EMIRATES AIRLINE CASE STUDY

Khalil Ullah
TO: ADNAN KHER  CMS: 121-17-0017
 Executive Summary
Emirates airline is the Government of Dubai's national carrier, United Arab Emirates. Emirate
Airline Company is Dubai 's largest air carrier; it has over 100 destinations. It was created by the
Government of Dubai. It is the largest airline in middle east. Emirates airlines are supposed to
offer elegance and convenience to customers while each aircraft follows advanced and global
quality requirements and you can feel like a good time king, flying in the air for a lifetime
experience. Emirates Airlines' highly promising characteristics which have made it a truly global
class airline are its calm and magnificent atmosphere.
Emirates has positioned itself as differentiated and low cost airline simultaneously so it’s an
integrated model. Company business strategy is expansion through strategic alliances, investing
in buying large aircraft and broadening to new destinations, building strong brand image,
recruiting professional multinational staff and developing sustainable business through corporate
social responsibility.

Major issues were the declining profits, challenging operating environment, unstable dollar
value, intense Competition, pricing pressures, security pressures, political environment
uncertainties.

From the SWOT analysis we can depict that the company's strength rests in its professional
management and its staff, who make effective business decisions. Yet market growth in the
sector is influenced by global economic and political conditions and trends in the aviation
industry. The company has rolled out a 5 to 10 operational growth to keep it competitive,
addressing the issues which have constrained its operations.

In general, based on the results of the EFE matrix, we can conclude that Emirates has a
Rating of 3.18, stating that the Emirates have good actions & responses to opportunities &
threats and then from the IFE matrix we conclude a score of 2.96, stating that emirates received
its performance advantage by taking advantage of their strengths to cover weak spots in
moderate ways.
The QSPM strategies assessed core business economies, market development and cargo
expansion, using the QSPM matrix, Emirates most line up strategy is recommended to be Market
Development in new emerging markets, with increased consumption and disposal revenue level
as it gets the highest end score of 2.9.

Emirates Airlines can take various strategies to maintain a cost advantage, and good market
position. All of them is knowing that supplier strategies go in two ways. Majority of corporations
focus on what should suppliers do with them, rather than what they can do for the manufacturer
to cut costs. Emirates will also aim to create a partnership that would maximize the overall cost
of production to the benefit of all parties. Planning for deviations and even big contingencies is
also essential for Emirates Airlines. At times emergencies may occur, particularly in complex
multiple supply chains. Consequently it is imperative that the Emirates prepare how to deal with
crises and even take part in them joint planning with a view to smooth management of disruptive
events
 1.
“Emirates airline mission is to deliver the highest standards of service quality to support
business in the air transportation industry and to achieve complete customer satisfaction
through innovation and refinement of service levels.”
2.
“to be the best airline on every route we fly from”
3. Pastel

PASTE L Define Reasons and Strategies

Political These factor validate the degree  Emirates Airlines is funded by the Dubai
to which government might effect the
factor economy. state.

 Political insecurity in the Middle East area

Indicators Government stability and
likely changes. Competition
 Industry is sensitive to wars and political
regulation, Government involvement
in trade unions and agreements, condition
Bilateral Aviation Agreements.
 Current political instability across middle-

east and Asia pacific region

 Unable to join top alliances

 The rules and policies established by the

Dubai government and other countries in

which they work have protected Emirates

Airline.
Economical These factors are causes of associate  The demand for air travel has dropped

factor grade economy’s performance that dramatically.

directly impacts operations  Advantaged by indirect governemtn

subsidies (no tax, airport charges &


discounted fuel
  Dubai is a hub for diversification (business

(no taxes), tourism)

 Income from oil reserves has declined

resulting in low demand

 In 2009, several major airlines will further

reduce domestic and international capacity

due to a failure of around 25%-30% over

the last quarter of 2009.

 The dropping oil price is often seen as a

positive development for airlines, but it

also reduces demand for luxury travel to

Dubai (and the Gulf region)

Social factor These factor look at the  Benefits are extracted from a number of

communal setting of the market, and consumer trends based on values,

measure the factors like cultural trend behaviors, employment, faith, and

and shifts, demographics, and lifestyles.

population analytics.  Stable incomers allow annual holidays, as a

 matter of fact.

