10/6/2015

EMIRATESPERFORM AN ANALYSIS ON THE BUSINESS OF EMIRATES AIRLINE GROUP

AIPORT

Contents

1.Introduction ...........................................................................................................................2

2.Analysis the business mission and core competencies of Emirates Airline ......................2

2.1.Mission .............................................................................................................................2

2.2.Strategy ............................................................................................................................2

2.3.Company behavior ...........................................................................................................3

2.4.Values/ Culture ................................................................................................................3

3.Porter's Five Forces ...............................................................................................................4

3.1. Threats of New Entrants .................................................................................................5

3.2. Bargaining Power of Supplier's .....................................................................................5

3.3. Bargaining Power of Buyers ...........................................................................................5

3.4. Threat of a Substitute Products or Services ...................................................................6

3.5. Rivalry amongst existing firms .......................................................................................6

4.The effectiveness of using the BCG Growth Share Matrix ...............................................7

5.Stakeholders of Emirates Airline .........................................................................................9

Reference List ...............................................................................................................................11

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1.Introduction

Business strategy plays an important role in the formation and development of a business. It directly impacts operational efficiency and supplies chain products of the community. In the context of fierce competition, the strategic business analysis becomes extremely important and necessary to adjust the direction for Emirates Airlines. Emirates Airlines is an aviation enterprise with many customers trust to use the service, it also achieved great brand value and are in the list of prestigious airlines in the world. The activities of Emirates Airlines analysis helped businesses have reasons to look clear and substantive performance, from which the leaders will provide specific strategies to develop the brand further away in depth and enhance product value.

2.Analysis the business mission and core competencies of Emirates Airline

2.1. Mission

Emirates Airline's mission is to maintain and stabilize the brand with customers. The company also focuses maintain stable growth in the coming years. Emirates Airline wishes to build an aviation market beyond the national framework and lead the trend in the world. The leaders may devise new ideas in the future to bring the airline to become class and achieve higher revenue.

2.2. Strategy

With a mission to become a national airline of the United Arab Emirates, Emirates Airline provides services relating to the carriage of passenger flights scheduled with regional specific operations in Europe, North America, Middle East, Africa, India and Asia Pacific. These services are judged to be a modern, strong investment and commitment to customer service.

Core competences can be known as the skills and abilities by which resources are deployed through an organisations activities and processes such as to achieve competitive advantage in ways that others cannot imitate or obtain. A company is considered core competencies if and only if it meets three conditions, including matching the market, creating benefits for clients and existing a single. Core competencies such as technology, management, system, will bring its special character and become importantly contribution to creating competitive advantage. In fact, Emirates Airline has built VANET system allows modern voice recognition, which is a cost effective solution with the ability to automatically check the English proficiency of pilots and staff. In addition, Emirates Airline provides training services EAC brings convenience to keep the duration of the ICAO standards.

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2.3. Company behavior

For many years, Emirates Airline has developed into one of the premium long-haul airline in the world. Its fleet is also the world's largest Airbus A380 and Boeing 777 wide body. Emirates's plane is present in 140 locations around the world. Customers feel satisfied and appreciate outstanding entertainment system with TV and movies on demand. The cabin served good food, friendly staff, systems and services quickly and comfortably. These have helped airlines become one of the world's most prestigious companies.

Besides, Emirates Airline has the strategic positioning plans through product positioning and quality positioning. In terms of quality positioning, Emirates Airline has implemented a marketing strategy through two applications to help improve customer satisfaction. The online check at the airport to facilitate and save time for passengers. Airport security is enhanced tightened to ensure absolute safety for everyone. In addition, the dedicated service of aviation agents at airport gates will bring new experience for passengers. In terms of product positioning, Emirates Airline has conducted the service five-star standards towards shaping the customer's personal style. For example, Emirates Airline has attached the name of the customer with the sitting position so that customers can be served perfectly.

2.4. Values/ Culture

Employees in organizations are trying to implement the tasks assigned. The staff are trained in a basically high and responsible work. They are satisfied with the tasks and monthly salary. The staff care and incentives for employees to be done regularly every month, which brings the loyalty of workers and enterprises. Moreover, Emirates Airline gives customers more choices with the special flight. Culture creates value for airlines is the comfort, safety and security. Customers can choose the type of aircraft on demand, such as helicopters, jets with the leading standards.

