the capability to mobilize network resources in hotel firms through their managers. Finally, it proposes that social capital is a valuable resource for both hotel firms and their managers.
Originality/value
– This theoretical approach makes a key distinction between access to and mobilization of network resources, which leads to a better understanding of the potential of the individual social capital of hotel managers. Network resource mobilization capability is introduced as an adaptive capability of managers.
Elements such as tourists, service-oriented organizations, tourism resources, destinations and public institutions all have a role in tourism activity. If we are to understand the world of tourism, we need to examine the ties between these elements. Social network analysis (SNA) provides tourism research with a set of methods and tools that allow us to comprehend the patterns and the structures of these ties. The objective of this work is to establish how SNA is being applied to tourism, to describe its principal elements and to inquire into its potential in the development of tourism research. To do so, the articles that apply SNA research methods, published in tourism and hospitality journals, and the network of citations between their authors are all analysed. It was found that the application of SNA in tourism-related contexts is rare and very recent, although a cohesive and relevant group of authors is currently applying it. An exciting opportunity for tourism research becomes apparent with the use of SNA and future lines of research are presented in which its methods may be applied.
Purpose – This study aims to identify and examine the relationship between network resources and international performance of high tech small to medium-sized enterprises (HTSME) in the telecommunications industry in Ireland. The network resource construct for this paper comprises three dimensions: network human capital resources, network resource combination, and information sharing. Design/methodology/approach – Empirical research was carried out using a mail survey in which 154 firms completed and returned the questionnaire. Three hypotheses were analysed using structural equations modelling using LISREL. Findings – The study's main finding suggests a positive relationship between a firm's network human capital resources and international performance. However, no support was found for the relationship between network resources combinations, information sharing and international performance. Research limitations/implications – This study is cross-sectional, confined to a single industry and focused on the role of networks in the HTSME context only. Results from this study provide policy makers and practitioners with additional insights into specific network resource-based factors that are associated with international performance for HTSMEs. Such an assessment would help identify specific areas of relationship strengths and weaknesses in terms of the level of human capital available to firms, the combinations of complementary resources across firms and the extent and level of information exchange between firms. Practical implications – The paper concludes with a discussion of these findings and the overall implications for policy makers and managers. Specifically, it is necessary to identify and review the types of resources that are critical to the international performance of firms and develop and implement business strategies building on those resources in order to enhance the likelihood of international success. Originality/value – This study offers a multiple dimensionality to the network resource concept by measuring the direct effect of the type of network resources in terms of human capital, information and network resource combinations on international performance of HTSMEs in the telecommunications industry. These findings advance network research by highlighting the trade-offs that networks impose on firms that seek to manage and leverage their network resources.
The Seattle-Tacoma International Airport is the hub of Alaska Airlines, the largest airline in the Pacific Northwest. We analyze the impact of Delta Air Lines’ expansion at this airport on the operational and financial performance of Alaska Airlines. The time series consists of quarterly airline and economic data for the period 1Q 2010 to 3Q 2016. We estimated the econometric model using the generalized method of moments based on the Newey-West covariance estimator for robust standard errors. While Alaska Airlines remains dominant at its hub airport its yield has moved closer to Delta Air Lines’, indicating that intense competition has eroded but not eliminated Alaska Airlines’ pricing power. Our results indicate that higher market concentration and advertising intensity tend to reduce profits, implying that the number of firms and the Herfindahl-Hirschman index may not be sufficient in evaluating market power because industries with few competitors may behave as competitive markets when firms engage in profit-reducing non-price competition. Moreover, unit cost has a greater impact on the Lerner index than yield, indicating that cost-efficient airlines have more pricing flexibility, which may increase profits, underscoring the importance of examining an airline's cost structure in evaluating market power.
Purpose
The purpose of this paper is to analyze the impact of alliance portfolio internationalization (API) on firm performance in the context of exploitation alliances.
Design/methodology/approach
The hypothesis is tested by applying a panel regression using a sample of 64 airlines over a nine years period.
Findings
As a result, the study finds a U-shaped relationship between API and firm performance.
Research limitations/implications
The results are particularly relevant for firms using many exploitation (e.g. marketing) alliances.
Practical implications
In the context of exploitation alliances, managers should focus either on local partners or to take advantage of partners with a high degree of foreignness. Stuck in the middle seems to be not advantageous.
Originality/value
Previous work found an S-shaped relationship between portfolio internationalization and firm performance while concentrating on exploration alliances. In contrast, this study shows that exploitation alliance portfolios do not experience a decline of firm performance at high levels of portfolio internationalization.
Transshipment ports are important constituents of the global and regional container shipping networks. Betweenness centrality is often used to identify transshipment ports by focusing on the global topology of the shipping network without adequate consideration of local topologies of ports’ ego shipping networks, and therefore some ports that are playing intermediary roles as hubs within the regional scopes may not be recognized sufficiently. The structural hole theory is introduced to detect regional transshipment ports by paying more attention on local topologies. The results show that the structural hole-based approach can effectively identify some relatively small transshipment ports at the regional level, which are important supplementaries to the detected ports based on betweenness centralities. Las Palmas Port is taken as an illustration to explain how a port occupying the position of a structural hole is likely to become the regional hub by functioning as a connecting bridge. Several policy implications are further elaborated for relevant decision-makers such as liner companies, port authorities and international port operators.
