strategic alliance in aerotransport industry

7/29/2019 strategic alliance in aerotransport industry

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DEFINITIONS

1. Strategic Alliance is a mutually beneficial long-term formal relationship

formed between two or more parties to pursue a set of agreed upon goals or

to meet a critical business need while remaining independent organizations.It is a synergistic arrangement whereby two or more organizations agree to

cooperate in the carrying out of a business activity where each brings

different strengths and capabilities to the arrangement.

The term strategic alliance can in fact mean many different things, but

the commonly used meaningentails a joint cooperative effort by two or

more companies working towards agreed upon goals. The parties are

typically in the same or related industries and are looking for strategic

synergies in allying with a party in one or more of the following areas:

Joint product development

Joint research

Distribution arrangement

Co-marketing arrangement

Investment by one company in the stock of another company, typically for a

minority position

Licensing of patent or other intellectual property

The alliance can be structured as a separate entity joint venture, with both

parties making the agreed upon contributions (whether capital, technology,or services). More often, however, an alliance is promulgated as a

contractual arrangement or a series of interdependent agreements.

2. Strategic alliance is a specific form of collaboration between two or more

companies. Strategic alliances with stronger overseas partners can provide a

means of overcoming the problems of small size and lack of resources faced

by some US companies.

The term "strategic alliance" can mean many things. In its broadest sense, it

can apply to virtually any form of collaboration between two or more firms,including one or more of the following activities:

Design contracts

Technology transfer agreements

Joint product development

Purchasing agreements


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Distribution agreements

Marketing and promotional collaboration

Intellectual advice

For our purposes, the term strategic alliance encompasses a more specific

type of company relationship than the joint venture or a typical exporter-

distributor or licensing arrangement. A strategic alliance might be entered

into for a one-off activity, or it might focus on just one part of a business, or

its objective might be new products jointly developed for a particular

market.

Generally, each company involved in the strategic alliance will benefit by

working together. The arrangement they enter into may not be as formal as a

joint venture agreement. Alliances are usually consummated with a written

contract, often with agreed termination points, and do not result in thecreation of an independent business organization. The objective of a

strategic alliance is to gain a competitive advantage to a companys strategic

position. When you are a small company, a strategic alliance can allow you

to graft your whole business onto the superior manufacturing, marketing and

distribution structures of an established international company.

Characteristics of a Strategic Alliance

Compared to other types of company-to-company relationship, strategic

alliances often have the following characteristics:

Usually a non-equity, loosely structured relationship

Each partner retains its business independence

One Company will take a lead role in any contract or marketing and

the others will be "partners" in the work. They could work as sub

contractors or suppliers to the main company

The alliance can be struck between companies which would normally

be considered competitors

The relative size of the partners is not a significant factor Each partner must contribute distinctive "core strengths" eg

technology, manufacturing capacity, access to distribution

Strategic alliances can be combined with other agreements, such as licensing

of technology


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Strategic alliances come in all shapes and sizes, and include a wide range of

cooperation, from contractual to equity forms.

Various terms have been used to describe forms of strategic partnering.These include international coalitions (Porter and Fuller, 1986), strategic

networks (Jarillo , 1988) and, most commonly, strategic alliances.

Definitions are equally varied. An alliance may be seen as the joining of

forces and resources, for a specified or indefinite period, to achieve a

common objective.

Types of strategic alliances

Contractual:

Licensing

o Cross-licensing

Franchising

Joint R&D

Management Contract

Turnkey project

Equity:

New entity

o Independent Joint venture

o Dependent Joint Venture of Multinational Corporation

Existing entity

o Purchase of equity share

o Equity swap

Stages of Alliance FormationA typicalstrategic alliance formation process involves four steps:

Strategy Development: Strategy development involves studying the

alliances feasibility, objectives and rationale, focusing on the major

issues and challenges and development of resource strategies for
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production, technology, and people. It requires aligning alliance

objectives with the overall corporate strategy.

Partner Assessment: Partner assessment involves analyzing a

potential partners strengths and weaknesses, creating strategies for

accommodating all partners management styles, preparing

appropriate partner selection criteria, understanding a partners

motives for joining the alliance and addressing resource capability

gaps that may exist for a partner.

Contract Negotiation: Contract negotiations involves determining

whether all parties have realistic objectives, forming high caliber

negotiating teams, defining each partners contributions and rewards

as well as protect any proprietary information, addressing termination

clauses, penalties for poor performance, and highlighting the degree to

which arbitration procedures are clearly stated and understood.

