Arab Open University

Tutor Marked Assignment (TMA)

Fall 2020-2021
Academic Year 2020 – 2021 Semester: Fall
Branch: Program: Business
Course Title: Strategic Management: Creating Competitive
Course Code: BUS310
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Questions Q1 Q2 Q3 Total
35 35 30 100/100
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100/
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referencing Deductions
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deducted
Student’s Total Mark 100/

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 Bus310

Kuwait Airways have affected a lot through 2020 because of Corona pandemic. The
inflection of corona pandemic is really big and strong in which Covid-19 has caused lots of
influences through 2020 and the main influence of this catastrophe is the suspension of flights
from and to the country of Kuwait Airways for 5 months and this caused huge loss in its balance
in which it lost nearly 9.9 million dinars through 2020. (Jens, 2018)
Political –legal: corona catastrophe has many influences also on the political sides of the
countries in which lots of nations had to close its airspace and this really caused huge damages to
the Kuwaiti Airlines because of the protective procedures which are followed by the nation. In
fact, the Kuwaiti state comes at the primacy of these nations in which it is regarded one of the
first nations which stopped its flights and closed its airspace and so the Kuwaiti Airlines have
.been influenced strongly and witness a squeeze case
. Socio- cultural and demographic: in Fact, there are crucial alterations which have happened in
the preferences of the clients in which some clients consider that air flights more than
merchandise because there is a class of clients who are interested in the expense of the flights
and its time more than any other sides of the flights. On the contrary side, there are some
distinctive travelers who are only interested on their comfort and the high quality of the flight. In
fact, because of the increase of safety and protective procedures because of the great worry of
Corona catastrophe, there is a great increase in protocols of health besides delaying many flights
or even stopping some flights. Moreover, the corporation concentrated on the class of travelers
who were abroad during the period of Corona catastrophe in which it assigned some flights for
them and it reinforced the transit flights numbers for sustaining the passengers who are coming
from the restricted nations to the Kuwaiti state and so all these factors have its great influence on
the consciousness of the clients of value and the corporation profitability. Furthermore, the
travelers are not longer interested in of tourism and travel because of worry of corona plague,
and this really has affected negatively on the revenues of the corporation. The decrease of
individual income leads to a decrease in requests for flights.
Economical: there is a growth in the economical positions of the country in 2019 because of the
increase of oil rates. Consequently, there is an increase in net income of Kuwaiti Airlines in 2019
by nearly 124.1% up to 14.9 million dinars. Because of Corona plague, there is a prohibition for
flights for nearly 5 months and so the flight corporations have faced big loses. Globally: with
globalization, there are no borders and this has its positive influence on airlines and its recovery.
In fact, there are many sponsors for the Kuwaiti Airlines and they have a significant influence
inside the whole Middle East, especially the Gulf region. In fact, most clients are searching for
inexpensive flights and so the Kuwaiti Airlines are considered the first choice for most o clients
because it presents suitable and unparalleled prices for its clients which suit different classes of
clients. Because of the spread of Corona virus, there is a decrease in the commercial flights in
which the travelers feel worry and fear of moving among the nations. Technologically:
technological progress are really so responsive to the airline corporations for example; oil
efficiency techniques. For illustration, the expenses of fuel of A320neo has decreased because of
it new design. As well, constructing Terminal T construction leads to raise the capability of
carrying and successively raise in the revenues of the corporation. We have to concentrate on the
industrial milieu of the Airlines Corporations, so we needs to concentrate on the Five Forces of
Porter of competition sample.
Threat of New Entrants; it is not easy for the new corporations to face the challenges of the
airline milieu and complete in this field easily due to the several dangers inside the marketplace
besides the huge financial requirements, for illustration, A319neo price is nearly U$$101.5
million. Owing to covid-19, it is not possible for the corporations share in the different
marketplaces owing to the prohibition of flight corporations and so there is a great risk confronts
those corporations. The bargaining power of suppliers; in the condition of bargaining power of
manufacturing aircrafts is big as there are two types of aircrafts; Boeing and Airbus and so can
dominate on the flights prices. Because of corona virus, lots of deals have been inoperative, for
example tardiness delivering some aircrafts to the Kuwaiti Airlines. Bargaining power of the
buyers, due to the big number of travelers every year in which they reach up to 1.8 billion, these
results to raise in the power of buyers. As well, switching costs are not high because the clients
utilize the websites of the corporation to reserve the suitable offers for them. As a result of
Corona virus, there is retract in the numbers of travelers and so the corporation has become be
able to dominate on its travelers. (Duclos, 2015)
Threat of a Substitute Service or Product; there is not any alternative means of transmission
instead of flights in the global travel, whereas in the local travel, they may use different means of
transportation. Because of corona, airplanes have been used in the processes of cargo and so they
can use ships in this case instead of using airplanes. Rivalry among Existing Firms, the domain
of air transport includes lots of huge rivals for example; the Kuwait Aircrafts, Nile Air, Air
Arabia. In fact, after getting rid of Corona virus, there will be a great rivalry among the
corporations for compensating their big damage by presenting lots of offers with wonderful
prices for its clients. Kuwaiti Airlines should demand the polity to ease the procedures of
travelling because of the existence of corona virus by restoration the normal flights to the nations
which are prohibiting from going to the Kuwaiti state and this is by making a quarantine for
fourteen days for the travelers inside the Kuwaiti hotels. So, the Kuwaiti Airlines should
decrease its costs and increase its destination for compensating the flights from the prohibiting
states.