Alliances in the airline industry operate as a basic strategy to stimulate competition and both the number and the types of alliances have increased over time. Each airline maintains alliances simultaneously with a variable number of partners. The set of airline's alliance partners constitutes its alliance portfolio. A central theme of these portfolios is the way in which partner selection improve performance. Is the alliance portfolio configuration based on either similar or different partners? We examine how the differences can arise from differences between the partners themselves, from resource complementarity, and from the partners structural positions in the network. The relations between these types of differences and whether they affect firm performance are studied. Codeshare alliances established between airline companies at a global level are analyzed to establish their effects on performance. In particular, the study comprises 135 alliance portfolios all of which from major airlines. The results suggest that structural homogeneity and complementarity improve performance and that alliance portfolio diversity favors network resource complementarity.
We study preferential attachment (i.e., a rich‐get‐richer effect) in alliance networks. Thereby, we argue that various levels (firm, firm group, country) influence the strength of preferential attachment. To test our hypotheses, we take a sample of 117 airlines from 74 countries in the period 2001 to 2011. For the estimation, we use stochastic actor‐oriented models, a method for analyzing longitudinal network data. As a result, we find that preferential attachment is stronger for firms that have fewer resources and are located in a less‐developed country. Consequently, we show how different competitive positions affect alliance strategies.
.Scientific problems are solved in the dissertation associated with the business models of complementarity and its determining factors. Objective is formulated in the thesis - to establish complementarity of business models and its determinants in incoming tourism. In order to achieve the objective, four research problems were analysed and aimed at: defining the construct of the business models complementarity; theoretically substantiate traits and characteristics of the business model complementarity and the factors that determine it in the incoming tourism, by preparing the conceptual model; substantiate methodology for the research of the business model complementarity and the factors that determine it in the incoming tourism; empirically identify and evaluate traits and characteristics of the business model complementarity and the factors that determine it in the Klaipeda city incoming tourism. The dissertation is comprised of three sections. The first section of the dissertation is devoted to reveal the concept of the business model and complementarity of the business models, providing a theoretical concept, structure and typology of justification, which helps to develop a conceptual model. The second section of the dissertation is devoted to prepare the research methodology of the complementarity of business models and its determining factors in the incoming tourism. The third section is devoted to present results of the research. Based on the findings, conclusions and recommendations are provided. The results of the research were obtained by using qualitative research methodological approach where complementarity of business models is regarded as an intrinsic Interpretative phenomenological single case study with multiple units of analysis in the same context. Tour operator and its partners are considered as case study units of analysis: a hotel, a restaurant, a carrier, a guide.
Abstract
Purpose –The purpose of this study is to examine how access and mobilisation of network resources influence a firm’s performance. It has been established that alliance portfolio (AP) network parameters shape the access to network resources; however, resource access understood as value creation differs from resource mobilisation
understood as value capture. Hence, the paper contributes towards the comprehension of AP performance by examining the extent to which a firm’s level of network resource mobilisation (NRM) plays a role in improving financial performance and how this strategy conditions the benefits obtained from a firm’s AP.
Design/methodology/approach – This study employs an interorganisational network approach to describe the APs of firms; subsequently, it examines how AP network parameters and resource mobilisation determine financial performance. To this end, sequential multiple regression models are applied to a sample from the Top
International Airlines database, covering 135 portfolios that correspond to 1117 codeshare partnerships.
Findings – The analyses show that the NRM level has an inverted U-shaped relationship with revenue performance, thereby revealing the limitations and considerations in the strategic alliance strategy. In addition, the authors show how the resource mobilisation decision moderates the faculty of AP parameters to influence a firm’s financial performance, thereby exposing the nuanced relationship between AP size, diversity and
redundancy. The findings convey strategic and practical implications for managers regarding how to capture value from their APs.
Practical implications – The findings suggest the need for NRM to form part of a firm’s AP management capability, so that, by acquiring superior strategic knowledge in NRM, the firm is able to extract value from its AP through the optimal exploitation of complementary assets.
Originality/value – Previous research has highlighted the multidimensional nature of APs at the theoretical level; however, no simultaneous empirical analysis of various AP parameters has yet been produced. The research empirically analyses an AP network and how its parameters affect financial performance in the presence of a resource mobilisation strategy. Not only do the authors introduce the analysis of the curvilinear
relationship between the level of NRM and a firm’s performance, but also of its role in advancing the AP literature.
Keywords Alliance portfolio configuration, Network resource mobilisation, Airline performance, Strategic alliances, Moderation analysis, Alliance network parameters
This study constructed the international tourism cooperation network (ITCN) in the Belt and Road Initiative area and further analyzed the structural equivalence of the tourism cooperative network by block-modeling approach through Convergence of iterated Correlations CONCOR algorithm in UCINET 6 data set. The results displayed the layout of subgroups: The East Europe, North Asia-Pacific and South Asia were in core positions; Middle East, the Americas and Africa were at margins of the network. Besides, each inter-block relational pattern and the status of each block had been presented. The sociogram of inter-block density highlighted the importance of reciprocal ties. These ties were mainly constructed between core blocks, but seldom constructed between peripheral blocks. The degree of competition derived from structural equivalence can be balanced through the implementation of intra-block differential strategy and the design of inter-block relational patterns.