Alliance Operation: Alliance operations involves addressing seniormanagements commitment, finding the caliber of resources devoted

to the alliance, linking of budgets and resources with strategic

priorities, and measuring and rewarding alliance performance

Benefits of Strategic Alliances

Strategic alliances can be valuable and beneficial tools to implement

corporate goals. While no single alliance may provide solutions for meeting

all corporate goals, alliances, when properly structured, can provide thefollowing benefits:

Access to New Distribution Channels

An alliance can be structured to grant a company access to new distribution

channels that may otherwise be difficult or costly to penetrate on its own.

Access to New Technology

Many alliances are formed to enable one company to obtain access or rights

to new technology through license or other contractual arrangements

allowing Increase in capital for research and product development and yetlower risk (Innovation)

Access to Capital

A prime motivation for smaller emerging companies is the ability to access

new capital for growth, for development of new products or services, or for

entry into new lines of business. This is typically structured as license


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payments or investment in the stock of the emerging company. Valuations of

the company in such corporate partnering arrangements may be higher than

available in venture capital financings.

Access to International Markets. In an increasingly global economy,

multinational alliances that grant access to international markets can be a

significant benefit. Allying with a company that is already doing business or

stationed in a foreign country, that understands the market and the culture,

and that has existing business operations in the foreign country, can often be

much more efficient and successful than attempting to enter those markets

on the companys sole initiative.

Reduction of Cost and Uncertainty

Allying with a partner may reduce the significant cost and uncertainty of

pursuing a new market, product, or service. Often, the company may be

unable to expand on new initiatives without the backing and assistance of a

strategic ally, Allowing Decrease in product lead times and life cycles (timepressures)

Access to Manufacturing

. An alliance can provide a company access to manufacturing capabilities,

expertise, or capacity.

Enhancing the Ability to Compete

An alliance can provide a company enhanced ability to compete in its

existing markets and in new markets.

Enhanced Credibility

Under an appropriate alliance, a start-up or emerging company may

enhance its credibility (e.g., to the markets or to the potential investors).

Access to New or Existing Products

An alliance can provide a company with access to new or existing products.

Pharmaceutical companies in particular enter into strategic alliances with

biotechnology companies to place them in a preferred position for access to

new products.

Rapidly achieve scale, critical mass and momentum (Economies of Scale

- bigger is better)

Ability to bring together complementary skills and assets that neithercompany could easily develop on its own

Providing added value to customers


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Disadvantages of Strategic Alliances

There are a number of potential disadvantages to strategic alliances:

Lack of Total Control

By nature, most strategic alliances require a measure of shared control over

goals and method of implementation of the alliance. The lack of total control

of the direction of the business venture can cause significant problems if

there is a disagreement with the partner on fundamental decisions that arise

during the course of the venture.

High Rate of Failure

Notwithstanding good intentions by both sides in the start of an alliance,

there is a high rate of failure in such transactions. The failures often come asa result of corporate cultural differences, unrealistic expectations, inability to

agree on direction or on major decisions, or the inability of one party to

bring to the alliance the anticipated benefits (e.g., technology, marketing,

distribution) in the manner contemplated by the other party.

Adverse Impact on the Flexibility of the Participants

Alliances can limit the flexibility of the participants to engage in other

alliances, acquisitions, or other transactions. The drafting of the alliance

agreements is absolutely key in this area. The alliance agreements may also

prevent the parties from competing with the alliance or the other partner to

the alliance.

Overdependence on the Partner

Alliances can sometimes make one partner particularly dependent on another

partner. This can be damaging in the event the other partners performance

on behalf of the alliance deteriorates or in the event the other partners

business suffers adverse developments.

Commitment of Time and Resources

Successful alliances require a great deal of commitment by personnel and

management and potentially significant amounts of capital and other

resources. Such resources may be difficult to continually contribute and mayadversely divert managements attention from their primary responsibilities.


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EXAMPLES

IN AIRLINES INDUSTRY

Star Alliance

Star AllianceOfficial Launch Date May 14, 1997

Members

Full 18

Non-Voting 3

Pending 2

Destinations ServedAirports 842

Countries 152

Annual Passengers (M) 425

Fleet Size 2800

Management Jaan Albrecht (CEO)

Website staralliance.com

The Star Alliance, launched on May 14, 1997, is the largest and most

awarded airline alliance in the world, with the following points of

cooperation among its partnerairlines:

Frequent flyer program integration allows airline miles to be earned

and redeemed on all members of the Alliance at the same level

Premium customers of the alliance have access to all members' airport

lounges.

