A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Porter’s Competitive Strategies

A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Porter’s Competitive StrategiesAccording to Porter, even though not all companies that compete in a given industry clearly define their competitive strategy, they certainly have one. The competitive strategy that is formed through analysis of the industry as a whole, and making forecasts about industrial developments in the future, understanding competitors and its own position, and converting this analysis into a well-planned road map and in the end is compiled, so that the company’s own capabilities that will ensure superiority are brought together with the benefits of environmental opportunities. New-Generation Banks

In fact, the concept of competitive strategy in the literature emerged with Porter. Porter placed ‘competition’ as a focus of the strategy idea instead of planning and ‘competitive strategy’ as a focus of strategy instead of strategic planning. This approach caused a definite shift in the idea of strategic management, in the sense that the focus shifted from “strategic planning to competitive strategy”. Porter takes the competition concept as enhanced competition: direct competition (competition coming from existing competitors), indirect competition (competition coming from substitutes) and potential competition (competition pressure created by new investors that may potentially enter the industry). Taking this as the basis, Porter defines competitive strategy as a concept that is shaped according to the strategic position a firm has in the industry.
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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: The Deregulation Process

Deregulation in airline transportation suggests that restrictive regulations that organize airline transportation are either alleviated or totally annulled and that state’s interference in airline transportation activities are reduced. The issues, such as market entry and market exit, pricing, capacity offer, and mergers and acquisitions between operators are decisions that impact carriers’ strategies, competitive tools and outcomes and they have been subject to strict regulations for many years. It has traditionally been an individual country’s aviation authority that decides which airline is to operate between two cities, at what frequency and capacity, on which days and at what time, with what fares and under what conditions to resign from these markets. Thus, the aim was to keep competition under control, form a ‘regulated competition’, protect the industry and create public benefit. However, then came the 1960’s and 1970’s when this regulatory system became a target for criticism. Mainly in the USA, but also in many other countries, academic economists undertook studies on this issue and postulated that highly restricted airline transportation brings negative outcomes, contrary to expectations. On top of this came public pressure and following the 1980’s, airline transportation entered a new phase with an emerging tendency to deregulation that first started in the USA.
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A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: Introduction

A Study of the Strategic Responses of Turkish Airline Companies to the Deregulation in Turkey: IntroductionStudies conducted in the deregulated airline markets show that the most significant outcome of deregulation is an increase in competition and that airline companies give strategic responses to this change. In accordance with Porter’s competitive strategies, airline companies have started to position themselves in a clearer way and implement these strategies more consciously. A significant outcome of deregulation in this context is the fact that the cost leadership strategy from Porter’s competitive strategies is now visible in air transportation. Deregulation has ensured that all the restrictions on market entries and market exits, pricing, capacity offered, mergers and acquisitions are removed, so that airline companies are liberated as they will make decisions on these issues that will have an impact on their production output; thus the applicability of competitive strategies is ensured. Payday Loans Online

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Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan – Conclusion and Recommendations

Tax is significant at 1% level in textile sector and accepts 5th hypothesis it is also consistent with the similar findings by Krishnan and Moyer, Memon, Bhutto and Abbas and Zeitun and Tian. Tangibility is not significant at any level in textile sector. It means that tangibility does not play a significant role for firm’s performance in textile sector. Liquidity is not significant at any level in both sectors. It has negative relationship with firm’s performance in textile sector that rejects the 7th hypothesis. The non-debt-tax shield (depreciation) is significant at 1% level with positive relationship and accepts 8th hypothesis. It means that non-debt tax shield plays an important and significant role for increasing firm’s performance in textile sector of Pakistan.
The current study concluded that firm’s performance in textile sector of Pakistan is significantly affected by Short term leverage, size, risk, tax and non-debt tax shield. The Researchers recommends that the textile sector of Pakistan should make its financial decision taking into consideration of the above said factors because textile sector is the largest sector in Pakistan for non-financial industry and it is considered as benchmark for other sectors in Pakistan. The Findings of the researcher are also consistent with the previous researchers. The Textile sector should preferably decrease their short term debt financing as it will decrease firm’s financial performance while all other sector may increase it. The firm should use less short term debt as it neither provide tax shield advantage and not also cheap as long term debt financing.
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Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan – Regression Analysis

Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan - Regression AnalysisThe researcher used STATA 11 software for the regression analysis of the current study. The dependent variable is firm’s performance measure ROI while the independent variables includes Leverage (short, long), Growth, Size, Risk, Tax, Tangibility, Liquidity and Non-debt tax shield. The descriptive statistics showing mean, standard deviation, minimum and maximum values of textile sector indicated in table 2 while correlation matrix of textile sector is indicated in table 3. The regression result using one-way fixed effect model is indicated in table 4. The presence of fixed cross sectional effect is evidenced by the significant results of hausman test which validate the name of this model as one way-fixed effect model according to Baltagi. The above table 2 indicates the descriptive statistics like Mean, Standard deviation, Min and Maximum of Firm’s performance (ROI) and other firm’s specific factors like Leverage, Growth, Size, Risk, Tax, Tangibility, Liquidity and Non-debt tax shield (Depreciation) during the period 2005-2010 for Textile sector of Pakistan. The above table indicates that short term leverage has an average (mean) value as 51% in textile sector’s firm’s performance approximately, while long term leverage showing (mean) value as 22% in Textile sector. The firm’s Size in Textile sector on average (mean) value showing 139%. The above table 4.2 indicates the correlation matrix of dependent and independent variables in textile sector of Pakistan for the period 2005-2010. It indicates that short term and long term leverage including tax and tangibility having negative correlation with firm’s performance while growth, size, risk, liquidity and non-debt tax shield having positive correlation with firm’s performance in textile sector of Pakistan.

