SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION

FACULTY OF BUSINESS ADMINISTRATION

Name: Ventakash Pawan Bodani
CMS: 123-15-0017
Strategic Business Management
BS VII (A&F)
Fall 2018
Emirates Case Answers:
Case Questions

1. Pastel Analysis and any identify key factors?

Pastel Define Identify Reasons Counter
(Strategies)
Political These factors verify the extent to that a Support from Emirates
government might influence the economy or a the emirate of Airlines is
precise trade. Dubai supported by
Terrorism and the
civil unrest and Government
political of Dubai;
uncertainty which is its
across Europe, sole owner
middle East and by providing
Africa markets. infrastructur
e
developmen
ts to increase
the growth
of Dubai and
Emirates
Airlines.
A possible
issue
for Emirates
Airlines is
the current
political
instability in
the Middle
East region
which has
the
possibility to
reduce for
the
additional
growth of
Emirates.
Emirates
Airline has
been
 sheltered by
the rules and
policies
created by
the Dubai
government
and other
countries
where they
are
operating.
Since Dubai
government
is the only
owner of the
industry the
company
has been
able to
follow to the
policies
given by
government
to run its
operations
productively
and
efficiently.

Economical These factors are determinants of associate Emirates is an Recent When the oil
degree economy’s performance that directly international economic prices are
impacts a corporation and have ringing long airline so the downturn falling,
run effects. revenues are has options would
collected in significant be in favor of
multiple impact on emirates as it
currencies – any the industry. is cheaper to
sudden Air travel hedge
movement in demand has forwards and
the exchange fallen get protection
rate and change dramatically if prices go up
in global . Several but if one pays
macroeconomic major airline premium for
conditions s will cut options, they
could lead to domestic also retain the
revenue and internati potential to
fluctuation. onal benefit from
Low oil price capacity lower oil
environment further in prices more
affecting 2009 due to immediately.
economic and a falloff of
business. about 25%-
30% over
the last
quarter of
2009.
The
declining oil
price is often
considered
to be a
 positive
developmen
t for airlines,
however, it
also reduces
the
demand f or
premium
travel to
Dubai (and
to the Gulf
region)

Social These factors scrutinize the social setting of the Emiratization Both
market, and gauge determinants like cultural strategy to domestic
trends, demographics, and population analytics. recruit and and
retain UAE international
nationals. markets
where
Emirates
operates
have culture
diversity.
Dubai,
Australia,
Canada, are
multicultura
l countries.
Benefits
come from a
variety
of consumer
s’ trends
in accordanc
e to
their values,
attitudes,
education,
religion
and lifestyle
s. As a fact,
stable
incomers
make
holidays
annually.
It is true in
European
countries
where
most peopl
have a stron
g demand to
travel on an
nual holiday
s. Emirates
have advant
ages operati
ng in
destinations
 where the
trend of air
travel is
socially
enhanced.
The crew
should be
well aware
of cultural
values of
different
passengers.
Technological These factors pertain to innovations in Technology The new The
technology which will have an effect on the helps the airline technology emergence of
operations of the trade and therefore industry to affected IT affects the
the market favorably or unfavorably provide higher airline services of
quality at lower industry Emirates.
cost, by negatively Advancement
reducing the and and the
fuel usage, positively. innovation in
reducing the For technology
engine sound; example, the need to be well
E-ticketing technology recognized by
system of the Airlines.
decreases the teleconferen The products
customer cing reduced and services
service expense the need for must be
and time and face to face designed
enables business exceptionally
Emirates meetings which helps to
airlines to which meet the
provide the best affects on competition.
entertainments the number
features. of business
travelers and
on the sales
of business
tickets. How
ever, e-
booking
system
makes the
reservation
easier and
save many
expenses
such as
reducing the
printed
tickets.
There is a
growth in
internet
usage
worldwide.
In the UAE,
internet
accounts are
likely to
grow from
 251,000 in
2001 to
exceed
600,000
accounts by
2006.
Environmental These factors embody all those who influence Commitment of Airlines The UAE has a
or are determined by the encompassing setting. eco-efficiency major dry and warm
through major concerns are climate, so the
investments and the Emirates
initiatives. environment Airlines have
Development of al changes. to face almost
bio fuels to The no
reduce immediate environmental
environmental weather problems
impact. change and within the
climate home country.
conditions So it should
influence the not be
credibility of concerned for
service. So any counter
airlines need strategy in
to follow dubai for this
strategies for factor.
the excellent
service. The
environment
al factors
can include
the weather
and climate
issues,
which might
end up
affecting the
airline
business.
Legal These factors have each external and internal These include The policies In the case of
sides. There are sure laws that have an effect the rules and and airlines, just
on the business setting during regulations of regulation like the
a sure country whereas there are sure policies the country. The allow the environmental
that firms maintain for themselves. So that changes in the airline issues, the
they incorporate each of those sides. legal factors company to legal factors
will be more can also vary
undoubtedly cautious in from country
affect the local as well to country.
revenue of the as Hence the
company. international profit made or
dealings. forgone will
The also depend on
operations the country’s
will be policy and
arranged in a laws. So it
legal should not be
environment more focused
, which will on making the
ensure safe counter
and secure strategies for
journey for this factor.
 the
passengers.