Flight schedules are coordinated to permit almost seamless travelwhich may include several different carriers within the alliance, on a

single ticket

Special fares for round-the-world and similar travel on alliance

members offer discounts over booking individual itineraries

Customer service processes are harmonized in an effort to promote a

consistent experience
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Cooperation in development of a common information technology

platform

This tight cooperation led to suspicions of anti-competitive behavior, and the

alliance was investigated by theEuropean Union as a virtual merger of its

members. Indeed, some speculated that if government regulations were

relaxed, the members would merge into a single corporation, although no

evidence has yet materialized. Previous to Star Alliance,Northwest Airlines

and KLM were operating together as the forerunners of the modern airline

alliance system since 1993 - although there had been even earlier pairings

and groupings of airlines for decades on a less formal level. The creation of

the Star Alliance was a milestone in airline history due to its size and

sparked the formation of rivals, notably SkyTeam and Oneworld.

Star Alliance livery seen in 2006

Star Alliance now runs 16930 daily flights to 842 airports in 152 countries

with South African Airways and Swiss International Air Lines having joined

at the beginning of April 2006. The figure also includes the new USAirways, which reached a merger deal with America West in May 2005. Its

market share is 28%, including US Airways-America West Airlines, based

on the RPK (revenue passenger kilometers).

The alliance developed the "regional" concept in 2004, which helps the

alliance to penetrate individual markets through regional carriers, which

requires sponsorship from existing members.

Star Alliance was voted best airline alliance in the 2005 World Airline

Awards for the second time in three years

Full members

Air Canada+

Air New Zealand

All Nippon Airways (ANA)
http://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Northwest_Airlineshttp://en.wikipedia.org/wiki/Northwest_Airlineshttp://en.wikipedia.org/wiki/KLMhttp://en.wikipedia.org/wiki/SkyTeamhttp://en.wikipedia.org/wiki/Oneworldhttp://en.wikipedia.org/wiki/South_African_Airwayshttp://en.wikipedia.org/wiki/Swiss_International_Air_Lineshttp://en.wikipedia.org/wiki/US_Airwayshttp://en.wikipedia.org/wiki/US_Airwayshttp://en.wikipedia.org/wiki/America_Westhttp://en.wikipedia.org/wiki/US_Airwayshttp://en.wikipedia.org/wiki/America_West_Airlineshttp://en.wikipedia.org/wiki/Air_Canadahttp://en.wikipedia.org/wiki/Air_New_Zealandhttp://en.wikipedia.org/wiki/All_Nippon_Airwayshttp://en.wikipedia.org/wiki/Image:Flag_of_Japan_%28bordered%29.svghttp://en.wikipedia.org/wiki/Image:Flag_of_New_Zealand.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Canada.svghttp://en.wikipedia.org/wiki/Image:StarAllianceANA767.jpghttp://en.wikipedia.org/wiki/Image:StarAllianceANA767.jpghttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Northwest_Airlineshttp://en.wikipedia.org/wiki/KLMhttp://en.wikipedia.org/wiki/SkyTeamhttp://en.wikipedia.org/wiki/Oneworldhttp://en.wikipedia.org/wiki/South_African_Airwayshttp://en.wikipedia.org/wiki/Swiss_International_Air_Lineshttp://en.wikipedia.org/wiki/US_Airwayshttp://en.wikipedia.org/wiki/US_Airwayshttp://en.wikipedia.org/wiki/America_Westhttp://en.wikipedia.org/wiki/US_Airwayshttp://en.wikipedia.org/wiki/America_West_Airlineshttp://en.wikipedia.org/wiki/Air_Canadahttp://en.wikipedia.org/wiki/Air_New_Zealandhttp://en.wikipedia.org/wiki/All_Nippon_Airways


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Asiana Airlines

Austrian Airlines

bmi

LOT Polish Airlines

Lufthansa+

Scandinavian Airlines System (SAS) +

Singapore Airlines

South African Airways

Spanair

Swiss International Air Lines

TAP Portugal

Thai Airways International+

United Airlines+

US Airways

Varig

Note+: Indicates founding members of the Star Alliance.

