Complementary Alliance Research Articles

Analytical models of international alliances in the airline industry

This paper develops a theoretical model to investigate the effect of airline alliances on market outcome for fairly general demand and cost specifications. Two typical alliance types are examined: complementary and parallel alliances. The complementary alliance refers to the case where two firms link up their existing networks so as to feed traffic to each other, while the parallel alliance refers to collaboration between two firms who, prior to their alliance, are competitors on some routes of their networks. Our model predicts that a complementary alliance is likely to increase total output whereas a parallel alliance is likely to decrease it. The results of an empirical test utilizing trans-Atlantic alliance routes for the 1990–1994 period confirm the theoretical predictions on partners' output and total output.

Alliances versus acquisitions: choosing the right option

Recently, a wave of corporate acquisitions has swept across Europe, prompted by liberalisation and unification in the European Union. The authors ask the question: Has this made the traditional preference by European firms for alliances and co-operative strategies obsolete? Bearing in mind that, in global terms, alliances are popular, another question is: Should European firms use their experiences in alliances to develop new alliance strategies as an alternative to joining the trend to acquisitions? After a review of the European model of alliances, the authors discuss the pros and cons and rationale for horizontal acquisitions and scale alliances, and argue in favour of more aggressive complementary alliances combined with mergers and acquisitions to expand in Europe as well as globally.

The effects of airline alliances on markets and economic welfare

Abstract Recently, major airlines have been extending their service networks via strategic alliances with other airlines as a means of forming global service networks. This theoretical analysis examines the effects on firms' outputs and profits, air fare, and economic welfare of two types of airline alliances: complementary and parallel alliances. It is shown that the two alliances have different effects on output and economic welfare. The complementary alliance is likely to increase economic welfare, while the parallel alliance to decrease it. We also find conditions under which each type of alliance generates welfare improvement. Some policy implications are derived based on these findings.

The differentiation of alliances in South Sweden

The main objective of the present study was to attempt to assign different vegetation types in South Sweden to the Braun-Blanquet system of syntaxa. The alliance was chosen as the most appropriate phytosociological unit for this purpose. Coniferous forests represent the zonal vegetation in large parts of South Sweden: spruce forests on mesic to moist sites and pine forests on dry, often strongly oligotrophic sites can be assigned to thePiceion excelsae andDicrano-Pinion respectively. In addition, various types of azonal vegetation (e.g., mires, springs, swamps and salt-marshes) subjected to some form of extreme environmental factor can be placed in alliances described from Central Europe. In contrast, some southern vegetation types in Sweden are difficult to assign, partly due to a lack of character species, as in the case of deciduous hardwood forests. In other cases, species of southern syntaxa are still frequent, for example in dry basiphilous grasslands and sun-exposed forest edges, but the syntaxonomical difficulties arise from an intermixture of diagnostic species of complementary alliances. This might be explained by the floristic and climatic conditions in South Sweden which deviate considerably from those in e.g. Germany a feature supported by the communities' indicator figures for temperature and continentality. This refers particularly to the combination of rather low average temperatures and, except in the west, a strong thermal or hygric continentality.

Asset Specificity and Organizational Arrangements: the Case of the New Telecommunications Services Market

This paper uses new institutional economics to support strategic analysis in industries, where the production of goods and services requires the pooling of the assets of several firms. The type of assets owned by these firms has an impact on their bargaining power; this consequently influences the firms‘ ability to be involved in specific organizational arrangements. With the objective of conceiving optimal strategies for firms involved in these agreements, our study seeks to bring to light the relationships between the nature of organizational arrangements, the role of the firms in these arrangements and their competitive position in the industry in which the cooperation is formed. This analysis uncovers three principal forms of organizational arrangements: core firm with a network of subcontractors, homogeneous alliance and complementary alliance. With the support of various statistical methods, this framework is applied to the telecommunications industry