Emirates (Business Environment)

Hello,

I’m in a group doing a report and as a group leader, I don’t trust no one to bring my grades down. I would be happy if you could go through the report and add or deduct anything that is needed.

For more information about the report. go through the report guided.

MGT2311-6 Dubai Group Assignment Brief

Submission: 16h00 Saturday 12^th December 2020

 

 

report (40% of final grade)

In groups of no more than six and no less than four, prepare an analytical group report analysing to an appropriate depth, the key factors and issues in the business environment of your assigned company including an evaluation of the rate at which the key factors are changing.

 

There are two (main) parts to the assignment:

• Mission, objectives and history of your assigned company [30% weighting]

Provide a detailed overview of the company: i.e. Identify the size and type of company, the sector(s) in which it operates, whether it competes on a narrow or broad basis, and if any the growth strategy. Evaluate the company mission and how the company claims to achieve its objectives through its activities and its relationships.

 

2)      Market conditions and competitive environment of your assigned company [60% weighting]

Analyse the external business environment of your company using an appropriate analytical tool i.e. PESTEL analysis.

 

Analyse the industry environment in which your company operates using Porter’s Five Forces model.  Ensure you identify and briefly evaluate each of the forces that affect the industry environment in which your company operates.

 

Analyse the internationalisation strategy (Yips model) or the growth strategy (Ansoff matrix) of your company.

 

3)      Overall presentation [10% weighting]

Including brief introduction, citation and referencing, grammar and punctuation, use of appropriate charts, tables and diagrams, brief conclusion.

 

 

 

The report should be based on publicly available information.  Make use of learning resources listed in the Module Handbook and ensure that you do not rely solely on the company websites.  The more high quality independent sources used the better the scholarship and quality of your work is likely to be.

 

Make sure the work you submit is your own.  Quotations, factual information and opinions that are not your own require in-text citations and listing in the Table of References.  Provide all appropriate references in a conventional academic style.

Pestle – Akeel and Aqsa – 1000

 

Ansoff – Aniket – 800

 

Porters 5 – Habiba & Amina – 800

 

Mission & objectives & History – Daud – 400

 

 

3000 words 10%+-

 

 

 

 

Emirates

 

Mission and objectives.

Emirates Airlines is currently the leading carrier in the gulf region, operating in several nations across the world. Emirates’ main mission is to become the largest airline worldwide and to provide the best in flight experience in the world.

The setting of company objectives assists the company in creating effective strategic plans and allowing it to attain its goals. The goal of Emirates Airlines is to achieve maximum customer loyalty through innovative technological advancement and enhanced service quality. The main priority of this airline is consistency and efficiency, as these steps are strongly considered in order to improve its aviation business.

Emirates airline is a key part of the growth and development plan of Dubai. The goal is to prepare the UAE for the post-oil period by establishing it firmly as the major tourism destination, a hub for financial, IT and technical services, a place for corporate headquarters as well as a regional transport, logistics and distribution center. This is where Emirates plays a significant role in the formulation of its marketing strategy which involves Dubai as a primary element in its marketing plan.

Emirates airlines’ objective is to be established and recognized as the world’s most envied airline service provider by delivering the highest level of service in all areas of the business.

 

History

On October 1984, the UAE Minister of defense and member of Dubai’s royal family, Sheikh Mohammed Bin Rashid Al-Maktoum formed a team of experts including Maurice Flanagan the former managing director of dnata, Tim Clark and Sheikh Ahmed Bin Said Al Maktoum, who came up with an idea to set up an airline business known as the Emirates airlines.

The expert group’s proposal for the establishment of an airline based in Dubai was accepted under two terms. The new airline must meet the highest quality requirements and there would be no further additional government financial investment other than the agreed start-up capital of USD 10 million.

The first Emirates flight operated with a route to Karachi, Pakistan using an A300, which was leased from the Pakistan International Airlines. Emirates began to fly to two European destinations during the year 1987. The first flight was to Gatwick airport and Frankfurt, whereby the entire fleet operated. As the company developed and established itself in the market it purchased some of the largest and most expensive aircrafts ever during the year 2001, 2003 and 2005.

 

 

 

 

 

Bargaining Power of Buyers:

The buyers within the airline industry cannot exert any significant control over the costs charged for airfare. they need some influence on the costs, by choosing other airlines, charging lower airfare, however the demand quality may be a central feature for purchasers of Emirates. An impact of this lack of bargaining power is that the airline companies like Emirates can increase their prices because of the seasonal influences, and therefore the customers continue to avail the services despite the price hike, and they are willing to pay the next price than other no-frills airlines. supported this, it will be concluded that the buyers of Emirates have low bargaining power.