Regional members

Adria Airways (sponsored by Lufthansa)

Blue1 (sponsored by SAS)

Croatia Airlines (sponsored by Lufthansa)

Former members

Ansett Australia collapsed in 2001

Mexicana left alliance in 2004 after deciding not to renew a

codeshare alliance with United Airlines and opted to codeshare with

Oneworld's American Airlines.

Future members

Air China, currently partnered with ANA, Asiana Airlines,

Austrian Airlines, Lufthansa, SAS, United Airlines, and Varig.Despite Oneworld's Cathay Pacific being its shareholder, the airline

was officially invited to join the alliance on May 22, 2006, after an

agreement with Lufthansa[22].

Shanghai Airlines was invited to join Star Alliance on May 10th,

2006 [23].
http://en.wikipedia.org/wiki/Asiana_Airlineshttp://en.wikipedia.org/wiki/Austrian_Airlineshttp://en.wikipedia.org/wiki/Bmi_(airline)http://en.wikipedia.org/wiki/LOT_Polish_Airlineshttp://en.wikipedia.org/wiki/Lufthansahttp://en.wikipedia.org/wiki/Scandinavian_Airlines_Systemhttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/South_African_Airwayshttp://en.wikipedia.org/wiki/Spanairhttp://en.wikipedia.org/wiki/Swiss_International_Air_Lineshttp://en.wikipedia.org/wiki/TAP_Portugalhttp://en.wikipedia.org/wiki/Thai_Airways_Internationalhttp://en.wikipedia.org/wiki/United_Airlineshttp://en.wikipedia.org/wiki/US_Airwayshttp://en.wikipedia.org/wiki/Varighttp://en.wikipedia.org/wiki/Adria_Airwayshttp://en.wikipedia.org/wiki/Blue1http://en.wikipedia.org/wiki/Croatia_Airlineshttp://en.wikipedia.org/wiki/Ansett_Australiahttp://en.wikipedia.org/wiki/Mexicana_de_Aviaci%C3%B3nhttp://en.wikipedia.org/wiki/United_Airlineshttp://en.wikipedia.org/wiki/Oneworldhttp://en.wikipedia.org/wiki/American_Airlineshttp://en.wikipedia.org/wiki/Air_Chinahttp://en.wikipedia.org/wiki/All_Nippon_Airwayshttp://en.wikipedia.org/wiki/Asiana_Airlineshttp://en.wikipedia.org/wiki/Austrian_Airlineshttp://en.wikipedia.org/wiki/Lufthansahttp://en.wikipedia.org/wiki/Scandinavian_Airlines_Systemhttp://en.wikipedia.org/wiki/United_Airlineshttp://en.wikipedia.org/wiki/Varighttp://en.wikipedia.org/wiki/Oneworldhttp://en.wikipedia.org/wiki/Oneworldhttp://en.wikipedia.org/wiki/Cathay_Pacifichttp://en.wikipedia.org/wiki/Lufthansahttp://www.star-alliance.com/star_alliance/press_room/News_Archive/HTML/News22May06_AirChina_SAMem.htmlhttp://en.wikipedia.org/wiki/Shanghai_Airlineshttp://www.star-alliance.com/star_alliance/press_room/News_Archive/HTML/News10May06_FMFinal_Shanghai.htmlhttp://en.wikipedia.org/wiki/Image:Flag_of_the_People%27s_Republic_of_China.svghttp://en.wikipedia.org/wiki/Image:Flag_of_the_People%27s_Republic_of_China.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Mexico.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Australia.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Croatia.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Finland_%28bordered%29.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Slovenia_%28bordered%29.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Brazil.svghttp://en.wikipedia.org/wiki/Image:Flag_of_the_United_States.svghttp://en.wikipedia.org/wiki/Image:Flag_of_the_United_States.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Thailand.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Portugal.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Switzerland.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Spain.svghttp://en.wikipedia.org/wiki/Image:Flag_of_South_Africa.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Singapore_%28bordered%29.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Denmark.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Norway.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Sweden.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Germany.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Poland_%28bordered%29.svghttp://en.wikipedia.org/wiki/Image:Flag_of_the_United_Kingdom.svghttp://en.wikipedia.org/wiki/Image:Flag_of_Austria.svghttp://en.wikipedia.org/wiki/Image:Flag_of_South_Korea_%28bordered%29.svghttp://en.wikipedia.org/wiki/Asiana_Airlineshttp://en.wikipedia.org/wiki/Austrian_Airlineshttp://en.wikipedia.org/wiki/Bmi_(airline)http://en.wikipedia.org/wiki/LOT_Polish_Airlineshttp://en.wikipedia.org/wiki/Lufthansahttp://en.wikipedia.org/wiki/Scandinavian_Airlines_Systemhttp://en.wikipedia.org/wiki/Singapore_Airlineshttp://en.wikipedia.org/wiki/South_African_Airwayshttp://en.wikipedia.org/wiki/Spanairhttp://en.wikipedia.org/wiki/Swiss_International_Air_Lineshttp://en.wikipedia.org/wiki/TAP_Portugalhttp://en.wikipedia.org/wiki/Thai_Airways_Internationalhttp://en.wikipedia.org/wiki/United_Airlineshttp://en.wikipedia.org/wiki/US_Airwayshttp://en.wikipedia.org/wiki/Varighttp://en.wikipedia.org/wiki/Adria_Airwayshttp://en.wikipedia.org/wiki/Blue1http://en.wikipedia.org/wiki/Croatia_Airlineshttp://en.wikipedia.org/wiki/Ansett_Australiahttp://en.wikipedia.org/wiki/Mexicana_de_Aviaci%C3%B3nhttp://en.wikipedia.org/wiki/United_Airlineshttp://en.wikipedia.org/wiki/Oneworldhttp://en.wikipedia.org/wiki/American_Airlineshttp://en.wikipedia.org/wiki/Air_Chinahttp://en.wikipedia.org/wiki/All_Nippon_Airwayshttp://en.wikipedia.org/wiki/Asiana_Airlineshttp://en.wikipedia.org/wiki/Austrian_Airlineshttp://en.wikipedia.org/wiki/Lufthansahttp://en.wikipedia.org/wiki/Scandinavian_Airlines_Systemhttp://en.wikipedia.org/wiki/United_Airlineshttp://en.wikipedia.org/wiki/Varighttp://en.wikipedia.org/wiki/Oneworldhttp://en.wikipedia.org/wiki/Cathay_Pacifichttp://en.wikipedia.org/wiki/Lufthansahttp://www.star-alliance.com/star_alliance/press_room/News_Archive/HTML/News22May06_AirChina_SAMem.htmlhttp://en.wikipedia.org/wiki/Shanghai_Airlineshttp://www.star-alliance.com/star_alliance/press_room/News_Archive/HTML/News10May06_FMFinal_Shanghai.html


