Introduction
Although the airline industry plays a significant role in boosting a country’s economy, it also forms one of the most volatile industries due to the occurrence of extreme losses, problems with restructuring, and incidences of bankruptcy. With the emergence of various unstable conditions that see the fall of many airlines, Emirates Airlines has withstood all these challenges. The airline has shown continued improvement through developing global strategies that have enabled it rate amongst the best airlines in the world (El Namaki 9). The following study gives an analysis of the strategy the Emirates Airlines is planning in the United Arab Emirates market. The industry requires an analysis on the directions to follow for the current overall expansion strategy, and the best market plan for 2012-2013.
Analyze how the business environment is considered in strategy formulation by conducting an environmental and organizational audit in Emirates Airlines and apply strategic positioning techniques to the analysis.
Environment plays a significant role in the operations of the business in every organization. The external environments are those that pose opportunities and threats to the business and thus determine the weaknesses and threats of the business. In order to respond to the environmental factors, strategic options are necessary in every business. Strategic options are the responses that businesses make in order to counter the environment factors affecting the business. These environmental factors could be positive and that present opportunities to the business, for example, a perceived consumer need. On the other hand, they could be negative environmental factors that present threats to the business, for example, competition. Strategic options present alternative plans of the business in which creative actions needed (Artur, Thomson, and Gamble 2010).
Looking at the case of the Emirates Airlines, the formation of the business had the view of providing low cost and comfortable flights for customers. According to M. Silver Associates Inc, the company was able to survive the rising cost of energy and competitions, making it perform better compared to its competitors during the year 2008. To make the company going, there was a need for a proper investment to power the business. As such, investment in highly promising and fast return areas remained in mind as a strategic option of ensuring the survival in the turbulent business environment. Among the investments strategies, Emirates management sought to expand the flight destinations and services. Among the services to be included were; hotels where the customers could check in, renting out cars and cruises to the customers. Another investment opportunity found feasible by the company was the provision of food to on board passengers. This had a focus of attracting more customers to the company, which in return led to increased revenues (2012).
Emirates Airlines, which is part of Emirates Group, is a very fast growing multinational enterprise. The company has developed a multinational solution aimed at combining global integration with responses from the locals for efficient economic growth. The Emirates business model is composed of the following. The labor cost economies that ensure the company operates at the lowest cost possible through integrating Emirates lean workforce, and young fleet accounts. The company also faces 100 percent support from the Dubai government that offers them the necessary finances to implement their business strategies. Moreover, the company makes use of wide-body fleet whose unit cost is very low compared to other airlines that use mixed fleet, narrow and wide fleets. The Emirates Airlines strategic positioning techniques depend on the prevailing business environment. The environment is analyzed using Porter’s five forces as follows: Threat to new entrant; power of suppliers; power of buyers; substitution effect; and rivalry among competitors (El Namaki 12).
On the issue of threats to the new entrance, Emirates Airlines has a low entry barrier since it has the necessary finances to get into the United Arabs. Moreover, Dubai is well technologically advanced and its mechanics are well experienced. The second force concerns power of suppliers. The company has a reliable source of their aircrafts, the Boeing and Airbuses suppliers whereby competition is bearable. On the issues of the power of buyers, there is a very low bargaining power in the airline industry in United Arab Emirates. The fourth step is the availability of substitutes. The Emirates Airlines is globally known for its excellent transport and accommodation services thus, substitutes have a low probability of winning the business environment. Finally, on the factor on competitive rivalry, Emirates has the capacity of winning the airline market in United Arab Emirates. This is because the company is well established and uses unique strategies that hit all other competitors (El Namaki 12).
Understand the process of strategic planning by demonstrating an ability to think strategically and prepare a strategic plan for Emirates Airlines based on previous analysis.
In developing the marketing strategic plan for Emirates Airline entrance to United Arabs, the following areas concerning business strategies are put into consideration. First is the business model. This entails how the company plans to make profits at low costs in respect to the business environment, both internal and external. Secondly the company should develop it goals and objectives (M. Silver Associates Inc 2011). The following are the formulated goals and objectives for Emirates Airline penetration to United Arab Emirates;
1. To make Emirates Airlines a global industry and carrier of choice to United Arabs.
2. To promote its country of origin, Dubai, as the most technologically advanced country in the whole world.
3. To demonstrate high quality, and outstanding services through receiving the overall best awards, and produce the best airline workforce.
The figure below shows Emirate’s strategic plan for its entry to United Arab Emirates. The company’s strategies include; penetration, market development, product development, and diversification.
Figure 1: Emirates Airline
Strategic plan
Market penetration
Middle East is the Emirates target market since it contributed to the formation of the company. Organizations always perform an analysis that aids in market entry strategies formulation. The market, cost, competitive advantage and government forms the globalization drivers that the country analysis basis the focus. This depicts weaknesses and strengths for a business to participate actively in the international market. Multinational companies, like Emirates Airlines, require a market penetration strategy into the United Arabs analysis that outlines the potentiality of the company to gain from the market participation. The analysis incorporates strategic levers such as marketing, location and product, and organization analysis such as culture, people, management and structure.
