Emirates Airline Strategic Management Project Report

Introduction and Background

Emirate airline was launched by a particular loyal family of Dubai, back in the year 1985. The

Airline is one part of the Emirate Group, which is owned

by the Dubai Government. The Emirate airline started its operations with the flights to locations
such as Mumbai and Karachi, which were followed by travel to Delhi in September 1985. A
single Boeing 737-300 and Airbus A300 were leased form the Pakistan International Airline
(PIA), and most of the PIA employees were also hired at the same time by the Emirates.
Accordingly, two Boeing 727-200 Advanced was acquired from the Royal Flight of UAE. Those
aircraft were purposely applied until the Emirate started taking their delivery of a fleet of the
newly advanced Airbus A300-600R as well as the Airbus A3100-300 wide-body aircraft.

According to the international Airport Association (IATA), it is indicated that back in 2006,
Emirate Airline was ranked one of the best among the top ten best airlines in the world. On the
2005/2006 financial year, Emirates Airline carried approximately one million tonnes of cargo
and 14.5 million passengers. It has been placed on the par with the Singapore Airlines since both
the two of them do not have the lucrative domestic routes and all the flights and travels from
Dubai, which is the headquarter of Emirates, are international flights. The head of Emirates,
Maurine Flanagan, started the Emirates Airline back in the year 1985, with the two leased
aircraft and some ex-workers from PIA. The Government of Dubai gave Flanagan about $1.8
million to cater for the start up cost.

Over the duration of the past thirty years, His Highness Sheikh Ahmed Bin Saeed Al Maktoum
has been at the first place of the Dubai’s remarkable economic development and growth,
spearheading the successful expansion of this aviation sector. More recently, he formulated
economic, fiscal and investment policies as well as strategies toward the support of the Emirates
overarching vision.

Emirates’ Vision and Values

“A stable and strong leadership team, ambitious yet calculated decision making and ground
breaking ideas all contribute to the development of great companies.” In fact, these have played a
significant role in the establishment and growth of Emirates Airlines, and it’s clear that business
ethics, as well as customer focus, are the core foundations in which the overall success of the
airlines have been developed. Strong brand awareness via sponsorship on games and sports,
caring for their workers and stakeholders, and communities together with the environment served
by Emirates Airlines, have also played a significant part since it was launched and will continue
to signify success of its future (Nataraja, and Al-Aali, 2011).

Emirates Airline Mission

“We exist to deliver the world best in-flight experience.”

PART 1: Emirates Airline External Analysis

Competitive advantages, that are gained from the external changes, are typically triggered
through the innovations. These innovations do not only establish the competitive advantages, but
are also necessary for destroying rivals competitive advantages (CAPA., 2015). Emirate Airline
was recently named one of the fastest growing airlines and of course, the 5th most profitable
airline all over the world. In this section, I will cover the Macro-Environmental Analysis
(PESTEL Model), Industry Analysis (The Porter’s Five Forces of Competition Model), and the
Opportunities and Threats (Partial SWOT Analysis).

Macro-Environmental Analysis

PESTEL Model

 Political

International Airlines that operate their flights all over the six continents are entirely exposed to
the global political growths (Reuters UK, 2014). The developing global security considerations,
as well as the recent terror attacks conducted in Europe and other other nations in the world, can
significantly reduce the overall demand for air travel. The Emirate Airline run its flights to many
of the emerging countries of the world such as Iraq, Africa, and South-East Asia regions. These
areas have currently stable political and government environments. However, any legislative
adjustment or disruption and security considerations in these areas might halt the demand for
their flights (Dudley, 2016). According to the administration of Trump, the travel ban on
particular Muslim country citizens is forecast to reduce the airline services of the Middle
Eastern, which load factors on the most flights to the United States (The Washington Times,
2017).

 Economic

The Emirates Airline is an international air travel service and the revenues are collected in the
multiple currencies. Therefore, any sudden fluctuation in the rates of currency exchange and
also, the changes in the world macro-economic conditions may result to the overall revenue
fluctuation (Parasie, 2016). The United Arabs Emirates economy’s development and growth
have been one of the top economy that is fueled by the oil industry of the nation. However,
according to the recent research, the current investment in other sectors including commerce and
trade, which attempt to make the United Arabs Emirate an attractive destination for most
investors to start their businesses indirectly benefiting the Emirates Airline in the area (U.S
Department of State. 2015). This is through the improved travel demands (Malek, 2016).
Furthermore, the reducing costs of oil is also considered to be the positive development for the
Emirates Airline. On the other hand, it also reduces the entire demand for the premium travel to
some regions such as Dubai and the Gulf Region (Kamel, 2017).