The important links that are formed between tourist destinations and the airline industry are evident in the previous literature. These links are active in both directions. The characteristics and the policies of tourist destinations can affect such relevant aspects as the organization of airline route networks, the inauguration of new routes and their expansion. In this study, it is proposed that the value of a tourist destination and the inclusion of airports close to the tourist destination on the routes of an airline are also related to whether that airline decides to plan its route networks with its own resources or to complement those resources with assistance from other partner airlines through cooperative alliances, specifically code-share agreements. Taking into account the assumptions of the Resource-Based and the Relational views, the value of a tourist destination can be a relevant factor in the cooperative behaviour of airlines. Moreover, the routes within which the most valuable tourist destinations are embedded can be of different types. It is therefore of interest to know whether the type of route plays a relevant role in the preference for cooperative behaviour among the routes that include tourist destinations. Around 50,000 routes and the most important global tourist destinations were considered to analyse this behaviour. The results showed that the airlines under study preferred to operate the routes that included valuable tourist destinations with their own resources, although this behaviour was more variable when differentiating between types of routes.
This report presents the findings of qualitative research carried out between February and September 2018 as part of an AHRC Creative Economy Engagement Fellowship at Newcastle University. The project was supported by the Scottish Music Industry Association and Music Tourist who shared their contacts and expertise, offered advice on selecting potential interviewees and assisted with the design and distribution of an online questionnaire. The principal aims of the research were:
● To identify potential beneficiaries of music tourism in Scotland
● To identify barriers to and opportunities for collaboration between the music, retail,
hospitality and other tourism sectors
● To better understand the role played by the various actors involved in music tourism and the challenges facing them
● To produce a set of recommendations aimed at helping representatives of these sectors and policymakers to facilitate the development of music tourism in Scotland
The resulting report is based on interviews and presents a snapshot of opinions from individuals working in the field of music tourism including promoters, hoteliers, musicians, tour guides and retailers, as well as representatives of the public sector. We hope that the following key findings and recommendations will be of value to representatives of the sectors who are engaged in developing music tourism initiatives across Scotland, and to policymakers who are interested in growing the potential of music as a generator of economic, cultural and social value for Scotland.
The saturation problem of Mexico City airport is a complex problem, due to several reasons, such as the number of passengers served and operations carried out, as well as the fact that it is located in a megalopolis with severe problems of ground connection in all types of transports. The use of mathematical and simulation models is a convenient option for assessing hypothetical situations, for example, with respect to whether air traffic management is improved when using the recently redefined metropolitan airport system. This study proposes a discrete-event simulation model to assess saturation in the Mexico City Metropolitan airspace, considering the currently installed capacity of the system’s airports, as well as the current airspace design above Mexico City’s metropolitan area.
In a highly competitive environment, airlines tend to participate in global airline alliances (GAAs) to become more advantageous. This study employs IATA MarketIS data to examine the coopetition effects of three GAAs for ten selected airports. Each airport is a main gateway or hub in Asia with at least one based airline. The analysis in this paper focused on round-trip and transferred passengers for the international markets in 2018. The Herfindahl-Hirschman index (HHI) and Entropy Index (EI) were used to express the internal competition of round-trip markets for each GAA. A quartile separation with the calculation results of various traffic shares presented another coopetition status. These airports all had higher internal cooperation on transfer markets. Part of them appeared stronger internal competition on round-trip markets or external competition on transfer traffic. The airport-based airlines significantly developed home-ground advantages for their attributed GAAs.
The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.
The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.
The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.
The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.
The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.
This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.
This paper gives a cross-national comparison, involving West German, Dutch, and United States data, on the use of social ties
in the job-search process. Data for West Germany and the Netherlands are compared with the Lin et al. research on Albany-Schenectady
and Troy. The findings show that (1) there is more use of informal sources in the U.S. than in West Germany and the Netherlands;
(2) informal sources do not generally lead to higher occupational prestige and income; (3) for the Dutch data (no West German
data are available for this question) greater social resources, that is, a contact person with relatively high prestige, do
lead to a job with a higher prestige, though effects are less pronounced than found by Lin et al.; and (4) an extension of
the Lin et al. analysis shows that these social resources do not have a significant impact on income. This last finding is
consistent with the recent results of Marsden and Hurlbert's analysis of Detroit Area Study data. Institutional differences
that might be relevant to the explanation of cross-national differences are discussed.
In addition to theoretical arguments advocating various advantages of industrial networking, many examples of good practices and positive experiences can be found worldwide. Therefore, in many countries political measures have implemented to boost strategic partnership between companies. Nevertheless, examples of good practices of networking in the hospitality business are still relatively rare. In this paper, results of a study on the potentials for good practice in this regard and some reasons for the current state of poor networking in the Slovene hospitality sector are presented. The research consists of two parts. Managers of hospitality companies and leaders of two formal networks were interviewed for this purpose. The quantitative approach with Likert-type ordinal scale was used with the former group, while semi-structured interview and qualitative analysis was employed for the latter. The results revealed some interesting differences in the operational focus between formal and informal networks in terms of goals sought by their members. Strategic cooperation with the suppliers turned out to be the most common field of networking, while the principal obstacles for more intensive networking seem to lie in the conservative character of managers in the hospitality business, distrust and lack of time and organizational knowledge. This research fills the gap in dealing with industrial networking by confronting formal and informal strategic cooperation praxes in hospitality business.
