1 HEC MONTRÉAL Internationalization Speed: Strategies in the Low-Carriers (LCCs) Industry par Othman NAMLI Sciences de la gestion (Option International Business) Mémoire présenté en vue de l’obtention du grade de maîtrise ès sciences en gestion (M. Sc.) July 2020 © Othman NAMLI, 2020 2 Table of contents CHAPTER 1: INTRODUCTION ................................................................................................... 13 LITERATURE GAP AND RESEARCH QUESTIONS ....................................................................................... 14 RESEARCH CONTEXT ............................................................................................................................. 15 Definition and growth ...................................................................................................................... 16 LCC internationalization uniqueness .............................................................................................. 17 Source of learning for airlines ......................................................................................................... 17 Conclusion ....................................................................................................................................... 17 METHODOLOGY OVERVIEW .................................................................................................................. 17 STRUCTURE OF THE THESIS ................................................................................................................... 18 CHAPTER 2: LITERATURE REVIEW ........................................................................................ 20 INTERNATIONALIZATION PROCESS THEORIES: ...................................................................................... 20 Uppsala model ................................................................................................................................. 21 Network Model ................................................................................................................................. 23 Born Global ..................................................................................................................................... 25 INTERNATIONALIZATION IN THE LCCS INDUSTRY. ................................................................................ 27 SPEED OF INTERNATIONALIZATION ....................................................................................................... 28 Definition of Internationalization’s Speed ....................................................................................... 28 Measurement of internationalization speed ..................................................................................... 29 FACTORS INFLUENCING SPEED OF INTERNATIONALIZATION ................................................................. 31 Technology ....................................................................................................................................... 33 Competition ...................................................................................................................................... 34 Management and Knowledge Learning ........................................................................................... 34 Business Networks ........................................................................................................................... 35 Firm’s Strategy ................................................................................................................................ 36 Firm’s Resources and Capabilities .................................................................................................. 36 Innovation ........................................................................................................................................ 37 Opportunity development ................................................................................................................. 37 Institutional Environment ................................................................................................................ 38 CHAPTER 3: METHODOLOGY .................................................................................................. 40 THEORETICAL FRAMEWORK .................................................................................................................. 40 RESEARCH DESIGN ................................................................................................................................ 47 STEP 1: DATA COLLECTION ................................................................................................................... 49 2 3 STEP 2: EVENT HISTORY DATABASE ..................................................................................................... 50 STEP 3: CASES PRESENTATION .............................................................................................................. 51 STEP 4: INTERNATIONALIZATION SPEED MEASUREMENT. ..................................................................... 51 STEP 5: CROSS ANALYSIS OF DIFFERENCES AND PATTERNS ................................................................. 53 CHAPTER 4: CASES PRESENTATION ....................................................................................... 55 AIR CANADA ROUGE ............................................................................................................................. 55 Internationalization Journey ............................................................................................................ 55 Technology ....................................................................................................................................... 56 Competition ...................................................................................................................................... 57 Management ..................................................................................................................................... 58 Business Network and Knowledge ................................................................................................... 59 Firm’s Resources ............................................................................................................................. 61 Strategy ............................................................................................................................................ 63 Innovation ........................................................................................................................................ 64 Opportunity Development ................................................................................................................ 65 Domestic Commitment ..................................................................................................................... 66 Regulatory Environment and Institutional Theory .......................................................................... 67 RYANAIR ............................................................................................................................................... 68 Internationalization Journey ............................................................................................................ 69 Technology ....................................................................................................................................... 69 Competition ...................................................................................................................................... 71 Management and Knowledge ........................................................................................................... 72 Business Network and Knowledge ................................................................................................... 73 Firm’s Resources ............................................................................................................................. 74 Strategy ............................................................................................................................................ 76 Innovation ........................................................................................................................................ 77 Opportunity Development ................................................................................................................ 78 Domestic Commitment ..................................................................................................................... 79 Institutional environment ................................................................................................................. 79 EASYJET ................................................................................................................................................ 81 Internationalization Journey ............................................................................................................ 81 Technology ....................................................................................................................................... 82 Competition ...................................................................................................................................... 84 Management ..................................................................................................................................... 84