Summarize the case in 300 to max 400 words.

(5 marks)

Emirates Airline’s case presents the success journey as one of the world’s Airlines that is currently facing
competition from new entrants. Since its establishment, Emirates have always made profits which have
created a false notion in the industry that its success is associated with receiving government subsidies.
As an industry leader in terms of fleet and transportation of passengers around the world, the case
presents Emirates as a player with strong resource base, allowing competitive expansion to all global
destinations. In the Middle East, the case presents Qatar and Etihad Airways as Emirates’ main
competitors. Their market entry have redrawn the world map and moved the international travel hub
from Europe to Dubai, the world's busiest airport handling over 5 million travelers each year. As the
airport owner, this has advantaged the 224 Emirates’ aircrafts to fly to over 145 destinations. Emirates
competitive strategy includes a large fleet that offers unique onboard amenities and high standards of
service from its expansive crew sourced across the world. Through its premium services, the emirates
have continued to make profits with progressive profitability for the past 27 years. In 2014, for instance
Emirates Airline carried over 45 million passengers. From a noble idea created by a market need after
Gulf Air cutting its flights to Dubai, Emirates stands a key player in the industry. With Dubai being within
8 hours of two thirds of the world population, its inception geographically strategic. To penetrate and
dominate the market, Emirates pioneered the current in-flight television, quality culinary services as
well as latest robotics. This also includes business-class tickets with limousine rides around the airport,
personal assistance with the check-in process, and use of one of the airline's worldwide lounges.
Emirates also pioneered the concept of a first class suite. The airline has excellent organizational culture
that starts with employing, training and motivating the right but diverse people to drive the company
dream. Emirates Airline also has strategic marketing for global brand awareness. On the contrary,
chasing its Tomorrow presents great challenges particularly as a result of threat of new entrants. For
instance, Etihad and Qatar are aimed at beating Emirates by offering truly enhanced premium economy
section and improving the first-class suite that Emirates had pioneered. The case concludes with clear
picture that the threat of new entrants is threatening Emirates’ ability to remain competitive in the
market challenge.

Is the original vision still applicable given the present circumstances? (10 marks)

All markets experience shifts that demand strategic actions from players. These shifts are always as a
result of expanding customer needs and threats of new entrant. Based on the cases study, Emirates
invested a lot to become an iconic player in the air transport industry. Majority of its efforts were put in
pioneering advances in the planes, marketing, offering excellent customer experience as well as hiring
the right people to propel the company’s dream. While this vison proved functional in the past 27 years,
it is evident that the company needs to revise its competitive strategy in order to sustain its position. Its
original vision has become a common activity in the industry and as such, it can’t apply to the current
circumstances. This is based on the fact that competitors are going an extra mile to offer something
above what Emirates is offering. As such, there are high chances that the company will lose its
customers to competitors. For example, Singapore Airlines are planning to outweigh Emirates by
providing a more enhanced premium economy section for its customer. If they do, it is evident that they
will have a market advantage. Similarly, Etihad is also improving the first-class suite that Emirates had
pioneered. Since customers always want experiences that goes beyond their expiations, it is evident
that they will shift from Emirates to enjoy the new flight experience from Etihad. Therefore, Emirates’
original vison is threatened and cannot sustain it’s in the current market. As such, there is need for
Emirates to devise new competitive strategies that are above those of competitors in order to remain
dominant in the market.

How the external environment might affect Emirates’ strategy? Assess the political/legal, economic,
sociocultural/demographic, technological and global forces. (10 marks)

Political/legal factors- Airline industry is easily affected by political dynamisms that are sensitive to the
industry. For example, political instability in Emirates Airline destinations enhances profitability with the
converse also being true. Emirate airline is also bound by political factors based on the fact that it is a
Dubai Government property. Thus, it must follow government rules and regulations as well as
government agreements with other countries with its destinations. Wars and terrorism in areas of
operation can also limit its performance.

Economic factors- usually, they economic condition of countries that Emirates airline operates in affect
its profits, capital as well as cost demand. If capital and demand buyout is relatively, it’s positively
affects emirates business. As such, strong economies in countries of operation can enhance its
profitability while operating in financially constrained countries may mean loses.

Social factors- these are people’s tastes and preferences. As such, people may have different
preferences which might benefit or disadvantage the Airline. For example, if competitors offer better
experiences, people might prefer them. Similarly, if Emirates offers such experiences, then it may
attract more preferences. This in turn enhances profitability. Emirates operates in different
demographics characterized by religions, affluence and age. As such, its employees must be conversant
with each of the demographics’ culture to offer customer needs. For instance, its crew must respect the
values of Muslim passengers during Ramadhan by availing food and other services knit on Ramadhan
practice.