Product development
In developing a business strategy all efforts and activities should have unity, and focus on giving customers the quality products and services they demand. In case customers are price sensitive, the strategy should focus on offering fair prices combined with quality services. Businesses operate to attain growth through profits; thus, product development process should be cost effective (Lewis, & Slack: pp. 150-162). Emirates Airlines should focus on product development that conforms to the current marketing requirements. This should go hand in hand with product specifications in conjunction with the type of services to offer. United Arab has its population made of Muslims thus; the strategy should also consider culture and religion. On the other hand, the company management has the responsibility of ensuring all its operational processes are with accordance to the international business standards. In developing product development strategy the following factors should be considered: the international marketing programs, sales and distribution channels, manufacturing requirements, management and organization, and reporting on financial issues (Local Tech Wire 2008).
Market development
In market development the company should focus on realizing the goals and objectives as discussed earlier. The first step will involve understanding the market and customer needs and wants in the targeted market. Secondly, the company will develop a customer-driven business strategy. Emirates market expansion entails entry into the United Arab Emirates market. Thirdly, the company should come up with an integrated business program based in United Arabs aiming at delivering superior values. After that the company will be in a position to develop profitable relationships with the target market and then create customer delight. Finally, the business captures customer values, which enable assist in creating profits and customer loyalty.
Diversification
Businesses with a need of proceeding and capturing all the market always perform multiple operations at the same time. Emirates should formulate a storage strategy as a form of diversification. The storage facility will ensure customers’ luggage is well kept and in a secure place. The storage facilities are also expected to charge affordable prices.
Examine the approaches to strategy evaluation and selection. Select an appropriate future strategy for Emirates Airlines
Networking is very necessary for the business since customers require desirable networks. As such, the company’s management should improve the business in United Arab markets while maintaining their hold in Dubai. Moreover, brand extension would be necessary in maintaining business for the company. As such, a new advertising strategy formulation will act as a crucial need. The company should also use a marketing campaign in order to attract more customers. In this, Emirates Airlines will offer attractive packages to customers, examples, free service for the first bag checked, provide snacks, television shows and movies to customers while on the flight. The following strategies will enable the company win the airline industry market in the years 2012 to 2013.
Alternatively, the company set business strategies that take into consideration the fast growing technology and globalization. This will happen through developing a global strategy that takes the world as a single market whose aim is to promote standardization, and competition among companies. In adopting this, Emirates should develop future strategies aimed at; attracting customers, market positioning, effective competition, and value creation. In addition, the company should come up with innovations and current technology since they are very important for airline companies. If the company is more technologically advanced compared to its competitors, it will be in a better position to win the market in future (Articlebase 2010).
Analyze how strategy implementation is realized at Emirates UAE sales commercial operations and compare it to one another major passenger airline company in the UAE market by comparing roles and responsibilities for strategy implementation in both companies, identify and evaluate resource requirements to implement a new strategy and propose targets, timescales for achievement to monitor a given strategy.
Emirates Airlines’ marketing strategies have been very successful in United Arab Emirates. One of the factors contributing to success of Emirates Airlines in UAE is the fact that the company owns 43.6 percent of all the airlines in the region. This indicates that the company has a high probability of developing and implementing its strategies. Compared with other passenger airlines in UEA like Air Arabia, Emirates has won a big number of customers. On the other hand, Emirates Airlines plans to establish a leading tourist attraction through developing post-oil era. This would act as a centre for all technologically based operations, and as an area for transportation, that is link between Singapore, Europe, and Southern Africa (Dubai Government 2006). Emirates strategic growth is supported by Dubai government since it assists in promoting the country’s economy. Because of this, Dubai government takes all the roles and responsibilities in ensuring that the company settles in UAE. Another significant reason for Emirates success is the increased Gross Domestic Product (GDP) growth rate in UEA of 8 percent. The growth was because of many tourists who visited the country through Emirates airlines transportation (The Sunday Times 2006).
In implementing the new strategies the following resources are necessary. First there is a need for a good-balanced mix model for Off-flights and Departure that enables faster transfer of customers from one destination to the other. Secondly there is a need for a strong observation on cargo traffic, since it brings more than 20 percent of company’s revenue. The third consideration is on the substitute markets that are served by Emirates’ competitors since they absorb some of the passengers. Finally, the company requires to install quality services on all classes, both on-bond and on the ground by incorporating the current Information Technology (IT) (M. Silver Associates Inc 2012). The most targeted customers are the tourists and business people. The implementation process, which commenced in 2011, is expected to take a period of 3 years so that Emirates Airlines could achieve the 2015 goals.
Cited work
Articlebase. Organizational Strategy-Emirates Airline. 2010. Retrieved from: http://www.articlesbase.com/flights-articles/organisational-strategy-emirates-airline-1908526.html
Artur, A, Thomson, J, & Gamble, E. Crafting and Executive Strategy. The Seventeenth Edition. 2010 Dubai Government, Dubai Strategic Plan 2015. Highlights, Dubai. 2006. Retrieved from: http://egov.dubai.ae/opt/CMSContent/Active/CORP/en/Documents/DSPE.pdf
EL Namaki, M. S. S. business Strategy: Emirate Airlines in a League of its Own, Is this the Right Strategy. 2007. Retrieved from: http://www.micm-canada.org/Emirates_Apr07.pdf
Lewis, M. & Slack N. Operations Management: Critical Perspectives on
Business and Management. London: Routledge. 2003
Local Tech Wire. Global integration – Being successful requires more than being ‘ready in country’. 2008. Retrieved from:
http://localtechwire.com/business/local_tech_wire/opinion/story/3038070/
M. Silver Associates Inc. Emirates - Program Planning and Strategy. 2012. Retrieved from:
http://www.msilver-pr.com/media/pdf/emirates.pdf The Sunday Times, Emirates boss heads for bigger goals, Times Newspapers Ltd., London, 2006
