Business Strategy for Emirates Airline

This report provides an analysis of the business strategy of Emirates airline, including external environment analysis using PESTLE and stakeholder framework, internal capabilities, and application of Porter's five forces. It also outlines a strategic management plan for the development of the business.

BUSINESS STRATEGY
(UNIT 32)

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE and stakeholder framework used for external environment analysis in context of
Emirates airline...........................................................................................................................3
Internal environment and capabilities.........................................................................................5
Application of Porter five forces.................................................................................................7
Strategic management plan.........................................................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy is defined as the formulation and implementation of the various
strategies for the successful running of the business in profitable manner. The business strategy
provides a guidance to company that in which direction they have to take the working so that the
company can gain profit (Bıçakcıoğlu, Theoharakis and Tanyeri, 2019). The current report will
be based on Emirates which is a state- owned flag carrier established in Garhoud in Dubai, UAE.
The current report will outline the analysis of macro and the internal environment of the
business. This is essential as this will help the company in formulating the strategy for the
development of the business and make the operations of the company profitable. Further the
strategic management plan will be made in order to manage the various types of strategies for the
development of the business.
MAIN BODY
PESTLE and stakeholder framework used for external environment analysis in context of
Emirates airline
PESTLE analysis-
Political factor-
In context of Emirates airline, It is state owned airline from United Arab Emirates, which
has operations spread all over the world. It is an subsidiary of Emirates group which is owned by
Dubai government, so it is very natural that there is a lot of government influence on firm
strategic decisions. (Tzvetkova, 2018).
Economic factor-
The cost of running planes is one of the economic factors that impact on Emirates airline
negatively. It is quite difficult to mains each and every system of planes and make up to date, it
require a lot of money which affect profit margin.
Social factor-
Income source is one of the social factors that impact on airline business positively,
because people can buy more tickets when they earn better. In current eras, Emirates airline saw
a sudden progress in their tickets sales which is quite good for its venture. It can be said that
increase in income of individual has promoted travellers to travel in airlines.
Technology factor-

Technology advancement is one of the best factors that impact positively on strategy and
success of airline. With advanced technologies, management of company can provide online
booking services to consumers. It allows them to gain attention of new passengers and satisfied
existing one as well. By providing online seat booking facilities airline can gain greater success,
they drive more passengers towards purchasing their tickets which in return increase profit
margin of firm rather than before.
Environmental factor-
Government and consumers concern for environmental safety and sustainability put high
pressure on Emirates airline to reduce their carbon foot print (Mawed, Tilani and Hamani 2020).
It significantly impacts current operations of firm and strategy to enter into new market.
Company before entering into new market change their plans and develop the new one. It can be
said that airline sector is accountable for approximately 12% of total carbon emission.
Legal factor-
Policies and regulations related to employment put affect on current employment policies
of Emirates airline in positive manner. Organization already provides their cabin crew staff all
the facilities which each applicant wants. They cater good salary package according to workers
skills and abilities without making any differences, which in return building strong brand image
of company in airline industry.
Shareholder analysis-
Keep satisfied- Suppliers is one of the external stakeholders who can put negative impact
on Emirates airline operations and business practices as well as strategy. They have high power
to increase amount of each service or supply of product, which is not suitable for company as it
affects financial performance of business.
Manage closely- Workers are another external factor or stakeholder who have low power
and low interest in success of company. Organization manage them more closely because they
are able to increasing firm strength to enter into new place.
Keep informed- these are the stakeholder of Emirates who are low in power but have
high interest in the operations of the company. These are helpful for Emirates as they work with
more efficiency as they have high interest in working of company.
Monitor- these are other set of stakeholder which includes low power and also low
interest in the working and operations of the company. They just monitor the working of the

company and have no interest in the working of the company. In Emirates the monitor
stakeholders are managers, executives and the management team.
Internal environment and capabilities
Internal analysis is very essential for the company as this will assist the company in
analysing its internal strengths and weaknesses of the companies. This assists the company in
managing the working of the company in accordance with the latest changes taking place in
external environment. For this various types of model can be applied by Emirates and these are
as follow-
VIRO Analysis
VIRO is an analysis of framework related to a business that forms parts of firm’s larger
strategic plans (Ariyani and Daryanto, 2018). The basic strategy of every firm starts from the
vision mission of the company and continues including objectives, Internal and external analysis,
strategic implementation and strategic choices.
VIRO Analysis of Emirates Airlines
Valuable Rare Difficult to
imitate
Utilizable by
the
organization
Competitive
implication
Training
college
Yes Yes Yes Yes Sustainable
parity
Human
resource
Yes No No Yes Competitive
parity
Young and
Modern fleet
Yes Yes No Yes Competitive
parity
Terminal 3 Yes Yes Yes Yes Sustainable
parity
Digital
transformation
Yes No No Yes Competitive
parity
New Markets
and new
routes
Yes Yes No Yes Competitive
parity
Maintenance Yes Yes Yes Yes Temporary