 Social-Cultural

The dramatic increase in the global population is a crucial factor when it comes to shaping the
demand for air travel (Forbes, 2016). In fact, one of the most lucrative segment for travel is now
the baby boomers, which has reached the top of the career ladders and of course, responsible for
engaging in the regular business travels. However, an increasingly essential generation,
Millennials, are coming up with an insatiable appetite and demand to air travel (Cederholm,
2014). Therefore, the Millennial travelers are accompanied by diverse expectations from the
predecessor generations. The previous population had a high reliance on the preferences and
advanced technology for convenience at the most affordable rate in the market (Cederholm,
2014). In this case, particularly in the emerging or developing regions of the world, the
disposable income of the middle class is increasing, which is a factor that is responsible for
attaching the valuable business potential, mainly for the Emirates Airlines to demonstrate the
opportunities in those markets (IATA, 2014).

 Technological

The overall application of the digital technology in air travel, with the primary aim of improving
the performance, increase the efficiency of the journey, and of course, accurately predict the
expectations of the customers in the most competitive Airline Industry is essential (Accenture,
2016). There is an increase in the demand from the client’s side to embrace the utilization of
advanced technology, especially in personalizing and managing the itineraries, through the
mobile apps. The market demand is high mainly if the Millennial travelers are considered as the
factor that has the duty of carrying the entire opportunity for the Emirates Airlines to precisely
personalize and customize their services to the existing customer’s preferences and needs
(Accenture, 2016). The main advancements in the aviation technology that is affecting the fuel
efficiency aren’t expected. However, the Emirates Airlines, as well as other aircraft,
manufactures remain under a firm pressure toward the utilization of all the available technology,
with the aim of reducing their overall fuel consumption (Phys.org, 2017).

 Environmental

The Airline Sector is responsible for about 12 percent of the total emission of carbon by the
aircraft, in the transportation industry (ATAG, 2016). According to the research conducted by
Upham, (2015), the increase in adverse weather conditions such as Hurricanes, snow storms,
extremely high temperatures, among others might significantly affect the Emirates Airline
operation. The company’s flight operations could be disrupted both in the middle east and in
other nations of the world.

 Legal

The phenomenal development of the Gulf carriers, which includes the Etihad, Emirates and
Qatar Airways, periodically incentivized the American and European competing companies. The
primary purposes of this is to make various attempts toward limiting the access to the Gulf
Carriers, to their respective home markets. This is achieved through the protectionist policies and
rules enacted and implemented, although few people on the involved airlines may openly admit
that this accusations for the alleged subsidies as well as the lobbying to renegotiate Open Sky
Agreements, together with the Gulf Airline services are done as part of the protectionism policies
(Flottau, 2015). The Middle East traffic of airlines on America and Europe routes have
significantly developed in the past few years, which is attributed by the agreements to liberalize
the entire air travel markets (Parker, 2013). According to a research conducted by Reuters,
(2017), the recent restrictions for travel that applies to the citizens from some selections of High-
Risk Countries to the United States is supposed to address the security concerns. However, it is
clear that this is one part of legal covert which the American and European Legacy airlines are
applying to strictly restrict the Emirates Airline and other Middle Eastern Airlines to access their
market.

Industry Analysis

The Porter’s Five Forces of Competition Model

1. Threat of New Entrants

The new company entrant into the Airline industry causes a severe threat to the existing
companies in any sector. This is because they may provide better quality services, cost-efficient,
and better products. In the airline sector, such a threat is low because the level of entry barriers is
high. In the same case, many challenges are supposed to be considered by the new entrants in the
business as follows:

 Capital Requirements: An enormous amount of budget is needed for starting a new

airline company to offer the services to the customers and also, to buy aircraft. For
example, Boeing costs approximately $2 Billion (Ashraf, Emirates Airline)
 Brand Name and Customer Loyalty: Most of the existing airline companies have already
established and built a strong and excellent position in the current market, a strategy that
assists them to compete against the threats of new entrants. Therefore, depending on their
long-time experience in the market, their existing companies’ experience curve is high.
For instance, American Airlines. Typically, the alliances that lie between the essential
airline companies make the entry on the sector hard for any new company that offers the
same service.

