The surrounding environment impacts any given business, and the same can applies to Emirates Airline. There are models conceived to facilitate understanding of the environmental situation that a company is subjected. One such model that helps in the understanding of the business environment is the PESTE analysis. As the abbreviations would mention, the political, economic, social, technological and environmental factors are assessed. In some literature, an” L” is added which caters for the legal aspect as a section of the business environment. This section of the paper looks into the business environment of Emirates Airline with the incorporation of the PESTE methodology.
Company Description
The Emirates Airline has seen tremendous growth since its founding by the Dubai government in 1985 (Mohammed 221). The company’s roots indicate that the firm commenced operations with just two air crafts and with limited route operations. The company would then grow over the past three decades and as a result expand its presence in the continents serving well over 70 countries. A PESTE Analysis is in order, for ascertaining the features of Emirates market environment. The analysis is as follows.
PESTE Analysis
Political factors in the form of instabilities and terrorism fears have significantly impacted the airline regarding a reduction in passenger traffic. Unrests in Lebanon and Qatar plus the global effect due to terrorist activities during the 9/11 weighed negatively on the airline. The instabilities interfered with business operations between the Middle East and the rest of the world.
The economic environment determines the success of a business and in this case, the Emirates. The company has invested and is continuing to invest in the modernization of its airports. With the airport, development comes an enhanced economy and promotion of tourism which plows back profits to the airline firms. Reduction in the operational costs would further reduce fares, and so increment in passenger traffic would mean success for the airline as it has been the case with Emirates Airline.
The social environment addresses population increase and the educational levels of the said population together with tourist influx. Global population growth together with multiculturalism of the world's population assures a high number of travelers which promotes profit. Diseases, however, result in the reduction of passengers in the carriers e.g. the bird flu pandemic.
Technological issues can have both positive and negative impacts. Development of technologies like video conferencing has cut down on the number of travelers. Because of the development of video conferencing, the need for face to face interaction is absent. On the brighter side, technology has promoted business growth and with modification of the online airline services, the business is bound to grow (Smith 1).
Environmental factors surrounding Emirates airline makes note of the climate change and particularly, the global warming menace. The increment in carbon footprint is attributed to the airlines to a greater extent, including Emirates airline. Environmentally conscious passengers are likely not to aboard planes for that matter. Commitment to play a role in the reduction of the carrier’s effects to global warming can enhance customer confidence (Sundaram & Al-Aali 483).
Conclusion
The above theoretical basis of studying the market environment is critical. The outcome of a PESTE analysis is meant to enable the company to modify its functionality and to find ways of adapting to the market environment and as a result, achieve success at the end of the day.
Works Cited
Bitelmal, Mohamed A. Strategic challenges facing airports in gaining competitive strengths: lessons from the practice of Dubai International Airport. Diss. © Mohamed Abdalla Bitelmal, 2010.
Nataraja, Sundaram, and Abdulrahman Al-Aali. The exceptional performance strategies of Emirate Airlines. Competitiveness Review: An International Business Journal 21.5 (2011): 471-486.
Smith, Carolyn. Organisational Strategy-Emirates Airline. 2010 Retrieved 29/07/2016 from http://www.articlesbase.com/flights-articles/organisational-strategy-emirates-airline-1908526.html
