Financial Planning, Pricing Policies & Strategies: Emirates Airline

This report delves into the financial planning and management accounting strategies employed by Emirates Airline. It defines the balanced scorecard and its application within the airline industry, highlighting non-financial measures like market share and innovation. The report also examines various pricing policies, including price skimming and dynamic pricing, and analyzes their impact on sales, profit, and revenue in the post-COVID-19 tourism and travel sector. Furthermore, it describes the role of contribution tools and techniques in decision-making, providing examples of how these tools can be used to determine minimum selling prices and safety margins, offering key insights into Emirates Airline's strategic financial approaches and their effectiveness in a dynamic market environment.

Management
Accounting and
Financial Planning

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Define the concept of Balanced scorecard and in what ways it could be used by the airline
business. Also highlight two non financial measure which the airline company would be
adapting or using for monitoring its performance and results....................................................3
State the pricing policies and strategies which might be adopted while launching a new
commodity or product, also describe the pricing strategies as how the profitability and pricing
strategies would be affecting sales, profit, revenue of tourism and travel based companies
after the COVID-19 pandemic....................................................................................................6
Describe the role of contribution tools and techniques in decision making process while
giving suitable examples.............................................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The report prepared as under takes in account the concept of Balanced scorecard and in
what ways it could be used by the airline businesses, it would also help to understand two non
financial measure which the airline company would be using for monitoring and controlling its
rendered performance. Balanced scorecard can be explained as a management system which
aims at translating the organisation strategic objectives which in turn are controlled, monitored
and measured and altered if demanded for ensuring that an companies strategic aims are
completed and achieved. The report includes various sort of pricing strategies which are to be
considered for assessing the level of profitability and in what ways the chosen pricing strategy
would be affecting profit, revenue generated and growth of the business over a period of time.
The airline company which has been chosen is Emirates airline company. It is a organisation
which is located in middle east, it operates over a range of 1990 passenger flight per week, from
its related hub at Dubai international airport, for over 101 destinations in 61 territories across 6
continents.
TASK
Define the concept of Balanced scorecard and in what ways it could be used by the airline
business. Also highlight two non financial measure which the airline company would be
adapting or using for monitoring its performance and results.
The concept of Balance scorecard is a strategic management result metric which is more
useful and helpful for business enterprises to identify and improve their operational functioning
prevailing in the firm for helping to render external outputs. It measures previous year
performance based information and would provide companies with feedback on ways which
would help in better decision making keeping future situations in mind. It generally aims at
translating an organisation's strategy based goals into a set of business enterprise performance
based objectives which in turn are being managed, measured, controlled, monitored and
modification if needed for ensuring that an company's strategic goals are achieved (Bastida,
Bracci and Hoque, 2021). Balanced scorecard could be used to have a better understanding about
what the company is aiming at and in what ways it could be achieved. It can be implemented
with the help of planning well in advance as what the business wants to achieve and preparing
budgets which would help it to fulfil them in given time period.

Two non - financial measures which would help in assessment and measurement of performance
can be explained such as:
 Market share: It can be defined as the market being captured which can be used for
explaining what market area has been accessed. Emirates Airline company has proved to
be rendering best services over the globe for the related period as compared to others. It
is one of the top companies which have served their commitments in best manner
(Heggen, 2019). The strategies of company have been realised to revolve around for
achievement of global expansion. In other way the strategies of business has a sole aim to
attain global competitiveness in the related industry and manage stability as well
sustainability too. Market share can be increased rapidly when the company would be
focusing on opportunities and tapping them well in advance for making best use out of
them. Market share denotes positioning and profitability of the company in a competitive
environment. It helps to understand whether the brand image developed by the company
is true and fair, it also is useful for users to have an idea about growth and expansion over
a period of time. If Emirates airline company is observed to increase its market share with
each passing year it depicts that it is carrying out its function on a efficient and effective
basis.
 Innovation: It can be explained as the capability and ability to bring new goods or
services in market successfully (Heinicke, 2018). Innovation is useful to plan a new
product or service or make certain changes and improvement in the existing product by
finding where it is lacking and lagging behind. Non financial measure such as innovation
cannot be measured on financial grounds or in any figures which would help to ascertain
growth level in a business. Thus, such measures are considered in non financial areas but
seem to affect business in same way such as financial measures. Innovation can serve as a
advantage over others which would turn out to be obsolete and old with the passage of
time but with innovative qualities one could make slight changes and get attractively
placed in marketplaces. Innovative plans could serve to be helpful for cutting down costs
and expenses and in return increasing revenues.

State the pricing policies and strategies which might be adopted while launching a new
commodity or product, also describe the pricing strategies as how the profitability and
pricing strategies would be affecting sales, profit, revenue of tourism and travel based
companies after the COVID-19 pandemic.
There are many pricing strategies which are being examined at the time of launch of a
new good or service such as Value based pricing, penetration pricing, economy pricing, cost plus
pricing, competitive pricing, price skimming, dynamic pricing. The best pricing strategy which is
chosen by company is Price skimming that explains launching of a new product or good at a high
price point, before gradually lowering the price level. It would be useful for the company
because it would initially charge high prices that customers would pay and then cut it down with
the passage of time.
Price skimming can be explained as the best pricing strategy the reason being it helps to
generate enough revenues in initial stages which would help to cover investment made and
expenses incurred. It is useful to make people understand the purpose of the company and as it is
being noticed that the company is having a strong market share and has many investors linked
with it thus it won't be lead to any complex or difficult situation. Pricing policies are a key to
attract and attain a large scale of customers from marketplaces. Emirates airline company has
adopted the strategy of dynamic pricing whose objective is manage seat capacity on each air
plane in relation to get the highest available prices for every seat which would result in flexible
prices of the seats. It further would be recommended that they must switch to price skimming
which would turn out to be innovative and beneficial. It can be observed that being creative and
innovative would serve as a better advantage over other competitive companies. Pricing policies
have played a important role in every area of business whether small or large. Thus they have
affected and impacted the working and functioning of business. Affect of pricing policies over
sales, revenue and profitability is being explained as under in case of tourism and travel based
organisation after the impact of COVID-109 situations:
 Increase/Decrease demand: Price skimming strategy can be explained as a technique
which would help Emirates airline company to attract chain of users from market thus
resulting in generating revenues, rendering best services, able to provide qualitative
goods which are better than competitive products existing in market. The strategies