I examine how firms use alliances to respond to the alliance networks of their rivals, by either allying with their rivals' partners or by building countervailing alliances. Evidence from the global airline industry (1994-98) suggests that these strategic responses depend on alliance cospecialization. Cospecialized alliances by rivals may involve exclusivity, precluding alliances with the rivals' partners and thus encouraging countervailing alliances. Nonspecialized alliances are less exclusive and are used when rivals share the same partners.
Purpose – This study aims to identify and examine the relationship between network resources and international performance of high tech small to medium-sized enterprises (HTSME) in the telecommunications industry in Ireland. The network resource construct for this paper comprises three dimensions: network human capital resources, network resource combination, and information sharing. Design/methodology/approach – Empirical research was carried out using a mail survey in which 154 firms completed and returned the questionnaire. Three hypotheses were analysed using structural equations modelling using LISREL. Findings – The study's main finding suggests a positive relationship between a firm's network human capital resources and international performance. However, no support was found for the relationship between network resources combinations, information sharing and international performance. Research limitations/implications – This study is cross-sectional, confined to a single industry and focused on the role of networks in the HTSME context only. Results from this study provide policy makers and practitioners with additional insights into specific network resource-based factors that are associated with international performance for HTSMEs. Such an assessment would help identify specific areas of relationship strengths and weaknesses in terms of the level of human capital available to firms, the combinations of complementary resources across firms and the extent and level of information exchange between firms. Practical implications – The paper concludes with a discussion of these findings and the overall implications for policy makers and managers. Specifically, it is necessary to identify and review the types of resources that are critical to the international performance of firms and develop and implement business strategies building on those resources in order to enhance the likelihood of international success. Originality/value – This study offers a multiple dimensionality to the network resource concept by measuring the direct effect of the type of network resources in terms of human capital, information and network resource combinations on international performance of HTSMEs in the telecommunications industry. These findings advance network research by highlighting the trade-offs that networks impose on firms that seek to manage and leverage their network resources.
Codesharing has become an essential tool for airline alliances. This paper investigates the effects of codesharing on firm conduct and air fares, focusing on oligopolistic interaction between airlines, and measures the impacts of a codesharing agreement between non-market leaders on the market leader's price and volume. An analytical model is developed and applied to a panel data of fifty-seven transpacific routes for the 1982-92 period. A complementary codesharing is found to reduce the leader's price by $83 and increase annual volume by 10,052 passengers.
Drawing on the social embeddedness perspective, this article examines the impact of entrepreneurs' social capital on their firm performance in post-Soviet Russia. Based on face-to-face interviews with 75 Russian entrepreneurs in 1995 and follow-up interviews in 1999, the study examines effects of structural embeddedness, relational embeddedness and resource embeddedness on firm performance. The main finding is that relational embeddedness and resource embeddedness have direct positive impacts on firm performance, whereas structural embeddedness has no direct impacts on performance.
Purpose
– The purpose of this paper is to examine how domestic airlines benefit when they have code sharing arrangements with international carriers.
Design/methodology/approach
– The data for this research study have been collected primarily from three sources. The first database, the digest of statistics no. 400 is from International Civil Aviation Organization (ICAO) based in Montreal, Canada. The second source of data comes from the Airline Business database. The third source of data for this research study is from Official Airline Guide (OAG). Ten years of data from 1994 to 2004 are collected from the databases of ICAO, Airline Business and also from individual airlines. Data such as the revenue passenger miles (RPMs) and load factor are obtained from the ICAO database and data such as alliance pattern are culled from the Airline Business database.
Findings
– This research study reveals that code sharing agreements between a domestic and international airline will benefit the former by way of increased RPMs, passenger load factor (PLF), and market share. However, the coefficients of the hypothesized variables suggest that the initial gains achieved by the domestic airlines by way of increased RPMs start to erode in the long run. Thus, a domestic airline must form a code sharing agreement with an international airline at the earliest, so as to get the initial increase in RPMs. The effect of code sharing on the market share of domestic airlines is explicit and consistent throughout this research study. The second dimension in the code sharing is the multiple alliances between domestic and international airlines. Multiple alliances refer to an airline having more than one code sharing agreement with international carriers. The third factor in this sequence of hypotheses is equity investment by international carriers in domestic airlines. The relationship between equity investment and its influence on the performance of the targeted firm is always an interesting topic explored by both the academic researchers and practitioners. However, in this study, the regression results do not support the hypothesis. That means that mere equity investment by international carriers in domestic airlines may not result in increased RPMs, load factor and the market share for domestic airlines. The interesting finding in this particular section is the influence of the large size of the alliance partners on all the three dependent variables; RPMs, PLF, and the market share. Therefore, we can conclude that if both the airlines are large enough and they form code sharing agreements, then this may result in increased RPMs, PLFs, and market share for the domestic airlines. Similarly, the study supports the premise that if the partners are unequal, then the domestic airlines may not be able to increase the RPMs, load factor, and the market share.
