Date of Submission:
Table of Contents
1. Executive summary 2
2. Overview of the company 2
2.1. Evaluation of the organization’s performance 3
2.2. Mission and Goals 4
3. A comprehensive analysis of the company’s external environment 5
3.1. PEST 5
3.2. Porter’s 5+1 forces 6
4. References 10
Emirates serves to be the largest Airline Company in the Middle East and one of the fastest growing airline across the globe. The Business models and structures that are adopted in Emirates are used as standard benchmark by other airlines. It has a significant contribution in the global aviation industry. There are many strategic moves that are adopted by the Emirates Airline Company that has helped them to achieve a leading position in the aviation industry. These strategies reflect the requirements of the customers that they want to accomplish.
In one such effort to provide the customers with an exclusive service, Emirates Airlines successfully completed world’s longest non-stop scheduled commercial flight between Dubai and Auckland that consisted of about 14,200 kms and lasted for about 17 hours and 15 minutes in the air (THE GUARDIAN, 2016). It is one of the most significant contribution in terms of strategic move taken by the company for the customers across the globe as it helps in connecting people from one part of the globe that is Dubai, to another part of the globe in New Zealand. It is a very innovative strategy move taken by the Emirates Airlines to secure and maintain their position in the Aviation industry. The strategies that are adapted by the emirates Airlines and an overview of the company’s profile has been discussed.
Overview of the company
Emirates Airline was founded in 1985 with only two aircrafts in the beginning. However, the rate with which Emirates Airline has grown has helped them develop a niche for themselves in the global aviation industry. Emirates Airline falls under Aviation industry (ZAWYA, 2016) and is a part of the Emirates group. It is entirely owned by the Government of Dubai (ownership type: government) but they have grown through competition and high standard of quality in airline business (THE EMIRATES GROUP, 2015). Due to various business divisions and subdivision, Emirates operates mainly in transportation sector with other emphasis such as food and beverages, education, tourism and leisure, retail and real-estate. The size of Emirates is large not in business sectors but also number of employees and business operations. Now, Emirates operates with 84,000 multinational team members compromising of more than 160 cities across 78 nationalities and across six continents (THE EMIRATES GROUP, 2015).
Emirates provide airline services and it is their main business activities. Therefore, they offer transportation and travel services, which also include in-flight entertainment, young flyer accommodations, first-class lounges, and air catering for serving worldwide customers (BLOOMBERG.COM, 2016).
Emirates Airlines has launched the world’s longest non-stop schedules commercial flight that operates between Dubai and Auckland. It spreads across 14,200 kms and has a journey of about 17 hrs. and 15 minutes in air (THE GUARDIAN, 2016). The aviation industry in the UAE has to face not only the national challenges but also regional ones. The reason is that UAE motivates excellent aviation, transportation and infrastructure with quality facilities and technology. Therefore, it is important that Emirates meets expectation of their passengers with quality services and offerings along with proper internal communication.
Evaluation of the organization’s performance
The performance in an organization can be determined by the business that it generates in local as well as international markets. For the Emirates Airlines, the evaluation of the performance can be done through establishing the number of passengers that travel through them on annual basis. It also includes comparing the performance in terms of number of passengers in Emirates Airlines with other potential Airlines like the Qatar, Etihad, Air Arabia, etc. that are providing their service with their headquarters in UAE. There are many variables that are responsible for these statistics. It includes the strategic moves that are identified by these companies and are evaluated by them in such a way that it provides them with the required position in the market across the globe.
Figure 1 shows that the number of passengers increased tremendously since 1989. At the same time, when comparing with competitors of Emirates, it shows that Emirates is handling more passengers than Qatar Airways and Etihad Airways.
Figure 1: Number of Passengers in Dubai 1989-2014 (CAPA Centre for Aviation, 2015)
Mission and Goals
Emirates Airlines has strived on achieving quality par excellence since its very inception in 1985. The goals of the Emirates Airlines are:
• To develop a world class Airline service with utmost quality
• Establish a strong and stable leadership team
• Build a global network bridging different nations
• A high efficient international cargo system
• Contributing in the welfare of the society through coordinated efforts for upliftment of humans across the world.
• Achieve a niche in the global market along with accomplishing their business ethics.
Mission of the Emirates Airlines is “Offering consistently high-quality value-for-money service and to be the best airline on all of its routes” (THE EMIRATES GROUP, 2016)
A comprehensive analysis of the company’s external environment
PEST analysis refers to the analysis of the external environment through evaluating the Political, Economic, Social and Technological factors that are related to a specific industry. For the Emirates Airlines, the PEST analysis is discussed as follows:
Emirates Airlines is affected by the unstable political conditions in the Middle-East countries of Iran, Kuwait and Iraq. It has been affected by the political conditions prevailing across the world such as wars, terrorist attacks and natural disasters. Due to this, the flow of passengers in terms of passenger traffic reduces by a large margin.
