Strategic Management of Etihad Airways: A Comprehensive Analysis

This report brings out a discussion on strategic analysis on Etihad airways complied with the assessment of business and corporate level strategy. It presents internal and external assessment of Etihad airways by using organisation`s system prototype and also the drivers of the company.

STRATEGIC MANAGEMENT

Contents
Introduction...........................................................................................................................................2
Pestle Analysis......................................................................................................................................3
Value chain and value proposition.........................................................................................................5
Porter`s five forces model......................................................................................................................6
SWOT analysis......................................................................................................................................6
Recommendation...................................................................................................................................7
Conclusion.............................................................................................................................................8
References.............................................................................................................................................9

Introduction
This report brings out a discussion on strategic analysis on Etihad airways complied with the
assessment of business and corporate level strategy. This report will analyse the capacity of
Etihad airways with an aim to sustain appropriate competitive advantage. This report presents
internal and external assessment of Etihad airways by using organisation`s system prototype
and also the drivers of the company. The company was started in 2004 and it was established
on 2003. The company carried nearly 4.5 million travellers. The company has been
scheduling to fly with near to 25 million travellers by 2020. For internal analysis, SWOT has
been conducted that consists of four main factors such as strength, weakness, threat, and
opportunity. It is an framework that has been used to examine the organisation`s competitive
position and develop strategic planning. The company will have to analyse accurate after
avoiding conceived beliefs. A pestle analysis is a agenda and tool that is used to examine
macro environmental factors, which effect organisational performance (Rastogi, and Trivedi,
2016).
The financial performance of the gulf airways have been given here-

(Source: CAPA, 2016)
Pestle Analysis
Political factors- Etihad airways is an global airline that has been situated Abu Dhabi that
works on worldwide routes as it is exposed to other development of politics internationally.
With the sudden drop in the factors relating to the gulf airline`s flight to US where it absolute
to minimise the occurrence of the US flights and finally discontinuing few ways (Rastogi,
and Trivedi, 2016).
Trump government has banned to transportable for the countries of six Muslim nations that
are related with increased danger of terror attack that remains a political decision by limiting
the growth of airlines that are located in the affected regions (Souza, 2017). Due to
unexpected drop in load, factors have affected airline flights to US, airline has decided to
reduce the frequency of US flights and stop few paths. European and U.S. flights last the
strong promoting activations to prevent Middle Eastern airlines and their admittance to the
marketplaces (Gupta, Gupta, and Gupta, 2019).
Economic factors- Global airlines are relatively exposed to several fluctuations in regards to
the presentation of global cheap as any expansion in the macro environmental factors can
lead to demand for air travel. After the 2007-2008 financial crisis, the global economic
conditions have recovered and it was able to continue to moderate growth (Alshubaily, 2017).
The uncertainty of the emerging markets performance that pose economic risks for the gulf
airlines earnings. Decrease in price of crude oil can help several carriers to minimise the
operational expenditures (Alsyouf, Kumar, Ashi, and Hammadi, 2018).
Social factors- Apart from the major influencer of economy recovery after 2007-2008
financial crisis, there is an increase in people in middle class from emerging regions, which
has certainly donated to several optimistic changes in claim for its air transportable. In areas

such as Asia and Africa, people have the ability to afford to travel that have grown by
concentrating on lucrative markets (Alshubaily, 2017). Additional social growth have been
worth considering generation Y travellers with high possible for the airlines as the baby
boomers inclined to travelling to lead decrease in coming future (Alsyouf, Kumar, Ashi, and
Hammadi, 2018). Customers of generation Y places a stronger priority on the travelling as
the generation Y are not among the main market for the airways, business processes, and
developing the services, which closely accomplishes segment`s wants which always
remained as an critical success factors for the international airlines (Gupta, Gupta, and Gupta,
2019).
Technological factors- The airways has also witnessed severe technological changes that
pertains to method employed in order to influence out the objective audience and determine
corporate forms to optimise service delivery and development (Narain, and Ilango, 2015).
Numerous customer are using the online stages and applications to achieve the options and
finally involve with other airways. Industry companies do not have substitute to embrace
digital technologies to follow the customer prospects through flexibility, Customised
services, and mobile applications (Narain, and Ilango, 2015). In regards to the aircraft
technology, to foresee future, jet engine technology is not at all anticipated to suspect the
substantial variations as fuel efficiency enhancements and leading it to the top priority for
both airlines as well as manufacturer (Gupta, Gupta, and Gupta, 2019).
Legal factors- The airline industry has been affected by decision made by Trump`s
administration to reduce the risk relating to the escalating terror. This terror lead to
significant legal challenges for the Middle Eastern airlines (Narain, and Ilango, 2015). Travel
ban specific to the citizen of the Muslim nations that is a legal action, which will reduce
Middle Eastern airlines and its access to the US markets. Further actions can be pursued to
secretly by limiting Middle Eastern airline and their access to US and EU markets is also