2. Bargaining Power of Suppliers

Suppliers have a significant effect on any industry through their capabilities to increase the prices
and of course, to reduce the entire quality of the purchased services and goods. The airline
industry comprises of few suppliers all over the world. They include the Airbus and Boeing.
Therefore, the bargaining power of the suppliers is very high, since those who are limited
suppliers have the control over the market due to the tremendous demand for their products.

3. Bargaining Power of the Buyers

The buyers of manufactured products typically affect the sector through their abilities to reduce
the costs, bargain in order to get high-quality or more services. Therefore, the power of the
purchasers in this industry is powerful. This is because there are many passengers, over 1.8
Billion Annually. The attempts to have many buyers on the airline services makes the switching
costs to be low, and passengers or customers have many options in the market (ITAT).
Furthermore, the advanced technology of e-ticketing provided customers with the chances and
flexibility to search for a lot of airline services companies, which offer better as well as cheaper
costs and services. Moreover, this concept eases the entire operation of switching between
various airline businesses. Therefore, most companies providing the airline services give the air
miles systems to have the attention of customers and also, to retain them.

4. Threat of a Substitute Service or Product

The risks that are posed by the substitutes differ, mainly from one region to the other and the
international airlines. In cases of the regional airline services, this threat may be higher as many
people can drive their personal vehicles or just use railroads as a way to travel within the same
region. However, on the international level, most people typically use airplanes to move more
comfortable and faster. For instance, in Europe, they are using trains to travel from one country
to the other. In fact, it is easy to move using passengers from the United Kingdom to France, due
to the Eurostar Train, which spends about 1 hour 40 minutes (London to France). However, in
many nations, railroads, and trains are not available, such as in the United Arabs Emirates.
Accordingly, such carriers do not have a potent threat to the airline sector, because they aren’t
used for long distances journey by many nations.

5. Rivalry Among Existing Firms

In the Airline Sector, the competition is significantly high, especially between the companies,
since there exists a variety of airline companies, which offers the best aircraft as well as services
to their esteemed customers. For example, most businesses try as much as possible to expand
their market shares through providing perfect prices, customer services, and some exclusive
promotions. Also, expansion of the market by airline company can be done by being creative in
their campaign of advertising.

All these Porter’s Five Forces of Competition favors the Airline Industry. Therefore, it is crystal
clear to conclude that this sector is profitable, having less competition and threats for any new
entrant company or substitutes.

Partial SWOT Analysis

Opportunities And Threats

Opportunities

The strategy of Emirate Airline to focus on the premium travel section have been proven by
economist to be one of the most successful decision. However, some adjustments in its business
environment like rising competition form the long-haul low-cost airline’s services are suitable
for the expectation of Millennial travelers and of course builds substantial opportunities. By
because this company has never suffered any shortage of resources to develop, the attempt of
launching a subsidiary airline that is cost-effective or a low-cost business model may be an
incredible opportunity that worth exploring. In fact, Emirates Airline can expand under its fifth
freedom rights in the United Kingdom, mainly linking the European cities with several
destinations, which are currently under-served by the local airline services. This will enable the
company to develop some small hubs outside Dubai as well as deploy modern aircraft
(ArabianBusiness.com., 2016). Emirates Airline is currently operating two flights pairs under the
freedom (Athens-Newark & Milan-New York). On the other hand, exploring different regions’
route pairs, with a primary purpose of exploiting the Fifth Freedom Rights may be an excellent
opportunity to use a significant amount of aircraft, primarily to be delivered to the Emirates
Airline in the next five years.