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Emirates Airline Value Chain

3.Porter's Five Forces

Figure 1: Porters Five Forces (Magretta, 2011)

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3.1. Threats of New Entrants

Threats like these invisible opponents of the enterprise, which hinders the operation of the airline (Vitolo, 2013). The first threat is the tough competition of the new airline, which attracts about every aspect for customers. The new airlines, especially the low-cost carrier, will often have much original preference for multiple customers and customer care professionals. Modern service system will attract customers, because customers tend to be interested in the new products and incentives. They will only have to pay a lower amount than the traditional aircraft, while they are enjoying the new service. This causes challenges for Emirates Airlines. Second, Emirates Airline has always required a large amount of capital to invest in new projects and invest in other industries to increase profitability. Securities, real estate or consumer business can be invested thoroughly in order to increase revenue. However, Emirates Airline may face uncertainties about the domestic economic situation, which tend to change in recent years. The lack of thorough calculations can cause the failure of investment in other industries, the impact on net profit of the airline. Finally, the company will face customer loyalty for the brand. Issues of customer care services, trip delay may cause the decline of corporate reputation. Besides, customer concerns about the plane crash can also cause bad threaten the operation of the airline. Emirates Airline's share accounted for 40% aviation, which suggests strong brand resources remain sufficient to maximize of Emirates Airline. Therefore, the threat of new entrants for Emirates Airline is medium level.

3.2. Bargaining Power of Supplier's

The product supplier is always important partners and trust of the business. These products are offered better will contribute revenue growth for airlines and vice versa. However, suppliers can easily change market trends and break out of the business requirement for goods supplied. This depends on the agreement among stakeholders on issues such as vision, objectives and business expenses (Magretta, 2011). Specifically, Emirates Airline has cooperated with the US Federal Aviation Administration to study VATE software, which is designed to assess the level of English used by pilots. This connection creates highly effective in improving the quality and service in the airline industry.

3.3. Bargaining Power of Buyers

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Emirates Airline has always a number of high customer loyalty thanks to good service for many years. In the current competitive trend, which may be changed by the buyer can continuously change the trend of service options, compare prices and buy operations airfares thanks to thrive strong of diverse media. However, there is a great opportunity for Emirates Airline by the number of customers around the world using the services of the airline industry is growing rapidly, which stimulate the research and development of products to meet aviation better customer needs.

3.4. Threat of a Substitute Products or Services

The other types of vehicles such as cars, trains, trams and buses are always competitors with the planes. The strength of these vehicles include the convenience, low cost, diverse selection, which will affect a certain level for the aviation industry. Service users will consider vehicles with the ability to meet their needs most effectively, in which time is an important factor. The aviation industry has the advantage of saving time and cost for customers, which is a strong point to attract customers (Porter, 1998). However, the threat of the different types of services with Emirates Airline is low. This brand was certified as one of six airlines belonging to the five-star list worldwide. This assessment ensures for Emirates Airline about the new progress in the future.

3.5. Rivalry amongst existing firms

The competition among enterprises in the aviation sector is enormous. More the number of airlines is established, more modern aircraft are designed to attract customers. Each business will study the specific strategies to promote brand and earning higher net income. The listing on the stock market as well as increasing the prestige of every enterprise. In fact, the biggest competitor of Emirates Airline includes Singapore Airlines, British Airlines, Etihad Airlines, Qantas Airline and Lufthansa Airline. Some opponents of this among the top airline brands in the world. However, the opportunities for development of Emirates Airline is still high. Emirates Airline succeeded in shaping corporate brand focusing on developing the service and quality. The modern restaurant and resorts with international standards combined with the airline to expand the market.

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4.The effectiveness of using the BCG Growth Share Matrix

Investment diversification is inevitable in the process of developing enterprise scale. However, the issue of diversification with creating sustainable competitive value is not simply in the context of the current competition. According to (Thomas del Marmol, 2015), large corporations are often applied in the form of investment set BCG Matrix. BCG Matrix focused on simplification strategy through two factors, including the growth rates and market share. It assumes that in order to get a high growth rate, it must use more resources. It is not only applies to products that can be used to analyze the division or subsidiary of a company, but it also helps redistribute resources within the company. This method of operation divided into 4 groups, including: dogs, stars, question marks and cash cows (Martin Reeves, 2015).

Dogs: The operating losses and it is less likely to profitability in the business.

Question marks: The activities potentially lucrative but it hides many risks.

Stars: Activities have lucrative opportunities and it needs capital investment.

Cash cows: The activities are profitable and stable.

