Fueling the Future…Creating Competitive Advantage

Posted by: in Corporate and Strategy, executive insights, gary grates, Thought Leadership on May 22, 2012

Delta Air Lines recently announced it’s buying an oil refinery in an attempt to save hundreds of millions of dollars off its annual fuel bill.

Talk about a new model!

Pundits are calling it an innovative move to manage the business – especially with fuel comprising upwards of 40% of an airlines costs.   The strategy is being seen as the first wave of new business approaches by companies looking to better compete in an uncertain, constantly changing world.  Rather than be a passive spectator as fueol costs continue to rise, the company is making a defensive investment.

While the purchase isn’t risk free, it certainly reshuffles the deck competitively and places other airlines in a potential cathc-up mode.

The beauty of this action is that even a staid, conservative industry can push itself to a new place and in so doing generate new value.

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