The Impact of Globalization on Competitive Advantage of the Airline Industry: Analysis of Kenya Airways

Abstract

Notably, globalization creates intensive competition for companies, necessitating survival thorough strategies such as innovation and market expansion, thus the need to gain a competitive edge. The past few years, competition in the Kenyan airline industry has become stiff resulting from increased new market players. This research sought to determine globalization effects on Kenya Airways’ competitive advantage. The study focused on how strategic alliances, joint ventures and multidomestic strategy influence the competitive advantage of Kenya Airways. The service marketing and the resource-based view theories guided the research which used a descriptive design. The study’s population comprised the departmental head and operational managers from Kenya Airways. Questionnaires were used in data collection and the analysis involved quantitative techniques. An 88% response rate was obtained. The correlation results revealed the existence of a strong positive correlation between strategic alliances, joint ventures and multidomestic strategy and competitive advantage among airline firms. The findings ascertained that globalization was responsible for at least 63.7% of the variations in the airline’s competitive advantage. Thus, conclusions point to the need for airways firms to adopt globalization strategies as the strategies will improve the firms’ overall performance of airline firms and facilitate the realization of long-term organizational goals. The study also concludes that joint ventures have a strong and positive outcome on the airline’s performance. The research also concludes that strategic alliances have a strong and positive result on the airline’s competitive advantage. It was lastly, concluded that multi-domestic has an insignificant influence on the firm’s competitive position. Before embarking on partnerships and alliances, the study recommends that the airline considers its areas of strengths and weakness to ensure that the partnerships complement the firm’s objectives. The study also calls for airline firms to issue intellectual property rights to foreign firms. The study also recommends that airline firms explore foreign direct investment to a certain degree to ease market entry and improve niche market acquisition.