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A Strategic analysis of Emirates Airlines

Content
  1. Table of Contents
  2. Section
  3. Name of Contents
  4. Page no.
  1. 1
  2. Emirate's Profile
  3. 04
  4. 2
  5. External Environment
  6. 05
  7. 3
  8. Airline Industry Analysis
  9. 05
  10. 4
  11. Life Pattern of Air travel Industry
  12. 06
  13. 5
  14. Porter's 5 Forces
  15. 07
  16. 6
  17. Key Competitor's
  18. 09
  19. 7
  20. Emirate's Strategies
  21. 09
  22. 8
  23. Emirate's Development Strategy
  24. 10
  25. 7
  26. Strategic Functions of Emirate's
  27. 10
  28. 8
  29. Key Success Factor's
  30. 11
  31. 9
  32. PESTEL Analysis
  33. 12
  34. 10
  35. Competitive Benefit of Emirate's
  36. 13
  37. 11
  38. Internal Environment
  39. 13
  40. 12
  41. SWOT Analysis
  42. 14
  43. 13
  44. Summary of Internal Environment
  45. 16
  46. 14
  47. Conclusion and Recommendation
  48. 18
  49. 15
  50. References
  51. 20
  52. Profile:
  53. External Environment
  54. Airline Industry Analysis
  55. Airline industry Profile
  56. Life Cycle of Airline Industry.
  57. Airline Industry Life routine:
  58. Porter's 5 Forces
  59. Threats of New Entrants
  60. Bargaining Electric power of Supplier's
  61. Bargaining Vitality of Buyers
  62. Threat of a Substitute Products or Services
  63. Rivalry between existing firms
  64. Key Opponents (Strategic Group analysis)
  65. Strategy
  66. Emirates Airlines Strategies:
  67. Quality Control strategy:
  68. Extensive Aviation Training strategy.
  69. International Airline Information Technology Development Strategy.
  70. Resort, Hotel and Tourism Strategy.
  71. Growth strategy
  72. Strategic Functions of Emirate's
  73. Key Success Factors
  74. Differentiation
  75. Strong brand name
  76. Alliances
  77. Relations with supplier
  78. PESTEL Research.
  79. Political factors
  80. Economical factors
  81. Social factors
  82. Technological factors
  83. Competitive advantage of Emirate's
  84. Internal Environment
  85. SWOT analysis
  86. Strengths
  87. Weaknesses
  88. Opportunities
  89. Threats
  90. Summary of Internal Environment
  91. Current situation of Emirates Flight:
  92. Conclusion and Recommendation
More...

This report conducted on Emirates Airlines which discusses a strategic review about global flight industry, especially Emirates Airlines. 1st part of the article will be reveal at length about Emirates air travel company with internal and external examination of the company. The final section is about current situation of the company with conclusion and also indicated main issues that Emirates Airlines should talk about with recommendation.

Table of Contents

Section

Name of Contents

Page no.

1

Emirate's Profile

04

2

External Environment

05

3

Airline Industry Analysis

05

4

Life Pattern of Air travel Industry

06

5

Porter's 5 Forces

07

6

Key Competitor's

09

7

Emirate's Strategies

09

8

Emirate's Development Strategy

10

7

Strategic Functions of Emirate's

10

8

Key Success Factor's

11

9

PESTEL Analysis

12

10

Competitive Benefit of Emirate's

13

11

Internal Environment

13

12

SWOT Analysis

14

13

Summary of Internal Environment

16

14

Conclusion and Recommendation

18

15

References

20

Profile:

Emirates Airlines was proven in 25th Oct, 1985. Presently Emirates Airlines has 142 fleets aircrafts and locations over more than 102 countries worldwide. Just lately it made an order for aircrafts worthy of $ 27 Billion for 45 Airbuses A380, in this way cit become the world's largest customer of Airbus's super-jumbo. (Regarding Emirates)

Emirates Airlines is very fast growing airlines. Emirates have 5th number around the world in success. Emirates earned profit on March 31, 2010 is more than $3, 538 since previous 17 years and it's really growth ration more than 20% yearly. (BBC Information)

External Environment

Airline Industry Analysis

Airline industry Profile

Presently airline industry growing very well and world top level success industry where from we can earn earnings. Alternatively political plus some other monetary factors are afflicted on this industry, after 11th September there is a great change in the development of abroad voyage for visit, learning and business purposes etc. Another big factor is speedily rising in essential oil prices around the world specially in midsection east as well, for this reason cost increased of airline industry and in this manner revenue has been reduced and these deficits has been come to around $ 6 billion in '09 2009 (IATA) 6 billion in '09 2009 (IATA)

Eventually, the flight industry has been restored amount of passengers. We are watching again the style of tourism, international trade and development of globalization and in this manner numbers of passengers has been increased and exceed 2. 3 billion by the finish of 2009. (IATA). Thus, for earning and strong image in aviation market its compulsory for airlines that cut of the prices and enhance their services.