 

Bargaining Power of Suppliers:

The bargaining power of suppliers within the airline industry is set by the quantity of suppliers of planes and demand of the airlines for these carriers. There only 2 leading companies that are manufacturing the airplanes for civil transport usage, namely Boeing and Airbus. The low number of suppliers available in the aviation industry leaves enough opportunity for the suppliers to point out limited flexibility in the price structure, while maintaining high bargaining power. As a result, they’re able to have a better bargaining power when coping with airlines like Emirates. The supplier gets the good thing about gaining agreement with this leading global airline. The management has developed close ties with the suppliers, collaborating for the aim of developing airplane designs that are equipped with the needed technical mechanisms to boost customer experience.

 

Industry Rivalry:

The global airline industry features a high degree of competitive rivalry, putting pressure on the corporate to develop a technique to keep up financial supremacy despite the extreme rivalry. in line with the management, target enhancing the service quality and updating the aircrafts and infrastructure helps in maintaining a grip within the industry. although Emirates has the advantage of being the national airline of Dubai, its competitors have a world presence, necessitating the requirement to strive for maintaining customer loyalty through brand loyalty programs. a number of the competitors are Qatar Airways, Etihad, British Airways and Air France which have a major market share, making quality as a key component of differentiation for Emirates.

 

Political

Emirates airline is a government owned airline from the UAE, which has functions spread all over the world. Airline industry is vulnerable to the political factors as the state is always trying to keep their passenger’s safety their first priority. it is not only about the customers but the government has to make sure that the country in which the airline is based does not have any rivalry with the country in which it wants to operate, as it can be very risky for the Emirates airline. Apart from this, the airline is a subsidiary of the Emirates Group, owned by the government of Dubai’s Investment Corporation, that is one reason why there is a lot of state influence on the strategic decisions of the airline.

 

 

 

Economic

According to the International Air Transport Association, by 2030 passengers travelling by air will be doubled to 8.2 billion. This is a great opportunity for Emirates airline to inflate its market in North and South America as well as they can increase their travel to Europe and Asian markets where airline market is growing at a rapid speed. The change in the prices of oil is effecting Emirates airline. Apart from this the company is still not able to recover from the global slowdown which took place in 2008. Disappearance of the Malaysian airline has also created a destruction in the industry as the passengers have started questioning whether the airline they are travelling in is as safe as it says it is.

 

Social

Recently the airline industry saw a growth in the sale of the tickets specially from the developing countries like China and India. The cheap prices of the tickets and an increase in the salaries of the people has encouraged people to travel through airlines. People always prefer aircraft but earlier the high pricing of the tickets made it nearly impossible for middle class families to travel through an aircraft, but the competition between the airlines led to a huge decrease in the pricing of the tickets which made it easy for the middle class families to travel in planes. The increase in tourism also played a role in the increasing sales of Emirates airlines. People now days want to travel the world and explore different places, this has helped Emirates airline to increase its market share as it is now attracting potential travellers the its airline.

 

Technology

 

The usage of technology to improve Emirates performance is to build effectiveness and to precisely find consumers desires in the competitive environment of the airline industry is really important for Emirates. There is a developing interest from the client side to utilize innovation to oversee and customize schedules through versatile applications (Accenture, 2016) (especially if Millennial voyagers are thought of) that convey the open door for carriers to accurately alter administrations to existing consumer needs (Accenture , 2016). Significant headways in avionics innovation affecting eco-friendliness are not expected, notwithstanding, carriers and to stay constrained to use all accessible innovation to decrease their fuel utilization.

 

 

Legal 

 

The impressive growth of Emirates has often encouraged competing European and American airlines to attempt to restrict the access of Gulf carriers to their home markets (Avation week, 2020) through protectionist policies although very few of the airlines involved would openly admit that the allegations of alleged subsidies and the lobbying of Gulf Airlines to renegotiate Open Sky agreements are carried out as part of protectionism Traffic on European and American routes by Middle East airlines has grown significantly in the last couple of years, Because of series of agreements to internationalize air travel markets over the last couple of years. The recent travel restriction applicable to citizens from a range of high-risk countries to the US is supposed to address safety concerns, but it is very likely that this is part of the covert legal attempts used by European and American legacy airlines to restrict access to their markets by Middle East airlines. This is due to the current COVID situations.

 

Environmental

 

The developing public interest for handling environmental change has constrained numerous organizations to change their methodologies. The fuel utilized for flight is a significant supporter of an Earth-wide temperature boost. A ton of fuel is devoured by more established airplane. Just 25-30 percent of fuel is devoured by take-and-landing. The general population is requesting that organizations purchase airplane that devour considerably less fuel and run on greener fuel, if conceivable. What’s more, airplane are reprimanded for creating a ton of contamination from commotion. Emirates likewise ensures that 100 % reused plastic jugs are produced using their economy class covers on long stretch flights. They additionally watch out for biofuel improvement that is all the more actually secure.