Threats

According to research on the past years, Emirates Airline has never enjoyed any favorable
relationship with the American and European Airlines. In fact, the airline companies in this
countries accuse Emirates Airline of attaining the government subsidies, which in turn provide
Emirates with an unfavorable competition benefit. These are illegal practices in Europe and
America (Flightglobal.com, 2014). In cases where the lobbying activities of the airline will be
successful, the Emirates Airline will have to face the strict restrictions on its North American and
European routes. Also, while the United Arabs Emirates is by no means a region frequented by
the extremist terrorist groups, Emirates Airline Company serves many nations, which have been
marked as potential threats to security concerns by the administration of Trump (Alkhalisi,
2017). According to the new security rules and procedures such as the travel ban, which was
implemented for the United States, whether or not it was a security measure or political is
debated, but the adverse effects are apparent for the Emirate Airline (Alkhalisi, 2017).

Furthermore, Emirates Airline is highly threatened by the introduction of long-haul low-cost

airline services including the Norwegian Air, Wow Air, and AirAsia X, which are meant to
increase the overall competition rate on the long-haul routes (Fehrm, 2016). By now, it’s the
Asian nations where the long-haul low-cost airline services are enjoying a rapid development
and growth. However, the European full-service airline’s companies have been interrogating the
feasibility of establishing a low-cost long-haul subsidiary, which will benefit from the massive
potential market (Fehrm, 2016).

Table 1.0: Emirates Airline Partial SWOT Analysis

Opportunity Threat
– To develop continuously new and modern generation of – Rival Companies are major threats and the incr
more advanced airline and aviation services unhealthy competition in the Middle East Marke
in United Arab Emirates may significantly affect
– The brand new Emirates Airline fleet can be used to expand Airlines’ business
their services as well as improve the overall confidence of
customers in the Airline – Continuously increasing costs of fuel have som
impacts on the margins
– Emirates have more international Air Travel Destinations,
which are famous amongst their customers
– Airline Budget Travelers Operation
-Constant change in political stability of various
Emirates Airlines serves
– Joint ventures/partnership and alliances with most popular
international players in the industry can provide more business
-Changing Government Policies as well as regula
opportunities to Emirates’ Airlines
-Security Concerns on several nations with secur
– Innovation and new talents where the Emirates Airline serves

– Emirates has its own Aviation Institute, which provides -Allegations of Emirates Airline on obtaining the
constant workforce to the company subsidies, which provide Emirates with an unfav
competition benefit.

PART II: Emirates Airline Internal Analysis

The Internal Analysis of weaknesses and strengths involves all the internal factors that give the
Emirates Airline Company certain advantages as well as demerits in meeting the entire
requirements of its target market. Here, strengths denote the core competencies that provide the
company with some benefits in achieving these conditions. On the other hand, weaknesses
typically refer to any disadvantages or limitations the Emirates Airline Company faces,
especially in establishing or implementing particular strategies.

Analysis of Emirates’ Resources and Competencies

Identification of the Resources & Competencies

Emirates’ Value Chain Analysis

Porter (1985) identified the primary value making processes of a company, mainly when offering
any product or service as inbound logistics, outbound logistics, operations, services, marketing,
and sales. The core concept or intention of the value chain is that in any action taken by the
company, it is supposed to add value or think about outsourcing it to another business which can
do it in the same manner or add more value compared to the first company.

 Inbound logistics

Reasonable advantages can be gained through the inbound logistics of Emirates Airlines by
developing great relations with its suppliers, specialized training, and advanced stock control
systems (The Washington Times. 2017). In this case, Emirates Airline has expert engineers,
cabin crew, flight deck crew, personnel, Airline maintenance, aircraft controllers. Also, it has
enough airlines as well as pilots and can maintain the time of flight accurately.

 Outbound Logistics
Emirates Airlines has gathered all its aircraft plus other required tools and equipment in fastest
possible time. It offers several emergency customer services. The company has the capabilities
of keeping the supervision of their business through reporting, settlement, EDI, and audit.
Emirates Airline picks their clients appropriately and maintains their flight schedules.

 Operations

Emirates Airlines have been providing excellent services through the utilization of various
Airline types. The leading airline, Dubai International Airport, has the private Emirates Terminal
3. Emirates Airline operates multiple fleets of Boeing and Airbus Aircraft and has been ranked as
one of the rare Airlines to utilize all-wide-body airplanes. The company provides the long-haul
flight services at a low cost. Emirates Airlines also plans to raise its long-haul flight services in
diverse international destinations.

