Posted at 10.14.2018
Having been regarded as the national airlines of the country, Etihad Airways stands tall as the leading airline company in UAE since its establishment by Royal Decree in Abu Dhabi in the entire year 2003. The airline company holds the distinction to become the speediest growing airline company in commercial aviation. The company has a Table of Governors to govern it with HH Sheikh Hamed bin Zayed Al Nahyan as its chairman. The business's accolades know no bounds after having gained the 'World Leading Air travel' Prize in the year 2009 by the earth Travel Prizes. Also, the business holds the differentiation of being honored as the 'Best Long Haul Airlines' at the 2010 Business Vacations Awards. Moreover, in '09 2009, Etihad was given the award of the 'Best Marketing Strategy' by the center East Business Accomplishment Award'. With so many accolades in its handbag, it is high time for the business to follow a market penetration strategy and increase more customers to its current tally. The company is headquartered at the administrative centre city of UAE, Abu Dhabi. So far as the Asian places are concerned, Etihad covers market segments in the Indian sub-continent, Middle-East and South East Asia. Luckily for the company, all these market segments are on a growing spree in conditions of these GDPs, which help the use of airlines especially in the high grade and business class segments. The company officials have assured promptly performance of 91% of Etihad Airways. The business's earnings collection for 2009 was more than 2. 3 billion USD. The marketplace penetration spree in the company can be seen from the fact it reported a rise of as high as 24. 5% in travellers' revenue as compared to 22% which is the industry average. (Etihad Airways, 2010)
The company's opponents can be best observed in their degree of problem that they create to Etihad Airlines by virtue of a thorough competitors' evaluation using Michael Porter's five pressure analysis. This can be done the following:
Threat of Substitute Products: The competitors in this category have been identified as Jet Airways and Oman Air. According to the recent global tough economy, it has turned into a mind-set for all your companies to choose for flying at low costs. Actually there are individuals who are ready to go for plane tickets that provide no fringe benefits either.
Threat of Rivalry: The rivals in this category are Emirates Airlines, Air Arabia and Soar Dubai in terms of market share which is the biggest threat to the business in conditions of its market penetration strategy. As these flight companies are increasing their amount of fleets each day, competition gets even tenser.
The Threat of New Entrants: With UAE and its own Asian counterparts improving at a rise rate much better than elsewhere, there's a huge likeliness that new commercial airline companies would open in sometime. So, this would improve the various reasons for that your customers would prefer switching.
The Bargaining Electric power of Suppliers: With Boeing and Airbus being the only real two suppliers in the category, there is a large amount of dominance from these suppliers. This can only be reduces of the company succeeds in its marketing penetration spree and purchases more fleets as necessary.
The Bargaining Electricity of Customers: That is comparatively low in the aviation industry. The customers generally have to pay the purchase price that is asked. Here, price reduction can be a good way for better market penetration. (Etihad Trumps its Competition, 2010)
The following table illustrates the competition of Etihad Airways in the individual product segments:
Low Price Luxury (1st category)
Jet Airways, Oman Air
Number of flights available for Business class
Emirates Airlines, Air Arabia and Soar Dubai
Better Communication facilities for both 1st category and business class (indirect competition)
Telecom and Trip Cruise Line
Lounge & Spa and Chauffeur driven facility for 1st class and business class on and near airport
As we have seen in the prior analysis, the immediate opponents of Etihad Airways are Emirates Airlines, Air Arabia, Fly Dubai, Qatar airways, Gulf Air and Oman Air Airlines in UAE and other Midsection East regions. So far as its other Asian competitors are worried, Singapore Airlines also poses a big threat. The largest of all is Emirates Airlines.
Also, the company has a number of indirect competition. They can be in Telecom Industry and also Getaway Cruise Series Industry. Telecom industry has made communication so easy that video getting in touch with is very easy and cheap that folks wouldn't normally need to visit places for conferences. Some Holiday luxury cruise Brand industry players like Carnival Sail Liners and Legend Cruises took up the work of not only transportation but providing hotel facilities and other enjoyment facilities, beyond Etihad Airlines' reckoning. As far as direct competitors are worried, with Emirates, customers receive larger value for this being more than 25 years old in the industry, for Air Arabia, this is because of its cost command strategy as the other rivals offer same value as Etihad Airways. This needs some change of strategy by the company.
Market show would determine the position that Etihad Airways could have in front of its rivals in the Asian Market. This has been proven in the next table:
We can easily see that for both Business Class and First class that your company rates as Etihad Pearl Business and Etihad Gem First Class, the business has a good degree of market talk about immaterial of the fact if the market growth is high or low.
