Open Skies Policy : A Study on the Alliance Performance and International Competition of FFP (항공자유화정책상 상용고객우대제도의 제휴성과와 국제경쟁에 관한 연구)
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- The Korean Journal of Air & Space Law and Policy
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- v.25 no.2
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- pp.139-162
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- 2010
In terms of the international air transport, the open skies policy implies freedom in the sky or opening the sky. In the normative respect, the open skies policy is a kind of open-door policy which gives various forms of traffic right to other countries, but on the other hand it is a policy of free competition in the international air transport. Since the Airline Deregulation Act of 1978, the United States has signed an open skies agreement with many countries, starting with the Netherlands, so that competitive large airlines can compete in the international air transport market where there exist a lot of business opportunities. South Korea now has an open skies agreement with more than 20 countries. The frequent flyer program (FFP) is part of a broad-based marketing alliance which has been used as an airfare strategy since the U.S. government's airline deregulation. The membership-based program is an incentive plan that provides mileage points to customers for using airline services and rewards customer loyalty in tangible forms based on their accumulated points. In its early stages, the frequent flyer program was focused on marketing efforts to attract customers, but now in the environment of intense competition among airlines, the program is used as an important strategic marketing tool for enhancing business performance. Therefore, airline companies agree that they need to identify customer needs in order to secure loyal customers more effectively. The outcomes from an airline's frequent flyer program can have a variety of effects on international competition. First, the airline can obtain a more dominant position in the air flight market by expanding its air route networks. Second, the availability of flight products for customers can be improved with an increase in flight frequency. Third, the airline can preferentially expand into new markets and thus gain advantages over its competitors. However, there are few empirical studies on the airline frequent flyer program. Accordingly, this study aims to explore the effects of the program on international competition, after reviewing the types of strategic alliance between airlines. Making strategic airline alliances is a worldwide trend resulting from the open skies policy. South Korea also needs to be making open skies agreements more realistic to promote the growth and competition of domestic airlines. The present study is about the performance of the airline frequent flyer program and international competition under the open skies policy. With a sample of five global alliance groups (Star, Oneworld, Wings, Qualiflyer and Skyteam), the study was attempted as an empirical study of the effects that the resource structures and levels of information technology held by airlines in each group have on the type of alliance, and one-way analysis of variance and regression analysis were used to test hypotheses. The findings of this study suggest that both large airline companies and small/medium-size airlines in an alliance group with global networks and organizations are able to achieve high performance and secure international competitiveness. Airline passengers earn mileage points by using non-flight services through an alliance network with hotels, car-rental services, duty-free shops, travel agents and more and show high interests in and preferences for related service benefits. Therefore, Korean airline companies should develop more aggressive marketing programs based on multilateral alliances with other services including hotels, as well as with other airlines.
For us, there is virtually no distinction between being a responsible citizen and a successful business... they are one and the same for Wal-Mart today." ~ Lee Scott, al-Mart CEO after the 2005 Katrina disaster; cited in Green to Gold (Esty and Winston 2006). Lee Scott's statement signaled a new era in sustainability as manufacturers and retailers around the globe watched the world's largest mass merchandiser confirm its intentions with respect to sustainability. For decades, the environmental movement has grown, slowly bleeding over into the corporate world. Companies have been born, products have been created, academic journals have been launched, and government initiatives have been undertaken - all in the pursuit of sustainability (Peattie and Crane 2005). While progress has been admittedly slower than some may desire, the emergence and entrance of environmentally concerned mass merchandisers has done much to help with sustainable efforts. To better understand this movement, we incorporate the perspectives of both executives and consumers involved in the consumer packaged goods (CPG) industry. This research relies on three underlying themes: (1) Conceptual and anecdotal evidence suggests that companies undertake sustainability initiatives for a plethora of reasons, (2) The number of sustainability initiatives continues to increase in the consumer packaged goods industries, and (3) That it is, therefore, necessary to explore the role that sustainability plays in the minds of consumers. In light of these themes, surveys were administered to and completed by 143 college students and 101 business executives to assess a number of variables in regards to sustainability including willingness-to-pay, behavioral intentions, attitudes, willingness-to-pay, and preferences. Survey results indicate that the top three reasons why executives believe sustainability to be important include (1) the opportunity for profitability, (2) the fulfillment of an obligation to the environment, and (3) a responsibility to customers and shareholders. College students identified the top three reasons as (1) a responsibility to the environment, (2) an indebtedness to future generations, and (3) an effective management of resources. While the rationale for supporting sustainability efforts differed between college students and executives, the executives and consumers reported similar responses for the majority of the remaining sustainability issues. Furthermore, when we asked consumers to assess the importance of six key issues (healthcare, economy, education, crime, government spending, and environment) previously identified as important to consumers by Gallup Poll, protecting the environment only ranked fourth out of the six (Carlson 2005). While all six of these issues were identified as important, the top three that emerged as most important were (1) improvements in education, (2) the economy, and (3) health care. As the pursuit and incorporation of sustainability continues to evolve, so too will the expected outcomes. New definitions of performance that reflect the social/business benefits as well as the lengthened implementation period are relevant and warranted (Ehrenfeld 