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Business Model Changes of an Incumbent Player in the European Airline Industry: A Case of the Lufthansa Group

Dombrowski, Julian (2014) Business Model Changes of an Incumbent Player in the European Airline Industry: A Case of the Lufthansa Group.

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Abstract:The purpose of this paper is to investigate in how far influencing environmental factors have caused developments and adaptions to a dominant incumbent player of the European airline industry in the last decade. As a representative for these various incumbents the Lufthansa Group with its flagship airline Lufthansa has been chosen as a unit of analysis. Developments within the group were analyzed by using Osterwalder’s business model canvas framework. Subsequently, these developments were not only reported but also put into context of macro-environmental and competitive forces that may have caused them in the first place. The data and information have been gathered via a desk research approach, analyzing majorly annual reports, press releases and newspaper articles of influential papers. Results from the research indicate that the Lufthansa Group made majorly small-scale, incremental adaptions to its practices over the last decade that may have been caused by social, economical and technological forces in the macro-environment, as well as by competition of low-cost entrants in the European short-haul market. A drastic revolution in their business model has just emerged within the last couple of years, when a restructuring of the group started. The key development, is the decision to move most short-haul operations to the low-cost subsidiary Germanwings, having Lufthansa’s focus on the medium-and long-haul market. This finding indicates some sort of convergence of the incumbent’s business model on the short-haul segment with the new-entrants approach. Depending on the success of this move, it may imply a superiority of the low-cost model in short-haul markets, so that the new hybrid approach of operating different business models in separate markets may indicate the a future alternative of international airline groups.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/65284
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