Business Strategy: Macro Environment, Internal Capabilities, Competitive Forces

This report explores the impact of macro environment, internal capabilities, and competitive forces on business strategy, using Emirates Airlines as a case study. It discusses the PESTEL analysis, internal environment analysis, and Porter's Five Forces model.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1:Elaboration of macro environment and its impact or influence in organisation.......................3
2. Internal environment and capabilities of organization. ...........................................................5
3. Porter five model in evaluating the competitive forces...........................................................8
4. Strategies management plan..................................................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business Strategy is a vital tool for an organisation who wants to grow its business in a
strategic manner. Business strategy is basically a clear set of plans and actions that defines how
an organisation survive in the market and compete with others with its product or services. The
study of this report is focus on Fly Emirates company, which is one of the largest airline of the
UAE. The mission of Emirates is to provide high quality services to all its passengers and to
achieve customer satisfaction with innovation and highest quality standard. The report further
elaborate about the PESTEL or stakeholder analysis to examine the macro environment of the
company. Moreover, the report discuss about the internal environment with the help of SWOT,
along with the Porter Five Forces to examine the marketing strategies. Lastly, various theories or
models, concepts are explain that devise strategic planning for an organisation.
MAIN BODY
1:Elaboration of macro environment and its impact or influence in organisation.
PESTEL Analysis of Emirates examines its business strategies and elaborate its various factor
like political, legal, social or environmental. Lets discuss more in detail about PESTEL analysis
of Emirates:
Political
Emirates started it journey when Dubai started developing and now Emirates spreads its
operations all over the world. As airline industry is more prone to the political factors, hence
Emirates should operates in that country where political environment is stable. Emirates is
emerging in various countries and governments always try to keep the passenger's safety its
supreme priority. Any political change or security issues in these countries may halt the demand
of the Emirates. There are many international airlines restricted in some countries and also travel
bans are imposed, making situations worse for the company (Zeyada, 2018). However, many of
the international destinations of Emirates may benefit from political stabilities.
Economical
As because of the global presence of the company, the revenues are is collected in various
currencies. Therefore, any fluctuations in currency and changes global conditions may lead to
fluctuations in revenue. There are great opportunities for the Emirates to mark its presence and

expands its market in Asian or European market where market of airline is growing at faster
pace. However, one factor that may hinder the performance of Emirates is oil, the fluctuations in
prices of oil makes the situation worse and affects its business.
Social
The company saw a sudden growth in its ticket sales particularly from various developing
countries. Most of the people prefer to travel in the planes but because of the high prices its not
possible for middle class people to travel in planes (Alshubaily, 2017). However, high
competition in the airline industries lead to cut in the prices of the tickets and thus make it
possible for many people to travel in the plane. Moreover, growth in the tourism sector also
contributed to Emirates in increasing its overall sales.
Technological
Emirates is highly dependent on technological advancements. In today's era, the technology is
changing rapidly and any changes in innovation has now benefit only for few years. So every
few years, there is breakthrough in technology obsolete. Therefore, its essential for Emirates to
keep up with every technological changes to remain in the competitive market. Emirates also
developed navigation techniques which allows the airline to carry extra cargo.
Environmental
Emirates also faced many issues related with environment. As increasing demand of the folks
to solve the problem of environmental changes has now forced Emirates to make changes in their
strategies. Hence, the fuel that come from aviation is consider a major contributor to global
warming and aircraft consume a lot of fuel (Abu-Rahma and Jaleel, 2019). The landing process
of air-planes almost take 25% of fuels. So, now the demand is arising from the people that those
planes should be used by companies which consume less amount of fuel. If possible for the
company than they should take initiative to run on greener fuel.
Legal
This factor consists the lawsuits by other companies, governments and folks against the
company. The European supreme court has imposed compensations on emirates airlines. The
passengers of European now have right to demand compensations on delays of planes. The
lawsuits can be costly and ruin the brand reputation of Emirates (Alshubaily, 2017).
Stakeholder Analysis