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Figure 2: BCG Growth Share Matrix (T. Marmol, 2015)

Emirates Airlines used this theory to build operating models. They used the profits of cash cows group to include in the group of stars and question marks group to develop the company. Emirates Airlines is aiming for 70% market share in the airline industry. So, the brand's strategy is focused on developing a comprehensive senior client group, which serves people from the upper class. The potential market is also collaborating with Emirates Airlines to form supply chain best service to customers. Besides developing strengths in aviation, Emirates Airlines also took money from the industry to invest in other sectors such as real estate, securities, tourism. With this method, Emirates Airlines has developed corporate business of scale with strong multi-disciplinary firms. Since then, Emirates Airlines has the ability to attract many investors to buy shares and shareholders called for more joint participation capital.

The effectiveness of this strategy can be seen through the growth of the Emirates Airlines. This company has the advantage of increasing production experience by increasing market share. It is the reason why it has the ability to achieve cost advantages in the business, so that rivals are8

unlikely to be achieved. Emirates Airlines has focused investments to rapidly gain market share because this investment will be offset in the future. This strategy became the new trend for many businesses, which focus on building market to gain market share.

5.Stakeholders of Emirates Airline

Figure 3: Stakeholders (McPhail, 2014)

The stakeholders of Emirates Airline include internal stakeholders and external stakeholders (David Chandler, 2013). The internal stakeholders, such as employees, managers, will have a direct impact on the productivity and efficiency of businesses. These factors will direct the operation of the company, adjust and balance the business strategy accordingly. Specifically, the employees of Emirates Airline will assume various positions in business; contribute directly to the operation of a system under a detailed plan. They are the essential factors, which need to remain in a business. Meanwhile, the manager will act as orientation; define the core objective to build businesses. Besides, they are the foundation for developing corporate culture long, motivate and encourage employees to work more efficiently.

The external stakeholders include the suppliers, society, the government, the creditors, the shareholders and customers (A. L. Friedman, 2006).

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Suppliers: Suppliers contribute to the activities of Emirates Airline by providing the equipment and supplies in a cycle, which was signed between the company and suppliers. The equipment provided may change in the design, quantity, delivery method, which depends on the strategy of the business and the quality of products from the suppliers. These vendors often have strong ability to change the opinion of customers, provide high-quality merchandise and international standards. The long-term cooperation between providers and enterprises can bring a long-term competitive advantage compared to other competitors.

Society: Society creates resources to stimulate the development of Emirates Airline. For aviation business, society is always a positive effect and creates favorable conditions in all operating conditions and trafficking. The support from the society and create preconditions for building enterprise-scale appropriately, ensure product supply processes in the value chain of the market overall.

Government: Government cooperates with Emirates Airline in the issuance of legal documents suitable for the operation of the business. The legislation aims to benefit businesses, contributing to regulate the behavior of enterprises under democratic and inclusive.

Creditors: The creditor is the source of great help for Emirates Airline during trading. Funds for investment in air services are very large, so businesses need the support of funds from the banks, the creditors. Capital investment may be borrowed in several stages, and it will be returned in the condition of the business is profitable and effective investment.

Shareholders: The shareholders will contribute capital to Emirates Airline under certain percentage share, which is determined by the key leaders. The shareholders will have a vested interest in a profit, and they can contribute ideas for the strategy of the business. The support of the shareholders is an effective source of support for solidarity building strong brands (McPhail, 2014).

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Customers: The customer is the deciding factor the existence and development of Emirates Airline. Customer loyalty has become a driving force and essential to guide business. Enterprises rely on the customer to make a profit. Enterprises also rely on the customer to position the brand value of the fierce competition among airlines today.

6.Conclusion

In conclusion, the context of the business strategy of Emirates Airline was analyzed based on a specific model number. This analysis was to clarify the operations of the company, which became important in the context of competition among airlines in the world. In near future, Emirates Airline needs to innovate and creative efforts to be successful based on the resources available, and this company should focus on the weaknesses in strategies to overcome market challenges. The breakthrough and innovation will contribute to bring success to the company, form a brand of trust for customers around the world.

Reference List

A. L. Friedman, S. M. (2006). Stakeholders: Theory and Practice. Amazon Digital Services, Inc.

David Chandler, W. B. (2013). Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation. SAGE Publications, Inc.

Magretta, J. (2011). Understanding Michael Porter: The Essential Guide to Competition and Strategy. Harvard Business Review Press.

Martin Reeves, K. H. (2015). Your Strategy Needs a Strategy: How to Choose and Execute the Right Approach. Harvard Business Review Press.

McPhail, T. L. (2014). Global Communication: Theories, Stakeholders and Trends. Wiley-Blackwell.

Porter, M. E. (1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press.

Thomas del Marmol, 5. m. (2015). BCG Growth-Share Matrix: The key to portfolio management

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Vitolo, D. (2013). Porter's Five Force Model's International Strategic Effectiveness. David

Vitolo.

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