STRATEGIC ALLIANCES

Strategic Alliances

Strategic Alliance

The businesses these days have gone to the extent of providing products and services at large scale and across the entire world. This globalizing of business organization has let them gain competitive edge over other businesses in the same industry. Globalization can be a very expensive process, particularly when a firm must perfectly coordinate research and development, production, distribution, marketing, and financial decisions throughout the world in order to succeed. However following the process of economic globalization and regional integration, international strategic alliances have become increasingly common within the global airline industry. This paper will analyze the implications of international strategic alliances for Emirates that flies to Nigeria.

Strategic Alliances

The term, Strategic Alliance, pertains to a relationship of two parties in order to fulfill a critical business need or pursue a mutual goals and being an independent organization at the same time. This type of collaboration stays between organic growth and mergers and acquisitions. The strategic alliance may be provided by the partners through resources like distribution channels, distribution channels, project funding, manufacturing capability, knowledge, expertise, capital equipment, or intellectual property. The alliance pertains to the collaboration or cooperation which is performed for the creation of synergy through which every partner expects that the alliance will benefit them more than the benefit they will receive form the individual efforts. This type of alliance usually involves the transfer of technology, right to use to expertise and knowledge, shared expenses, economic specialization, and shared risk.

Star Alliance

Amongst many other airline alliances, Star Alliance is the largest and first global alliance of airline companies which is based in Frankfurt am Main, Germany (Star Alliance, 2012). The alliance was established in the year 1997, and its emblem and name symbolize the five founding airlines, Lufthansa, Air Canada, Thai Airways International, Scandinavian Airlines, and United Airlines. Since then, Star Alliance has expanded notably and currently, 28 member airlines have joined the alliance and it has daily departures of over 21,100 altogether. The number of passengers carried by these flights every year is 678.5 million, and they reach around 1,356 airports in 193 countries. Mark Schwab is the CEO of the alliance, who has replaced Jaan Albrecht, the previous CEO (Bay, Tampa, 2010).

The Star Alliance was formed when; five airlines Air Canada, United Airlines, Thai Airways International, Lufthansa, and Scandinavian Airlines System joined each other on May 14, 1997. Young & Rubicam Advertising was chosen by the newly formed alliance to enhance the awareness with $25 million in budget. The conventional star logo was shared jointly by the five airlines and it had five points which represented the five founding airlines. The alliance soon expanded and grew with the major admission of many other airline companies. These included The Austrian Airlines Group (Lauda Air, Austrian Airlines, and Tyrolean Airways), Singapore Airlines, Mexicana Airlines, Emirates, Turkish airlines and the airlines of various other countries.

Star Alliance offers to its customer's two types of levels in memberships: Silver and ...