of fleet competitive
parity
Luxury
service to the
passengers
Yes Yes Yes Yes Competitive
parity
Environment
friendly
initiatives
Yes Yes No Yes Sustainable
parity
The company is having numerous capabilities including various assets and luxurious
appliances in both normal and business class. The company is also having facilities of in flight
dinning which provides both vegetarian and non vegetarian food items (Vargas-Hernández and
Garcia, 2019). The brand value of the firm is also very well maintained and the firm is having
million of trustful customers. The firm also provides facilities of free Wi-Fi in the plane to
maintain a good customer value. The company provides flight facilities in almost every country
of the world excluding some rare ones. The flight is costly but provides maximum satisfaction to
its customers. The financial capability of the firm makes the firm to take free decisions regarding
technological up-gradation irrespective of the cost issues. The firm provides five star services to
customer in both first class and business class. The plane is well maintained and the firm has
lowest plane crash incidents all over the world which makes the customer trust the company.
Value chain analysis- this is a model which assist the company in identifying the various
activities that is primary and supporting activities which adds value to the final product and
service of the company and reduces the cost or either increases differentiation. According to this
model the primary and support activities of Emirates are as follows-
Primary activities Operations- the operation of the company is the most important activity of business as
this will assist the company in managing the profits and running of the company. This is
due to the fact that if the operations will not be effective then the employees will not be
able to work in effective manner. The major operations of Emirates are taking the
passenger from one place to another within the airlines of the company.

 Marketing- this is another important primary activity without which Emirates cannot
work in effective manner. The competition is very high and only way of reducing it is
effective marketing techniques. For the marketing Emirates use a variety of strategies like
social media marketing, sponsoring the various events and many other different types of
marketing techniques.
Support activities Human resource management- this is a support activity as the function of human
resource help the company in managing all the activities within the company. Thus, this
supports the company in accomplishing all the aim and objectives of the business to a
great extent and in successful manner (Value chain analysis, 2020). The human is the
workforce which is working in the company and the major work of them is to follow all
the directions of the leaders and manager and work in direction of attainment of group
goals.
 Technology development- this is another important support activity which will assist
Emirates in managing and adapting all the latest technology in the business. This is
important as this will assist the company in improving the working efficiency of the
company such as use of digital technology for marketing, online payment modes, online
booking of the tickets and much other latest technology.
Application of Porter five forces
Porters 5 forces is a framework which is used to find out the competitiveness of the
industry in which organization is operating. This used to highlight the different forces impact on
the organization operating in the industry (Sia, Soh and Weill, 2016).
Threat of new entrant: This sort of the threat in the market is very low, as it has been
seen that there are very few number of new companies which used to enter into the market, as
this industry requires a good sort of the investment to be made by the organization in the long
run. As a result, it can be said that threat of the new entrant is very normal for the organization in
the long run. As very low number of the companies used to enter in the industry.
Threat of competition: This threat is normal for the organization, as there are many
different type of competitor who used to operate in the market which used to create the issue for
the organization to overcome the same, at the same time with the help of good services and
activity of the company in the market organization is able to manage the competition very easily.

So it can be said that threat of competition is very nominal in the market (Cubas‐Díaz and
Martinez Sedano, 2018). Some of the competitor of Emirates is Malaysian Airline, Turkish
Airline and Saudia Airlines.
Threat of Substitute Product: This threat is also very much moderate in the industry, as
there is no as such direct substitute of Airway in real scenario which used to help the different
organization in safeguarding the challenges which is offered by the substitute product in the
organization. At the same time there are indirect substitute services such as roadway and
waterway and railway which are cheaper in the rate as well. This eventually used to create the
impact on the organization but as Airway is fastest mode of transport it helps them in
maintaining the customer base of company.
Bargaining power in the hand of supplier: There is high amount of bargaining power in
the hand of supplier, reason behind the same is identified that there are many few suppliers who
used to supply different services to the organization which used to give the good sort of the
power in the hand of the supplier in the industry.
Bargaining power of consumer: There is few number of the consumer to select the
Airway they looking to travel, so it used to give some sort of the power in the hand of the
consumer in term of selecting the organization for their travel (Chen, Eshleman and Soileau,
2017). This type of the force in the nation used to bring moderate amount of impact on to the
performance of the new company in the market.
SWOT- with the help of all the above internal and external analysis and the analysis of
the competitive position within the industry the SWOT of Emirates is as follows-
Strength
 The major strength of Emirates is that it
has a good level of infrastructure and
the level of growth which is good for
development of company.
 Another strength is that it has a high
support of the local government to the
company which is a big help in the
development process of company.
Weakness
 The major weakness for Emirates is
that the prices of the tickets are high
priced and because of this consumer
gets less attracted towards the company
(Holotiuk and Beimborn, 2017).
 Another weakness is that most of the
people belong to low class and they
cannot afford the high class airplanes of
Emirates.