 Marketing and Sales

Emirates Airline implements the strategy of vertical integration into its primary business
arrangement. This has been achieved through marketing, production and technology and the
company has already diversified its entire investment into different airport services and the
improvement of infrastructure within its operating regions. The company is developing its
services daily by satisfying the customer’s desires and needs. The brand name and image of
Emirates Airline is handled by most skilled professionals, who are experienced in the
management of brand (Economist.com. 2017).

 Services

Emirates Airline consists of three types of First Class Chairs, that is, the horizontal bed “Sky
Cruiser” seat, the full suite with doors, and “Sleeper” seats. The company functions directly
through check-in resorts and hotels, Emirates Aviation College, Emirates Sky Cargo, Emirates
Engineering Center, Emirates Catering, Maintenance, and Training, which incorporates the
business support to make special services for their customers.

These primary activities of the business produced a smooth operation for the Emirates Airlines’
success and became the pioneer airline service to offer some personal entertainment system on
the commercial airplanes after providing the initial Seatback Commercial Monitor of the world
in 1992. All the three classes offer in-flight entertainment system and self-service cabins on
Emirates Airlines.

 Infrastructure of the Firm

The Emirates’ infrastructure is attained from the vertical integration arrangement. In this case,
each organization or business under the Emirates group has the responsibility of establishing or
producing a market specific function or services. This enhances the overall Emirates Airlines
Services. Other support systems for the firm’s infrastructure include the partnership with the
government and the developed tax-free environment.

 Human Resources Management

The Emirates Airline Company is one of the famous employers in its home region, having over
62, 000 workers currently. The process of recruitment is done via campus placements,
specifically from their institute, Emirate Aviation College. Here, students have trained the
specific subjects of the aviation industry, an attempt that shapes them in a manner that they will
become the future workers of Emirates. The company also consider its employees as the core
values and provides a myriad of advantages, regarding the non-cash and cash components to its
workers. Furthermore, they have a program for rewards, which enhances the overall performance
of their staffs (Emirates Group, n.d.).

 Technology Development

The Emirates Airline houses its technology research center. The Technology Centre make sure
that the company has the latest and advanced technology onboard. One of its most recent
accomplishment in the technology development field is allowing the use of Wi-fi and mobile
phones onboard.

 Procurement

The Emirate Airline procures its resources from various sources outside and within the Emirates
Group. In fact, the fleet of their airlines is obtained via the top airline manufacturers, Boeing and
Airbus. Technical assistance that is required to the company is offered by the Emirates
Engineering, while the Emirates Flight Catering provides the catering services needed in flight.

Distinction Between Threshold and Distinctive Resources & Competencies

Figure 1.0: Emirates Airline Competency

Framework

Strategic capabilities mean that the skills used in business have the abilities to accomplish the
steps for the surveillance in the entire market. It may be divided into two parts; Competencies
and Resources. Emirates has its threshold resources which include the office equipment, flight,
financial resources, headquarter, and workers. The company also has the core resources in the
form of active management team including the CEO/chairman, Ahmed Bin Saeed Makhtoum.
Similar to resources, Emirates Airlines consists of threshold competencies which include the
operation of on-time delivery, online booking, and point-to-point routing. The core competencies
of this company are the IT development, no frill strategy, and the route policy strategy.

It is possible to differentiate various Airline Companies through providing the modern and latest
services such as the big comfortable seats, new e-ticketing system, and advanced aircraft. All
these not only distinguish the airline companies but are also useful when it comes to attracting
new customers to the firm. Emirates Airline uses many other strategies and plans to develop their
businesses which include the strategy for development and motivation of their workers. Such
approach assists the company to become the leading Airline Company all over the world.

Emirates is differentiated from other airline companies by being the legacy airline where
advanced technology, ancillary services, and staff skills are the core drivers of the success. Also,
it is popular with the strong brand name, Alliances, and relationship with suppliers. Some of the
distinctive resources include the development of its image and brand within the last two decades.
The Airline company is also aware of the need for continuous innovations, not only in the fleet
and employee expansion but also in the premium services.

Appraisal of The Resource & Competencies

VRIO Framework

While using the Jay Barney’s VRIO Framework, it is possible to understand better the
competitive advantage of Emirate Airlines as well as the reasons that are behind its success
(Australia., 2016).