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Potential members

Turkish Airlines has chosen to apply for membership to the

alliance. However, there is no official announcement from neither the

airline nor the alliance.

Egypt Air - according to the homepage of the Arab Air

Carriers Organization AACO the airline is in early talks

with Lufthansa in order to promote their application.

Egypt Air aims to become a member within the next 24

months. Air India is set to join the Star Alliance as well. A

former announcement on joining the Star Alliance is to bemade in December 2006.

Star Alliance livery seen in 2003.

Star Alliance has two premium levels, Silver and Gold, based on a

customer's tier status in a member carrier's frequent flyer program. Each of

the member and regional airlines recognizes Star Silver/Gold status, with a

few exceptions (mainly pertaining to airport lounge access). The statuses

have no specific requirements of their own; membership is based solely on

the frequent flyer programs of individual member airlines.

Star Alliance Silver

Star Alliance Silver status is awarded to customers who havereached the premium level of a member carrier's frequent flyerprogram.

Benefits of Star Alliance Silver membership:

Priority Reservations Waitlisting

Priority Airport Standby
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Some carriers also offer the following to Silver members:

Priority Boarding

Priority Airport Check In

Priority Baggage Handling

Preferred Seating

Additional Checked Luggage Allowance

Airport Lounge Access

Star Alliance Gold

Star Alliance Gold status is awarded to customers who have reached a high level of amember airline's frequent flyer program.

Benefits of Star Alliance Gold membership:

Priority Reservations Waitlisting

Priority Airport Standby

Priority Boarding

Priority Airport Check In

Priority Baggage Handling Additional Checked Luggage Allowance

Airport Lounge Access (Gold members of United States airlines only

receive lounge access when traveling internationally)

Some airlines also offer the following to Gold members:

Preferred Seating (Exit seat or even on a special section on the plane

on some carriers which provide more leg room)

Guaranteed Seating on Fully Booked Flight (Subject to the Booking

Class Code and notice period)

Complimentary Upgrade (In the form of voucher/certificate or

automatic upgrade upon check in)
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Currently the lowest qualification criteria for a Star Alliance Gold status is

35,000 status miles earned during calendar year with Air Canada's Aeroplan

program awarding a status valid for one year from March of the next year.