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Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan – Data and Source

The type of data is panel/longitudinal and has been created from the State Bank of Pakistan’s annual publication “Financial Statement Analysis of companies (non-financial) listed in Karachi Stock Exchange for the period 2005-2010”. This statement contains the 6 years financial figures of 12 different sectors relating to non-financial industry having 411 firms in total and available online at www.sbp.org.pk while the researcher selected the Textile sector because it covers the greatest part of overall population of non-financial industry in Pakistan.
The sample consists of 139 companies from textile sector of Pakistan. The findings of the current study is applicable on all sectors of non-financial industry of Pakistan as the sample selected covers 4.0% approximately of the whole population of non-financial industry.
It is not applicable on financial industry like banks and insurance sector as their capital structure is entirely different from non-financial sector.
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Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan – Literature Review

Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan - Literature ReviewA large number of previous studies relating to firm’s performance or sometimes corporate performance has identified a number of factors that empirically and even significantly affecting the firm’s performance. There are a little number of research findings available in Pakistani context relating to firm’s performance however the foreign researchers has done a lot in this context. The researcher used the framework of Zeitun and Tian with the extension in their regression model by adding liquidity and non-debt tax shield and applied this regression model simultaneously on textile and food sectors of Pakistan. The findings of Zeitun and Tian indicated that leverage has a significant and negative relationship with firm’s performance. They used leverage, growth, size, tax, risk and tangibility as independent variable to see their effect on firm’s performance. They concluded that firm’s size and tax have positive and significant relationship with firm’s performance while risk and tangibility have negative and significant relationship with firm’s performance. Memon, Bhutto and Abbas concluded in their study of capital structure and firm’s performance on textile sector that the companies in this sector are performance below optimum level of capital structure and also fail to achieve the economies of scale. Nosa and Ose found that effective funding required for the growth and development of the corporations in Nigeria.

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Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan – Significance of the Study

Textile sector is the largest industry in Pakistan. It consist of 164 firms which includes 145 firms related to spinning, weaving and finishing while 6 firms consist of made up textiles articles and the remaining 13 firms are related to other textiles items. From the last many years, Pakistani textile industry is facing a large number of crises due to continuous load-shedding from the last many years. A large number of firms in this sector have closed their operations because without electricity it is not possible to produce any product in textile sector. The remaining firms are forced to take loan for their survival in order to use generator or private electricity resources which are much costly. It has increased debt financing trend in this sector and the firm’s performance is affected largely by this trend. APTMA has requested to Government of Pakistan to take some serious steps in order to rescue the textile industry for possible survival by controlling the problem of electricity and restructuring the outstanding loans. In this way PICIC commercial bank was previously establish to provide loan both short term and long term according to this sector need and recently NIB bank has been established for this purpose.
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Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan – Introduction

Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan - IntroductionThere are a total number of 411 firms in non-financial sector of Pakistan which is subdivided into 12 sectors while Textile sector is the largest and the first sector which comprise of a total number of 164 firms which covers 40% of the overall non-financial sector of Pakistan. The researcher used the financial data of 139 firms of textile sector because the remaining firms missed some of the financial records required for analysis. The textile sector represent a large part of the non-financial sector of Pakistan, the financial performance of this sector may influence the performance of the other sectors. The basic and fundamental duty of every financial manager is to maximize the shareholder’s wealth and to increase firm’s value which is possible when the firm’s financial performance can be increased. The researcher’s aim during this research is to identify the number of factor that determines the firm’s financial performance. The previous studies conducted on firm’s performance indicates that a large number of factors affect significantly the firm’s performance. David Durand presented different theories for starting the argument on firm’s value.

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The Empirical Investigation on The Relationship of Foreign Trade, Institutions and Economic Performance of The ASEAN Nations – Conclusion and Implications

The Empirical Investigation on The Relationship of Foreign Trade, Institutions and Economic Performance of The ASEAN Nations - Conclusion and ImplicationsIt shows that accountability is not statistically significant at 5% confident interval, but more than 10%. Even so, foreign trade and other factors still play important roles in economic development of these nations. The interaction term between foreign trade and accountability is till negative but not statistically significant. It still suggests that better accountability and foreign trade push economy to grow. In the sense of statistics, it is clear that about 96% that all explanatory variables support economic growth; basically based on the F-test and P-value of the model. In this short empirical paper, the perspectives of economic cooperation and free trade agreements are described, in particular the ASEAN. The purpose of this association is not only to promote peace in the region but also to promote economic growth and social welfare. Another purpose is to enhance foreign trade in order to boost productivity growth. Therefore, some factors that may affect foreign trade such as institutional quality and financial development are reformed and improved.
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