Business strategy of US Airways - Case Study Example

Business strategy of US Airways Number According to Porters theory, a firm’s relative position within the industry rests upon how it positions itself in its business environment. The strength of a firm to make a profit and attain sustainability has been zeroed in to be affected by two factors: cost advantage and differentiation. When they are applied in either a broad or a narrow spectrum, the resultant are three generic strategies, cost leadership, where a firm sets out to be the lowest cost producer in the industry, differentiation, where it seeks to be unique from other competitors and focus, where it establishes a narrow competitive scope based on cost or differentiation.

US Airways initiated a merger with American Airways which was completed in 2013. The merger is a cost leadership strategy in addition to boosting profits and strategically positioning themselves for stiff competition with other industry leaders. According to analyst (Staff, 2013), the company can benefit from $600 million cost reduction under the new deal. US Airways employed a no-frills strategy to lure cost sensitive customers. Though its West Coast flights are within the United States, it operates a full slate of European flights from its East Coast hubs.

US Airways has also employed differentiation strategies in a bid to attract a certain segment of the market. US Airways has considerably few international flights but is concentrated in Charlotte, N.C., Phoenix and Philadelphia. Unlike American Airlines, US Airways has little presence in Los Angeles with only a strong presence in outlying airports such as Ontario, Burbank and Long Beach. The merger is a strategy that will make US. Airways presence in Los Angeles significantly felt hence a boost on its performance.

Under the new merger, the Group president Scott Kirby indicates that they anticipate targeting corporate customers as they can spend thrice as much as leisure clients, qualifying them as a lucrative segment on the airline market (Staff, 2013). ReferenceStaff, P. B. (2013). American Air Groups new strategy: no layoffs, more business travelers post merger. Phoenix Business Journal .