Life Cycle of Airline Industry.

The Product Life Pattern identifies the sequence of stages a product undergoes. Any new product in market proceed through a sequences of stages from intro to maturity, growth to decrease and this sequence of all periods is called product life circuit. We are able to also say the phases through which individual products build up over time is named" THE MERCHANDISE Life Cycle". (Saaksvuore. A and Immune. A, 2008)

The typical product life routine has four stages are:

Introduction Stage or Development stage

Growth stage

Maturity stage

Decline stage

Airline Industry Life routine:

According to product life circuit at the movements flight industry on its maturity level credited to big and perfect competition on the market. On this Maturity level competition is more hostile in order to increasing advert and advertising activities. In addition many rivals increased their finances on Research and development (R&D)

Through increasing customers' brand commitment many companies want to differentiate them using their competitors in their services. In this stage companies starts lowering their working cost mean profit margin decreases result least reliable companies aren't more in market. Consequently, many companies' use offensive strategies instead of protective strategies by using methods of changing their market strategy, product development and marketing mixture for stay alive and remain competitive during this competitive stage. "(Development of new product)"

Porter's 5 Forces

Threats of New Entrants

The new entrants in virtually any industry face some dangers from existing companies because new company offer more attractive product with low cost etc. In air travel industry risks are low as relatively obstacles are high. Some obstacles under below credited to new entrants. .

Capital Requirements. We are in need of huge capital because of this industry for purchasing new crafts and also for starting new projects and also need for appealing to customers.

Brand name & Customer commitment: Airlines companies with excellent goodwill and strong image in market will easily compete with new threats during entry. #

Bargaining Electric power of Supplier's

Suppliers can easily change market tendency through their popular and control on prices and quality of the products & services. Boeing and Airbus are internationally suppliers of the flight industry.

Bargaining Vitality of Buyers

Buyers are also can change the industry craze because of their requirements for high quality, demand for low prices and also have skill I reduced amount of the cost. Potential buyers are more powerful due to huge amount of passengers in market and approximately 1. 8 billion yearly. (ITAT)

Threat of a Substitute Products or Services

Another big risk of substitute product credited to availability of substitute searching for any product. For example people use theirs autos and use trains and buses within the same area or country.

Rivalry between existing firms

He tendency of rivalry in flight industry is very famous and high credited to availability of many airlines in the market which also offering best services, best cost etc. For example a great deal companies want to increase their show price and want to increase their image want to gain best goodwill among the customers only due to offer best services, cost and also others lot of offers to appeal to and attain the customers. (Thompson & Strickland, 1995)

Key Opponents (Strategic Group analysis)

1st English Airways is one of the primary on the globe. 2nd Qatar Airways getting success from its extreme development plan. Singapore Airlines have very good repute in market because so many respectful travel brands in the market and was proven in 1947. American Airlines set up in 1930 and major airlines around the world due to every year passengers of this air travel more than 80 million.

Strategy

Strategy is the lasting likely to achieve business aims through set up of resources of firm within a difficult environment, to fulfill the market needs and also satisfaction of stakeholder's goals". (Dibb. S, Simkin. L, 2008)

Emirates Airlines Strategies:

Emirates Airlines has a good and effective business design which is very useful to get company goals and help to company become leader in the flight Industry. following are strategies of the emirates airlines strategies.

Quality Control strategy:

This is the essential and fundamental technique to achieve goals of any organization so in this manner airlines have very attractive and best technique to control its quality and standard of the brand.

Extensive Aviation Training strategy.

This is another fundamental and key strategy of the Emirates for Aviation training. In this manner company get maximum benefit through intensive training of its employees. In this way not only keep their workers with it but also open up new opportunities for outsiders as well.

International Airline Information Technology Development Strategy.

This is another important and very important strategy of the company for development of its e-business system, self check services system and also improve the revenue through its progress in It system in this manner it make a whole lot of agreements with very big companies of the world.

Resort, Hotel and Tourism Strategy.

This is also another fundamental strategy of the company for increased the numbers of tourist in this manner it assist to local body and advice for development of new Hotels, Restaurants, new structures etc.