2. Analyze the changing industry structure in which EACH Company is operating by using Porter’s Five
Forces Model. How did Company counter the changes and challenges of the industry competitive forces
in which Company is operating by using Porter’s Five Forces Model?
Five Forces Level of Reasons
Threat/Bargaining
Power
Threat of Low The existed barriers of entry:
new Emirates Airlines is the national carrier of Dubai; so this will hinder
entrants the entry of rivals in Dubai and provide the Airlines with many
benefits.-

Brand equity:
Emirates is well-known and reputed market player, with very high
brand value.

Switching costs or sunk costs:

It is easy to change the suppliers expect for airplanes suppliers.-

Capital necessities:
Emirates Airlines is part of emirates group, so gaining capital is
easy. For other company it will be difficult to raise capital.

Customer loyalty to
Established brands.

Government policies: very elastic due to national carriers and

monopoly of Emirates Airlines in Dubai

Bargaining High Supplier replacement costs:

power of It is very expensive to change the suppliers; since they are only two
suppliers (namely Boeing and Airbus.)
Existence of substitute inputs: A lot of substitutes are present for
suppliers as there are over a hundred airlines currently operating
and most of them are planning for expansions.

Those limited suppliers have a control on the market due to the huge
demand of their manufactured products

Bargaining High There are lots of passengers (1.8 billion yearly), the switching costs
power of are low and passengers have many choices in the market
buyers (ITAT).The new technology of e-ticketing gives people the chance
and flexibility to search for many airlines.
Companies offering better or cheaper costs and services.
Furthermore, it eases the operation of switching between different
airlines companies. Therefore, many companies provide the air
miles system to gain customers’ attention and to keep them as well.

Threat of Moderate to high Threat of substitutes differs from the regional and
substitute international airlines. In the regional airlines it can be higher as
products people can drive their cars or use trains as a way to travel within the
same region, but on the international level people use airplanes to
move faster and more comfortable. In the Europe they are using
trains to travel from country to another for example, it’s easy to
travel by
train
 from the UK to France by “Eurostar train” in just 1 hour 40 minutes
(London to
France)
However, in many countries trains are not available ex UAE,
accordingly such carries have a weak threaten in
the airlines industry since they are not used for long distance
journeys by many countries

Buyer tendency to substitute

Very high as there are two types of companies in market, low cost
and luxury. This causes large price variation. So a lot of customers
choose to buy low cost tickets for short distance flights.

Rivalry High There is variety of airline companies that provides best aircrafts and
among services to passengers. For instance, many companies try to expand
existing their market shares by offering best prices, best customer services
firms. and exclusive promotions as well as by being creative in their
advertising campaigns. (Ex: Air Arabia is low cost airline).
Diversity of competitors: international rivals like Lufthansa, local
flyers like Etihad Airways and regional rivals like Gulf Air and
Qatar Airways.
Fixed cost share per value added: additional cost for services like
meal choices for first class passengers.
Level of advertising and marketing cost: It is very expensive high:
the company considers marketing through sponsorship is a part of
its sustainability.

3. You are also advised to conduct a strength, weaknesses, opportunities and threats (SWOT) analysis for
EACH Company and provide strategic suggestions based on analysis.
Identify Counter (Strategies)
Opportunities: Development of more advanced
airline services:
To develop incessantly new
generations of more advanced
airline and aviation services, and
in result tap into more markets.

Leveraging Emirates Airline’s

infrastructure business to get
first choice.

