Lufthansa Airline Company

Questions: 1. What type of international strategy has Lufthansa chosen and what means has it used to expand internationally? 2. Assess the elements and objectives of Lufthansa's cooperative strategies. 3. What options does Lufthansa have for managing cooperative strategies, protecting the company from risks, and sustaining success? How can Lufthansa's role in the Star Alliance influence performance? Answers: 1. Lufthansa is a German based airline company which is among the biggest in Europe. The carrier company has adopted the transnational strategy by which it seeks to be globally recognized. The company has decided to expand its business outside Germany since there was saturation in the market (Hooks Palm, 2000). Lufthansa has made a strategic alliance called the Star Alliance which is the biggest international alliance of airlines. The alliance allowed the company to reduce cost and also the resources. By sharing the resources among the members of the alliance, it has resulted in a higher profit. Lufthansa formed the Lufthansa Regional to take down the other low cost airliners that arose due to deregulation (Drijber Dictus, 2014). Lufthansa has partnered with Jet Airways, Air Malta, and Air India and formed a bilateral cooperation. Lufthansa also went on joint ventures in the transatlantic area with Air Canada and United Airlines. 2. The Star alliance of Lufthansa which was a global strategy required an efficient handling throughout the network. Lufthansa started the SCORE programme in the year 2012 which aimed at modernizing the structure of the company and change the corporate value. Since very few companies have the resources to develop strategies and gain advantage of their own they need to engage in cooperation (Aras Crowther, 2012). Coordination as well as cooperation among the members in the alliance is a vital tool for success. The main strategies of the company are: Increase the value of the company To expand the market position of their airlines along with shaping the airline industry. To increase the satisfaction of the customers. To maintain the business keeping in mind the economical, social, ecological and sustainability factors. The alliance formed in the Star Alliance has allowed the company to combine resources with other partners and thus has allowed them to serve the customers better by providing better flight connectivity. It has also allowed the company to strengthen the network of airlines in the transatlantic area. By achieving all these, the company wants to gain a long term value in the corporate culture. 3. The company has several industry related risks. The risks may come from the partnerships or the alliances. The risk is that some companies may take more opportunities than the others. The member airlines have to abide by the contracts and rules guiding them. Other risk can be from the companies that do not invest considerably in the alliance for development purposes (Drijber Dictus, 2014). It is important for the company to continue with the requirements as well as the conditions while searching suitable partners so that they can improve their key market position. Lufthansa plays a very active role in consolidating the industry. It invests continuously for the renewal and growth. The Passenger Airline Groups expansion has added weight in Lufthansas profile. Lufthansa group provides the largest network of flights in the world. Thus systematic networks and management of alliance helps the risk being identified and proper opportunities to be used effectively. References Aras, G., Crowther, D. (2012).Business strategy and sustainability. Bingley, U.K.: Emerald. de Bandt, P. (2014). Lufthansa: a new era for State aid enforcement?.Journal Of European Competition Law Practice,5(4), 206-207. doi:10.1093/jeclap/lpu017 Drijber, B., Dictus, G. (2014). Lufthansa.Markt En Mededinging,17(1), 28-31. doi:10.5553/menm/138762362014017001005 Hooks, M., Palm, A. (2000).Lufthansa. Erfurt: Sutton.