Situational Analysis of Emirates Airways: Challenges and Strategic Action Plan

Running Head: Travel and Tourism
Travel and Tourism (Ass.1)
Report
System04104
3/23/2019

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TASK-1
1. Introduction
Emirates Airways is a popular airline based in Dubai, United Arab Emirates. The airline is a
subsidiary of The Emirates Group, which is wholly owned by the government of Dubai's
Investment Corporation of Dubai. The present work divided into two sections. The first
section shows the situational analysis of the company. In this section, various strategic
management tools have been applied to analyse the current situation of the Emirates airways.
In the first part, STEEPLE analysis shows the various external factors that affect the Emirates
groups, while some other techniques such as SWOT analysis, porter five forces model,
McKinsey 7s framework shows the various internal and external factors that affect the airline
business operations of Emirates Group. In the second part, the focus of this report is on a
strategic action plan that helps the company to face the key challenges. In the end of this
report, a short conclusion summarises the overall report that how Emirates can face the
existing challenges.
2. Situation Analysis of Emirates
The Emirates is a giant airline company in all over the world. Emirates Airways is the world's
fourth-largest airlines that operates more than 3000 flights every week across its network that
is spread in 80 countries and more than 155 destinations (Emirates, 2019).
2.1 STEEPLE Analysis of Emirates
STEEPLE analysis provides an external environment analysis of Emirates Airways.
STEEPLE stands for Social, Technological, Economical, Environmental, Political, Legal, and
Ethical factors that affect the organisation and its operations. STEEPLE analysis for Emirates
is done in the below table.
Macro Factors Impact on Emirates
Social
Increasing population enhances the number of tourist and visitors all over
the world. The Emirates follows cultural diversity by offering its airlines
for various religions, cultures, and societies all over the world and all are
interacting at one place.

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Technological
Company purchase the latest fleets such as Boeing 777s and A380s for
providing better services to the customers, while an online ticket booking
facility provides convenience for people (Bose, 2018). The company
provides inflight entertainment services to its customers. Although, the
Emirates airways need to renovate and innovate some new designs for
aeroplanes that reduced the negative environmental effects.
Economical
Fluctuation in fuel prices is a challenge for Emirates airways. 40% of all
expenses are related to jet fuels. The investment related to travel and
tourism encourages people to visit Dubai. Apart from this, the economy of
other countries where Emirates operates its business could affect the
company. The currency fluctuation is also a matter for Emirates.
Environmental
The new aircraft Airbus 380 is environment-friendly aircraft that consume
very less fuel and emission. However, the natural calamities like
earthquake and volcanic eruptions are major threats for aircraft.
Political
Emirates Airways is governed by the Dubai Government. Thus, It helps
the company to follow government rules and regulations. Emirates
Airways signed various agreements with Asia Pacific countries to
promote trade with other countries. Adverse situations like war and
terrorism also affect this Airways company.
Legal
Thousands of people migrate to Dubai every month because there is no
tax on personal income in Dubai. The government of Dubai treated
Emirates as a wholly separate and independent business entity that is a
major reason behind its success.
Ethical
Emirates strictly follow the ethics and basic norms in its business
operation whether it is related to fuel emission or quality of services. The
Emirates Airline believes in ethical practices and they also believe that the
Company's success is the result of ethical practice. Emirates always care
for its employees and stakeholders, as well as the environment and its

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community.
2.2 Porter's Five Force Model of Emirates
Threats of new entrants: In the airline industry, industry threats are very low but barriers on
new entrants are high because a new entry in the aviation industry required too much capital.
Thus, entry of new airline needs the implementation of EPA standards and follows the strict
rules and regulation. The company should also follow the regulation related to emission
under the specified limit (Al Ameri, 2013). Although, Emirates airline is a part of the
Emirates group, so capital is not an issue for Emirates. Emirates also launched various
programs such as Skywards and frequent flyer miles that increase the loyalty of customers in
Emirates airlines.
Bargaining power of buyers: The buyers have no control over the prices charged by airline
companies but they have some influence on the price, by opting other airline companies that
are charging low prices for tickets and provide excellent facilities to the customers. However,
Emirates is known for its quality services. Thus, here some lack prevails in the bargaining
power of customers because in the festival season when Emirates increases the prices in peak
season, customers of Emirates continue to avail the Emirates services without any care of
price hike (Kotsi and Michael, 2015).
Bargaining power of suppliers: The supplier switching costs in comparison to firm
switching cost is very high in the aviation industry. There are many substitutes available for
suppliers because there are more than 100 airlines operating the business in all over the world
and all airlines are planning for expansion. Apart from this, only two leading companies
provide aeroplanes to various airline companies, i.e. Boeing and Airbus. Thus, the low
number of suppliers has strong bargaining power with Emirates.