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, 2008).
Examining U.S. Airways it is apparent that the organization does not have superior profits to other airlines; the 10-k for 2012 showed a net profit of 4.61% to 2012, while the firm has a better profit margin compared to some other airlines, it is lower than some other airlines, including American Airlines and Southwest (Yahoo Finance, 2013). As it is not have a superior profit margin the company is not a firm with a cost advantage. Therefore, this leaves the competitive advantage of differentiation.
Examining the organization in order to identify ways in which the service is different from competitors indicates that the service levels in the firm are not a source of differentiation. In 2007 in a consumer report U.S. Airways was ranked as being the worst for the customer service that was provided, where it gained only 5/30 marks of food, 10/30 marks the comfort and 10/30 marks for service and finally the reservation system gained only 15/30 marks (Zagat, 2007). However, when examining the airline there are some strategies which may help to create differences within the firm make it attractive to consumers. The airline has created a frequent flyer program, where members of the loyalty scheme are able to gain points or miles and on all of their flights. In addition to the loyalty scheme, the airline is also a member of the "Star Alliance," an alliance of airlines which have code sharing agreements and can share sell flights on each other's airlines, with the ability for passengers to earn loyalty points alliance flights which are booked through themselves. The Star Alliance is the largest...
The airline is also relatively large, and has a concentration of shortfall flights in the eastern states, which may help to provide increased convenience for passengers. Therefore, the organization does have some sources of differentiation. However, you may also be argued that the agreed merger with American airlines which was announced in February 2013 has the potential to facilitate the gaining of economies of scope and scale as it will create the world's largest airline. It maybe argued that in the past the organization sought to gain the cost advantage, as seen with the failed attempt to acquire Delta airlines, which may account for the lack of significant differentiation. In the future the organization may change, and focus on cost advantage rather than differentiation following the merger.
References
Baye Michael, (2007), Managerial Economics and Business Strategy, McGraw-Hill/Irwin
Mintzberg Henry, Ahlstrand Bruce, Lampel Joseph B. (2008), Strategy Safari: The Complete Guide Through the Wilds of Strategic Management, Financial Times / Prentice Hall
US Airways, (2013) 10-k, [online] retrieved 11 March 2013 from http://www.usairways.com/en-U.S./aboutus/investorrelations/secfilings.html
Yahoo Finance, (2013), U.S. Airways, [online] retrieved 11 March 2013 from http://finance.yahoo.com/q?s=LCC&x=52&y=18
Zagat, (2007), U.S. Airlines, 2007, [online] retrieved 11 March 2013 from http://www.webcitation.org/5qBVFbmqo
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