IDENTIFYING STRATEGIC GROUPS IN THE U.S. AIRLINE INDUSTRY: AN APPLICATION OF THE PORTER MODEL

Abstract

Since deregulation in 1978, the U.S. airline industry has undergone significant and often surprising change. Well-established airlines including Pan Am, Eastern, Western, and Piedmont have disappeared. Other airlines such as People Express and Midway became highly publicized success stories and then took a financial nose-dive into oblivion. Specifically, this article seeks to identify strategic groups within the U.S. airline industry using the well-established competitive strategy model of Michael Porter. According to Porter, a strategic group consists of rival firms with similar competitive approaches and positions within the market.