Question

What generic competitive strategy has America West chosen to use in entering the air passenger market

Answer 1

The competitive strategy associated with America West is not explicitly stated, but discussions point to instances of predatory pricing strategies in the airline industry, intending to prevent new competitors from entering the market.

Step-by-step explanation:

The generic competitive strategy that America West has utilized in entering the air passenger market is not explicitly mentioned in the provided excerpts. However, these excerpts discuss instances of alleged predatory pricing within the airline industry. Predatory pricing is a competitive strategy where a company, typically a large incumbent, sets prices very low with the intent to drive out new entrants or competitors who cannot sustain such low pricing. After eliminating competition or discouraging new entrants, the incumbent firm may raise prices again. This strategy can be effective in maintaining market dominance and dissuading potential competitors from entering the market.

It is important to note that while predatory pricing can be a barrier to competition, it can also lead to legal consequences, as shown by the 2015 ruling against American Express and Mastercard for establishing restrictions on retailers, leading to an unfair competitive environment. The complaints about predatory pricing by ValuJet, Frontier, and Reno Air against larger airlines like Delta, United, and Northwest also illustrate the tension between large established airlines and smaller start-ups trying to enter the market.

Answer 2

The generic competitive strategy that America West chose to enter the air passenger market is:

Low Cost (Cost-focused Leadership)

Step-by-step explanation:

American West can acquire competitive advantage by pursuing one of Michael Porter's generic strategies. The Airline could have chosen to enter the air passenger market via lower costs than its competitors or by differentiating itself along dimensions valued by customers in order to be paid a higher fare. In 1983, it chose the lower cost strategy before merging with American Airlines in 2013.