An analytical model for the assessment of airline expansion strategies

Abstract

Purpose: The purpose of this article is to develop an analytical model to assess airline expansion strategies by combining generic business strategy models with airline business models. Design/methodology: A number of airline business models are examined, as are Porter’s (1983) industry five forces that drive competition, complemented by Nalebuff and Brandenburger’s (1996) sixth force, and the basic elements of the general environment in which the expansion process takes place. A system of points and weights is developed to create a score among the 904,736 possible combinations considered. The model’s outputs are generic expansion strategies with quantitative assessments for each specific combination of elements inputted. Originality/value: The analytical model developed is original because it combines for the first time and explicitly elements of the general environment, industry environment, airline business models and the generic expansion strategy types. Besides it creates a system of scores that may be used to drive the decision process toward the choice of a specific strategic expansion path. Research implications: The analytical model may be adapted to other industries apart from the airline industry by substituting the element “airline business model” by other industries corresponding elements related to the different specific business models.