Technological factors-emirates airline have been at the forefront in using technological advancements as
a competitive strategy. For instance, internet and other information technology components plays a
critical role of attracting customers. Personalized digital entertainment in the plane attracts customer
airline presences leading to higher profitability. As such, Emirates airline must be at the top in
incorporating latest technologies in its carriers in order to remain competitive.

Environmental factors- Emirates operates in an industry that contributes to pollution. Wu, Cheng and Ai
(2018) argues that climatic or abrupt weather conditions affects credibility of airline operations. Besides,
its operations are affected by the national and global demand to ensure sustainable environment.
Currently, Emirates Airline uses recycling considerations to ensure conformity to environmental
conservation demands.

Which are the current forces in the industry environments that affect Emirates’ ongoing strategy?
Please apply Porter’s Five Forces of competition to the international airline industry. (10 marks)

Porter’s Five Forces of competition plays an important role in the analysis of a market environment. As
seen from the case study, the current forces affecting Emirates in the international airline industry are
competitive rivalry, threat of new entrants as well as Threat of substitute.
Competitive rivalry: Emirates faces intense competition from Singapore Airlines and Etihad airlines.
Singapore Airlines and Etihad airlines are considerably enhancing customer experience are making a play
in the performance apparel market to exert rivalry to Emirates. The market lacks process patents making
its service portfolio to be copied and enhanced by competitors

Threat of new entrants: while this threat is limited due to the fact that the industry requires large capital
costs for branding, advertising and creating service demand, existing airlines in the industry like
Singapore Airlines and Etihad airlines can enter the Emirates’ rich markets and topple its
competitiveness.

Threat of substitute products: The demand for enhanced customer experience in there airline industry
continues to grow. In this sense, competitors are offering similar services to those of Emirates with
others going beyond to offer a state of the art experience beyond Emirates current abilities. Threat of
substitutes is also evident with companies in the industry offering private jet services.

In terms of ranking the most competition force facing emirates is Competitive rivalry. This is flowed by
threat of new entrants with focus on emirates rich markets and lastly threat of substitute. Based on the
above, Emirates needs to analyze its competition and identify threats to its business. This must be
followed by figuring out on how to address the competition.

Since some of Emirates new competitors are also fairly new airlines (Qatar and Etihad), what
implications does this have for threat of new entry into the industry? (10 marks)

Qatar and Etihad airlines are fairly new entrants in the market competing Emirates. As such, they pose
changes in the competitive environment and will directly impacts Emirates’ profitability. In particular,
the advances by Qatar and Etihad airlines shows that there is a higher threat of new entrants. This
implies that there are low barriers to entry pointing to a possibility of the industry profitability to
potentially decrease. Snider and Williams (2015) says that this is based on the fact that more
competitors will fight for the same market. In addition, there will be a high likelihood that sales and
market shares will be redistributed leading to an impact on price and service quality. Based on the case,
the competition between Emirates, Etihad and Qatar airline will create a barrier to new entry. With an
already constrained market, new entry threat will be limited based on the fact that entry will need huge
production-profitability threshold requirement. They industry will also be dominated by well-known
brand names (Emirates, Etihad and Qatar) leading to a strong entry barrier. Thirdly, the stiff
competition and technological advances in their airlines will also signal huge upfront capital investments
to enter the market. This will lower the new entrants’ threat. In sum, the competition brought by the
new airlines will enhance service differentiation leading to a strong barrier to new market entry. As
strong competitors in the market, Emirates, Etihad and Qatar airlines will establish controls on how new
airlines enters the market instead of stopping the competition among themselves. As such, the
incumbent firms will respond to the threat of a new entrant by controlling access to the established
distribution channels.

How does Emirates compete: Overall cost leadership? Differentiation? Or focus strategy? (5 marks)

When the airline was started, it competed through differentiation. It enjoyed first-mover advantage in
the Middle East with customers willing to pay for premium services. Based on the case study, the market
dynamics have made Emirates compete through both differentiation and overall cost leadership. The
airline operates a unique flexible business model that supports delivery of innovative services that are
relatively unique and affordable to the market. Johnson (2015) says that this have made Emirates to
prides itself as the leader of the world’s most innovative long haul flights. This has enabled its leadership
to strategize ways of maneuvering the world economic crisis. Its competitive model supports long haul
flights connecting two points of the world through its Dubai terminal. This competition strategy does not
favor the expensive short haul that always drains revenues. Through its overall cost leadership/
emirates also uses open skies’ strategy by sharing its Dubai airport with other airlines thus encouraging
competitive forces in order for it to effectively control its market share.

