Emirates Airline Strategic Management

This assignment requires a thorough analysis of Emirates Airline's strategic management. It examines the airline's current situation, identifies key challenges and opportunities, and proposes recommendations to improve its profitability. The analysis should consider various aspects of strategic management, including market penetration strategies, economies of scale, resource restructuring, and competitive landscape.

STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Identifying competitive strategies utilized by Emirates Airline.................................................3
TASK 2............................................................................................................................................5
Critically evaluating the competitive strategy utilized by Emirates airline................................5
TASK 3............................................................................................................................................6
Appropriate recommendations for Emirates airline....................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management is a process of structuring of a keen understanding of how the
world or business environment is changing, as well as a knowledge of how those changes might
affect a particular firm. It requires the ability to 'manage change'. Apparently, managers have to
be careful to monitor and to interpret, what is happening in their environment, to take appropriate
actions when needed, and to monitor performance to ensure that their firms are able to survive
and, it is relied, and flourish over time. In the present report, Emirates airline has been chosen
that is having 151 airports in 80 countries serving customers globally with having its
headquartering in Dubai, United Arab Emirates. Main purpose of the present report is to
critically evaluate and identify the strategic management of Emirates Airline.
Internal and External analysis of Emirates Airline
Internal Analysis
The internal strategic change and approach is to be more welcoming to partnerships with
commercial value which plays a prominent role in the airline industry.. It depicts a recognition of
changing business scenario where bilateral alliance is gaining major share in the market.
Emirates has a well-structured and developed infrastructure which is able to attract more number
of consumers for consuming its services across the world. The company has adequate financial
resources to as well as it has approximate 39% market share of the overall airline industry. It
provides various unique and differentiate services and products to its consumers which lead to
increase sales and revenue as well as profit level. (Hill, Jones and Schilling, 2014). All these
factors contribute in gaining competitive advantages over competitors for the firm. Skills
possessed by staff along with technical and non-technical know-how altogether with strong
dedication are crucial to attain success which can be proved through the way they survived and
made profits after the 9/11 event which was a crisis in the industry while other airlines
announced bankruptcy or losses. The service provider was always cautious of not creating over-
capacity. Emirates succeeded in establishing a new international airline services into New
Zealand and going to expand its services in another countries where it currently not operating.
Emirates Airline took complete advantage of tax free environment and low labour cost
(less than 20% of total cost) of and a proficient airport was built. Over the past two decades, it
has built up a significant brand value with high product quality, innovation and excellent services
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resulting to increase the loyal customers from Middle East, Europe, Pacific Asia as well as New
Zealand and Australia. Coming to the established value chain of Emirates Airline, they have a
vast range of diversified business and properties which all are contributing to its operational
activities. Most operations are owned and run by the group. Emirates have a direct operation on
check-in, service desks, boarding and lounge services, baggage and handling along with airport
push backs (Rothaermel, 2015). In addition to these, Emirates hotels & resorts; sky cargo;
engineering centre for repairs, maintenance and training; Aviation College for pilot and staff
training; Catering; Incorporate business support etc. are enhanced number of consumers. All
these make up smooth operations for its success over competitors in terms of productivity, cost
efficiency and whole management.
External Analysis
Aviation regulation by governments have a direct impact on the success of Emirates
Airlines which is negotiated by agreements. Dubai launched a policy, open sky which is
implemented by the airline organisation in order to become more advantage and beneficial to the
firm. With implementation of Dubai's open sky policies Also, from full traffic agreements from
America, Australia and New Zealand, they have benefited in attaining global market shares by
entering into these international boundaries. Development strategies have been influenced by the
social and cultural factors. Both domestic and international markets have cultural diversity where
Emirates is operating. Dubai, Australia, Canada, U.S.A, U.K, Africa, India and Pacific Asia are
multi cultured countries. (Mellahi and Frynas, 2015). Adoption of the latest technology is a
success driver for Emirates airline. To attain lucrative market share, company has invested in
Boeing B777 and the Airbus A330. Emirates Airline focuses on ozone-friendly air crafts, quitter
take-offs and landing as well as substantially reducing impacts on environment. It is obvious to
have strategic competitors in the market namely Cathay Pacific, Qantas, Air France-KLM,
Lufthansa, etc. These major market-players offer similar product lines to Emirates indicating
aggressive competition. Environmental partnership with aircraft builders for ozone friendly
products, quieter take offs as well as landing of the passengers, and substantially reduce impact
of the environmental factors on the services. Segmentation of market focusing on differentiated
customers with various airline segmentation such as legacy for business travellers, low-cost and
budget for sophisticated customers have gained positive feedbacks.
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SWOT analysis of Emirates airline
It is the mostly used model for analysing company's internal performance. SWOT stands
for strengths, weaknesses, opportunities and threats which are widely useful elements in order to
analyse a business entity. It helps the management to scrutinize its strategic decisions in response
to the context of analysis (Strumickas and Valanciene, 2015). In this, strengths and weaknesses
are internal factors while opportunities and threats are considered as an external factor. SWOT
analysis of Emirates airline is given as below:
Strengths:
 Emirates airline is a strong backbone of government of Dubai.