Alternatively 50,000 qualification miles during a calendar year in Thai

Airways Royal Orchid Plus program awards a status with two years of

validity.

SKYTEAM ALLIANCE

SkyTeam

Official Launch Date June 22, 2000

Members

Full 10

Non-Voting 0

Pending 7

Destinations ServedAirports 728

Countries 149

Annual Passengers (M) 373

Fleet Size 2151

Website skyteam.com

SkyTeam Alliance is the second largest airline alliance in the world

behind Star Alliance partnering ten carriers from three continents.

The stated benefits and goals of the alliance are:

Easy frequent flyer mile collection and redemption across carriers

Reciprocal airport lounge access between carriers

Guaranteed reservations for Elite Plus customers More available flights and easier connections between carriers

More fare options

Unified check-in for all carriers

Consistent quality standards across carriers

One reservation network for all members
https://www.aeroplan.com/en/collect/collect_status_miles.jsphttps://www.aeroplan.com/en/collect/collect_status_miles.jsphttp://www.thaiairways.com/Royal_Orchid_Plus/Status_Benefits/Status_benefits.htmhttp://www.thaiairways.com/Royal_Orchid_Plus/Status_Benefits/Status_benefits.htmhttp://en.wikipedia.org/wiki/June_22http://en.wikipedia.org/wiki/2000http://www.skyteam.com/http://en.wikipedia.org/wiki/Airline_alliancehttp://en.wikipedia.org/wiki/Star_Alliancehttp://en.wikipedia.org/wiki/Image:SkyTeam_banner.pnghttps://www.aeroplan.com/en/collect/collect_status_miles.jsphttps://www.aeroplan.com/en/collect/collect_status_miles.jsphttp://www.thaiairways.com/Royal_Orchid_Plus/Status_Benefits/Status_benefits.htmhttp://www.thaiairways.com/Royal_Orchid_Plus/Status_Benefits/Status_benefits.htmhttp://en.wikipedia.org/wiki/June_22http://en.wikipedia.org/wiki/2000http://www.skyteam.com/http://en.wikipedia.org/wiki/Airline_alliancehttp://en.wikipedia.org/wiki/Star_Alliance


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Sky Team calls itself the "first alliance built around customer needs".

In 2005 SkyTeam was the world's best airline alliance, according to the

readers of Global Traveler Magazine 1.

Nonetheless, Skyteam service to Australia and New Zealand is quite limited,making it the only worldwide airline alliance that does not provide a

practical Round-The-World itinerary in the Southern Hemisphere. Also, it's

the only alliance with no member airlines providing a one-plane Kangaroo

route service

WOW Alliance

Successfully established in airfreight market within three years of its

founding, the WOW cargo alliance grouped around Japan Airlines Cargo,

Lufthansa Cargo, SAS Cargo and Singapore Airlines Cargo is successfully

entrenched in the market. Meantime, with a market share of about 20 per

cent, it is the world's biggest air cargo alliance. The partners in the grouping

have reached a major milestone and pressed further ahead with their

integration. the alliance was founded by Lufthansa Cargo, SAS Cargo und

Singapore Airlines Cargo in April 2000. JAL Cargo joined WOW in July

2002. The air cargo alliance commands a combined fleet of 43 freighters and

the belly hold capacity of more than 760 passenger aircraft, many of themwide body jets. Between them, JAL Cargo, Lufthansa Cargo, SAS Cargo

and Singapore Airlines Cargo offer an unparalleled route network of

destinations, linking the world's major trading centres.

Among the IATA airlines, Lufthansa Cargo is the biggest carrier in the

international airfreight business, Singapore Airlines Cargo is the second

biggest and Japan Airlines Cargo the sixth biggest. SAS Cargo operates a

dense network, notably in northern Europe.