Q2
Primary value inbound logistics: in fact, there are several advantages presented by the Kuwaiti
Airlines by the services of inbound logistics in which it evolves the process of communication
with creative suppliers. As well, there are training programs for the workers so as to reinforce
their performance and this affects positively on the progress of the business and the profitability
of the corporation. Kuwaiti Airlines build upon recruiting skillful employees who own big
experience in flight domain. In fact, there are lots of experienced and clever pilots inside Kuwaiti
Airlines who bear a big standard of responsibility in which they do all their best to avoid
delaying flight appointments. Because of corona, the corporation had to cancel training programs
of the workers for decreasing the costs.
Outbound logistics: Kuwaiti Airlines do not take long time to gather, planes, captains or any
other items. In contingency case, Kuwaiti Airlines present wonderful client service. Kuwaiti
Airlines own a big ability to do lots of tasks and processes for example; making statements and
reconcilement besides auditing the electronic information. Kuwaiti Airlines build upon choosing
its clients besides interesting to the timetable of the flights and really the corporation presents an
effective timetable. Owing to Corona Virus, the corporation has confronted a trouble in vending
tickets through its websites due to the asymmetry of time and so it had recourse to its offices.
(Duclos, 2015)
Operations: Kuwaiti Airlines present wonderful services in which it builds upon strong aircrafts
such as A320neo and Airbus Aircraft A320 and these types of airplanes decrease the costs on the
corporation and it presents long-haul flights into many destinations. Because of Corona Virus,
the corporation had to make flights without any destination for maintain its planes from disrupt
and this increased the expenses on the corporation.
Marketing and sales: the corporation presents high services to its clients and this really costs it
huge numbers of money for satisfying them and it really is interested in its infrastructure. It
builds upon unparalleled marketing strategy for catching big numbers of clients from everywhere
in the world. Also, the administration chooses its employees carefully and trained them for being
able to do all the tasks successfully and accomplish the targets of the corporation. It makes huge
and attractive advertising campaigns in many languages. Because of Corona Virus, the
corporation has to decrease its advertising campaigns for compensating its losses as a result of
delaying its flights during this plague. Services: Kuwaiti Airlines introduces many services to its
clients in which it presents different sorts of food and drinks during its flights. Owing to the
protective procedures, the corporation can not present all of its services as previously.
Support value the human resources management in the Kuwaiti Airlines is powerful as it builds
upon difficult stipulations for hiring its employees. Also, the administration offers many training
programs for reinforcing the skills of the employees and making them more qualified and
learning them many languages. Actually, the administration had to cancel many training
programs this year because of Corona Virus besides decreasing the staff. Technology
Development: it builds upon the modernist designing and operations for offering the best
services for satisfying the clients. It builds upon the high technological planes such as Airbus
A320neo in which this type of planes decreases the costs and saves fuel. Procurement: because
of Corona Virus, the suppliers of A329 Airbus had to cancel its deals with the Kuwaiti Airlines.
General administration: the administration follows the strategy of Top-down in taking decisions.
The administration of the corporation owns perfect relationship with the Kuwaiti polity and this
relation sustains it strongly in many sides. In fact, there is a struggle between the Kuwaiti
corporation and the polity because the corporation wants to restoration some flights for
recovering its big loss because of Corona Virus. According to the resource-based vision of the
Kuwaiti Airlines, there are 3 types of resources which reinforce the competitive merit of the
corporation and back its position; intangible resources, tangible resources and the organizational