What are the primary and support activities in the value chain of Emirates? What challenges does
Emirates have in its value chain? (15 marks)

Based on the case study, primary activities of Emirates Airlines entails direct involvement in the
production and selling of services to target customers. The following are its primary value chain
activities.

Primary activities

Inbound logistics-this encompasses developing strong relationships with suppliers. Operations-This

involves machining, assembling, packing, testing, repair as well as maintenance also falls into this
category.

Outbound Logistics-This entails all activities that deliver the services and products to its customers
through different intermediaries. Among the activities are order processing, warehousing, material
handling, scheduling, transporting as well as delivering to respective destinations.

Sales and Marketing- this activity involves brand awareness were emirates highlight the advantages and
differentiation points of its products and services to persuade existing and potential customers.
Caswell(2016) assert that emirates carries Sales and Marketing through channel selection, quoting, sales
force, promotional activities, pricing, advertising, and establishing relations with other channel
stakeholder.

Services- emirates offer pre-sale as well as post-sale services to develop customer loyalty. Emirates offer
support activities to enhance brand reputation and promote positive word of mouth. Other services
include culinary services, entertainment etc.

Secondary Activities

Management of company infrastructure- this includes planning, quality management, handling of legal
issues, financing and accounting. Emirates manages company infrastructure to control overhead costs.

Human resource management- this activity involves evaluating of HR aspects such as recruitment,
selection, training, compensation, appraisal and other personnel management activities. This activity
helps the company to reduce competitive pressure by enhancing employee motivation, commitment
and skills.

Development of technologic capabilities- this activity involves automation of services, online customer
service, and product design research as well as data analytics.
Procurement- this secondary activity entails purchasing of inputs such as equipment, machinery, raw
material, supplies, raw material etc.

Challenges in Emirates’ Value Chain

From its start, Emirates created an ultimate experience where its customers never minded to pay for
excellent services. Will this continue?

Other Middle East airlines are innovating in their services representing a possibility of losing customers.
The entry of competitors in the market is making value chain implementation difficulty. Emirates will
need detailed expertise in order to enhance its value chain.

The other challenges is whether Emirates will continue to deliver and remain competitive that there
market players.

Due to the increased complexity, it is difficult for emirates to separate operations into primary and
support activities. Emirates faces a challenge of losing its vision and the entire strategy in the event that
it divides operations into different activities.

The company is also finding it difficult to get needed information if it’s Business Information System to
understand the market dynamics brought by competitors.

Though it pioneered many airline advances, Emirates is facing a challenge of meeting technological
advancements that are being undertaken by competitors such as Singapore, Etihad and Qatar airlines.

What are the tangible resources, intangible resources, and organizational capabilities of Emirates? (10
marks

Tangible resources

Based on the case study, Emirates has a number of tangible resources which include financial resources
acquired from 27 years of profit making. The second tangible resource is the physical up-to-date aircraft
and many terminal facilities. The company also have a well-developed infrastructures such as private
terminal, home-base airport as well as other supporting services. Emirates also have tangible
technological resources in terms of technological advancements in its aircraft improvements.

Intangible resources

Emirates Airline intangible resources include organizational relationship with its founder who is now the
head of government (Sheikh Mohammed bin Rashid Al Maktoum). The other intangible resource is
human resource which is characterized by recruitment and training of its staff.

The company has competence employee management to achieve success. Another resource in this
respect is the innovation which has been a key success enabler of emirates. Besides, emirates have a
great brand reputation which stands as an important intangible company asset.

Organizational capabilities

In terms of organizational capabilities, emirates has strategic leadership with ability to propel the
company to success. For the past 27 years, the airline’s leadership have devised strategies that enhance
competitiveness. Emirates’ leadership expertise is evident for its ability to survive in hard times where
most airline companies went bankrupt. The airline is also state owned and thus limited leadership and
funding problems.

Are the internal resources valuable, rare, difficult to imitate, or difficult to substitute (VRIN) to help
Emirates sustain a competitive advantage? (10 marks)

When the case study is analyzed through VRIN model, there are a number of aspects that can help
Emirates to sustain its competitive advantage. These aspects surround the internal resources of
Emirates Airline. First, there is path dependency. In this respect, the founders of Emirates Airline
created a strategic relationship the Dubai government. In itself, this is a valuable long-term support link.
Emirates also enjoys a vast resource based to exploit opportunities. As such, the internal resources are
valuable.