Growth strategy

New Bases.

Expansion of existing bases.

More opportunities available as airlines close/ consol.

Cost, cost, cost (long-term minimization).

Efficient facilities.

Demographics.

Geographic.

Strategic.

Auctioned winter capacity.

Increasing communication of benefits.

Strategic Functions of Emirate's

Strategic capabilities means the skills are abilities to accomplish the level for the monitoring on the market. It may be in two forms; (1). Resources and (2). Competences

Emirate has its threshold resources which include its plane tickets, office equipment, head quarter, money resources and employees. Emirate also has core resources in the form of management team, Ahmed Bin Saeed Makhtoum (CEO/Chairman). Identical to resources Emirate has threshold competences which includes online booking, operations of on time delivery and point to point routing. While in its main competences includes IT development, no frill strategy and path insurance plan strategy.

Key Success Factors

Differentiation

Airline companies can be differentiated by offering latest and modern services like big comfortable chairs, move forward aircrafts and new e-ticketing system. All of these thing not only separate the companies also beneficial to attractive new customers for the business. (e. g. British isles Airways).

Strong brand name

Strong brand with faithful customers is very important for career of any business. It's proven with strong brand name companies are most untactful for customers.

Alliances

In Airline industry building the alliances between different companies is vital trend in this manner different companies will show their resources through strong network and can gain benefit for large range customers network and will develop numerous others routes. In this way operations cost will be reduced.

Relations with supplier

Strong relations with suppliers are compulsory for Flight companies through long-term agreements companies stay safe to be able to any future change in pricing strategy.

PESTEL Research.

Political factors

The Airline industry is very sensitive industry and immediate influenced by and changing in political conditions including wars and instability in financial situation in different countries. The recently political and economical instability in pacific Asia region disturbed the business Midsection East and snooze of world because of this Airline companies unable to become a member of any International Alliances with top Airlines companies like American Airlines. (Growth phenomena, Nora & Byman)

Economical factors

Modern airports along with most advanced technology are essential factor for success of airlines business. UAE have been planed to big investment on development of Dubai and Abu Dhabi airports. This investment on airport terminal development will exceed up to Dh 71 billion over coming twenty years.

Developed airports can give us pursuing benefits: enhancing current economic climate, increasing holidaymakers' overcome the dependency on oil income by alternatives business strategies.

Social factors

There is speedily increasing world populace and in this manner increasing in quantity of tourist and informed people. For instance, globally growing populace especially in UAE based on the National RECRUITING Development and Employment Authority Tanmia, UAE population this year 2010 has been reached up to 7. 557million from 5. 63million, increased by 1. 9million people according to the official people statistical report given 2006.

A range of emigrants are increasing in UAE, airlines companies' profits increase due to visiting of those emigrants to their home countries. Furthermore, diseases also disturb the populace of different countries, big exemplory case of this Parrot Flue which is a killer unprocurable disease. (Economic Development)

Technological factors

The latest technology also damaged in both ways positively and negatively. Negative impact is the fact teleconferencing decreased the need of physical and in person conferences which directly impacts on the sale of the business and decreased the passengers. Alternatively positive influences of e-booking system make reservation system very easy and accessible to any one and it has very good impact on the sales of the company. (PRESENT STATE)

Competitive advantage of Emirate's

Emirates Airlines use differentiation common strategy by offering high quality services in order to gaining profit among its competition and getting palce in market as Leader Company. For this purpose the emirates airlines was the 1st Airline on the planet who offered Television set display screen in its all air travel and 1st time create e-ticketing system in UAE.

Thorough segmentation of market it also gained another competitive gain. It was only company in UAE which providing training by using most advanced technology called plane simulator. The purpose of all changes only become the head company in around the world in this order enhanced brand name understanding by locally, regionally and also world level and in this manner it will increase income and goodwill as well.

Internal Environment

SWOT analysis

Strengths

Membership of the Arab Alliance, which is recognized as "Arab Air Carriers Organization"

First Flight company in the Arab world who present e-booking system

Self check-in system at international airport made available from Emirates

Emirates Airlines world biggest customer Air travel company by order of new 45 Super jumbo Air Buses.

Providing qualitative training, benefits and rewords' and very impressive salary packages and benefits to his employees and also trimming labour cost increasing employees' commitment (People).

Latest March, 2010 held Festival of Books and in 2006 sponsored Fifa World Glass in both way he gained its brand understanding and also makes its goodwill in market.