The Emirates Airlines has concrete and valuable human resources and well-experienced
employees. The airline’s vice-chairman has more than 50 years of experience in the sector. The
Airlines also provides excellent training to its workers, and it’s keen in the improvement of their
overall skill, regardless of the expenses. It is the leading international carrier of Dubai, with a
politically stable region and has a strategic location, mainly for transit passengers. The human
capital, as well as the airline, plays a significant role in assisting the company to exploit the
opportunities available and eliminate any threats (Australia., 2016).

Table 1.1: Representation of Emirates’ VRIO Framework

Resources/
Exploitable/ Non- Comp
Valuable? Rare? Imitable?
Substitutable? Impli
Capabilities
Yes. Emirates
Airline Yes. Due to the Occasionally. But No. Not easy to replace,
Exceptional Level implements this adapted services may be possible but few low cost
Comp
of Customer practice with the for customers, the by offering new Airlines may attract
Adva
Service aim of attracting company is service techniques some Emirates
more customers exceptional which are unique Customers
and fill their routes
 Maybe. That is the
Yes. Emirates has Difficult. It is hard to
Yes. No outer reason why most
the most advanced replace the technology
Advanced Airline is offering of the airlines
technology for in aspect, since it Comp
Technology the same level of giants have not yet
their Airlines, maintains the maximum Parity
Applied Technology to embraced the
Airplanes and for safety feature in Air
Emirates Advanced
Entertainment Travels
Technology
Yes. Emirates
Yes. Trained staff Yes. It is hard for Occasionally. If the
have the largest
Trained Personnel fro different the low-cost competitors can reach Susta
number of cabin
and Operating nationalities to airline to employ more destinations Comp
crews staffs
Strategy offer best level of and operate big compared to Emirates Adva
compared to its
service number of workers Airline
rivals
Yes. Emirates has
the largest fleet of Ye. Possible if any rival
aircraft related to Difficult. Since the enter in alliance with
Yes. It has kept
Large and any other operational costs other airlines, where Comp
the large fleet for a
Innovative Fleet company and related Is they will achieve low- Adva
long-term
reaches many significant operational costs and
regions around the more services
world
Yes. It’s the only
Airline all over the
world doing huge
Yes. Emirates is Difficult. Very
sports No. Since the company Temp
improving the hard since the
Advertisement sponsorships is targeting huge fans of Comp
brand Awareness costs related are
programs and various sports Adva
and Image high.
massive
campaigns for
advertisement

Personally, I would consider the Dubai’s strategic location as rare resources that typically offer
the company with an incredible demand for its service. Labor or human capital is also a limited
resource. For instance, Sheikh Ahmed is both a rare and valuable resources. His image has an
excellent contribution towards the success of the airline.

The strategic location of Dubai is a great resource that can never be imitated easily. This is
because Dubai acts as the Business Capital of the Middle East. The partnership and collaboration
of all the branches of Emirates Airline have achieved most of the cost-cutting and raised the
efficiency of the service. The management of this company as well as the policies of the
compensation worth mentioning as a key to its success. In the assessment of the Emirates’
internal factors, it is clear that competitive advantage is the core to the success of this company.
The competitive advantages are the position that the company’s signature occupies, especially
against its rivals. Some of the resources that are highly contributing toward the sustainable
competitive advantages of Emirates Airline include the strategic location of the headquarter,
office equipment, and financial resources. Accordingly, competencies such as No Frill Strategy,
IT development and Route Policy Strategy are contributing to the competitive advantages of the
Emirates Airline (Malek, 2016).

PART III: Emirates Airline Current Corporate and Business Strategies

Emirates’ Corporate Strategy

 Extensive Aviation Training

The aviation education, which is the airline’s arm of the business, is a crucial and fundamental
strategy to the success of the company. It continually adds and keeps the essential aviation
talents within their employment and of course, builds a large footprint as Emirates trains other
people within the sector. This brand and image realization generated from the business segment
renders it a valuable strategy.

 International Air Travel IT Development

The Emirates Airlines company have leveraged the international airline domain knowledge into
another core profit center. This involves the development of software for the airline industry. The
fundamental strategy of utilizing their trained and knowledge programmers, with the aim of
establishing an Information Technology development company for the entire International
Airline Industry is an incredible addition to the portfolio of the Emirates business strategies.