abilities. For the tangible resources which concern the Kuwaiti Airlines, the capitalize of the
corporation was huge until the spread of Corona in 2020 as this virus has made a bad influence
on the profits of the corporation The corporation has continual technological evolvements as in
the new design of A320neo. According to the intangible resources and the organizational
abilities, the relations with the Kuwaiti polity is powerful because the polity is keen on backing
the corporation for reinforcing the economical positions of the country. Also, the corporation
presents high standard of service for its clients. The strengths sides of the Kuwaiti Airlines are
represented in its inexpensive flights comparing to its high services. Organizational capabilities;
the corporation has a perfect organizational capabilities. (Michael, 1997)
Q3
The Kuwaiti Airlines builds upon proficient Business-Level Strategy which includes two sides;
cost leadership and differentiation. The policy differentiation is regarded the best advantage
which distinguish the Kuwaiti Airlines. So, the corporation has managed in achieving its
differentiation policy effectively by placing the corporation’s structure and its policy. Innovation
is regarded its main policy which manage the corporation to accomplish its differentiation by its
Terminal 5 travelers in which it manages the construction to reinforce the passengers’ expertise
and this makes the clients feel that they are distinguished because this building decreases the
overcrowding of the clients inside the fundamental building and save time for the clients. On the
contrary side, the corporation will cost extra big costs because of this building, but it will
compensate it on the long-term. (Hamel, 1992)
The Kuwaiti Airlines own Airbus A320neo and really this type of planes has several advantages
which make the corporation differentiate on the other Airlines corporations as this aircraft
sustains the corporation to accomplish its strategies in which it manages the corporation to
spread its destinations with few costs as it saves fuel. In spite of these merits, it does not take big
cargo in which it takes 150:180 travelers comparing to Boeing’s airlines which take 300
travelers. Cost leadership is regarded one of the perfect strategies of the Kuwaiti Airlines as it is
regarded an inexpensive corporation in the sphere of flights in the Middle East. For illustration,
the Kuwaiti Airlines used A320neo as its many advantages, however, there are some clients do
not prefer the Kuwaiti Airlines and deal with the other airlines corporations.
For maintaining the competitive merit of the corporation in this period of plague of Corona virus,
the administration should seek to reinforce its cost leadership policy for decreasing the costs for
compensating its pervious loses. So, the corporation has to decrease the expenses of employees
by decreasing their numbers besides decreasing the executive administration costs. The outline
of the civil flight management must be adopted for presenting it t the polity for opening the
airspace of the prohibiting states with the adherence to the protective procedures. The
corporation must concentrate on the class of clients who are still in the restricted states and
working hard to solve their trouble quickly by decreasing the prices of their tickets. As well, the
administration must concentrate on the air load for decreasing the losses. (Barney, 1991)
References:
1.  Flottau, Jens (15 October 2018). "Kuwait Airways orders eight widebody Airbus A330-
800s". Air Transport World. Archived from the original on 29 October 2018.
2.  Duclos, François (17 July 2015). "Kuwait Airways de retour à Munich, Vienne et
Istanbul". Air Journal. Archived from the original on 17 July 2015. 
3.  Stephen, Hamilton; Richards, Timothy (2009). "Product Differentiation, Store
Differentiation, and Assortment Depth". Management Science. 55 (8): 1368–1376.
4.  Michael J. Stahl; David W. Grigsby (1997). Strategic Management. Blackwell
Publishing. ISBN 978-1-55786-650-9.
5. Hamel, G.; Prahalad, C. (1992). "How capabilities differ from core competences: The
case of Honda". Harvard Business . ISBN: 263-759-537
6.  Barney, J. (1991) "Firm Resources and Sustainable Competitive Advantage", Journal of
Management . ISBN: 395-627-493