Macro‐varieties of Capitalism and Micro‐varieties of Strategic Management in European Airlines

Abstract

Abstract The relevance of the varieties‐of‐capitalism approach to strategic management is demonstrated by the evolution of competition in the European air‐transport sector. In the highly regulated environment that prevailed until the mid‐1980s, the German carrier, Lufthansa, was highly successful in a setting that rewarded incremental innovation, especially in engineering. After deregulation in the European airline industry began, rapidly evolving areas such as selling systems, distribution channels, and marketing techniques acquired central strategic importance. In this altered context, British Airways, benefiting from its LME home institutional environment, surpassed Lufthansa in its capacity to adopt radical innovation in its commercial systems.