2005; Hitchcock and Willard 2006). We identified three primary categories of outcomes based on a literature review of both anecdotal and conceptual expectations of sustainability: (1) improvements in constituent satisfaction, (2) differentiation opportunities, and (3) financial rewards. Within each of these categories, several specific outcomes were identified resulting in eleven different outcomes arising from sustainability initiatives. Our survey results indicate that the top five most likely outcomes for companies that pursue sustainability are: (1) green consumers will be more satisfied, (2) company image will be better, (3) corporate responsibility will be enhanced, (4) energy costs will be reduced, and (5) products will be more innovative. Additionally, to better understand the interesting intersection between the environmental "identity" of a consumer and the willingness to manifest that identity with marketplace purchases, we extended prior research developed by Experian Research (2008). Accordingly, respondents were categorized as one of four types of green consumers (Behavioral Greens, Think Greens, Potential Greens, or True Browns) to garner a better understanding of the green consumer in addition to assisting with a more effective interpretation of results. We assessed these consumers' willingness to engage in eco-friendly behavior by evaluating three options: (1) shopping at retailers that support environmental initiatives, (2) paying more for products that protect the environment, and (3) paying higher taxes so the government can support environmental initiatives. Think Greens expressed the greatest willingness to change, followed by Behavioral Greens, Potential Greens, and True Browns. These differences were all significant at p<.01. Further Conclusions and Implications We have undertaken a descriptive study which seeks to enhance our understanding of the strategic domain of sustainability. Specifically, this research fills a gap in the literature by comparing and contrasting the sustainability views of business executives and consumers with specific regard to preferences, intentions, willingness-to-pay, behavior, and attitudes. For practitioners, much can be gained from a strategic standpoint. In addition to the many results already reported, respondents also reported than willing to pay more for products that protect the environment. Other specific results indicate that female respondents consistently communicate a stronger willingness than males to pay more for these products and to shop at eco-friendly retailers. Knowing this additional information, practitioners can now have a more specific market in which to target and communicate their sustainability efforts. While this research is only an initial step towards understanding similarities and differences among practitioners and consumers regarding sustainability, it presents original findings that contribute to both practice and research. Future research should be directed toward examining other variables affecting this relationship, as well as other specific industries.
This paper examined archaeological resources that discuss how Silla entered the Gangneung area, the coastal region along the East Sea that has been excavated most actively. Silla expanded its territories while organizing the its system as an ancient state and acquired several independent townships in various regions, stretching its forces to the East Sea area faster than any other ancient states of the time. In particular, many early relics and heritages of Silla have been found in Gangneung, the center of the East Sea area. Many archaeological resources prove these circumstances of that time and provide brief texts that are valuable for our interpretation of historical facts. In this respect, it was possible for me to examine these resources to answer my question as to why early relics and heritages of Silla are found in the Gangneung area. Based on my research on Silla's advancement into the Gangneung area, I have acquired the following results: How did Silla rule this area after conquering Yeguk in the Gangneung area? After conquering the Gangneung area, Silla attempted an indirect ruling at first. Later, Silla adopted a direct ruling system. I divided the indirect ruling period into two phases: introduction and settlement. In detail, Silla's earthenware and stone chamber tombs first appeared in Hasi-dong in the fourth quarter of the 4th Century and the tombs spread to Chodang-dong in the second quarter of the 5th Century. A belt with dragon pattern openwork, which seems to be from the second quarter of the 5th Century, was found to tell us that the Gangneung region began receiving rewards from Silla during this time. Thus, the period from the fourth quarter of the 4th Century to the second quarter of the 5th Century is designated as the 1st Phase (Introduction) of indirect ruling in terms of aechaeological findings. This is when Silla was first advanced to the Gangneung area and tolerated independent administration of the conquered. In the third and fourth quarters of the 5th Century, old mound tombs appeared and burials of relics that symbolized power emerged. In the third quarter of the 5th Century, stone chamber tombs were prevalent, but wooden chamber tombs, stone mounded wooden chamber tombs, and lateral entrance stone chamber tombs began to emerge. Also, tombs that were clustered in Hasi-dong and Chodang-dong began to scatter to Byeongsan-dong, Yeongjin-ri, and Bangnae-ri nearby. Steel pots were the symbol of power that emerged at this time. In the fourth quarter of the 5th Century, stone chamber tombs were still dominating, but wooden chamber tombs, stone mounded wooden chamber tombs, and lateral entrance stone chamber tombs became more popular. More crowns, crown ornaments, big daggers, and belts were bestowed by Silla, mostly in Chodang-dong and Byeongsan-dong. The period from the third quarter to the fourth quarter of the 5th Century was designated as the 2nd Phase (Settlement) of indirect ruling in terms of aechaeological findings. At this time, Silla bestowed items of power to the ruling class of the Gangneung area and gave equal power to the rulers of Chodang-dong and Byeongsan-dong to keep them restrained by each other. However, Silla converted the ruling system to direct ruling once it recognized the Gangneung area as the base of its expedition of conquest to the north. In the first quarter of the 6th Century, old mound tombs disappeared and small/medium-sized mounds appeared in the western inlands and the northern areas. In this period, the tunnel entrance stone chamber tombs were large enough for people to enter with doors. A cluster of several tunnel entrance stone chamber tombs was formed in Yeongjin-ri and Bangnae-ri at this time, probably with the influence of Silla's direct ruling. In the first quarter of the 6th Century, Silla dispatched officers from the central government to complete the local administration system and replaced the ruling class of Chodang-dong and Byeongsan-dong with that of Silla-friendly Yeonjin-ri and Bangnae-ri to reorganize the local administration system and gain full control of the Gangneung area.