Competition and competitiveness in the US airline industry

Abstract

Purpose

This study aims to employ a resource-based lens to explore the competitive implications of firm strategies under conditions of market commonality and shared resource pools.

Design/methodology/approach

The firms’ core capabilities in these environments may focus on operational efficiency, as firms seek to compete under significant resource heterogeneity constraints.

Findings

Using data from the USA airline industry from 1996-2011, we find that price has a positive relationship with firm performance, whereas quality has a negative relationship. Operational efficiency is a driver of both strategies.

Research limitations/implications

The study uses US data. Extending the findings to the global setting may require recognizing other competitive dimensions.

Originality/value

Firms that focus on non-core activities perform less well. The results offer insights into an industry that has interested strategy researchers for many years and may suggest an application to other industries with similar characteristics.

Citation

Hannigan, T.J., Hamilton III, R.D. and Mudambi, R. (2015), "Competition and competitiveness in the US airline industry", Competitiveness Review, Vol. 25 No. 2, pp. 134-155. https://doi.org/10.1108/CR-11-2014-0036