would help to have a better understanding as which can be implemented in which areas
and would be profitable for the company as well as customers.
 More saving and less spending: It has been observed that people have been saving on a
larger scale and spending bare minimum only on needed and required products which
have in return affected the wealth and health of company in long run. It has been noticed
that COVID-19 has impacted and affected the functioning of business in a dynamic and
unpredictable environment. It has also led company in a unpredictable situation which is
hard to tackle and manage liquidity as well as solvency of related enterprise in market.
Emirates airline company can use price skimming strategy as a technique which would be
helpful for the users who cannot afford high prices and would chose to adapt for such
products and services when the price would decrease or fall.
 Attract investors from the market: Price skimming based policies are important for
investors of Emirates company to understand which strategy has been adopted and In
what ways it is helpful to generate adequate profits for carrying out operational work in
more efficient and effective manner. It proves to be a tool which would give them a clear
understanding about which products have been launched by the Emirates airline company
and if it proved to be fruitful for them or not. It would also help to understand whether
they shall continue with it or not (Jangkholam, 2021).
 Adding value to product: Emirates airlines company can adapt price skimming policy and
form a comparison as which strategy would prove to be more helpful and would increase
the value being provided to customer in form of products and services which would result
in increasing the satisfaction being experienced by a consumer over a period of time. This
would help to emphasize the value of goods and represent the motivation for consumers
for paying more than they are being modelled on what users are expecting. Pricing is
observed to be a reason behind successful cycle of a business and it would be difficult if
one doesn't serve the objectives in appropriate manner. Company are expected to review
and go through process for viewing in what ways pricing would be rendering highest
profitable level and in what certain manner it would prove to be beneficial as well
(Jayesh And et.al, 2022).

Describe the role of contribution tools and techniques in decision making process while giving
suitable examples.
It can be explained as a tool or technique which impacts direct and variable cost on the
net revenues being generated or earned by a business organisation which further would help in
realising and recognising the value each good or product and cost on business would be
rendering. It further identifies the overhead which are connected to various plan or project and
also would examine their performance being given and comparing the modification or change in
the marginal cosy of things. It would be working on the basic formula being written as under:
Contribution = Revenue – Variable and direct cost
This system would be useful for ascertaining the weaknesses and strengths related to cost
stricture with the help of differentiating the expenses into fixed as well as variable too.
Role
 Finding minimum selling price: This method would be useful in generating data about
minimum pricing level can be charged against the consumers. There are many cases in
which the demand of client being discounted and sometimes the business is having a
larger stock and plans towards selling It in lower prices (Oberoi And et.al, 2022). Thus, it
helps in finding the minimum amount and recommending that a company should reduce
the cost lower that lesser value otherwise, it would not be able to cover its variable costs
or expenses.
 Decide the margin of safety: The technique of contribution analysis would help in finding
out margin of safety. This would denote that the firm about the quantity of services and
its quality must be sold for generating a profit. For example, if break even pint is 10000
unit then margin of safety would depict to be unit number 10001.
This technique is very helpful to Emirate airline company as it would provide
information about various things. It can also be view in the stated example:
For instance, Emirates has produced seatbelts which would help to find out when the health of
customer is resulting to be unwell and in what ways one could automatically get medical
assistance on immediate basis (Ozdil and Hoque, 2019). This can be viewed and counted as an
example:
Emirates has decided the sell price as $ 50 per belt. Following expenses have incurred in the
production.

Foxed cost = $1000
Variable cost = $ 3000
Revenue on sale of 100 units = 100 * 100 = $10000
The total cost being incurred in production is 3000 + 1000 = $ 4000.
 Computation of break even point: Every new firm is required to find out and decide its
break even before moving towards generating revenues. Contribution examination would
be helpful in ascertaining such points for providing data or information to the enterprise
about the least unit, it would to sell cover all its cost (Palmer And et.al, 2021).
 Clarity in analysis of profit: This technique would be developing a relation among the
volume of profit and sales with the help of graphical presentation. Through this, mangers
would be easily able to interpret the income being earned by a company at a specific unit
being sold out.
CONCLUSION
From the report prepared above it can be concluded and asserted that for every company
being chosen which is planning to launch a new product or service in the market it is important
for them to understand which pricing strategy would turn out to be more useful as well as helpful
keeping long run in mind. It would help to carry out comparison such as which non financial
measures would prove to be more fruitful for the existing business. It would also help to evaluate
the results being rendered and if it is beneficial for the company to change and alter policies or
not. The report would help top build a understanding which areas demand improvement and
which are lacking behind. It would also help to build competitive advantages for maintaining
sustainability and stability.

REFERENCES
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