German Wings
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1. Germanwings should not restrict its bases within the German market for the following reasons:
– Germany is becoming intensively competitive with many low cost players wanting a share (70% of the market
is shared almost equivalently between Air Berlin, Germanwings,
Ryanair and easyJet).
– It already has five bases in important cities that are strategically
located to attract maximum number of travelers. More bases could lead to overlapping of routes and doubling
of costs.
– Long term goal for any big player is to be able to expand internationally which will ensure its survival and success.
2. The continuance of the current strategic relationship between Lufthansa and Germanwings is very critical for the progress of the �daughter’ for achieving its stated objectives.
But history has been a witness to breaking up of many such relationships profitably or otherwise. This occurs due to several incompatibilities that arise in course of the journey such as: cannibalization between business models; implausibility of the communication concept; increase
in organizational complexity to mention a few. So the sustainability of this relationship will depend on the extent of fulfillment of the basic purpose, for which this was initialized and the value generated.
3. In order to be successful, any organization has to expand
its operations as far as possible at a reasonable pace to keep ahead of the competition. The rule is: You beat the competition or the competition eats you. In the LCC market, success can be achieved organically or through mergers and acquisitions or both. When Germanwings expands into markets