 Capitalizing The Alliance With Qantas

Emirates Airlines has benefited from the strategic alliance with Qantas, which has assisted in
spurring tourism in Dubai, primarily through the partnership. More than 250, 000 Australian who
visited Dubai this year, reflect the coverage and convergence of both networks of the airline.

Emirates’ Generic Strategy

The Three Generic Strategies, which were identified by Michael Porter, include the
differentiation, cost leadership, and focus. These are all the options which are available for small
businesses. Cost leadership needs a tight set of interrelated tactics that involve the aggressive
construction of efficient-scale facilities, fixed costs and overhead control, vigorous pursuit of
cost reductions from experience, avoidance of marginal customer accounts, and the cost
minimization in every activity in the firm’s value chain. On the other hand, differentiation is the
strategy of differentiation that comprises of developing a difference in the products or services of
the company by building something that that is unique all over the sector and valued by the
consumers. Focus depends on the preference or choice of narrow competitive scope within the
industry (Upham, 2015).

 Differentiation

Emirates Airline adopts the distinction as one of the three generic strategies to achieve the best
out of the competition and gains competitive advantages amongst its competitors by providing
high-quality services to their customers. This makes Emirates Airlines be the best Air Travel
Company all over the market and differentiates from its competitors. For instance, Emirates was
the first airline across the globe to provide TV screen for all the classes of Aircraft. Also, it was
the first airline company in the Middle East to serve the e-ticketing.

 Focus

In addition to the gained competitive advantage through differentiation, Emirates Airlines have
achieved the same strength by focusing on new market segments. For instance, it provided
another Air Travel Company like Qatar Airways, with outstanding training courses, specifically
by utilization of modern machines, called the Plane Simulator, to be the only company all over
the Middle East that provides such a service (Reuters. 2017). The primary aim of this
adjustments is to be the core leaders in the entire airline sector, mainly by increasing the brand
name awareness in the region as well as internationally. This will, in turn, increase the full
demands and the profit margin of the company.

 Cost Leadership

Emirate Airline has been the cost leaders by decreasing the company’s operating costs. The
lower price of fuel and gas has assisted the Emirates to lower the operating costs. Emirates
Airline has a significant Cost per Seat Kilometer (CASK) advantage compared with other
European legacy groups, and these include the carriers that have been hardest hit by the Gulf
carrier competition (Reuters. 2017).

PART IV- Emirates Airline Main Issues And Challenges

Emirates Airline is highly threatened by the introduction of long-haul low-cost airline services
including the Norwegian Air, Wow Air, and AirAsia X, which are meant to increase the overall
competition rate on the long-haul routes (Fehrm, 2016). This company is also facing the
challenge of price difference since many Airline Services traveling to and from Dubai offer
significantly low prices.

Recently, the Emirate Airline published its first full-year profit report on the decline for the five
years as an erosion in the travel demands, which delivered one of the Dubai “most challenging
year to date” carrier. In fact, the profit plunged 82% to $340 Million for the 2016/2017 financial
year as the Emirates Airline faces severe economic as well as political headwinds after the
duration of untrammeled growth. The overall global challenges, which are responsible for
undermining the entire ambitious fleets, together with the airline expansions plans due to the
competition on every airline for long-haul custom, have combined with the sluggish hit of the
regional economy by a slump in the prices of oil. According to Emirates Airlines President,
Sheikh Ahmed Bun Saeed, the airline will be hurt by the United Kingdom’s vote to exit in the
EU, new US policies on air travel, terror attacks in Europe, Devaluation of Currency and the
high cost of oil as well as sluggish gas industry.

PART V: Emirate’s Strategic Options for Growth

Generating Strategic Option

Ansoff’s Matrix

To get the Emirates Airline Strategic Options, The Ansoff’s Directional Matrix can be applied as
a strategic point, which is responsible for identifying all the choices that are available.

 Marketing Penetration (Improving In-flight Services)

Any company that focuses on selling an existing service or product to any existing markets
drives growth strategy for the marketing penetration. Telecommunication is fundamental in the
current life, and to allow the Emirates’ passengers to make voice, as well as data, calls over their
telecom systems. In this case, Emirates Airline is supposed to add communication while on the
airplane, which is an incredible service to business passengers.

