Ebm3083 - Case Study 1 - Group A

EBM3083 STRATEGIC MANAGEMENT
FACULTY OF ECONOMICS AND BUSINESS
UNIVERSITI MALAYSIA SARAWAK
SEMESTER 1 22/23
CASE STUDY 1
GROUP NAME: GROUP A
LECTURE GROUP: G01/W02
LECTURER: DR ABANG AZLAN MOHAMAD
NO. NAME STUDENT ID
1 Angelyna Lia Anak Luking 74138
2 Catherine Jatie Anak Geronsin 77384
3 Fahim Aimi Bin Jamhari 73447
4 Lydia Anak Seli 75516
5 Suhilin Anak Chubing 77450
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Discussion Questions
1. How important is the environment to the performance of airlines in the airline industry?
What does this suggest regarding the industrial organisation (I/O) model to explain
how firms can earn above-average returns?
Environments are critical to the performance of the airline industry as they represent
core competencies, resources, and capabilities to provide continuous and efficient
service. According to the industry organization model, the aviation industry can quickly
formulate and execute strategies through proper execution by monitoring the external
environment, developing assets and improving existing skills. The airline industry can
greatly benefit from strategic planning and its timely execution.
The industrial organization model suggests that the external environment has a greater
impact on strategic decisions than the internal environment in relation to available
resources, skills, and competencies. The environment plays an important role in
achieving maximum benefits. These factors are not within the direct control of the
airline. Airline competition is based on factors such as reduced flight cancellations,
industry entry barriers, consumer demand and revenues, fuel prices, technological
developments, reduced delays, WiFi services, and other incentive programs. The
airline industry should understand the external environment, implement strategies to
deal with these situations, and generate superior revenue by offering product
differentiation such as discounts and better facilities such as food.
2. Why is there a lot of imitation in the airline industry, and how does this affect firm
performance?
Based on the case study, imitation in terms of service occurs as it is easily to be made.
Even Though there is uniqueness in some airline companies, it is only temporary since
they are a benchmark for other companies to improve their offerings. Based on our best
findings, the imitation is high in the airline industry because of the high number of expert
people, handful of suppliers and the cost of creating it is very high for the aircraft. The
options for excellent airlines are very little, so other companies try to duplicate the idea
from the initiator.
When an airline discovers a successful strategy, others quickly copy it. "When competitors
adopt comparable strategies, there is less likelihood that any enterprise would win or fail
in comparison to others. Therefore, imitation keeps the status quo among competitors who
copy one another, even in businesses where fierce competition is still present (Lieberman,
2006). Because so many airlines offer the same services and pricing, they are constrained
in how they may draw customers. Among these things are improving client service and
caring.
Therefore, imitation does affect firm performance both in positive and negative ways. On
the bright side, it may provide motivation to the industry to cope well in the market for the
sake of sustaining high demand. Negatively, not every firm is able to survive the process
of imitation and reach the desired goal to be successful as problems may occur in the
process.
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3. How important is the resource-based model to explain how well firms perform in the
airline industry?
A resource-based model can be confusing because the term resources is used in many
different ways within everyday common language. However, the theory is important as
it helps firms identify their unique resources and capabilities. Other than that, these
unique resources help firms evaluate their advantage for above-average returns.
These advantages can be valuable for the firms and further help them stand out from
their competitors. Specifically, it is important to recognize that overall strategic
resources are often created by taking several strategies and resources that each could
be copied and bundling them together in a way that is difficult to duplicate.
4. How can strategic leaders be successful in an industry like the airlines industry?
Strategic leaders in the airline industry can succeed by maintaining a strong customer
focus and ensuring that it scores high on metrics such as on-time performance and
customer complaints. They can win by focusing on mistake reduction such as fewer
lost luggage, lower flight cancellation and delay rates. Strategic leaders that focus on
minimising errors will be able to give high levels of customer satisfaction which allows
them to prosper in the industry and have high on-time performance rates.
Reference
Lieberman, M. B., & Asaba, S. (2006). Why do firms imitate each other? Academy of Management
Review, 31(2), 366-385. https://doi.org/10.5465/amr.2006.20208686
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EBM3083 STRATEGIC MANAGEMENT

FACULTY OF ECONOMICS AND BUSINESS

UNIVERSITI MALAYSIA SARAWAK

GROUP NAME: GROUP A

LECTURE GROUP: G01/W02

LECTURER: DR ABANG AZLAN MOHAMAD

NO. NAME STUDENT ID

1 Angelyna Lia Anak Luking 74138

2 Catherine Jatie Anak Geronsin 77384

3 Fahim Aimi Bin Jamhari 73447

4 Lydia Anak Seli 75516

5 Suhilin Anak Chubing 77450

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