Emirates internal resources also presents causal ambiguity with social complexity. In particular, hiring
Flanagan Sir Tim Clark constituted a rare talent combination that propelled the company to success.
Smith (2014) argues that this talent combination can’t be substituted and in case of an attempt, it’s
difficult to succeed. As such, the internal resources were rare and difficult to be substituted

In terms of imitability, Emirates has an extensive process of sourcing the right people propel its vision.
This is seen in its recruitments process. While competitors have the ability to also establish their own
recruitment practices, Emirates Human capital resource is hard to replicate. As such, the internal
resources are not imitable. As such, Emirates needs to capitalize on its internal resources in order to
remain at the top of market competition. Currently, other Middle East airlines are advancing on what
Emirate pioneered. As such, there is need for Emirates to come above board and deliver customer
experience that cannot be met by competitors. This can be achieved through expanding flight
affordability to get more customers.

Please assess the effectiveness of Emirates’ leadership. (15 marks)

Based on the case study and my own assessment, Emirates airline presents a rare case of effective
leadership. Its leadership is democratic with the management encouraging other members to connect
with the conglomerate in terms of shareholding and decision making. Emirates’ leadership is also
strategic in terms of maintaining business competitiveness. This is seen in its keen approach to hiring
right people who can buy into the idea of the company and lead the company to success. Through its
top elite industry experts, the company uses employee motivation to inspire employees’ abilities for
company success. Emirates leadership is also effective based on the fact that it respect employee
diversity. This has enabled the company to hire employees and operate flights in different cities across
the world. In terms of innovation, Emirates Airline leadership has remained at the forefront in advancing
new innovations in its aircrafts. This points to the fact that it has an effective innovative leadership that
observes the technological trends and incorporates them in its value chain. In addition, it eldership is
effective since it has ensured smooth flow operation irrespective of economic downtowns. It leadership
has remained observant on economic environment and this has made the airline never to run bankrupt
irrespective an adverse global economic crisis. Emirates Airlines leadership seem effective since it has
enabled the airline to expand its business to all parts of the world. Redpath, O'Connell and Warnock-
Smith (2017) say that Emirates leadership is effective because its talented leaders have enabled its
employees to rank in the first position as one best airhostess globally with over 400 awards in 27 years.
Based on the fact that Emirates airline have always made profits for the past 27 years, it is evident that
the airline has one of the most effective leaderships in the industry. This s based on the fact that many
airlines have run bankrupt in the same period of time. Despite the above, there are a number of deficits
in Emirates leadership. First, it cannot be disputed that it has always been profitable. On the other hand,
its leadership is giving a deaf ear on the effects of new entrants in the market. For example Etihad and
Qatar airlines are developing modifications on its patents as a way of enhancing their competitive
strategies. Even with this reality, its leadership claims that it has always made profits. From analytical
point of view, there is a great strategic necessity for Emirates leadership to address the effects of new
entrants. Similarly, the leadership needs to lobby for government subsidies as a state organization in
order cover itself from upcoming competition. In sum, Emirates leadership is effective but a more focus
on the upcoming industry competition in the market can make it more effective.

References

Caswell, M. (2016) “Emirates Unveils New Business Class Seat.(upfront)(brief Article),” Business
Traveller, 10(1), p. 10.

Harbi, M. (2016) “Emirates Adds A380 Flight Smith, G. (2014) s.(upfront)(emirates Airline)(brief Article),”
Business Traveller, 10(1), p. 10

Johnson, G. (2015) “Emirates A380-800 Business Class: Dubai-Los Angeles.(tried & Tested:
Flight)(emirates Airline),” Business Traveller, 18(1), p. 18.

Redpath, N., O'Connell, J. F. and Warnock-Smith, D. (2017) “The Strategic Impact of Airline Group
Diversification: The Cases of Emirates and Lufthansa,” Journal of Air Transport Management, 64, pp.
121–138. doi: 10.1016/j.jairtraman.2016.08.009.

Smith, G. (2014) “Emirates.(airline News),” Business Traveller, 16(1), p. 16.

Snider, C. and Williams, J. W. (2015) “Barriers to Entry in the Airline Industry: A Multidimensional
Regression-Discontinuity Analysis of Air-21.(report)(author Abstract),” Review of Economics and
Statistics, 97(5), p. 1002.

Wu, H.-C., Cheng, C.-C. and Ai, C.-H. (2018) “An Empirical Analysis of Green Switching Intentions in the
Airline Industry,” Journal of Environmental Planning and Management, 61(8), pp. 1438–1468. doi:
10.1080/09640568.2017.1352495.