Title: Service operations to analyse cooperative and non-cooperative competition

Authors: Kuangnen Cheng; Hui Ping Chen; Jason Z-H. Lee

Addresses: School of Management, Marist College, Poughkeepsie, NY, USA ' Department of Industrial Management, National Ping Tung University of Science and Technology, Taiwan ' School of Management, Marist College, Poughkeepsie, NY, USA

Abstract: This study addresses two kinds of competitive behaviour simultaneously: one from action - mobility barriers vs. the other, from reaction - mutual forbearance. We study service frequency and pricing strategy that the US domestic airlines have used against rivals. We attempt to show whether deliberately aggressive strategic action necessarily serves its purpose to deter rivals, or inadvertently stimulates retaliatory reaction. The Pearson correlation statistical method was employed to analyse the relationship between service frequency and price dispersion based on 79,080 observations of real time panel population data over the period of 1-30 September 2016, where the results were compared to the effects of mutual forbearance. The findings reveal that value contributed to coalitions by rivals from stronger leagues cannot overpower the effects of industry structure. On the other hand, collective security is a rational defence for weaker leagues to sustain their performance.

Keywords: competitive dynamics; mobility barriers; mutual forbearance; strategic groups; service operations.

DOI: 10.1504/IJBCG.2018.092442

International Journal of Business Competition and Growth, 2018 Vol.6 No.2, pp.139 - 158

Received: 14 Oct 2017
Accepted: 28 Feb 2018

Published online: 11 Jun 2018 *

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