Originality/value
– This paper reveals that code sharing arrangements reached earlier in the competition is better as the benefits tend to reduce after a certain period of time.
The purpose of this article is to evaluate the strategic motives for alliance formation among tourism businesses. Based on past work on motivation for strategic alliance formation, this article identifies a set of motives and analyzes their implication for tourism businesses. The article further examines the role played by company characteristics in examining these motives. These motives are discussed in the context of the Australian tourism industry. A survey of Australian travel sector businesses was carried out and the results indicate that ‘internal drivers’ are perceived as more important than ‘external drivers’ as reasons for alliance formation. Company characteristics (sub-sector, number of employees, turnover, category, and ownership status) were found to be influential in top managers' assessment of alliance motives. The findings of this study imply that managers should conduct environmental analysis with a view to understanding how internal and external factors affect tourism businesses before any form of strategic alliances can be formed.
This paper focuses on dynamic capabilities and, more generally, the resource‐based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high‐velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well‐known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high‐velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long‐term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high‐velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.
What explains differences in firms’ abilities to acquire competitive capabilities? In this paper we propose that a firm’s embeddedness in a network of ties is an important source of variation in the acquisition of competitive capabilities. We argue that firms in geographical clusters that maintain networks rich in bridging ties and sustain ties to regional institutions are well‐positioned to access new information, ideas, and opportunities. Hypotheses based on these ideas were tested on a stratified random sample of 227 job shop manufacturers located in the Midwest United States. Data were gathered using a mailed questionnaire. Results from structural equation modeling broadly support the embeddedness hypotheses and suggest a number of insights about the link between firms’ networks and the acquisition of competitive capabilities. Copyright © 1999 John Wiley & Sons, Ltd.
This paper presents a dynamic, firm‐level study of the role of network resources in determining alliance formation. Such resources inhere not so much within the firm but reside in the interfirm networks in which firms are placed. Data from extensive fieldwork show that by influencing the extent to which firms have access to information about potential partners, such resources are an important catalyst for new alliances, especially because alliances entail considerable hazards. This study also assesses the importance of firms’ capabilities with alliance formation and material resources as determinants of their alliance decisions. I test this dynamic framework and its hypotheses about the role of time‐varying network resources and firm capabilities with comprehensive longitudinal multi‐industry data on the formation of strategic alliances by a panel of firms between 1970 and 1989. The results confirm field observations that accumulated network resources arising from firm participation in the network of accumulated prior alliances are influential in firms’ decisions to enter into new alliances. This study highlights the importance of network resources that firms derive from their embeddedness in networks for explaining their strategic behavior. Copyright © 1999 John Wiley & Sons, Ltd.
Network researchers have argued that both relational embeddedness—characteristics of relationships—and structural embeddedness—characteristics of the relational structure—influence firm behavior and performance. Using strategic alliance networks in the semiconductor and steel industries, we build on past embeddedness research by examining the interaction of these factors. We argue that the roles relational and structural embeddedness play in firm performance can only be understood with reference to the other. Moreover, we argue that the influence of these factors on firm performance is contingent on industry context. More specifically, our empirical analysis suggests that strong ties in a highly interconnected strategic alliance network negatively impact firm performance. This network configuration is especially suboptimal for firms in the semiconductor industry. Furthermore, strong and weak ties are positively related to firm performance in the steel and semiconductor industries, respectively. Copyright © 2000 John Wiley & Sons, Ltd.
We investigate whether firms learn to manage interfirm alliances as experience accumulates. We use contract‐specific experience measures in a data set of over 2000 joint ventures and licensing agreements, and value creation measures derived from the abnormal stock returns surrounding alliance announcements. Learning effects are identified from the effects of unobserved heterogeneity in alliance capabilities. We find evidence of large learning effects in managing joint ventures, but no such evidence for licensing contracts. The effects of learning on value creation are strongest for research joint ventures, and weakest for marketing joint ventures. These results are consistent with the view that learning effects are more important in situations characterized by greater contractual ambiguity. Copyright © 2000 John Wiley & Sons, Ltd.
The imputation problem is how to account for the sources of the value of the firm. I propose that part of the value of the firm derives from its participation in a network that emerges from the operation of generative rules that instruct the decision to cooperate. Whereas the value of firm‐level capabilities is coincidental with the firm as the unit of accrual, ownership claims to the value of coordination in a network pit firms potentially in opposition with one another. We analyze the work on network structure to suggest two types of mechanisms by which rents are distributed. This approach is applied to an analysis of the Toyota Production System to show how a network emerged, the rents were divided to support network capabilities, and capabilities were transferred to the United States. Copyright © 2000 John Wiley & Sons, Ltd.
This paper introduces the important role of networks of interfirm ties in examining fundamental issues in strategy research. Prior research has primarily viewed firms as autonomous entities striving for competitive advantage from either external industry sources or from internal resources and capabilities. However, the networks of relationships in which firms are embedded profoundly influence their conduct and performance. We identify five key areas of strategy research in which there is potential for incorporating strategic networks: (1) industry structure, (2) positioning within an industry, (3) inimitable firm resources and capabilities, (4) contracting and coordination costs, and (5) dynamic network constraints and benefits. For each of these issues, the paper outlines some important insights that result from considering the role of strategic networks. Copyright © 2000 John Wiley & Sons, Ltd.