 Marketing Developments (Extending New Routes)

The primary objective of Emirates Airlines is to build up Dubai into a famous aviation center,
which will be serving as a central universal long-haul hub. Emirates offers an alternative to the
European traditional airline hubs as Charles De Gaulle (Paris), Heathrow Airport (London) and
Schiphol (Amsterdam).

 Product Development (Private Suite)

As Dubai is the hub for all international air travelers, this is an excellent time to improve the new
services to offer to the top business executives. Emirates have many services for this group of
people, and it is the reason why it introduces high-quality first-class private lounges that attract
business travelers. Also, the premium class private suite is fully outfitted with personal storage,
desk, individual mini bar, and coat cabinet.

 Related Diversification (Low-cost carrier)

Emirates Airline is supposed to strictly spread from the current objectives of marketing to get the
low-cost airline market share. This will also help them in retaining their client base of UAE
expatriate market. It can be achieved by launching new subsidiary that will be responsible for
catering at the budget of marketing. The core routes must have high demand and a massive
number of expatriate’s home country such as India, Egypt, and Pakistan.

TOWs Matrix Model

Evaluating The Strategic Options

The SFA Framework

Table 1.2: Representation of Emirates’ SFA Framework

Criteria Strategic Option 1 Strategic Option 2 Strategic Option 3 Strategic Option 4
Sustainability 3 3 5 4
Feasibility 3 2 2 4
Acceptability 4 3 7 3
Total 10 8 14 12

Implementation of Strategic Options

The strategy is a long-term planning that is aimed at achieving the objective of the business
through the arrangements of the resources of organization within a challenging environment. It is
meant to fulfill the needs of the competitive market and also, the satisfaction of the expectations
of all stakeholders. Therefore, Emirates Airline has a good as well as a practical business model,
helpful in gaining the company goals and assist the company to become the leader in the airline
industry (Economist.com. 2017). International Airline Information Technology Development
Strategy is one of the fundamental and very crucial strategies of Emirates Airline for
development of its overall e-business system, self-check services and of course, maximize the
company’s profit via its advancement in the Information Technology System.

Recommendation

The Extensive Aviation Training Strategy is a critical strategy that Emirate implements. In this
way, the Emirates Airlines gets the maximum benefits through their extensive training of the
workers. This approach assists the company keeps not only their workers but also open new
opportunities for the outsiders. At the period of intense competition which refers to the maturity
stage if the Airline industry, every Airline Company such as Emirates should approach offensive
and also apply offensive strategies after in details review of the internal as well as the external
environment and all factors that directly influence the position of the company (CAPA., 2015).
During the implementation of the strategic options the following recommendations are for
Emirates Airlines:

 Emirates Airline is supposed to improve the maintenance process, efficient and effective
flight schedules and perfect utilization of the company resources such as aircraft.
 Operation cost of Emirates Airline is very high due to massive investments in
technologies, best quality customer services, and aircraft. Therefore, Emirates is required
to control its price and should reduce its costs through the improvement as well as the
development of operational activities.
 In response to the low-cost airlines in the United Arabs Emirates Markets, the company is
supposed to offer an advanced level of service and control cost. In this way, there is no
need to reduce the entire prices and the Emirates Airline should introduce its new brand
as subsidiary which will be based on the low-cost haul.

Conclusion

In any Airline business, the safety of the flight is imperative. Therefore, being one of the largest
Airline in the World, Emirates is the most successful fleet, especially in maintaining the safety of
the flight. In fact, since induction, the company did not experience any significant air travel
accident, and there were no injuries or loss of life. Furthermore, the adverse impact on the
marketing aspects has shut down the airlines only with the crash of an aircraft. However, the
Emirates Airlines’ efficient management is successfully operating the fleet, such that it has
become an exemplary airline in the aviation sector.

From the perspective of analyzing the internal and external environments, it’s worth for Emirates
Airlines management to identify its overall capabilities as well as the competitive advantages. It
is also wise for them to assess how the competition is in the aviation sector. From this analysis,
various implications require Emirates Airline to respond to some changes in the attempt of
changing the context such as technological, political, and the current economic downturn. The
Emirates Management is also aware of any future problem and develops new strategies
accordingly, with a primary aim to retain their leadership in the aviation sector all over the
world.

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