Stakeholder analysis on airline sector are huge. If talking about Emirates, its main stakeholders
involves the customers, suppliers, governments, the public and the press. The level of impact all
these stakeholders that creates on Emirates and its strategic decision or progress is different. The
most powerful stakeholders should need to managed properly because their levels of interest are
really high (AlHosani,Dweiriand Ojiako,2020). For Emirates, the most powerful stakeholders
are its consumers because their needs or satisfaction should be the supreme priority for the
company.
On the other hand, other powerful group of stakeholders are those ones who also need to be
satisfied by emirates. However, their level of interest is usually low as compare to the power.
These stakeholder includes the suppliers. The power of governments is also high in the company.
So, its really essential for the government of Dubai to inform about the changes in airline sector
and should need to be informed on the progress of the airline sector (Venkatachalam, 2017).
Moreover, the service providers also belongs to the stakeholder of Emirates. All the stakeholders
of Emirates should need to be kept informed that also includes the potential customers.
2. Internal environment and capabilities of organization.
Internal environment is the culture, events, factors that the organization are ability to
have impact the decision of company especially the behaviour of human resources. The VIRO
analysis the internal environment to assess in providing competitive advantage.
Valuable:-
The Airlines Emirates shows VIRO about their financial resources and help their valuable
in investing more to arise external opportunities. The local food products also makes them
different from some other airlines along with that received the high of customer satisfaction.
Importance mainly given to employee for having better training so that could have high
productive results for company (Yudiono, Wilopo and Iqbal, 2019). Patents are of company are
more valuable as they sell them without interferences of competitive in market. In analysing this
Airlines research and development could have more costing in profits for products with making
innovation.
Rare:-
The organization has strong financial resources to possessed in few industries of
company. Workforce of Airlines Emirates are identified with highly trained and skilled, they

have opportunities for better compensation as well work environment so that employee could not
leave the firms. Airlines have rare distribution of network resources this is because required lots
of investments and it will take time to come up with better distribution of networking.
Imitable:-
Company has acquired huge amount of profits over the years along with that competitors
and investor had some amount to give importance in research and developments. The employee
in Airlines are not much costly to identify this can be because in company all workforce are
well-trained and skilled in their departments (Vargas-Hernández and Garcia, 2019). These
companies also hired employee in offering them better compensation package, benefits, growth
opportunities and working environment etc.
Organization:-
Financial resources of Airlines Emirates are well-organized and captured so that could
have more investor in their company and have enough profits. Employee network being strong
through which they can easily develop the in some other countries and allocated proper resources
to their employee. In allocation of proper resources to employee that could help in arranging heir
work and reduce working productivity as well saves their time. Trained and skilled employee
support Airlines in building more customer satisfaction (Rosales and et.al., 2017). Company
makes the use of network to reach out their customer while in ensuring that products are
available at all outlets and hence these resources proves that all to competitive advantage are
sustained.
Value chain analysis
Currently, the company has first Airlines in among operations of boosting luxurious and
Airbus with having number of routine fleets. It created the value in its services due to highly
used of luxurious of products at lower prices as compares to other international companies.
Value chain analysis is being more popular for every business and have equal significant to all
activities.
Inbound logistics:-
It is much important to have strong relationship with suppliers for providing products to
Airlines as they have to face various issues in products development period. Emirates Airlines
have their main focused on transformation of raw material into finished products. Few examples

of inbound logistics are stock the inputs, distribution of raw material and components for starting
production.
Operations:-
Emirates Airlines is always ready to produce their raw material into finished goods and
launched into market (Beretta, Stucki and Hellweg, 2017). Operational like maintenance of
products, repairing, packaging, testing etc. While due to having increased in productivity it can
help Emirates Airlines to achieve growth in economic along with huge amount of profits and set
basis for competitive advantages.
Marketing and sales:-
Organization have highlights their products and benefits in offering to customer that are
much better than other competitors. Airlines mainly follows the marketing and sales as they have
various agents which plays important role in selling their products. Few examples in Emirate
Airlines of marketing and sales are advertising, promotion, channel selection and developing
relationship with various channels.
Services:-
Emirates Airlines plays important role in developing their more customer loyalty and modern
customer considered post sales as much necessary in marketing and promotional activities.
Company must need to analyse about the activities in avoiding that harm the brand reputation
rather than using positive tools for having very quick support in business.
Human resource management:-
Emirate Airlines evaluating different HR aspects such as recruiting, selection rewarding,
performance management and some other personnel management (Goyal, 2020). The effective
HR in Emirates Airlines allow decrease competitive pressure which has been based on
motivation, skills to their workforce.
Technology department:-
Company have highly connected to their technology department which make them more
achieving customer satisfaction. As they supported customer services, designing products and
software. Technology help in integrating with production, marketing along with human resource
management.
Competitive advantage through access their rare resources which have been used in their
making well-developed companies. Emirate Airlines depend on develop their competitive supply