Balance sheet looking audio and showing Revenue for 2009-2010 grew four-fold to $964m inspite high engine oil prices and hard trading environment.

Latest improvement of Emirates Airlines rolls out flights to San Francisco. It is prepared to rule the roost for taking world head in Air travel business with the most advanced technology at hand.

Weaknesses

High procedure cost due to big investment on purchasing aircrafts and application of latest technology.

High Prices as comparatively other airlines companies.

Non membership of any International Alliances.

Non availability of hub in Abu Dhabi.

As establishment very little old just in 1985, so it's young flight.

Opportunities

Good progress in Per capita income in UAE.

Huge investment plan by Administration on the introduction of its international airports in UAE.

Growth in society of the world and in also in UAE.

Forecasting of World Travel & Travel and leisure Council that holidaymakers will be increased in UAE credited its best locality, huge beautiful properties, safe and secure environment luxury hotels and restaurant and good monetary condition after 2010.

Rapidly development in internet surfers over the world and in also in UAE.

A different Aviation event like Air Show of Dubai good promotes Middle East airlines in depends upon.

A great deal of international companies want to shift their headquarters in Dubai scheduled to security and sound politics situation so in this manner smart chances for increasing in variety of passengers.

Threats

Emirates airlines located in the spot where politically instability heading very high credited to terrorism activities has been increased.

Rapidly increasing in the functions cost anticipated aviation security.

Recently increase in fuel prices which is also reason behind high operations cost.

Due to non controlling of petrol prices in this way might be Airline industry suffered reduction by $ 3 billion (IATA)

New appearance of airlines companies with low cost. .

Modern online ticketing system can be hack by hackers and can be crashed by computer virus so in this manner database of the business will destroy and eventually company will suffer large amount of deficits.

The natural crises and deserters in the region like earthquake, flooding and hurricane. Latest worst flooding situation in Pakistan as before he experienced crises by earthquake as well which was worst impact on the sale of airlines companies.

The quickly increase of fresh sensitive unprocurable diseases like as SARS and Bird Flue that have very bad impact on airline industry deal.

Summary of Internal Environment

With the help of external environments, organizations or companies in a position to recognize their internal factors. Recognizing of that factors and make companies in this position that companies utilize their strength's, triumph over their weaknesses, get advantages from opportunities of the firms and can certainly avoid from dangers of the firms.

Current situation of Emirates Flight:

Any new entrance or entry in virtually any industry is known as unattractive scheduled to suprisingly low demand, high prices and strong competition. But attractive for Emirates Airlines because of its good strategy and strong market position. Also, it has many opportunities to take care of any uncertain situation since it is person in very strong Emirates Group which show its resources and decrease the company expenses.

Overall, Emirates enjoying with great market position along with high success rate which is considered as competitive good thing about the company and high revenue rate of the business of its best competing strategy and other expansion strategy.

Conclusion and Recommendation

At enough time of strong competition which refers to maturity level of Airline Industry so each company should tackle offensive and use the unpleasant strategy after in detail review its inner and exterior environment and everything related factors which immediately effect the company position. The next tips are for Emirates airlines.

Operational cost of Emirates is high only scheduled to huge assets on technology, aircrafts and best quality services. Emirates should control its cost and really should lower its cost through improvement and development of functions activities. Emirates should improve maintenance process, effective and useful flight plan of the company and better usage of the business resources like aircrafts etc. Another method for reduced amount of cost is progression in its technologies by investment in solutions and in this manner lower of labour cost. For instance it is firmly recommended to new installing self check service system on all airports.

In answer the threat of low cost airlines in UAE market. Emirates should offer advance level services and control cost and this way no need to reduce the prices and in this order it will present its new brand as subsidiary which should be base on low priced. a subsidiary

Extension in routes firmly recommended and should be special expansion in travel and leisure UAE. On this order to it will extend its road worldwide most attractive areas and Canada one of them. Joining with global alliance will increase its worldwide destinations in this manner should offer more impressive and effective technique for competing low priced airlines.

Advancement in IT is most significant for progress of emirates airlines and in this order it should make deals with E-Business Company for enhancing its services and raise the customer's satisfactions. E-CRM is the latest technology and followed by Emirates this plan since increasing in amounts of the internet surfers and this way out for keep long term connection with customers. (Jiang, 2003).

Eventually, Emirate's Airlines make detailed analysis and overview of company inside and external factors and its competitors and should develop new strategies for keeping and keep good position in flight industry as of this maturity time.

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