Business strategies in a hyperinflationary environment: the case of Air Zimbabwe
Date
2011-03-23
Authors
Chanetsa, Edphan Peter
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Abstract
Strategic theory prescribes the formulation and implementation of strategies in either fairly stable macroeconomic environments or for environments in economic crises which are normally characterised by downturns in the economic cycle. Strategic theory does not specifically prescribe the type of strategies that an airline can pursue when competing in a hyperinflationary environment. This study therefore aims at identifying what strategies were available to an airline that would find itself competing in a hyperinflationary environment and more specifically, identifying the optimal strategy to pursue. The research method used was a qualitative case study of Air Zimbabwe which is currently operating in a hyperinflationary economy. In-depth, structured interviews were conducted to obtain the views of members of top and middle management who are involved in the management of the airline. The study found that slow decision making in responding to changing market dynamics as a result of being a state-owned parastatal, and the failure to generate sufficient foreign currency when needed, has negatively impacted on the airline's performance and threatened the airline's continued viability. In addition, total quality management as a driver of an operational effectiveness strategy was identified as the preferred strategy to pursue, which should lead to operational efficiency and cost containment. The study may be useful in highlighting the strategic options available to airlines that seek either competitive advantage or continued viability when operating in a hyperinflationary environment.
Description
MBA - WBS
Keywords
Strategic planning, Hyperinflationary environment, Zimbabwe, Aviation