Determinants of strategic alliances in the Airline Industry in Kenya
The concept of strategic alliances has received a lot of attention from scholars for a very long time now. Despite numerous studies in this area, interest has not faded away. To this end, the objectives of this study were to identify the determinants of strategic alliances to better understand what drives airlines into such alliances and to identify factors that affect the performance of the alliances. The research was done through descriptive survey design, which involved all airlines with scheduled flights in and out of Kenya totaling thirty six (36). The target population was CEOs or Senior managers within the airlines, which had response rate of 72%. Key findings of the study showed that market entry and market position-related motives, resource use efficiency-related motives and uncertainties and formulation of technical standards and access of new technologies are major determinants of strategic alliances. In addition, organization strategy, management of the alliances and organizational environment are key factors that influence the performance of alliances. This pointed to the current and future importance of strategic alliances in the airline industry since the era cut throat competition is slowly coming to an end. This validated the underlying principles enshrined in the strategic alliances theories in the study namely transaction cost, resources dependency, organizational learning, relationship marketing and strategic behavior theories. A key recommendation proposed by this study is that airlines should identify their needs to ensure that as they enter into alliances they can build on their weaknesses. The crafting of the strategy, the involvement of management, and organizational environment cannot be over emphasized if the alliance is to succeed. This study recommends an expanded study in regard with intermodal alliances, vertical alliances within the airline industry.