 Indicators- Attitudes toward  On annual holidays, most people travel

product quality and customer service, with high demand.

Lifestyles, Average disposable income  Emirates has benefits in destinations where

level& Social classes the air travel pattern is culturally

strengthened.

 The crew should be well aware of different

 passengers ' cultural values.
Technologica These factors relate to innovation in  Positively and negatively affect the
technology which will have influence
l factor on the operations of the business. company.
Indicators are Communication system,
 Negative- due to advanced technology,
infrastructure, Access to newest
technology, Internet usability and social media becomes tool to
penetration & Basic infrastructure
level communication which reduces the travel

demand.

 Nonetheless, the e-booking system makes

booking simpler and saves a lot of costs

including through the tickets printed.

Environment Environmental: the determinants that  The major concerns of airlines are the

al factor affect survival, growth and operations changes in the environment.

of the business.  The rapid changes in weather and

Indicators- Attitudes toward “green” atmosphere harm the reputation of the

or ecological products, Climate system. So for the excellent service,

change & Laws regulating airlines need to follow policies.

environment pollution  Reduce carbon emission.

 The environmental factors may include

weather and climate problems, which may

inevitably affect the business of the airline.

Legal Factor Factors that explain how law affects  The policies and regulations make it

the business and consumer behavior. possible for the airline to be more proactive

in both local and international purchases.

 Indicators- Copyright, patents /
The activities will be organized in a legal
Intellectual property law,
environment that will provide travelers
  Consumer protection and e- with safe and secure transportation.

commerce, Employment law & Health  bilateral and multilateral trade agreement

and safety law. with USA (TIFA)

 Free trade agreement with different

countries

 Protectionist aviation policies in Canada

and germany

4.

Five Define Identify/ Reasons Level Actions Strategies

Forces Are
Threats of Is the  The existed barriers of Low Maintaining the
entry
New competitors  Emirates Airlines is services and

Entrants can enter Dubai's national carrier qualities at higher

that will negatively affect
and exit the entry of Dubai rivals level can make their
and provide many
from the benefits to Airlines.- position in the

market market more

 Emirates brand equity is
a very well-known reliable.
market player with very
high mark value.

 Aircraft suppliers can

easily expect switching
costs or sunken costs.
 Capital essentials as
Emirates Airlines is part
of the group of emirates,
so it's easy to gain
 capital. Capital raising
will be difficult for other
companies.
 Customer loyalty to
Trademarks established.
 Government policies are
very elastic given
Emirates Airlines'
national carriers and
monopoly in Dubai
Threat of Product or  In many countries trains Moderate Decreasing cost in
are not available as UAE,
substitute services accordingly such carries to High domestic flights and
have a weak threaten in
that can offering deals and
the airlines industry since
replace our they are not used for long offers can be
distance journeys by
product many countries effective
 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.

Bargainin Degree of  Supplier replacement High Maintaining sound

costs as it is very
g power of control that expensive to change the business
suppliers; since they are
suppliers supplier relationship with
only two (namely Boeing
can exert and Airbus.) suppliers will make
 Existence of substitute
on its buyer inputs as a lot of their position strong
substitutes are present for
suppliers as there are
over a
 hundred airlines currentl
y 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

Bargainin Power of  A lot of travelers (1.8 High Maintaining right

billion annually),
g power of buyers to  The switching costs are mix of quality and

customers affect their small, and there are prices will increase
several business options
service for passengers (ITAT). customers loyalty
 New e-ticketing
decisions technology gives and will increase
passengers the
switching cost of
opportunity to search
several airlines and the customers
comfort.
 Companies which offer
better or cheaper services
and costs. In fact, it
enables switching
operations between
various airline firms.
Hence, several
businesses have the air
miles program to draw
the interest of consumers
and also to retain them.

