Work

Demand variation, strategic flexibility and market entry: Evidence from the U.S. airline industry

Year: 2018

Type: article

Abstract: Entry into dynamic environments can be challenging for firms. We study if, and under which circumstances, firms can use strategic flexibility to enter markets with variable demand. In the airline industry, we find broad support for our hypotheses. We observe less entry with more demand variation, more entry of more flexible firms, and that more flexible firms are more likely to enter markets with greater variation in demand. Furthermore, we find that this relationship is especially strong when variation in demand is harder to predict, which suggests that strategic flexibility is most valuable in unpredictable turbulent environments.

Source: Strategic Management Journal

DOI: 10.1002/smj.2940

Authors: Jörg Claussen, Christian Essling, Christian Peukert

Institutions: Copenhagen Business School, Ludwig-Maximilians-Universität München, Universidade Católica Portuguesa

Language: English

Topic: Aviation Industry Analysis and Trends

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

Funder: Fundação para a Ciência e a Tecnologia

Award: Católica Lisbon Unidade de Investigação em Gestão e Economia