Opportunity to tap budget

travelers' market:
Emirates Airlines is part of
Emirates Group; so the parent
company can establish low
cost airlines to attract the
customers who cannot afford to
pay expensive tickets on
Emirates

Threats: High rival market, locally and

internationally.
 The entrance of new rivals like
low cost airline such as Air
Arabia in Sharjah; fly Dubai and
Etihad Airways in Abu Dhabi as
well as Qatar Airlines and Gulf
Air in GCC and globally
Lufthansa and British Airways-

Airlines business is disturb by

the economic crises:
Airlines business is very
responsive to economic crises
and other changes like the
variation in currencies exchange
rates, many airline companies
had great losses or bankruptcy.
Emirates profits became less
during 2008 recession.-

Oil prices and fluctuation in

exchange rates:
Changes in oil prices are highly
affecting the cost of operations,
because oil cost is the second
main portion of operations cost.

Variation in demand and failure

to forecast:
Fluctuation in consumers
demand disturbs the capability
of predicting demand.-

Security reasons: hijacking

airplanes or any other terrorist
actions can increase the
operations cost and cause a
decrease in number of travelers.

Strength: One of the

leading airlines worldwide:
Emirates is one of the
leading airlines worldwide in
revenue, fleet size, and number
of passengers. As well as being
one of the fastest growing; with
growth rate has never been lower
than 20% annually.-

High service quality:

Emirates is advanced in quality
of service given to customer and
was awarded the "Airline of the
Year".-

The official carrier of modern

Dubai:
The enormous development of
Dubai infrastructure and
facilities is considered as
strength to its carrier,
 Emirates Airline. The Dubai
Airport and the new airport in
Jebel Ali are measured from
largest airports around the world.
Also, Dubai considered as an
important commercial center in
the area.

The company is good in

developing the staff:
The company communicates its
vision, value, and strategic plan
to first line staff and stresses cost
control with them. Also, it is
providing a frequent training and
improvement of the employees.-

Variation of the executive

management approach and the
multi-origin staff:
Managements come from
different nationalities and
backgrounds which enhances the
experience; with a combination
of different cultures. Emirates
consist of more than 80
nationalities, and they are
working together as a team.-

Desired working environment:

Emirates is reputed airlines
which offers salaries and
benefits with no taxes and no
unions.-

Strong branding strategy:

Emirates spends lots of money
on its marketing and branding
strategies and consider it the
only way to global expansion.
The airline spent approximately
$300 million annually on
sponsorships, promotions,
events and public relation

Weakness: No available succession plan:

Emirates Airline does not have a
succession plan for its top
managers. This h can be
considered as a risk and lack of
applying sound corporate
governance practices.-

Lack of Emirati Staff:

Hiring Emirati is very difficult
due to the low percentage of
Emiratis in the country’s
population.
 Diseconomy of scale:
Emirates could reach a point
where the airline would face
diseconomies of scale. Emirates
getting complex and costs are
high

4. How is the Company using its resources and capabilities to get competitive advantage and why is it so successful
in it?
Company is using its valuable resources and capabilities like advanced technology, exceptional level of customer
service, trained personnel, large and innovative fleet, advanced infrastructure, widespread network and its advertisement
strategy like sports sponsorship to gain competitive advantage and it is successful so far by exploiting the above
mentioned resources and its capabilities.
5. What was the Company’s first strategy plan and was it different from the current?
Emirates operated out of a single global mega- hub at Dubai Airport, a strategy it had maintained since its
origins. Emirates Airline current strategy is expansion through strategic alliances, investing in purchasing large aircrafts
and in expanding to new destinations, building strong brand equity, hiring professional multinational employees and
developing sustainable business through corporate social responsibility.

6. Describe Company Business strategy?

Company business strategy is expansion through strategic alliances, investing in purchasing large aircrafts and
in expanding to new destinations, building strong brand equity, hiring professional multinational employees and
developing sustainable business through corporate social responsibility.