5.
 Opportunities:  Increase in Per capita income in UAE.
 Enormous investment strategy of Government for the development of
its airports in UAE.
 Increase in the population of the world and in UAE .
 High world tourism trend
 Can establish low-cost airline by emirates group
Threats:  Political instability affects demand
 Swiftly increasing cost of operations due to aviation security.
 Recent rise in fuel prices.
 New entrance of airlines with least cost.
Strength:  Single mega hub in dubai
 Arab Alliance membership, known as Arab Air Carriers Organisation
 The Arab world's first airline company to introduce e-booking system
 Self-check-in system at Emirates airport
 One of the world's leading airlines;
 High quality service.
 Official modern carrier Dubai:
 Workforce growth is great for business:
 Variety in Corporate and Multi-Origin Selection approaches:
 Strong strategic branding:
Weakness:  High costs compared to other carriers.
 Not to be part of any Foreign Alliances.
 High operating costs due to big technological investments
 High staff turnover due to low salaries

6.
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.

7.
Emirates has positioned itself as differentiated and low cost airline simultaneously so it’s an
integrated model. Company business strategy is expansion through strategic alliances, investing
in buying large aircraft and broadening to new destinations, building strong brand image,
recruiting professional multinational staff and developing sustainable business through corporate
social responsibility.

8. What are the Four Criteria of Sustainable Competitive Advantage which the company
uses its resources and capabilities to get competitive advantage and why is it so
successful in it?

 Valuable: Help the company deactivate 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 which the competitors don’t have strategic
equivalents.
Emirates retained the competitive edge because their facilities, such as sophisticated
technologies, outstanding customer support quality, qualified personnel, huge and
creative fleet, modern networks, extensive network and promotional campaign such
as sports sponsorship, remain as important as they were in the past, are uncommon
and somehow replaceable.

9. What are Company’s key Strategies?

 Emirates operated out of a single global mega- hub at Dubai Airport, a strategy it had
maintained since its origins.
 Emirates operated at Dubai Airport from a single global mega hub, a strategy that it had
maintained since its origins.
 Emirates Airline's current strategy is to expand through strategic alliances, invest in the
purchase and expansion of large aircraft to new destinations, build strong brand equity,
hire professional multinational employees and develop sustainable business through
corporate social responsibility.
 The Group's business strategy is to grow through strategic alliances, invest in the
purchase of large aircraft and extend it to new destinations, build strong brand equity,
hire professional foreign employees and establish sustainable business through corporate
social responsibility.
 Emirates Airlines adopts a common distinguishing strategy to achieve a competitive edge
over its rivals by delivering the highest quality goods to be the best business on the
market and to differentiate it from its rivals;
 It was also the first company in the Middle East to serve on e-ticketing.
 In addition, it achieved a competitive advantage by focussing on new market segments. It
provides training courses for other airline companies, such as Qatar Airways, for
 example, using the most modern aircraft, called the aircraft simulator, which is the only
company in the Middle East to serve the e-ticketing. It has achieved a strategic edge by
focussing on emerging market segments
• it offers training courses for other airline companies, such as Qatar Airways, using state-
of-the-art aircraft simulators as the only organization in the Middle East that operates these
facilities. The aim of such changes is to be the industry leader by raising regional and
international awareness of the brand name, which will increase demand and profit as much as
w

10. Who are Company’s competitors?

 Ethihad Airways
 Qatar Airways
 Fly Dubai
11. How does competitive rivalry, competitive behavior, and competitive dynamics effect
Company?
For Emirates Airlines and Etihad Airways, Qatar Airways and just a few others are called
major competitors. Competitive rivalry, competitive behavior and dynamics are affecting the
Emirates in the way that the Etihad currently runs around 116 destinations, and with 120
aircraft over 25,200 flights per week. Etihad Airways has lived through a milestone year.
Like Emirates, Etihad even sponsors soccer teams such as the Manchester City Football
Club; cricket teams and golfing teams. Another rival Qatar Airways operates the same
product and service options as Emirates does. Since its establishment in 1994, Qatar Airways
has developed 150 destinations internationally and its fleet has 180 air crafts with good
service. And both of these competitors impact the emirates. It faced no lack of competition as
it was expanding to new markets. Flagship carriers in both established (especially in Europe)
and emerging economies (Singapore Airlines, Thai Airways, or Cathay Pacific) have
extended beyond their regional bases to provide through non-stop service to key Asian ,
European, and American gateways. Other Gulf carriers and Turkish Airlines did enjoy the
same geographical advantages as Emirates, and had built operating models that offered a
similar range of high-end service offerings to varying degrees. While Emirates welcomed
competition on routes and on quality products, heavily copied its aviation innovations such as
in-flight bars.