WOW is not an abbreviation; it stands for the alliance's values:

"Dynamism", "Innovation" and "Vitality". An enthusiastic "WOW" is the

customer response that the alliance aims to elicit with its services and

quality.
http://www.skyteam.com/EN/aboutSkyteam/pressCenter/pr010706.jsphttp://en.wikipedia.org/wiki/Kangaroo_routehttp://en.wikipedia.org/wiki/Kangaroo_routehttp://www.skyteam.com/EN/aboutSkyteam/pressCenter/pr010706.jsphttp://en.wikipedia.org/wiki/Kangaroo_routehttp://en.wikipedia.org/wiki/Kangaroo_route


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REMARKS

Strategic alliances represent an important form of cooperation between two

or more business Entities. A strategic alliance might be viewed as a lesser

form of a merger. It is not a mergerper se, since alliance partners remainseparate business entities and retain their decision-making autonomy. While

merger activities have slowed down significantly since 2000, strategic

alliances are increasingly, and widely, used by firms. They are particularly

prevalent in network-oriented industries such as airline, shipping,

telecommunications, multimodal transportation and logistics industries.

Consider the airline industry. The four largest global alliances namely,


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Star Alliance, OneWorld, Wings, and SkyTeam accounted for 57% of the

worlds revenue passenger kilometers in 2002 (Airline Business, November

2003).

Like alliances in logistics and other transportation industries, an airline

alliance is a multi-product network, with each of its products corresponding

to travel (either by people or by cargo) in a particular city-pair market. The

extent of alliance will affect not only the partners but also the nature of

interaction between competing alliances in various markets. The strategic

alliance between, for instance, United and Lufthansa the two major

partners of Star Alliance will thus have a major impact on the alliance

decision by American and British Airways in OneWorld, which is

competing with Star Alliance in the U.S., European and North Atlantic

markets.

Examples: The merger of Air France and KLM was recently approved byEU regulators. As a consequence, KLM is expected to leave Wings and join

SkyTeam, whose major partners are Air France and Delta. KLMs current

alliance partner , Northwest, is also expected to join SkyTeam, with

Continental (Northwests long-time domestic alliance partner) joining as

well (Brueckner and Pels, 2005). If the Wings and SkyTeam alliances are

consolidated into a single mega-alliance, the three largest global alliances

would each have about 20% of the worlds passenger kilometers

airline alliances enable partners to better coordinate their flightschedules to minimize travelers wait time between connecting flights.

The partners also benefit from sharing information, research and

experiences indifferent market segments and from linking their

existing networks; thereby, reducing the need for developing new

Hubs: a major cost of entry and particularly so for international aviation

due to bilateral treaties and foreign ownership restrictions (Baker and

Pratt, 1989; Pitelis and Schnell, 2002)

The three largest strategic alliances in the air cargo sector, namely,

New Global Cargo, SkyTeam Cargo, and OneWorld, accounted for

49% of international freight tonne kilometers in 2002.


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In water transportation, the five Shipping alliances namely,

Maersk/Sea-Land, Grand Alliance, New World Alliance, The K-

Line/COSCO Group, and United Alliance accounted for 61% of

international freight tonne kilometers in 2000. The same trend has

recently appeared in the U.S. domestic airline industry. Over the past

few years, virtually all of the U.S. hub-spoke carriers have entered

into broad code sharing partnerships, including the United/US

Airways alliance that began in January 2003, and the three-way

alliance between Northwest, Continental and Delta initiated in June

2003

IN ELECTRONICS

HP and Apple Partner to Deliver Digital Music Player

and iTunes to HP Customers


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LAS VEGAS, Consumer Electronics Show, January 8, 2004Working to

provide consumers with the most compelling digital content whenever and

wherever they desire, HP and Apple today announced a strategic alliance

to deliver an HP-branded digital music player based on Apples iPod, the

number one digital music player in the world, and Apples award-winning

iTunes digital music jukebox and pioneering online music store to HP's

customers.

As part of the alliance, HP consumer PCs and notebooks will come

preinstalled with Apples iTunes jukebox software and an easy-reference

desktop icon to point consumers directly to the iTunes Music Store, ensuring

a simple, seamless music experience. This offering is yet another way that

HP is helping consumers enjoy more from their personal digital

entertainment content.

HPs goal is to bring the most compelling entertainment content and

experiences to our customers, said Carly Fiorina, chairman and chief

executive officer at HP. We explored a range of alternatives to deliver a

great digital music experience and concluded Apples iPod music player and

iTunes music service were the best by far. By partnering with Apple, we

have the opportunity to add value by integrating the worlds best digital

music offering into HPs larger digital entertainment system strategy.

Apple's goal is to get iPods and iTunes into the hands of every music lover

around the world, and partnering with HP, an innovative consumercompany, is going to help us do just that, said Steve Jobs, Apples CEO.