7. Who are Company’s competitors?

Major competitors are

 Turkish Airlines
 Qatar Airways
 Etihad

8. How does competitive rivalry, competitive behavior, and competitive dynamics effect Company?
Etihad airways, Qatar Airways, and few others are termed as major competitors for Emirates Airlines and.
Competitive rivalry, competitive behavior and dynamics effect the Emirates in the way like the Etihad currently
runs around 116 destinations, and over25,200 flights per week with 120 aircrafts. Etihad Airways experienced a
milestone year. Like Emirates Etihad even is sponsoring football teams like Manchester City Football Club; cricket
teams and golf teams. Other competitor Qatar Airways is offering the same variety of products and services as
Emirates does. Since its establishment in 1994, Qatar Airways developed 150 destinations internationally and
having 180 air crafts in its fleet presenting good service which helped it to gain market share. So both of these
competitors are effecting the emirates. It faced no shortage of competition as it expanded to new markets. Flagship
carriers in both developed (particularly Europe) and emerging markets (Singapore Airlines, Thai Airways, or Cathay
Pacific) were also expanding beyond their regional bases to offer increasing non-stop service to key Asian,
European, and American gateways. Other Gulf carriers and Turkish Airlines enjoyed the same geographic
advantages as Emirates, and had to varying degrees built operating models that offered a similar range of high-end
service offerings. While Emirates welcomed competition on routes and on quality products, its aircraft innovations
such as in-flight bars were being heavily copied.
9. What is the purpose of Company’s value chain?
A value chain is a set of activities that an organization carries out to create value for its customers. In other words
the way in which value chain activities are performed determines costs and affects profits, so this tool can help you
understand the sources of value for your organization. Emirates should see its value chain at every step because then
they will be able to identify their core competencies and capabilities which are the basis of competitive advantage
for them.

10. Identify type’s value chain activities of Company’s?

Value Chain Analysis:

Porter (1985) specified the main value-making processes of a company when providing any product or service
as inbound logistics, operations, outbound logistics, marketing and sales, and service. His main concept of the value
chain is that in every action the company should add value or think about outsourcing it to another company which can
do it either in the same or probably can add more value.
Porter’s value chain analysis is mainly consisting of analyzing the following:

 Inbound logistics.
 Operations.
 Outbound logistics.
 Marketing and sales.
 Services.
Inbound Logistics:
Reasonable benefit is gained in inbound logistics period of the business by Emirates Airline by creating strong relations
with suppliers, advance systems for stock control and specialized training. Emirates has expert engineers, flight deck
crew, cabin crew, airline maintenance, personnel, air craft controllers, etc., it has sufficient airlines and pilots. So it can
maintain the flight time properly.

Operations:
Emirates Airline is giving excellent services by using a variety of airline types. Dubai International Airport has private
Emirates Terminal 3. Emirates Airline operates a varied fleet of air bus and Boeing airplanes and is one of the
rare airlines to use an all-wide-body aircraft fleet. Emirates Airline offers long haul flight services at cheaper charges.
Emirates Airline plans to increase its long haul flight services into different destinations.
Out bound Logistics:
Emirates Airline gathers its aircraft and other required equipment in fastest possible time. It provides emergency client
service. Emirates Airline keeps business supervision by reporting, EDI, settlement, audit. It picks the customer
appropriately and keeps the flight schedule.
Marketing and sales:
Emirates Airline implements vertical integration into its main business arrangement. This happens through production,
marketing and technology Emirates Airline has diversified its investment range into ranges of airport services as well
as infrastructure improvements within its operating routes. Day by day it is growing its services by fulfilling the
customers’ needs and desires. The emirates brand name and image is handled by skilled professionals experienced in
brand management (Emirates group careers,).
Services:
 There are 3 types of first class chairs; the full suite with doors, horizontal bed 'Sky cruiser' seat (without doors) and
'Sleeper' seats. Emirates Airline directly functions check- in services, service desks, lodging and lounge services, and
luggage and. Moreover, Emirates hotels and resorts, Emirates sky cargo, Emirates aviation college for pilot and staff
training, Emirates engineering center for repair, maintenance and training, Emirates catering, incorporate business
support are its special services.
These activities make up smooth operations for the airline’s success. Emirates became the pioneer airline to provide a
personal entertainment system on a commercial aircraft after providing the world’s initial seatback commercial monitors
in 1992. All three classes provide a personal in-flight entertainment (IFE) system on Emirates airplane. Self-service
cabins are also provided.
Human resource management:
The Company is one of the chief companies in the region with over 62,000 employees presently. The employment
procedure happens through site assignments from their own Emirates Aviation College, where students are studying
subjects of aviation industry, possibly modeling them to become a future staffs of Emirates. Emirates believes that their
staffs is its main values and provides them countless of benefits for example cash and non-cash benefits. Further, they
also provide a reward package to improve employees’ performance
Technology development:
Emirates has its own expertise research Centre to guarantee that the company gains the modern technology available.
Providing usage of mobile phones and Wi-Fi on board is one of its recent achievements in this regard.
Procurement:
Emirates airlines obtains its properties from multiple origins from inside and outside the emirates group. The fleet
of airlines is obtained from either Airbus or Boeing.
‘Emirates engineering’ is providing required technical support; while the in-flight catering services are provided by
Emirates flight catering

11. What are four specific criteria of sustainable competitive advantage Company’s? – Capabilities that are:

 Valuable: Help the company neutralize threats or exploit opportunities.