12. What is the purpose of Company’s value chain? And identify the types of the value
chain activities of Company’s?

Purpose of Value Chain:

A value chain is a series of activities an organization performs to create value for its clients.
In other words, the way value chain activities are carried out determines costs and impacts
profits, so this tool can help you understand the value sources for your organization. Emirates
can see the value chain at each level, and they can then define their central competencie and
capabilitie which are the basis of competitive advantage for them.
Value Chain Analysis:
Porter (1985) specified a company's main value-making processes when providing any product
or service, such as inbound logistics, operations, outbound logistics , marketing, sales , and
service. His main concept of the value chain is that the company should add value in every action
or think about outsourcing it to another company that can either do it in the same way or can
probably 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:
Emirates Airline gains reasonable benefit during the company's inbound logistics period by
creating strong relationships with suppliers, advanced stock control systems and specialized
training. Emirates has professional mechanics, staff from the flight deck, cabin crew, airline
operations, workers, air space controllers, and so on, it has ample airlines and pilots. So it can
maintain proper flight time
Operations:
By using a range of airline forms Emirates Airline offers outstanding services. Dubai
International Airport has Emirates Terminal 3 for private use. Emirates Airline operates a varied
fleet of air buses and Boeing aircraft, and is one of the rare airlines to use an all-body fleet of
aircraft. Emirates Airline provides long haul flight services at a lower cost. Emirates Airline
plans to widen.
Out bound Logistics:
Emirates Airline is gathering its aircraft and other required equipment in the fastest time
possible. This provides emergency customer support. Emirates Airline retains oversight of the
company by monitoring, EDI, arbitration, auditing. It correctly chooses the passenger and keeps
the flight schedule in order.
Marketing and sales:
Emirates Airline's main business arrangement implements vertical integration. This happens
through production, marketing and technology Emirates Airline has diversified its investment
range within its operating routes into ranges of airport services as well as improvements to
infrastructure. It is growing its services day by day by fulfilling the needs and desires of the
customers. The Emirates brand name and image is handled by skilled professionals experienced
in brand management that is by the group.
Services:
There are 3 types of first class chairs; the full door suite, the 'Space cruiser' seat horizontal bed
(without doors) and the 'Sleeper' beds. Emirates Airline directly provides check-in services,
support desks, hotel and lounge facilities, as well as luggage and. In addition, the Emirates hotels
and resorts, the Emirates sky cargo, the Emirates pilot and staff training college, the Emirates
engineering center for repair and maintenance and training, Emirates catering to incorporate
business support are its special services.
These activities represent smooth operations to the success of the airline. After providing the
initial seatback commercial monitors to the world in 1992, Emirates became the pioneer airline
for providing a personal entertainment system on a commercial aircraft. All three classes on
Emirates airplane provide a personal in-flight entertainment (IFE) system. They also have self-
service cabins.
Human resource management:
The Corporation is one of the region's largest enterprises with currently over 62,000 employees.
The job process happens by site assignments from their own Emirates Aviation College, where
students research aviation industry subjects, likely designing them into potential Emirates
workers. Emirates insists that its workforce is its fundamental values. They also provide a reward
package to improve employees’ performance
Technology development:
Emirates has its own Research Center for Expertise to ensure the company gains the available
modern technology. Providing onboard use of mobile phones and Wi-Fi is one of its recent
achievements in this respect.
Procurement:

From inside and outside the emirates group, Emirates airlines obtains its properties from
multiple origins. The airlines fleet is obtained either from Airbus or from Boeing. 'Emirates
Engineering' provides the technical support required; while Emirates Flight Catering
provides the in-flight catering services

13. Develop a Competitive Profile Matrix (CPM)

Total Weight 1.00. Rating 1to 4

Company Qatar Airways Etihad

 Critical Success Weigh Ratin Weighte Ratin Weighted Ratin Weighte
Factors t g d Score g Score g d Score
MArketing 0.25 3 0.75 3 0.75 4 1
Expansion 0.20 4 0.80 3 0.60 2 0.4
Financial position 0.15 4 0.60 2 0.30 3 0.45
Pricing 0.15 4 0.60 3 0.45 3 0.45
Loyalty of Customers 0.10 3 0.30 2 0.20 3 0.30
Quality 0.10 3 0.30 2 0.20 4 0.40
Share in market 0.05 3 0.15 1 0.05 3 0.15
Total 1 3.5 2.55 3.15

15. Develop External Factor Evaluation (EFE) Matrix

Total Weight 1.00. Rating 1to 4

Key External Factors Weight Rating Weighted

Score

Opportunities
1. Distinct diversification 0.14 4 0.56

2. Innovation, research and development 0.12 4 0.48

3. Support core business economies 0.12 4 0.48

4. product development 0.10 4 0.40

5. Retrieval of global economy 0.10 3 0.30

Threats

1. Local rivalry 0.06 2 0.12

2. Rivalry from organized companies 0.10 2 0.20

 3. Rapid increase in raw material cost 0.08 1 0.08

4. Legal, political, & regulatory factors of 0.08 2 0.16

host country
5. Imitation of products 0.10 4 0.40

16. Develop an Internal Factor Evaluation (IFE) Matrix

Key Internal Factors Weight Rating Weighted

Score
Strengths
1. Ease of services 0.14 4 0.56

2. Internet accessibility 0.14 4 0.56

3. Asian markets 0.12 3 0.36

4. Recovery of global economy 0.10 3 0.30

5. Free trade 0.08 2 0.16
Weaknesses
1. Local community critics 0.12 3 0.36

2. Technology making product 0.06 2 0.12

3. Shifts in customer preferences 0.10 3 0.30
4. Regulation of respective countries 0.06 2 0.12
5. No union 0.08 2 0.16
TOTAL 1.00 3.00

Total Weight 1.00. Rating 1to 4

17. QSPM Matrix

Strategic Alternatives

Be more Global Cargo expansion

Key Internal Factors Weight

Oppurtunities Rank (1-4) Total Rank (1-4) Total

Weighta Weight
Weight ge age

1. Backed Financialy by dubai govt 0.3 4 1.2 2 0.6

2. New markets 0.1 3 0.03 4 0.4

3. Alignment of human capital 0.15 3 0.45 2 0.3

4. Economies of scale and operations 0.15 3 0.45 3 0.45

Threats

1. Risky and high acquisition 0.1 3 0.03 3 0.3

2. Internal Alignment 0.15 2 0.3 2 0.3

3. More focus on luxury travels 0.1 3 0.03 2 0.1

4. Unhealthy economic conditions in middle east 0.05 3 0.15 3 0.15

SUBTOTAL 1.00 2.64 2.73

Strategic Alternatives

Be more Global Cargo Expansion

Key Internal Factors Weight

Strengths Rank (1-4) Total Rank (1-4) Total

Weighta Weight
Weight ge age

5. Largest airline in middle east 0.3 4 1.2 3 0.9

6. Excellent service 0.1 2 0.2 3 0.3

7. High quality standard 0.15 2 0.3 2 0.3

8. Early and rapid check in services 0.1 2 0.2 2 0.1

Weaknesses

5. R&D 0.15 4 0.45 4 0.6

6. Reliance on domestic sales 0.15 2 0.3 2 0.3

7. Too much focus on diversification 0.05 3 0.15 2 0.1

8. Very few flights to underdevelop countries 0.05 2 0.1 2 0.1

SUBTOTAL 1.00 2.9 2.7