Lufthansa: Going Global, but How to Manage Complexity

Lufthansa Aviation group has become a worldwide leader in the airline industry with several powerful business segments, inclusive of a passenger airline component, business component, logistics, MRO catering and IT services. The aviation success has been largely due to their focus on quality, innovation, safety and reliability. Head quartered in Germany, Lufthansa has lead the pack with regard to international airline business. The Aviation Groups’ International Business Strategy has evolved to that of a corporate level transnational strategy, whereas there is a shared vision to achieve global efficiency yet effort to strengthen its local responsiveness in Germany (Hitt, 2009). Evident with the strategic alliance with Star Alliance, the development of Lufthansa Regional serves as a local response provision of a low- cost carrier, in addition to the modernizations of various traveler hubs and welcome lounges throughout the major key traffic hubs located in Germany. This international business strategy is considered a combination of multi –domestic and global strategies (Hitt, 2009). A transnational strategy uniquely offers the benefits inherent in both global and multi-domestic strategies; under this strategy each business component of Lufthansa can successfully exercise independent innovation given its decentralized structure. Lufthansa understood early, the benefits and advantages of international expansion evident through post WWII with travels to various countries (Lufthansa, 2010) later the formation of an strategic alliance with Star Alliance, which serves a global airline network. Star Alliance was established in 1997 with Lufthansa being one of its core founding members. Despite industry ups and downs related to international travel through the early 1980’s with the Iraq war, and then the frightening threat of terrorism post September 11, 2001, Lufthansa remained optimistic as did the rest of the airline industry, and responded to globalization