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Strategic Analysis of the Airline Industry

            
             The purpose of this paper is to analyse the European airline industry in terms of strategic issues. This is achieved both practically by investigating the environment of the industry and theoretically by studying some theoretical framework and models concerning strategic analysis. There are three main sections in this report. The first section is about analysing the environment of the industry. It contains an analysis of the external factors affecting organisations operating within the industry. This will mainly help identify the opportunities and threats that might exist. .
             The discussion goes further by analysing the competitive environment of the industry. In this section the competitive forces that might affect organisations are identified. Understanding the competitive forces will provide insight into attractiveness of the industry and the potential for returns on capital. The final part of this report is an analysis of strategic groups within the industry. This part will specifically look at different groups of rival firms clustered around a similar competitive approach or strategic position. This will however help determine the different competitive positions that rival firms occupy. Furthermore it will discuss the potential strategic spaces that firms can move into. These analysis and frameworks are provided with the aim of helping to identify key issues and ways of coping with change and complexity. .
             .
             Industry Background .
             The airline industry is a very unique. It was protected through government controls until the early 1980s. However due to deregulation policy the industry opened to free competition. As a result collaborations and alliances were formed and low budget airlines were able to enter the market. However in a word that is moving towards globalisations the airline industry cannot remain unaffected. A trend towards globalisation is noticeable in the airline industry.


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