Opportunities
 The major opportunity for Emirates is
the Dubai World Expo 2020 wherein
many different businesses will travel
and come.
 Another major opportunity for the
business is the capture market like Iran,
Cuba and other.
Threat
 The major threat is the high and intense
competition which is present in the
global business environment.
 Another major threat is of the changing
preference of the consumer relating to
the travel with air.
Strategic management plan
The strategic management plan is a type of plan which will assist the company in developing the
various types of strategies and implement it in the business (Jermias, Gani and Juliana, 2018).
The plan clears the fact that how the various strategies are being applied in the business and for
the betterment of the company.
Vision- the vision of the company is to manage the recognition of the company as a leading
company in the highly competitive market which provides aviation and security services to
consumer.
Mission- the mission of the company is to be committed for safeguarding the requirements of the
consumers and staffs and practice lawful business and continuously review all the changes taking
place in the business so that it can adapt to the latest changes.
Objectives
 To increase the sales of the company by 15 % by the end of 2020.
 To implement the use of latest technology within the working of company by the starting
of 2021. To focus on the latest marketing technology to increase the consumer base by 10 %.
Strategies
Ansoff matrix- this is a strategy which assist the company to strategies for the development of
the business for the growth and development of the business. the Ansoff matrix involves the
following-

 Market penetration- in this the company majorly focuses on the development of the
existing product only for the existing set of consumer only (Yuliansyah, Gurd and
Mohamed, 2017).
 Product development- under this strategy the company majorly focuses on the
development of a new range of product for the existing set of consumers only.
 Market development- under this strategy of Ansoff matrix the company tries to enter a
new market area but with the existing product only.
 Diversification- this is another important strategy of Ansoff matrix wherein the totally
new product is developed for the new set of consumers.
Out of above all of the strategies the most recommended and suitable strategy is the
diversification. This is majorly because of the reason that objective of company is to increase the
consumer base and for this diversification is more suitable.
Bowman strategy clock- this is a model which is helpful for the company in managing the
strategies for the development of the business in profitable manner (Bai, Cordeiro and Sarkis,
2020). This model includes the following strategies
Strategy Description
Low price and low value added Here in this position the company produces the goods and
services which are not of good value and because of this their
prices are also very low. This is not a competitive position for
the company.
Low price This is the strategy wherein the produces the goods in large
quantity and because of this the price of the goods are low but
the benefit is of economies of scale (Hart, Sharma and Halme,
2016).
Hybrid Under this strategy the company produces a combination of
low price and differentiated product. These products are more
effective as they have quality as well as low price.
Differentiation Under this position the company offers more good quality and
different product and services which the company earlier
used.
Focused differentiation This is another important strategy in which the company may

focus on developing branded and luxurious product and
services to offer to the consumers.
Risky high margin Under this strategy the company charges the price to be high
but the consumer does not get that much value and they do not
like the low value and high price product (Bentley-Goode,
Newton and Thompson, 2017).
Monopoly pricing Under this strategy the company have the benefit of single
seller and they can charge the price in accordance with their
requirements. There is not much competition and it is
beneficial for the company in order to manage the sales of the
company.
Loss market share Under this position the company loses the market share as the
price of the company is not competitive and competition
within the market is very high and consumer will not buy the
product and services of company (Yuliansyah, Rammal and
Rose, 2016).
From the above it is recommended to Emirates to use the strategy of hybrid because of
the reason that this includes both the good quality of product and the price as well. As in this
stage the goods are produced at high level and in large quantities then it provides the benefit of
economies of scale for Emirates (Leischnig and et.al, 2017). This is particularly when Emirates
will charge nominal price for the tickets of travelling and with that they provide good and
effective services as well then this will attract more of the consumers.

Monitoring and controlling
This is the stage most essential stage of the strategic plan as here in this stage it is
evaluated that the whether the planned activities have been attained and executed in the same
manner or not. This is particularly because of the reason that when the planned activities are not
undertaken in intended manner then the strategy formulation and implementation will not be
good (Lim, Chalmers and Hanlon, 2018). For this Emirates must use the technique of setting
standard as when the company has some standard then the company can compare its
performance against that standard and analyse the fact that whether company has attained the
aim of the plan or not.

CONCLUSION
It has been concluded from above the report that Business strategy helps the company to
achieve its goals. Business strategies are formulated for gaining competitive advantage. Through
Pestle analysis it has been identified that macro factors influence the business of Emirates
Airline. It has been determined that Emirates Airline has an opportunity to develop their aviation
services. By applying Porters five forces it has been evaluated that there is tough though
competition in airline industry. The bargaining power of buyers is low whereas bargaining power
of suppliers is high in Emirates Airline. By doing value chain analysis it has been determined
that primary activities of the company are operations and marketing and secondary activities of
the company are human resource and technology development. It has been concluded that
Emirates Airline has capability that they have luxurious facility available in the Airplanes. The
planes of Emirates also have crashed very less time in the world. Thus, the customer trust is high
in this company.

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Value chain analysis. 2020. [Online]. Available through:
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