625409 Masterthesis Cialdino
Total Page:16
File Type:pdf, Size:1020Kb
MSc (cand.merc.) in International Business Master Thesis Hand-in date: May 15th , 2019 Airport strategy: a takeoff for a sustained competitive advantage A Case Study of Copenhagen Airport Dorothy Cialdino – 94236 Riccardo Cicconetti - 116445 Supervisor: Christian Erik Kampmann STUs count: 246172 N. of pages: 103 Abstract The rapid changes in the aviation industry over the last decades have evidenced a greater need for airports to focus on strategic thinking. The nature of competition has changed dramatically, increasing the competitive pressure over airports who need to identify their competitive strengths to survive in the market. The study of airport business has revealed some peculiarities relative to its business model that cannot be fully understood by a single theoretical perspective. The research has thus related traditional theories on strategic management together with more recent theories on multi-sided platform in order to explore whether these views could help understanding airport strategic decisions. This thesis is conducted under a single case study strategy focusing on Copenhagen Airport (CPH). The data collected have been analysed under three theoretical perspectives correspondingly the Industrial Organization View (I/O), the Resource Based View (RBV) and the theory of Multi-sided Platforms (MSPs). The research proposes that among the plethora of internal and external factors affecting CPH operations, some specific aspects should be closely looked in order to obtain competitive strengths. CPH market power, its ownership structure and the weight of each of the actors involved in the business have emerged from the combination of findings outlined by the three theoretical perspectives. The study concludes that the integration of different perspectives depicts the great complexity in evaluating CPH strategy. This has allowed to pull apart aspects of the firm and closely look at its operations to enhance the understanding of a sustained competitive advantage. Table of content 1. Introduction ....................................................................................................................... 1 1.1. Significance of the research .................................................................................................................. 1 1.2. Focus on Copenhagen Airport (CPH) ................................................................................................ 2 1.3. Research scope ....................................................................................................................................... 2 1.4. Research Questions and Objectives .................................................................................................... 4 1.5. Thesis Structure ...................................................................................................................................... 4 2. Literature Review ............................................................................................................... 6 2.1. Strategic management and competitive advantage ........................................................................... 6 2.1.1. The Industrial Organization View ............................................................................................... 7 2.1.2. The Resource Based View .......................................................................................................... 10 2.2. Business Model Theory ....................................................................................................................... 16 2.2.1. Multi-sided platforms ................................................................................................................... 17 2.2.2. Airport as a platform ................................................................................................................... 24 3. Methodology .................................................................................................................... 28 3.1. Research Methods .......................................................................................................................... 28 3.2. Case Study Selection ...................................................................................................................... 29 3.3. Data Collection Methods .............................................................................................................. 30 3.3.1. Interviews ............................................................................................................................... 31 3.3.2. Selection of Interviewees ..................................................................................................... 32 3.3.3. Data Analysis Method .......................................................................................................... 34 3.3.4. Limitations of the research .................................................................................................. 35 3.3.5. Validity of the research ........................................................................................................ 36 4. Case Description .............................................................................................................. 38 4.1. Aviation Market ............................................................................................................................. 38 4.2. Danish Aviation Market ............................................................................................................... 39 4.3. Copenhagen Airport ...................................................................................................................... 40 5. Data Analysis ................................................................................................................... 48 5.1. CPH’s Competitive Environment ............................................................................................... 48 5.1.1. Passenger’s competitive environment ....................................................................................... 49 5.1.2. Airline’s competitive environment ............................................................................................ 53 5.1.3. Governmental interventions ....................................................................................................... 58 5.1.4. Sub-conclusion .............................................................................................................................. 64 5.2. CPH’s Internal Environment ............................................................................................................. 67 5.2.1. CPH’s internal resources ..................................................................................................... 67 5.2.2. Value of resources and capabilities .................................................................................... 72 5.2.3. Implementing strategic decisions ....................................................................................... 76 5.2.4. Sub-conclusion ...................................................................................................................... 80 5.3. CPH’s platform business model .................................................................................................. 82 5.3.1. Business Model ..................................................................................................................... 83 5.3.2. CPH as a platform ................................................................................................................ 85 5.3.3. Sub-conclusion ...................................................................................................................... 92 6. Discussion ........................................................................................................................ 94 6.1. Discussion of findings ......................................................................................................................... 94 6.2. Managerial Implications ...................................................................................................................... 98 7. Conclusion ..................................................................................................................... 101 References ............................................................................................................................. 104 Appendices ............................................................................................................................ 115 Appendix 1. Interview guide .................................................................................................................... 115 Appendix 2. Interviews Transcript ......................................................................................................... 118 Table of figures and tables Figure 1: Annual growth in global air traffic passenger demand from 2006 to 2019 ............................ 39 Figure 2: Passengers at Copenhagen Airport (Passengers in millions, transfer share in %) ................ 43 Figure 3: Competition and catchment areas ................................................................................................ 50 Figure 4: Sources of airport competition ..................................................................................................... 65 Figure 5: CPH’s role as a platform of a multi-sided market .....................................................................