chain furthermore considered investing huge amount in research and development act within
their value chain supply.
3. Porter five model in evaluating the competitive forces.
Emirates Airline business operating globally airline industry and managing their
operation more than 70 regions. The Porter five model helps the company in gaining their more
advantage and understanding market position.
Threats of new entrants:-
Airline has high amount of entry in business, entering into market they need to take
permission of governments and aviation to association for starting business (Bruijl, 2018). While
at time of staring new airlines business they required capital, combined in having with effective
marketing strategies that could be stronger in making company position. It being more difficult
in gaining market share at starting of initial years. Therefore, Airlines has very low threat of new
entry in market as they have developed Emirates company which operating since from last
decades and have much capacity in handling load from new entrants. The companies have to
mention the quality of aeroplanes as well their food, some other products which are being require
to satisfied their customer. In having business starting companies must be make proper supply
chain of products so in between that could not be having their loss and for not break customer
loyalty.
Bargaining power of buyers:-
The buyers of airlines industry could not have importance in controlling over the price
changed. Emirates Airlines might be had some influenced over their pricing, charging low fair
along with that high quality of demands as customer required for the best features (Njuguna,
2020). Lack of having bargaining power in some airlines such as increasing prices due to
seasonal, dispute of customer with price hike. Emirates have developed them in price quality as
well for products quality and customer are willing to pay their high prices in airlines, it can be
said that Emirates have low bargaining power of buyers. Power of buyers in company they have
much gained of customer loyalty and facing no such problems in customer loyalty. Employee is
well-trained and much have skilled developed in them, they can easily deal with more customer
and some other competitors' industry. Airlines as such other companies have they van easily do

not make many profits. In Emirates airline customer are very much willing to pay when they
have high prices in their airline as well they also pay for their buying products.
Bargaining power of suppliers:-
In these suppliers are determined with number of plan being supplied and the demand of
planes are carried. There are only two suppliers of planes including Airbus and Boeing. As they
show the opportunities for being more supplied of pricing their planes and make their market
position. In addition, they have results with higher of bargaining power of suppliers who are
specially dealing with Emirate. Suppliers will have many benefits in making their tasks more
achieved while taking order for Emirate airline and flexible pricing in developing that strategies.
The management has to ties closed up with suppliers, hence collaborative in developing airlines
deigned such as technical mechanism for enhancing customer satisfaction (Wellner and Lakotta,
2020). The best opportunities for suppliers is to have flexible pricing in heir airlines designing
and supply at best dealing price that could make their more market position and could support for
future aspects.
Threat of substitute products:-
Emirate company facing moderate level in threat of substitute products and company
providing transportation services to people who travelling nearby modes of transportation
including auto mobiles. Hence, when it said about the international levels as they offer high
prices of tickets to customer, and they are more willing in buying their tickets. This might
created moderate level in threat of products for the company in developing them more and
making position towards other competitor. In addition, some customer just focused on their
quality and charging the premium for travelling their places. Emirates airline has various planes
in which they charge less to customer rather than charging high amount and when the company
do their amount high than also some customers are willing to pay their charges as per demand
(Gürel and Tat, 2017). It means that peoples are highly satisfied with their products and services
which they have given to the customer at time of travelling.
Competitive rivalry:-
Globally airlines have high degree in industry of rivalry, putting pressure of position for
developing strategies for being well-developing in maintaining their financial. As per
management views, they have main focused on services quality and updating their infrastructure
along with that maintaining the proper edge of the industry. Company needs to have main

