Case Study: AMR Corporation
Today, AMR Corporation is one of the largest airline companies in the world, which is the member of the Oneworld global marketing alliance, along with such leaders of the airline industry as British Airways, Cathay Pacific, Iberia, Qantas and other airlines. In spite of the relatively short history, the company has reached tremendous success at both domestic and international markets. Today, AMR Corporation maintains its leading position in the US market as well as in the international market. At the same time, the overall success of the corporation is, to a significant extent, determined by the successful marketing strategy and aggressive policies of domestic and international markets expansion, which brought the corporation significant advancements in the airline industry.
On the other hand, it is important to lay emphasis on the fact that the corporation cannot ignore challenges it is currently facing along with other companies operating in the airline industry. The 2000s were marked by the increased threats to airline corporations caused by different issues, from the spread of international terrorism to galloping oil prices. In such a situation, one of the major, strategic goals of AMR Corporation is to maintain its leading position and keep expanding its market share in the US as well as worldwide. However, taking into consideration existing challenges and difficulties, the company has to be aware of potential threats and adopt its current marketing strategy to threats it may and does face at the moment and in the nearest future.
Nevertheless, the corporation has a positive experience of overcoming difficulties and challenges, while its financial position is relatively stable, in spite of the economic recession that have struck the world airline market and economy at large. In such a context, AMR Corporation should focus on matching its actual potential and possibilities with its strategic goals and objectives in order to take the leading position in the world market and, thus, gain a strategic advantage over its major competitors at both domestic and international levels.
AMR Corporation was founded in 1982 as a part of American Airlines reorganization. The corporation started its operations in the turbulent years when the US faced consistent economic difficulties in the early 1980s. Nevertheless, this period proved to be quite successful for the corporation since AMR Corporation had managed to start its business in the US market, which was characterized by a high competition between large corporations and entering barriers were high to overcome. In spite of difficulties, the company started the domestic market expansion and focused on the development of its business at the regional level. For this purpose, AMR Corporation acquired regional airlines American Eagle Airlines (Dunning, 1998). In such a way, the corporation got access to the domestic market and started its market expansion at the regional level. In addition, to strengthen its position in the American market, AMR Corporation acquired TWA Airlines, LLC.
Furthermore, the 1990s – 2000s became the time when AMR Corporation had started aggressive market expansion. In this regard, it should be said that the company expanded in two strategic directions. On the one hand, the corporation attempted to strengthen its position in the domestic market through the increase of its market share in the US to become one of the leaders in the domestic market. On the other hand, the corporation focused on the international market expansion which became very prospective and highly profitable in the 1990s due to the rapid progress of the economic globalization. The latter stimulated the development of international business cooperation and travel that naturally stimulated the demand for services of such corporations as AMR Corporation. As a result, the international economic development proved to be beneficial to AMR Corporation.
At the same time, the corporation had definitely made a correct decision to enter international markets, which, to a significant extent, determined its current leading position in the world market. To put it more precisely, today, the company serves some 250 destinations in about 40 countries of the world, including North and South Americas, Europe and the Asia-Pacific region, which are the major target markets for airline corporations operating internationally (Littman, 2). In such a context, AMR Corporation definitely needed to develop its fleet in order to provide services of the high quality to its customers and ensure the high level of reliability of its services. Hence, today, AMR Corporation has a fleet of 625 jets, while the overall fleet of AMR Corporation is about 900 aircrafts.
In the course of the international market expansion the corporation had faced substantial difficulties. In spite of the economic globalization, which facilitated international cooperation and penetration new markets, some states still conducted protectionist policies, while the competition increased substantially raising practically unsurpassable barriers for the ongoing market expansion of AMR Corporation. In such a situation, the corporation took the logical decision to join the alliance consisting of leading airline corporations including British Airways, Qantas, Iberia and others. Thus, AMR Corporation became a member of the Oneworld global marketing alliance. The membership of AMR Corporation in this alliance allowed the corporation to optimize its performance internationally and maximize its benefits.
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