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What is AA's greatest strategic threat? [Speculation]

 
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Old Nov 29, 2011, 10:48 pm
  #46  
 
Join Date: Nov 2011
Posts: 691
Originally Posted by Upgraded!
It's a sad day for first class when its department store equivalent is Nordstrom...

Joking aside, the reason Nordstrom can succeed based on its customer service is that people attach more emotion and importance to their wardrobe and are willing to pay for something that in turn differentiates them from the crowd through a combination of products (different lines) and service (the personal shoppers).

While I have an idea of who your typical Nordstrom shopper is, I don't even have to consider that to know that their product lines sit squarely between those of Macy's and Bloomingdale's, hence their ability to cater to a particular type of customer better than any single competitor.

As long as most Americans are in the "it's just a shirt, who cares where it's from" mindset regarding air travel the two industries will never be comparable.
In the US, the market just isn't there among the majority of the flying public (assuming they generate substantial demand). Going from point A to point B regardless of mode of travel is an expensive undertaking for most Americans (as it is worldwide). Product differentiation in the airline industry requires huge price premiums that reach into the thousands. At the same price level, the majority of the flying public has to compare the benefits of flying in J/F, which you only benefit from for a few hours, with things that generate lasting memories (like a Disneyland vacation or a new hobby). I really think that premium airline product (at the required price levels) competes with many other luxury items, and I think that the majority find the other stuff to provide more return on investment.

For the business consumer who probably doesn't foot the bill for every J/F ticket, there is a good probability of real return for your business on booking in a higher class of travel in that you're potentially better on the ball in the morning meeting. If it were your money, you might fly Y.
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