In: Operations Management
In the US, airlines and hotel companies use different types of generic strategies. What types of generic strategies do airlines and hotel companies use, and why? (Short Essay)
Many airlines use cost leadership as a generic strategy. Delta airlines, Southwest airlines are examples that focus on reducing cost of operation so that tickets can be offered at really competitive prices.
Singapore airline is an example that followed differentiation as a generic strategy. They differentiate on the basis of innovation, technology and customer service. Singapore airline is the first to introduce hot meals, free alcoholic and non-alcoholic drinks, hot towels, personal entertainment system etc.
Hotels employ differentiation strategy in terms of customer service. Mariott has a generic strategy where it has diverse brands of hotels in its portfolio. This enables the hotel chain to have a dominant market presence in competitive markets and at the same time cater to diverse range of customers with unique needs.
Hotels such as Oyo rooms and airbnb has a franchise model and has cost leadership as generic strategy