 It has effective and proper communication channels with its consumers.
 It always uses advanced or updated technologies and come in market with innovative
products and services.
 It offers services at international level which covers 72 countries of the world.
 Company has 39% market share of airline industry in Asia.
 It has better organizational structure and financial resources.
 Firm is sponsoring in wider number of festivals as well as various sports and provide
financial support to them. It has approximate 50,000 efficient employees who are making efforts to provide high
level of customer satisfaction (Park and Shaw, 2013).
Weaknesses:
 The source of finance is mainly depended on oil-export which results in deficit during fall
in the price of oil.
 Highly diversified value chain drags the business to be cost-intensive.
 Totally rely on the local economy and government subsidies. Lack of skilled labours.
Opportunities:

 Quality of its products and services can be enhanced.
 Opportunity to become a brand in airline industry across the world. Consolidation can gain large sized network with spreading a lot of marketing benefits.
Threats:
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 Increase in fuel price is the main threat for company because it affects the prices of
tickets negatively.
 Government rules and regulations may hamper the operations of Emirates.
 New airline firms are trying to enter in the market of Middle east by which competitors
will be increased and affect Emirates in a negative manner (Osipov, 2013).
Identifying competitive strategies utilized by Emirates Airline
Competitive strategy utilized by Emirates with the help of Porter's generic model is
as follows:
Furthermore, to gain competitive advantage, Emirates airline uses porter's generic model
which helps the firm to a great extent (Ferlie and Ongaro, 2015). The model has basically three
strategies such as cost leadership, differentiation and focused strategy. These mentioned three
strategies are used by the respective firm in order to achieve competitive advantage of overall
airline industry. Examples of the strategies which are taken by business entity are given as
below: Cost leadership strategy: According to the strategy, company provides better facilities
and services to the passengers at low cost as compared to its competitors. Emirates allows
passengers to take mobile phones at the time of travelling by which more number of
consumers are getting attracted and thus, prices are cut down by the firm as well as prices
of tickets have also been reduced (Emirates Airline in Travel and Tourism, 2014). Apart
from this, it makes a new budget after the prices are cut by European airline which helps
to decrease the cost of services of mentioned firm. In this strategy, Emirates is launching
a new subsidiary which gives services at a low cost and offers lower prices in comparison
to traditional airlines. Hence, in this way, it uses the strategy to respond its rivalry firms
in airline industry. Product differentiation strategy: The strategy involves new and unique products which
are easily able to attract consumers and different from its rivalry firms. In this strategy,
company provides different services to the passengers such as first class private seat
where local passengers are not allowed (Casadesus‐Masanell and Zhu, 2013). It gives
other different services as well like long seats which become horizontal, coat cabinet
gourmet and wines, mini TV to each passenger, etc. After this, company is differentiated
in legacy airline in which advanced technology is used, ancillary services are provided as
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well as skilled staff is recruited. All these factors make the product differentiated in the
overall airline industry which helps to create competitive advantage over competitors.
 Focused strategy: The strategy which helps a business to concentrate on a particular
niche market is known as focused strategy. As per the strategy, the airline company is
focuses on only two elements such as provide unique and differentiate products and
services at lower rate in comparison to its rivalry firms. (Berrone and et.al., 2013). Apart
from this, it focuses on providing better and different airline services as compared to
rivalry firms so that customers can be attracted to avail the same.
Hence, it can be said that Emirates airline is able to create a competitive advantage over
rivalry firms and able to respond other airline businesses along with gaining higher profits.
TASK 2
Critically evaluating the competitive strategy utilized by Emirates airline
Competitive strategies utilized by Emirates are like cost leadership, product
differentiation and focused strategy which helps to take competitive advantage in airline
industry. Critical evaluation of these strategies with the help of advantages and drawbacks of
same are enumerated as below:
Cost leadership strategy:
Advantages: Cost leadership strategy helps the mentioned firm to achieve its objectives
and goals in an effectual manner. When company provides goods and services to the consumers
at lower cost, then they would get attracted towards it which helps in increasing the market share
and profitability as well (Hahn and et.al., 2015). Apart from this, firm is able to analyse the
overall market conditions and rivalries in terms of cost of products and services offered by
competitors. It helps to increase the number of customers as well as satisfaction level of them. It
is a widely used strategy by the firms and thus, it can be said that Emirates is getting benefits of
generating more sales and revenue as well as to increase the number of customers.
Disadvantage: Moreover, there are some drawbacks to company of using this strategy as
well. When company uses the strategy then it needs to take a strong action plan for which an
analyst has to be hired to analyse the market conditions. If the airline firm is unable to implement
strategy properly and to take benefits then it hampers the overall business conditions and must
provide differentiate products and services to the passengers.
