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Transnational Strategy Of Lufthansa

1545 Words7 Pages

Lufthansa Lufthansa uses transnational strategy to gain global presence and recognition (Franz 2014). This strategy has been achieved by creating alliances and partnerships with other renowned carriers globally, especially in the European region. It is the most fundamental strategy Lufthansa leveraged on, in order to maintain core leadership in the airline industry not only in the European markets, but worldwide as well. As one of the founding members of Star Alliance, Lufthansa is able to offer customers across the globe a more convenient travel experience (Franz 2014). It also has given Lufthansa the opportunity to reduce cost of resources, thus leading to higher market profits. It has also greatly reduced the barriers of market entry including …show more content…

(Franz 2014)The strategic decisions encloses the feasibility of cooperative strategy – which enables them to form various partnerships with other members of Star Alliance, including partnerships within different segments of the Lufthansa group, and from its subsidiaries. This cooperative strategy allows collaboration of combining talents and resources with partners and alliances in order to provide quality customer service. (Franz 2014) Lufthansa’s strategy includes focusing on profitable growth, at the same time, maintaining their corporate structure development and upholding their key values. They make use of a highly decentralized corporate structure, which comprises of separate business centers, yet generating a centralized profit. (Franz 2014) The capacity to make steady enhancements to the expense structure is essential in order for Lufthansa to stay ahead competitors. Lufthansa Group, has accomplish this by setting up and executing projects to shield profit as obliged and by continually diminishing the expense base of their ordinary business and making it more adaptable (Hild, 2004). For worldwide airline industry, opportunities can emerge from new client expectations, items, business sector structures or regulatory …show more content…

Looking at the respective case studies, SIA, EA and Lufthansa have shared similar challenges like striving for cost effectiveness and differentiation from competitors. Despite these similarities, SIA and EA seem to have survived throughout as an individual highly recognized brands while being involved in Star Alliance overshadows Lufthansa. As well, Lufthansa also operated with higher labor costs than low-cost players or emerging market competitors – years of union advocacy, pension fund obligations, and industry regulations forced these airlines to devote a larger share of revenues towards labor benefits. EA advantage mostly comes from government support and their self sufficient in fuel compared to the other two airlines. External factors like fuel prices or government factors may affect the airlines, but the root of sustaining competitive advantages still lies within the organization’s strategies and core values in order to gain

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