We combine theory and research on alliance networks and on new firms to investigate the impact of variation in startups’ alliance network composition on their early performance. We hypothesize that startups can enhance their early performance by 1) establishing alliances, 2) configuring them into an efficient network that provides access to diverse information and capabilities with minimum costs of redundancy, conflict, and complexity, and 3) judiciously allying with potential rivals that provide more opportunity for learning and less risk of intra‐alliance rivalry. An analysis of Canadian biotech startups’ performance provides broad support for our hypotheses, especially as they relate to innovative performance. Overall, our findings show how variation in the alliance networks startups configure at the time of their founding produces significant differences in their early performance, contributing directly to an explanation of how and why firm age and size affect firm performance. We discuss some clear, but challenging, implications for managers of startups. Copyright © 2000 John Wiley & Sons, Ltd.
The imputation problem is how to account for the sources of the value of the firm. I propose that part of the value of the firm derives from its participation in a network that emerges from the operation of generative rules that instruct the decision to cooperate. Whereas the value of firm-level capabilities is coincidental with the firm as the unit of accrual, ownership claims to the value of coordination in a network pit firms potentially in opposition with one another. We analyze the work on network structure to suggest two types of mechanisms by which rents are distributed. This approach is applied to an analysis of the Toyota Production System to show how a network emerged, the rents were divided to support network capabilities, and capabilities were transferred to the United States. Copyright © 2000 John Wiley & Sons, Ltd.
This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.
I find that a firm's innovation output increases with the number of collaborative linkages maintained by it, the number of structural holes it spans, and the number of partners of its partners. However, innovation is negatively related to the interaction between spanning many structural holes and having partners with many partners.
This paper examines the association between interfirm cooperation and the innovation output of startup firms in the biotechnology industry. A reciprocal association is hypothesized. The results, however, show only that cooperation affects innovation, not the reverse. Several control variables are related to cooperation and innovation, especially startup size and the startup's position in the cooperative network.
The intuitive background for measures of structural centrality in social networks is reviewed and existing measures are evaluated in terms of their consistency with intuitions and their interpretability.
Understanding sources of sustained competitive advantage has become a major area of research in strategic management. Building on the assumptions that strategic resources are heterogeneously distributed across firms and that these differences are stable over time, this article examines the link between firm resources and sustained competitive advantage. Four empirical indicators of the potential of firm resources to generate sustained competitive advantage-value, rareness, imitability, and substitutability are discussed. The model is applied by analyzing the potential of several firm resources for generating sustained competitive advantages. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other business disciplines.
At a time when tourism is the preeminent global industry, the Mediterranean is one of the most important tourist regions in the world, accounting for approximately a third of total tourism revenues and half of international arrivals. Because the traditional sun, sand, and sea tourist product of the Mediterranean is experiencing a crisis with subsequent market shifts toward other regions and alternative tourist products, the region has begun to lose its share of the international travel market. The time is ripe for the 21 Mediterranean countries to evaluate their tourist industries in the context of sustainable development strategies, begin to consider restructuring their industries to increase efficiency and competitiveness, and form strategic alliances for cooperative marketing efforts in order to maintain a competitive edge in the global tourist market at the threshold of the third millennium.
Alliance portfolios are ubiquitous and influential for firm performance. Extant research addresses attributes of high-performing alliance portfolios but not how executives originate such portfolios. In our inductive case study of six entrepreneurial rivals in the wireless gaming industry, we find that executives are more likely to originate high-performing portfolios when they visualize their portfolios in the context of the entire industry as opposed to a series of single ties and when they simultaneously form ties with multiple partners. The emergent theoretical framework emphasizes agency and strategic action in contrast to a deterministic account of dyadic interdependence and social embeddedness.
Defining social capital in terms of the information benefits available to a firm due to its strategic alliances tie present a theory, of social capital that conceptualizes it as a multidimensional construct. We draw from the literature to argue that social capital yields three distinctly different kinds of information benefits in the form of information volume, information diversity, and information richness. This extends current theoretical and empirical research by specifying and empirically demonstrating three interrelated vet distinct dimensions of social capital. Firms vary in their levels of social capital not just on their structural position in an alliance network but also in the dynamics that underlie alliance formation and maintenance. More importantly, the different dimensions of social capital theoretically provide differential benefits. We establish the construct validity of our proposed three-dimensional conceptualization of social capital using longitudinal data on tire population of strategic alliances formed during the period 1980-94 by firms in the global steel industry. In addition, rose establish predictive vadility by demonstrating drat the information dimensions have differential effects oil firm performance, using fire: nationality as a contingency. Copyright (C) 2002 John Wiley Sons, Ltd.
This study uncovers value creation and appropriation mechanisms in alliance portfolios. It reveals how the value created by network resources varies with their complementarity. The relative bargaining power of partners limits a firm's appropriation capacity, especially when the partners compete in its industry. This capacity improves with competition among partners.
