Strategic Management of Emirates Airline

Strategic Management

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TABLE OF CONTENTS INTRODUCTION........................................................................................................................... 1 TASK 1............................................................................................................................................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

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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.

TASK 1 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 overcapacity. 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.

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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 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 Avail the top class strategic resource management assignment help service from the writers of Instant Assignment Help. Order now and get upto 35% amazing discount on your first order.

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.

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.

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 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:  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 Avail the top class strategic resource management assignment help service from the writers of Instant Assignment Help. Order now and get upto 35% amazing discount on your first order.

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 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.

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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.

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-todate 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.

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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:  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.

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