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Business Strategy Analysis: US Airways
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This air company has earned a nickname “Agony Air” in the 1970s due to poor service. Now it is one of the leading carriers flying to 198 destinations in the US, Europe and Middle East. The company is a member of Star Alliance and serves over 80 million passengers yearly. This paper is an attempt to look into business strategies that US Airways employed to achieve this booming success, especially recently, in ever-growing fiercely competitive market conditions.
We can base our definition of some strategies leading US Airways to competitive advantage on Michael Porter’s research in this area. In his work “Competitive Strategy: Techniques for Analysing Industries and Competitors” (1980), he summarised his research into three leading tactics to achieving advantage: cost leadership, differentiation, and market segmentation. Porter (1998) suggested that combination of certain strategies can be winning, while the other combinations are not beneficial and trying to implement all strategies at once can be even detrimental to business. The bargaining influence of clients is another force that can control the competitive position of a company and affect its prices and profit potential (p.45).
Bamber, G. J., Gittell, J., Kochan, T. A., & von Nordenflycht, A. (2009) describe the volatile conditions in the USA airline industry since 9/11, when US Airways declared bankruptcy along with other major airlines (p.2). Cost Leadership and elements of Differentiation were the strategies that helped the company to reinvent itself. For instance, in 2010 the company cut many of its routes and traded some of the regional ones to Delta in exchange for Washington National routes and, thus, increased its presence there. Merger with American Airlines in February 2013 and claim to form the world’s largest airline can also be viewed as a part of Cost Leadership strategy. Differentiation strategy is used in relation to certain service, which is claimed to be the trademark of US Airways, such as introducing "FastPath", a new complimentary service for certain routes.
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Thus, we can see that the combination of Cost Leadership and Differentiation was employed by the company under review. It has allowed staying afloat and ultimately competitive advantage of this new merged company. Now we can wait for the new ideas the management will use in future in the battle for the customers’ dollars.