In this research, I proposed and tested a model of how firms learn from their strategic alliances. Based on a survey of 151 firms, the results suggest that experience alone is insufficient for the achievement of the greatest benefits from collaboration. Experience must be internalized first, and collaborative know-how must be developed for this experience to contribute to future collaborative benefits.
The airline sector is a mature industry in which a wide range of competitive practices reflect highly intense levels of rivalry. This is evident from the alliance portfolios of airline companies that are composed of mutually advantageous agreements between firms in the aviation sector. In this context, we examine the influence that access to valuable network resources may have on company performance (in operational and financial terms). Moreover, as network resources come under the resource dimension of a firm's social capital, we also study the way the resource dimension is affected by other dimensions of social capital (network position, network structure formed by the alliance portfolio and the quality of the relations). We study the alliances agreed between 214 mainstream airlines, up until 2007, during which time 351 airlines formed various types of partnerships. The results suggest, on the one hand, that access to partner resources is influenced by structural and relational factors. However, on the other hand, the structure of each airline's alliance portfolio has more influence than its position in the global network of alliances. These results point to the need for satisfactory governance of the composition and management of an airline's alliance portfolio.
This paper provides an overview of the literature on interorganizational relationships. Although the literature on interorganizational relationships is extensive, a pervasive theme that is either explicit or implicit in the majority of the articles is the simple notion of whether interorganizational relationships make sense and whether the advantages outweigh the disadvantages. This article reviews six widely used theoretical paradigms that explain interorganizational relationship formation, including transaction costs economics, resource dependency, strategic choice, stakeholder theory, organizational learning, and institutional theory. Although each paradigm alone is insufficient to capture the complexities of interorganizational relationship formation, the fact that interorganizational relationships can be justified from such diverse theoretical backgrounds is impressive. The paper also reviews the six forms of interorganizational relationships most commonly pursued in practice and discussed in the literature, including joint ventures, networks, consortia, alliances, trade associations, and interlocking directorates. Through these discussions, we elaborate on the potential advantages and disadvantages of participation in interorganizational relationships.
We evaluate the resource utilisation efficiency with strategy alliances by data envelopment analysis to investigate whether we can reinforce hotel efficiency improvement. The empirical results show that hotels with international chain strategy alliances enjoy higher resource utilisation efficiency than independent operated hotels. The hotel with the more diversification of precompetitive alliances enjoys less resource utilisation efficiency. Furthermore, the deregulation of tourism in China had no impact on the results.
Network researchers have argued that both relational embeddedness—characteristics of relationships—and structural embeddedness—characteristics of the relational structure—influence firm behavior and performance. Using strategic alliance networks in the semiconductor and steel industries, we build on past embeddedness research by examining the interaction of these factors. We argue that the roles relational and structural embeddedness play in firm performance can only be understood with reference to the other. Moreover, we argue that the influence of these factors on firm performance is contingent on industry context. More specifically, our empirical analysis suggests that strong ties in a highly interconnected strategic alliance network negatively impact firm performance. This network configuration is especially suboptimal for firms in the semiconductor industry. Furthermore, strong and weak ties are positively related to firm performance in the steel and semiconductor industries, respectively. Copyright © 2000 John Wiley & Sons, Ltd.
We examine how new network resources accessed through alliance formations interact with network resources present in a firm's alliance portfolio. We test our theoretical model using event study methodology and data from the global air transportation industry. We find that the market rewards firms forming alliances that contribute resources that can be synergistically combined with firms' own resources as well as with network resources accessed through their alliance portfolios. Our results also indicate that the market penalizes firms entering into alliances that create resource combinations that are substitutes to resource combinations deployed by existing alliance partners.
We propose a two-stage game-theoretic approach to study the operations of an airline alliance in which independent carriers, managing different reservation and information systems, can collaboratively market and operate codeshare and interline itineraries. In the first-stage game, airlines negotiate fixed proration rates to share the revenues generated by such itineraries. In the second-stage game, airlines operate independent inventory control systems to maximize their own expected revenues. We derive a revenue-sharing rule that is (i) an admissible outcome of the first-stage negotiation, in the sense that no airline coalition has enough incentives to secede from the grand alliance, and (ii) efficient for the second-stage game, in the sense that the decentralized system can achieve the same revenues as a central planner managing the global alliance network. Our numerical study shows that the proposed proration rates can lead to a significant increase in revenues with respect to other rules commonly used in practice. Finally, because our proposal requires the disclosure of private demand information, we introduce a simple alternative rule that is based on public information. This heuristic performs remarkably well, becoming an interesting candidate to be pursued in practice.
Numerous business studies discuss the importance of networks, strategic alliances and collaborative relationships for businesses. Despite such rich body of knowledge, however, such discussion appears to have fallen short of including small hospitality operations. In fact, hospitality industry studies exploring these dimensions are few and far between. Seeking to gather information and contribute to the limited body of knowledge in these areas, this study uses semi-structured interviews among 21 small accomodation operations around the city of Perth (Western Australia), including self-contained, bed and breakfast and farm-stay businesses. The overall tone of respondents' comments emphasises the critical value of collaborative relationships in ways that include referral of business and mutually beneficial exchanges with other local businesses. Furthermore, respondents' comments suggest that working collaboratively stimulates the growth of commercial opportunities among participating operations. Equally important is that some operators are able to design long-term strategies that might positively impact their community. For example, strong collaborative relationships can potentially enhance a destination's image with further implications for the area's promotion and marketability, while providing a positive experience for visitors.