focused on customer loyalty through conducting loyalty program, as they can also give some
offer to their customer who are booking with large amount of tickets before the travelling means
advance booking to their customer tickets. While by giving them tickets with having some offer
or discount that make company more valuable in market position and make their company
developed more than competitors (Abdolshah, Moghimi and Khatibi, 2018). Some other
competitors they have importance towards making quality of products and services, market share
that could key differentiation from Emirates Airlines.
4. Strategies management plan.
Aim:-
Company existing world best travelling in flight experience and make civil aviation, sustainable.
Objective:-
 To improve and retain business class frequent traveller market share.
 To increase market share by 50% by end year 2021,
 To decrease low cost market in achieving the company return on investment.
SWOT analysis:-
The company have main purpose to improve the children lifestyle while by location,
religion boundaries in guiding them to maintain the human dignity (Loredana, 2017). Here
internal environment that could help company for being more developed in various and build
more customer satisfaction-
Strength:-
Emirates have excellence level of advertising them among customer and make their
customer more loyalty towards them. It can be done through having print, TV, radio and so on.
The company airlines have huge big size of aircraft and take huge advantage. Emirate has main
focused on diversifying market in which they have strength and it can also increase their
visibility for gaining more revenue. Providing good customer services and enormous number of
customer response. As more people are happy from their services plus they preferred more to
these airlines.
Weakness:-
Company mainly depends on international traffic as they have intense in competition and
limited market share on more growing of airline (Martins, 2020). Emirate has main threat about

more accidents and incidents either when it comes to fall on airborne before end of runways. It is
more difficult to open market in US for Emirate airline and make their market position.
Opportunities:-
Emirates have more joint venture and partnership with many international business that
can give more opportunities for airlines in being more developed and become customer
satisfaction. Company also increased the number of international destinations that could help
them in making their opportunities more established along with become more popular in between
customer.
Threat:-
Increasing competition can be threat for Emirate, also caters high class traveller while by
giving big deceased visibility. Increasing fuel cost highly impact on airlines margins and hence
changing policies and regulation of government in airlines of different countries.
Ansoff Matrix of Emirates-
Following are the four dimensions of Ansoff matrix-
Market penetration:-
It means promoting exiting products in existing markets. The first strategies as they have
they promote their products through various route in developing their market position. It also
offers discount on holidays and on events gain many people as passenger (Vargas-Hernández
and Garcia, 2019). The people also keep motivated to them from various things giving the more
position in market and satisfied by their pricing.
Market developments:-
This means that existing products are sold in new market as termed in developing market.
Emirate expanding their new flying destination among various countries and this is done due to
have increasing number of people so the number of aircraft also being increased. It basically
targeted to premium passenger that use business class which offers get facilities.
Product development:-
Emirate develops new products in existing market and company have various strategies
in doing this product development. Another strategies that can be used association with
companies such as hospitality, hotels to provide better experience during flight with stoppage
and while having product development it is more important strategies in gaining more sales.
Diversification:-

This act has new products in new market and diversification by developing spare parts,
manufacturing new aircraft. Taking holds with hotels of company to maintain their supply chain.
It can horizontally diversify including low cost hotels, resorts, airline and cruise that can bring
opportunities for the company.
Porter's generic strategies-
There strategies of Emirates used cost leadership in which they used the best leadership
for making their company more developed and refereed the better set tactics for their required.
Cost reduction from the experience and avoidance of marginal customer (Omsa, Abdullah and
Jamali,2017). Differentiation leadership make their leaders style different from some other
leaders in making their products and services in which they can make their more customer.
CONCLUSION
From this report it had been concluded that macro environment analyse the framework of
organization and impact on their business. Also, about the internal environment in which value
supply chain and VIRO defines about their supply and customer satisfaction. Porter five forces
help company for being more developed with having different product development in to new
market so this can make their competition in market. Strategies management plan support
company for their establishment of new products and showing interior factor impact in their
business.

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