It is one of the most significant factor in the contribution of Emirates Airlines success in the global Aviation industry. There is a tremendous amount of investment made by the UAE government to improve its infrastructure and boost the economy of the country. This has resulted in a large number of international visitors to the country in the last 2-3 years. It has boosted the number of passengers that the Emirates used to carry.
Social factors refers to the changing dimensions in the society like the population, percentage of educated class, increase in standard of living of the people, increasing demands of the people to get good quality of service. These factors have contributed to the increase in the fleet of passengers that use Emirates Airlines and it is increasing tremendously.
The advancements in technology has boosted the Emirates Airlines industry as the ease of booking the tickets over the web and mobile applications has led to increasing booking by the passengers. Also, there is a boost in the requirements of the people and quality demands of the people and hence, they prefer travelling in emirates Airlines owing to its high standard and superior quality (Elbanna, 2010).
Porter’s 5+1 forces
Threat of entry of new competitors
There are large number of competitors and potential ones among them include Air Arabia, Etihad Airways, Royal Jet, and ExecuJet. The target of Royal Jet, and ExecuJet is similar to that of Emirates and so they are making the competition hard and giving Emirates a run for their money. However, they have a long way to go before they challenge and compete with Emirates directly or affect Emirates growth and revenue.
Bargaining power of suppliers
There are many options available to the Airlines for selecting an appropriate suppliers. Hence, as a result of it, there is a very limited bargaining power of the suppliers. They have the power of charging high costs depending on the level of quality and high standards that are required by the Emirates Airlines. The suppliers have the leverage to provide the required material and services at the desirable cost, but it has to be under the limits set by the Emirates Airlines.
Bargaining power of customers
Bargaining power of customers is high as they have a large number of potential options to choose from and hence the customers are a significant element in the policies of the Emirates Airlines. There are a lot choices developed by the Emirates Airlines for different level and standards of customers that are travelling through them. It involves taking important strategic moves to survive in the market.
Threat of substitute products
There are many options available to the customers across the globe in terms of different Airlines Company that provide high quality of service and travel packages to the customers. There are a large number of potential substitutes that the travelers across the globe and they would be having high demands pertaining from the substitutes. Hence, it should be taken into consideration while developing strategic moves in the company.
Regulatory constraints of government.
The regulatory constraints of the government and other regulatory bodies like the Environment act in UAE play a significant role in establishing strategies for the company. UAE government provides various incentives to the Emirates Group to develop an exclusive infrastructure and technology in UAE. Hence, the strategic moves of the Emirates Airlines are dependent on the UAE government and its regulations.
Resources, capabilities, and activities
The aviation sector in the UAE is expanding while promoting the competition with modernization. Gulf News reports that aviation sector in the UAE is expected to provide 750,000 employment opportunities and contribute AED 194.5billion in the UAE’s economy by 2020 (BLOOMBERG.COM, 2016). There is need for more 62,000 technicians, 55,000 pilots and 3,000 aero planes during the next 20 years. It shows there will be positive impact in airline quality of services. Therefore, I suppose that there is need for proper quality measures and programs to meet aviation industry demand by Emirates. Thus, the strategic moves are developed accordingly by the Emirates Airlines company that helps in the growth of their business (THE EMIRATES GROUP, 2015).
Figure 2: Number of Passengers 2005-2017 Etihad Airways, Qatar Airways vs. Emirates (CAPA Centre for Aviation, 2015)
BLOOMBERG.COM. (2016). Emirates Airline. Retrieved from http://www.bloomberg.com: http://www.bloomberg.com/profiles/companies/1000Z:UH-emirates-airline
Elbanna, S. (2010). Strategic planning in the United Arab Emirates. . International Journal of Commerce and Management, 20(1), , 26-40.
THE EMIRATES GROUP. (2015). Annual Report: Facts and Figure. Emirates Airline. Retrieved from http://www.theemiratesgroup.com/english/facts-figures/annual-report.aspx
THE EMIRATES GROUP. (2016). Our Vision & Values. Retrieved from http://www.theemiratesgroup.com: http://www.theemiratesgroup.com/english/our-vision-values/our-vision-values.aspx
THE GUARDIAN. (2016). Emirates plane completes world’s longest non-stop scheduled commercial flight. Retrieved from http://www.theguardian.com: http://www.theguardian.com/business/2016/mar/02/emirates-plane-completes-worlds-longest-flight
ZAWYA. (2016). Emirates Airline Profile. Retrieved from https://www.zawya.com: https://www.zawya.com/company/profile/759385/Emirates_Airline/