The sluggish airline industry in America and Europe has pushed major international carriers to offer bargain fares and concessions in order to survive. Though Asian airlines are performing well and are profitable, the global competition has increased pressures considerably and led to reforms in the regional market. After reviewing the drivers that are causing change and affecting airline performance, the discussions shifts to the emerging strategic alliances between carriers. The introduction of frequent-flyer programmes in Asia serves as an illustration of how regional airlines are attempting to cope with the challenge of global competition.
Status-based affiliation represents a valuable resource in economic exchange. However, affiliation strategies introduce a status ordering paradox: whereas higher status actors seek to maintain status hierarchies, lower status actors strive to affiliate with more prestigious actors. In this paper, using original data on the network of social and professional ties among 72 hotel managers clustered in an Italian hotel district, we develop a theory of status-seeking behavior that involves the exchange of status for valued resources.
This paper deals with the returns to social capital in occupational attainment in the GDR, once a communist showcase. It examines the extent to which getting ahead in an industrial communist society depends on social capital, which by existing research was shown to be the case in agrarian communist and capitalist industrial societies. Industrial technology and a Marxist ideology supposedly both impede particularism, suggesting that social capital is not that important for getting ahead. In addition, the relationship between the use of and access to social resources is explored. Retrospective data from two random samples collected in 1992 and 1993 in Leipzig and Dresden have been used to test our expectations. Although universalism seemingly dominated the attainment process, as a person's education was more important than his father's resources, nearly half of the employed got their jobs through some informal channel. Yet, the use of informal resources only led to a better job if the contact person had high occupational prestige. Part of the influence of human capital on occupational achievement should be attributed to the effect of a person's social capital, i.e. a contact person with high prestige. Access to occupations through informal ties did not imply that these ties were used. Although one reached higher occupational ranks through weak ties (acquaintances), access through strong ties (friends or relatives) was crucial for finding a contact person with high prestige. This probably reflects the high damage potential of using illegal particularistic ties under communism. Using a high prestige contact person was far more important for getting a better job than having access to higher occupations.
This study assessed air travelers’ perceptions of the importance of airline alliance benefits and the performance of airline alliances. In the process, important differences in terms of certain demographics, frequency of travel, and country of origin were established. Interviews were conducted with 819 international travelers departing Hong Kong. Results indicated that in contrast to previous research findings, it is mainly factors contributing to travelers’ convenience that were ranked highest rather than the ability to earn frequent flyer points and an expanded route network offered by alliances. Furthermore, importance ratings for respondents residing in Western countries were generally, and in many cases significantly, lower than those of respondents residing in Asian countries. The moderate evaluation of the global alliances by the most frequent travelers highlights the various areas that require further attention and improvement.
Organizations enter alliances with each other to access critical resources, but they rely on information from the network of prior alliances to determine with whom to cooperate. These new alliances modify the existing network, prompting an endogenous dynamic between organizational action and network structure that drives the emergence of interorganizational networks. Testing these ideas on alliances formed in three industries over nine years, this research shows that the probability of a new alliance between specific organizations increases with their interdependence and also with their prior mutual alliances, common third parties, and joint centrality in the alliance network. The differentiation of the emerging network structure, however, mitigates the effect of interdependence and enhances the effect of joint centrality on new alliance formation.
This paper examines the growth and structure of the UK tour-operating industry using competitive analysis models as developed by Porter and more latterly Thurlby. It argues that after a period of aggressive consolidation through acquisitions and mergers, a situation has arisen whereby the major tour operators maintain power over buyers and suppliers and have concurrently formed barriers to entry for new entrants. However, with the emergence of new forces, the major players face fresh challenges from virtual and niche entrants who are gaining a competitive position with the tour-operating environment.
The engagement of firms in multiple simultaneous strategic alliances with different partners has become a ubiquitous phenomenon in today’s business landscape. This article offers a review of the extant alliance portfolio literature and organizes it around three key research areas: (a) the emergence of alliance portfolios, (b) the configuration of alliance portfolios, and (c) the management of alliance portfolios. The article also highlights existing gaps in the present understanding of alliance portfolios and outlines a research agenda by identifying key research questions and issues in the areas where further research is needed.
We replicate and extend studies of job-matching by Lin, Ensel, and Vaughn (1981) and Bridges and Villemez (1986), concentrating
on the effects of social network resources on the following outcomes of job-changes: occupational prestige, wages, industrial
sector, firm size, possession of authority, and closeness of supervision. Our replication confirms major findings of prior
work, and demonstrates that these are not affected by incidental selection bias or the absence of controls for the immediately
preceding levels of outcome variables. Our extensions, however, qualify the social resources argument by indicating that effects
of different social resource measures are largely outcome-specific: no single measure among those studied appears as a general
indicator of “social capital” providing advantages in matching people to a broad range of valued outcomes. The analyses also
show no significant net effects of tie strength on either mobility outcomes or access to social resources.