As the industry balkanizes by offering digital music wrapped in a multitude

of incompatible proprietary technologies, consumers will be reassured in

getting the same unparalleled digital music solutions from both HP and

Apple, two leaders in the digital music era.

According to internal HP research, more than 54 percent of current HP

consumers download music to their PCs.

Over two million iPods have been sold since its introduction, solidifying its

position as the number one digital music player in the world. All iPods work

seamlessly with the award-winning iTunes digital music jukebox software

and the iTunes Music Store, which has sold more than 30 million songs,

providing music fans with the best digital music experience on either a

Mac or Windows PC.


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The iTunes Music Store offers Windows and Mac users a music catalog of

more than 500,000 songs, the same gold standard personal use rights and

the same 99 cents-per-song pricing. The iTunes Music Store features online

gift certificates for family and friends; Apples innovative and patent-

pending online Allowance feature, which allows parents to automatically

deposit funds into their kids iTunes Music Store account every month; more

than 5,000 audio books, which can be purchased with one click and listened

to on a Mac or Windows computer as well as on iPods; Celebrity Playlists;

and new exclusive tracks from more than 60 artists. The iTunes Music Store

offers music from all five major music companies and over 200 independent

music labels.

IN NETWORKS

Dell chose Enterasys to be one of their Preferred Partners

in Q1of 2002 to provide comprehensive networking solutions at aprice/performance value unmatched by any other networking vendors.

Leveraging Enterasys technology and thought leadership as well as the

strengths of the Dell strategic partnership, Enterasys and Dell strive to

develop flexible, scalable, intelligent solutions that are easy to purchase and

easy to own. Enterasys and Dell provide powerful, standards-based Secure

Networks customized for the unique needs of your organization and enable

you to easily build complete IT solutions, manage IT procurement andresolve challenges

Mission

Enable customer success by driving business and technology change through strategic

alliances with industry leaders.

Cisco Collaborates with IBM to Deliver New Fibre

Channel Embedded Switches for IBM BladeCenter


19/20

Cisco Alone Offers Full Range Of Protocols for Embedded Switches:

Ethernet, Infiniband, and Fibre Channel

LONDON, England (Gartner Data Center Summit), November 20, 2006 -

Cisco today announced that it is expanding its portfolio of award-winning

storage networking switches and directors by developing a new embeddedFibre Channel fabric switch for IBM blade server chassis. The new Cisco

embedded switch will allow customers to deploy end-to-end Cisco

intelligent SAN services, such as VSANs, advanced security, and high

availability.

With this addition to its switch portfolio, Cisco is the only company to offer

a full range of connectivity protocols for data center blade servers, uniquely

providing customers with the choice of Ethernet, InfiniBand, and Fibre

Channel to match their business and IT requirements. Customers benefit

through common provisioning and management tools, simplified operations,

and reduced operational costs.

"Today's data center managers need access to a variety of protocols in order

to match the specific requirements of their environment with the protocol

that best supports those needs," said Bob Pass more, research vice president

at Gartner. "Blade servers that can offer multiple protocols and common

management tools provide the flexibility and agility that the enterprise

demands."

Many organizations are deploying bladed server architectures to simplifymanagement and operations through standardization on a single platform for

operation consistency, reduction in cabling and rack space, and integrated

management. Blade server solutions help customers save in power, cooling,

floor space, time, money, and resources. By offering a full range of

protocols for embedded switches, Cisco helps enable seamless integration

with the broader data center infrastructure and extends the benefits of multi-

protocol intelligent network architectures to blade servers.

Powered by the Cisco SAN OS operating system, the new Cisco embedded

Fibre Channel fabric switch is fully compatible with the Cisco MDS 9000family of Multilayer directors and fabric switches for transparent, end-to-end

service delivery in large enterprise environments, while enabling customers

to take advantage of an end-to-end Cisco management framework to

simplify data center operations.
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"IBM has been leading the blade server industry with its innovative

approach to systems design and a rich ecosystem of partners, unparalleled in

the blade server market," said Doug Balog, Vice President for IBM Blade

Center. "We are pleased to be working with Cisco to continue to expand that

ecosystem and look forward to offering our customers the new Cisco

embedded Fiber Channel switch across the entire family of Blade Center

chassis."

At Cisco, strategic alliances engage in impact partnering that is differentiated by 8

unique but integrated characteristics

strategic alliance in aerotransport industry

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