Strategic management of a family-owned airline: Analysing the absorptive capacity of Cimber Sterling Group A/S

Abstract

The concept of absorptive capacity (ACAP) observing a firm's ability to value, assimilate and utilise new external knowledge is applied in this paper. This case study analysis focuses on the strategic management processes and competitiveness of the Cimber Sterling airline. The aim is to discover resources and capabilities that lead to competitive advantages within the aviation industry. From an ACAP perspective, Cimber Sterling Group A/S was analysed by interviewing selected owners, managers and employees of the airline. A comparison within the airline industry regarding external factors and the strategic management of other selected low-cost airlines is part of the ACAP concept. The analysis shows to what extent Cimber Sterling Group A/S, as a Danish family business, copes with increasing competition and critical situations, such as the recent volcanic ash cloud and the financial crisis. Identifying the potential and realised capacity of the strategic management of airlines was revealed as a source of strategic competitiveness. The ACAP was improved through stakeholder experience, strategic flexibility, networking capabilities and customer orientation, leading to a competitive advantage realisation in the low-cost airline market.