 Rare capabilities: That are not possessed by many others.
 Costly to imitate: these are capabilities that other firms cannot easily develop like organizational culture
and brand name, interpersonal relationships, trust, competence etc
 Non substitutable: those capabilities that do not have strategic equivalents.
Emirates sustained the competitive advantage as their services like advanced technology, exceptional level
of customer service, trained personnel, large and innovative fleet, advanced infrastructure, widespread
network and its advertisement strategy like sports sponsorship to gain competitive advantage remain
valuable as they were in the past, they are rare, and they are somehow substitutable. Emirates services that
are mentioned above are costly to imitate.
12. What actions created enduring sources of competing advantage?
Emirates Airlines adopts differentiation generic strategy to gain a competitive advantage amongst its competitors by
offering the highest quality services in order to be the best company in the market and differentiates from its competitors.
For example, Emirates airlines was the first airline that offered TV screen for all aircraft's classes. Also it was the first
company in the Middle East to serve the e-ticketing. In addition, it gained a competitive advantage by focusing in new
segments in the market. For instance, it provides another airline companies such as
Qatar Airways with training courses by using the most modern machines, called plane simulator to be the only
company in the Middle East that offers such service. The aim of such changes is to be the leader in industry by increasing
the brand name awareness regionally and internationally which will increase the demand and the profit as well.
13. What should be the success factors for Airlines industry?
Key Success Factors
To maintain airlines companies’ success, various key factors should be implemented for this purpose:
Differentiation
Airline companies tend to differentiate by providing advanced services. For example, providing the aircraft with the
latest technology, such as wide seats, e-ticketing (as mentioned in 5 porters section) will attract customers and
distinguish the company among other companies. (example: British Airways).
Strong brand name
Obtaining a strong brand name plus building a base of loyal customers are the carriers' companies most concern. It
guarantees that customers will stick with the strong brand name company and ignore any attractive offers from other
competitors. Some airline companies utilize some techniques to have a retain customers, such as offering a flyer mile to
win a free ticket if the points were completed. (example: American Airline)

Alliances
Airline industry is moving toward establishing alliances between companies. This will let companies to share resources
via linking their networks to build a wide base of customers, develop services and increase number of routes.
Additionally, it results in sharing experience and decreasing the operation costs. Ex. British Airways is a member of
largest airline alliance known as “One world”.
Relations with supplier
Airline companies must build a strong relation with suppliers by setting long-term contracts with them. Such relations
will benefit the airlines companies, because this will keep them in the safe side even if there was any change in the
pricing strategy (ex. increasing costs) in the future as there is a contract between them.

14. Recommendations for Emirates?

Recommendations
The company should continue in expansion through providing new and unique destinations. The important geographic
location of Dubai which is close to Europe, Asia, Africa and Pacific is an advantage to Emirates Airlines. The one stop
flights are the firm specific advantage and I think that Emirates Airlines should focus more on it. The company also
should keep on investing on its R&D to offer more luxurious services and experience on board. The unique
entertainment system of Emirates Airlines is hard to imitate. The huge operational cost is major concern to the company;
and diversifying is one solution. Another is to start low cost division to gain more market share.
As the Airline industry is in the maturity stage, there is a strong competitionbetween airline firms. Each firm should use
offensive strategies besides doing analysis for internal and external factors that may affect its position. The research and
analysis for Emirates airlines address following recommendations:

 The operational cost is increasing due to huge investments of Emirates on aircrafts and services and increase in
fuel prices.
 Emirates should reduce the costs by making operational improvements, namely improving maintenance
processes, maintaining high aircraft utilization and making effective flight scheduling.
 It could also be reduced by investing technology in distribution channels to reduce labor costs. For instance , it
is recommended to install more self-service kiosks in airports of the destinations of Emirates airline since it has
already install ones in Dubai airport.
 In response to the threat of low cost airlines, Emirates shouldn't lower its fares after years of offering advanced
services, instead it has to offer new low cost brand as a subsidiary of Emirates group serving economic travelers
who are now customers of new low cost airlines, thus expanding the market share.
 Extending routes is recommended especially there is a growth in tourism UAE.
 There are main regions in the world that Emirates do not have routes in, namely Canada, It has to extend
destinations worldwide (especially attractive areas).
 Joining a global alliance enables increasing its destinations, offering more fare options for customers helping to
solve problems of new low cost airline .Investigating technology is recommended for improving customer
service and Emirates has to sign contract with an e-business company that offers airlines technology solutions.