Stuck in the Middle Revisited: The Case of the Airline Industry

Abstract

When Porter (1 980) introduced his typology of business strategies, he used Laker Airways' as an example to illustrate the danger of being in the between the two basic types of competitive advantage, namely low cost and differentiation. However, the changing nature of competitive pressure in many business sectors and the accompanying need to perform well simultaneously in several aspects of operations performance, have eventually lead Porter (1 990) to revisit his early idea. When presenting Porter's generic competitive strategies, most strategy textbooks now offer a new choice, namely the cost leadershiptdifferentiation strategy (Coulter, 2002; Hitt, Ireland, & Hoskisson, 2003), or the strategy (Thompson & Strickland, 2001). Given this background, the purpose of this theoretical paper is to build upon the strategic management and operations strategy literature to develop a conceptual framework that will subsequently be used to explore the extent that airline companies successfully pursue the best-cost provider (or integrated cost leadershiptdifferentiation) strategy, and how they manage to resolve the trade-off between low-cost and differentiation. We aim at revisiting the stuck in the middle prescription by demonstrating that a number of aviation strategic options exist between the ''traditional'' and low-