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Product differentiation strategy:
Advantages: The strategy is very important and helpful for the organization to gain
competitive advantage in the industry where it operates. Advantage of the strategy is that,
Emirates entity is able to offer differentiate services and due to this, firm have not to face
competition. Another benefit is that it can charge higher price due to unavailability of substitute
products and rivalry firms, it can play as a monopoly business. (MacIntosh and et.al., 2013).
Another advantage is that in market, there is not any substitute product which is available in the
airline industry that leads to create a perceived value as well as to gain brand loyalty.
Disadvantage: Main drawback of using product differentiation strategy is that the firm
needs to use new technologies for which it is required to recruit new and skilled candidates. For
this, it has to bear more cost which leads to increase the prices of products and services offered.
Another disadvantage is that the firm has to recruit and retain an employee who remains up-to-
date with the new and updated technologies.
Focused strategy:
Advantages: When company is using focused strategy then it is able to know the
potential leverage of overall industry and market scenario as well. Main advantage to Emirates is
that it can charge higher prices from consumers due to offering differentiated and unique
products and services in comparison to competitors. To make the strategy company is always use
experts of particular field which helps to the firm up to greater extent. (Joyce, 2015).
Disadvantage: Limitation of the focus strategy is that Emirates is able to focus on a
particular criterion like providing services at low prices with offering differentiation in products
and services. Another limitation is that the company is not focusing on another elements of the
business which also important to make profitabile.
TASK 3
Appropriate recommendations for Emirates airline
Emirates airline uses competitive strategies to gain advantage over competitors in airline
industry and to get successful. (Rodrigo, 2012). Apart from all these strategies, company has to
focus on other factors which will help to become more profitable in the market. On the basis of
above research and analysis, recommendations to the airline firm are given as below:
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 It can be recommended to Emirates airline that it should re-structure the overall resources
of organization. It helps the enterprise in formulating effective strategies as well as
control over the expenses and cost to produce goods and services.
 It can be recommended to the business that it should use market penetration strategy to
stay in the airline industry for longer duration. From this strategy, business provides same
services at lower prices in comparison to other companies to existing consumers. Every
passenger wants to consume services at lower cost so, when company adopts and
implements the market penetration strategy then it will be able to attract more number of
consumers. The recommended tactic will help to become more profitable in the airline
sector.
 Moreover, it can be recommended to Emirates airline that it should use economies of
scale in the firm which helps to increase the production and level of services. From the
scale, company is able to enhance service level and decrease costs of production and
services as well.
CONCLUSION
It can be articulated from the above research that Emirates airline is providing better
travelling services or facilities to passengers at fair prices. The firm is able to gain competitive
advantages after using various strategies of porter's generic model. Company is using product
differentiation, cost leadership and focused strategies where it offers unique and differentiated
products and services to the passengers at lower cost. It can be concluded that in terms of
focused strategy, it focuses on providing differentiated services at lower cost in comparison to
rivalry firms. It can be recommended to Emirates that it should use market penetration strategy,
economies of scale and need to re-structure its resources to make the business entity more
profitable.
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REFERENCES
Books and Journals
Berrone, P. and et.al., 2013. Necessity as the mother of ‘green’inventions: Institutional pressures
and environmental innovations. Strategic Management Journal. 34(8). pp.891-909.
Bettis, R. A. and et.al., 2016. Creating repeatable cumulative knowledge in strategic
management. Strategic Management Journal. 37(2). pp.257-261.
Casadesus‐Masanell, R. and Zhu, F., 2013. Business model innovation and competitive
imitation: The case of sponsor‐based business models. Strategic management journal.
34(4). pp.464-482.
Ferlie, E. and Ongaro, E., 2015. Strategic management in public services organizations:
Concepts, schools and contemporary issues. Routledge.
Hahn, T. and et.al., 2015. Tensions in corporate sustainability: Towards an integrative
framework. Journal of Business Ethics. 127(2). pp.297-316.
Hill, C. W., Jones, G. R. and Schilling, M. A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Joyce, P., 2015. Strategic management in the public sector. Routledge.
MacIntosh, R. and et.al., 2013. Complexity and organization: readings and conversations.
Routledge.
Mellahi, K. and Frynas, G., 2015. Global strategic management. Oxford University Press.
Osipov, V., 2013. The wheel of competition as a new instrument of strategic management.
World Applied Sciences Journal. 27(8). pp.1083-1086.
Park, T. Y. and Shaw, J. D., 2013. Turnover rates and organizational performance: A meta-
analysis. Journal of Applied Psychology. 98(2). p.268.
Rothaermel, F. T., 2015. Strategic management. McGraw-Hill.
Strumickas, M. and Valanciene, L., 2015. Research of management accounting changes in
Lithuanian business organizations. Engineering Economics. 63(4).
Online
Emirates Airline in Travel and Tourism, 2014. Available through:
<http://www.euromonitor.com/emirates-airlines-in-travel-and-tourism/report> [Accessed
on 9th January, 2017].
Rodrigo, 2012. Marketing Strategy Analysis for Emirates airline. [Online]. Available through:
<https://writepass.com/journal/2012/11/emirates-airline/> [Accessed on 9th January,
2017].
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