The pursuing graph shows the percentage comparison of the marketplace share of each of the types of products or services that Etihad Airways provides:
To reach period of time even by the end of 2011 by lowering costs at the same time increasing yield
To maintain customer value throughout
To take up a status quo development of providing luxury at least costs
Increase income by more than 5-10% every year
Increase customer value by 8-10% by the end of 2015
Increase the number of staffs by 15%
Also, the business can increase inbound holidays to Abu Dhabi by 2030 which would make it the one player in the industry
As way as the high grade and business category can be involved, Etihad Airways segregates its services as Etihad Diamond First Class and Etihad Pearl Business Class. This is integrated with actual personnel provision and the multi-cuisine availableness on board. The company's augmented products give it maximum competitive advantage. It has been diagrammatically represented in the subsequent diagram. Abu Dhabi being the centre of tourism for many, provides company a location advantage. The company has chauffeur service because of its customers not only at Abu Dhabi airport terminal but other international airports as well where the company's airlines operate. This is especially for the 1st school and business school passengers. Also, the company provides 24 hrs departure facilities and only an hour early appearance as against the standard 3 hour early on appearance in other company's plane tickets.
The potential product of Etihad Airways will not include lounge which is often developed as time passes to be able to bring more customers in the targeted segment. The business also doesn't have the baggage at the entranceway pick up service. Once this is provided, it might be more convenient for the travellers to avail the center. Also, hot-towel can be provided to passengers at departure to match the likings of 1st category and business category passengers.
The company has a market penetration costing strategy so as to raise the market share in United Arab Emirates. If the business can deliver the same services at the same price when compared with Emirates Airlines and Uk Airways, it includes chances of obtaining its break-even as it focuses on. Once, this has been done, the company can raise prices by about 5% and street to redemption in the same group of customer understanding as Emirates Airlines. In this manner the clients would also not consider the company as a low cost carrier that could damage the image of being a first course or business class carrier. (The Marketing Combination, 2002)
Etihad Airways wouldn't normally only avail scheduling service at its main offices but also increase sales generally speaking throughout the Asian region that it targets. Also, it can increase the volume of ticket circulation at its corporate website. This might enable the active people of 1st category and business school to personalize their flights. The downside in this regard is that the company does not have many sales people. The business should look forward to appoint increased sales agents and eventually increase its sales.
The company's staffs have been highly acknowledged throughout its trip services. The one problem has been around a certain case when a traveler was treated inferior compared to an employee when he required a much better seat to facilitate his long-broken lower leg. Such issues need to be worked upon in any other case with the kind of education and courtesy; the business has high potential clients especially in the 1st course and business category sectors. The business has have scored 91. 5% in a survey conducted Ethos Consultancy on customer service benchmarking. If the company wishes to help make the most out of the survey, it should further provide better training and development to its personnel. Also, it must be kept in mind that no matter how many flights the company enhances, a person would always go for better hospitality which becomes all the more important in the very first school and business course services. The employees can work as catalysts to word-to-mouth marketing.
The customers' perceptions with respect to the promotional strategies of the company are as follows:
Sales Advertising: THE BUSINESS'S customers choose the option and bundled costs initiatives and the steady updated facilities with respect to offers in this esteem. This would help a long way in increasing market penetration.
Direct Marketing: By firmly taking part in a number of travel and travel and leisure events, the business's staff spread immediate word-to-mouth marketing which includes been a matter of great gratitude.
Sponsorship: THE BUSINESS in addition has been amidst the pioneers in sponsorships by sponsoring in huge amounts at situations like Abu Dhabi Grand Prix and also the Ferrari F1 team. The motorsports fans of the business were highly delighted at this step. Also the business's involvements at occurrences like Abu Dhabi Golfing Tournament, Gaelic Athletic Connection (GAA) have been loved basically by 1st class and business category customers.
The company practices a market penetration strategy as contrary to the skimming strategy by its biggest competitor, Emirates Airlines. This gives the company an good thing about lower prices at the availability of same service. Hence, sets it in a better position to get the market.
The company allows an integration facilities like chauffeur motivated autos and spa & lounge along with courteous staff provision and multi-cuisine facilities which places the company in a position ahead of companies like Air Arabia and Oman Air.
Also, with the company involved in many promotional strategies e. g. : sponsorship for F1, gives it a much better market recognition in the Asian market as compared to the other counterparts like Plane Airways and Journey Dubai.
So, overall, the business has the good thing about a better position than almost all of its competitors in the respected categories. At this time, the company should position itself such that it becomes the most well-liked carrier in all the categories collectively as well.