uncertain. With an ongoing procedure, American and European airlines have lobbed the
government authorities in order to reduce the state subsidised Middle Eastern airlines and its
access to the markets but with the limited success (Bose, 2018).
Environmental factors
The carbon footprint of airline industry has been increasing demand and use of the air travel
(Alshubaily, 2017). The manufacturers have been investing significant amount of appropriate
resources in R&D programmes to create several alternatives for fuel engines so that it can
claim the use of biofuel that can reduce pollution by 50 percent in the future as soon as the
technology matures (Bose, 2018). Etihad airways undertake to change the global climate to
bring out unique challenges for the operations (Bose, 2018).
Value chain and value proposition
(Source: Meer, 2016)
Etihad is the youngest airline as compared to its competitors. High services competition gives
competitive advantage as compared to the competitors. Customers have been given royal
treatment with the personal itineraries (Meer, 2016).

Porter`s five forces model
Bargaining power of buyers- bargaining power of customers is not much because Etihad
has been providing facilities with the lack of competitors.
Threat of new entrants- The aviation industry in UAE related to attractive business venture
that attract new entrants. Encouraging new customers may limit the growth of the Etihad
airlines.
Bargaining power of suppliers- Suppliers are the main stakeholder of the organisation.
They also get huge discount on the available stocks. In terms of strong competition, rival
players are Airbus and Boeing. Organisations opt buying bulk that will finally reduce the
bargaining power of suppliers.
Threat of competitors- level of competition is determinant for the success of company.
Etihad airways have severe and direct competition with the emirates Airlines, Air Arabia, and
Qatar airways.
Threat of substitutes- Global recession affect the sector in the negative sense. Several
customers often use cheaper flights because of hard economic times.
SWOT analysis
Strengths Weaknesses
Etihad Airways is another largest airway of
UAE. It is subsidiary-owned by government
of Abu Dhabi (Bose, 2018).
On-board services act as a main role in the
achievement of any airline such as food,
flying nannies, chef, and beverage
managers.
The airway`s strategic moves led to
ownership stakes so that it can grow routes.
This plan has led to huge loss.
Several economy passengers complain
where Etihad focuses on its attention on
business class (Naimi, Delclos, and Calvet,
2015).

It is one of the prestigious and world`s
leading airline (Naimi, Delclos, and Calvet,
2015).
Opportunities Threats
Etihad will look for the organic and other
growth opportunities in Asia and Indian
Sub-continent (Naimi, Delclos, and Calvet,
2015).
Etihad can add further depth to network
with great frequencies on key markets such
as Manila, Istanbul, Calicut, Riyadh,
Dublin, and Dammam (Amin, Yan, and
Morris, 2018).
The airways face severe competition from
emirates Airlines and Qatar Airways.
There is a threat to its existence coming up
with low cost carriers including Air Arabia,
Air Canada, American Airlines, and Fly
Dubai (Amin, Yan, and Morris, 2018).
There is an great threat in regards to the low
costing long hauling airline with low cost
base as compared to Etihad
Recommendation
From the above issues identified, the organisation has enormous growth opportunities in both
the areas such as cargo units and passenger. The company can open up with new commercial
chances in European, Asian, and Russian market (Beraja, 2016). Attainment of small and
new occupational possibly in several areas inclusive of worldwide markets. Purchasing the
new aircrafts will only enable development with improved number of routes that are being
intentional by the organisation. The company should emphasis on all the travellers rather than
concentrating on corporate session people. People flying in economic class as it should be
preserved well as a guest rather than customers. The organisation’s market is very limited as
there are many new competitors as they launch new treat aircraft that can force the
organisation to change the market statistics (Beraja, 2016). It is seen that wanted customer

volume is limited. Liabilities and compensation have been overdue. The company should opt
to promote services in order to serve customers. The company needs re-access the
profitability within the specific market geographically. Market penetration has been
recommended with the help of price cutting in the existing prices, which place it in low price
and budget competition. Loyalty programs can avail discount to the corporate clients so that
it can get up to date with customers (Beraja, 2016).
Conclusion
From the above discussion, the company is the public sector company of UAE (United Arab
Emirates), which will ultimately seek to replicate the nation`s best hospitality with
appropriate culture and also with generous totalled getting better status of Abu Dhabi. The
company`s manages to accomplish own success when boosting the prospects of business of
the airline with mutual alliance. The company can take the advantage from collaborating
approaches to build organisation as it is being identified to create business network. The
company has the benefit of better market position in regards to the rivals. The organisation
can position itself, as it wants to become rival and preferred carrier.

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