 

 

Porters five Forces:

Threat of New Entrants

The airline industry has high entry barriers, largely associated with the large start-up costs involved. In addition, joining the airline industry needs recognition by governments as well as compliance with the requirements of the aviation associations. Companies will need to enforce EPA requirements, comply with aircraft quality and keep emissions below a defined level (Belobaba, Odoni & Barnhart, 2015). Starting a new airline and entering a competitive market will entail financial investment, combined with an successful market entrance strategy that aims to create a strong position. Emirates Airline is therefore facing a low chance of new entrants. Well-established businesses, such as the Emirate, which have been running for many decades, have the resources to deal with the burden of new entrants.

 

Threat of Substitute Products

Emirates Airline is faced with a modest degree of danger to alternative goods in the airline industry. In addition to the Emirates, there are other carriers that offer transport services to customers, which can be considered as a replacement for customers. The other airline sells tickets at a reasonable price, generating a modest degree of challenge to the group, but Emirates remains focused on quality of service, while charging higher prices (Betz, 2010).

 

 

Ansoff Matrix for Emirates

Market Penetration:

Market penetration refers to the act of promoting existing products in existing markets. Emirates does this in various ways. The first strategy is to aggressively promote its services on various routes through different marketing channels. It also offers different discounts on holidays and other cultural events to gain a greater number of passengers. The company holds a large market share and continuously works to further increase this. The procurement of new airlines, renovation of existing, and the provision of improved facilities are various activities undertaken to attract customers. The passengers are also motivated to fly more with Emirates through various loyalty programs. The company has a strategic alliance with hotels and other resorts to facilitate customers during long stays at airports. The business and first-class of Emirates are also promoted by highlighting facilities to gain sales. All of these actions allow Emirates to dominate the markets it serves.

Market Development

When existing products are sold in new markets, the activity is termed as market development. Emirates develops its markets by geographically expanding to new flying destinations. These include destinations in new countries or new destinations in countries it is already serving. This is done by increasing destinations, the number of passengers carried, and the number of aircraft the company operates. The company can also develop its markets by targeting market segments which it does not currently serve. Emirates can also step into the low-cost carrier airline industry in various markets to compete with low-cost airlines and establish a new market. It can also target premium passengers that use the business class by flying exclusively business-class jets that offer greater facilities. Market development is a strategy that allows Emirates to expand its revenues and increase its sales.

Product Development

Organizations execute product development by launching new products in their existing markets. Emirates has various strategies to do this. The first strategy is to procure and utilize new aircraft. The Airbus A380 is one of the largest commercial aircraft in the world. When it was launched, Emirates made the largest procurement and advertised them when they joined its fleet. Many people flew Emirates just to experience the flight of an A380 (Rodrigo, 2012). Existing aircraft are also renovated and the services provided them are improved and enhanced to provide a greater experience for the passengers. This ensures that passengers continue to use Emirates and perceive it as a dynamic organization that works on product development. Another strategy that Emirates uses is to develop new associations with other hospitality companies, such as hotels, to provide an eventful experience during flights with multiple stops. Product development is an important strategy for Emirates to gain more sales.

Emirates airline has more services for business travelers that is reason why Emirates airline introduce high quality first class private lounges to attract business travelers. The premium class private suit would be fully outfitted with personal storage, coat cabinet and desk and individual mini bar. Long seat reclines to become fully horizontal couch and TV wide screen. Exceptional level of personal services including a gourmet and wines provided by specially trained multi-lingual cabin crews are the other value addition for this product.

Diversification

Diversification is the act of offering new products in new markets. This is a risky strategy that most companies refrain from adopting. Emirates can diversify in various ways. It can diversify vertically by establishing its spare parts manufacturing units, aircraft maintenance units, and other facilities it outsources to suppliers. This will allow Emirates to take hold of the entire supply chain of the company. Emirates can also horizontally diversify by establishing its hotels, resorts, a low-cost airline, cruise, and various other related diversification opportunities. Conglomerate diversification can also take place if Emirates steps into unrelated industries such as textiles, apparel, shoes, sports, broadcasting, and so on. These opportunities can help improve company reputation as well.

 

 

Citation:

(Porter’s Five Forces of Emirates Airline|Porter Analysis, 2020)

UKEssays.com. 2020. History And Strategy Overview Of Emirates. [online] Available at: <https://www.ukessays.com/essays/marketing/history-and-strategy-overview-of-emirates-marketing-essay.php> [Accessed 10 November 2020].

Scribd. 2020. Emirates Executive Summary | Emirates (Airline) | Airlines. [online] Available at: <https://www.scribd.com/doc/127566273/Emirates-Executive-Summary> [Accessed 10 November 2020].

https://www.mbaskool.com/pestle-analysis/companies/18058-emirates.html> [Accessed 14 November 2020].

Porter Analysis. 2020. Porter’S Five Forces Of Emirates Airline|Porter Analysis. [online] Available at: <https://www.porteranalysis.com/porters-five-forces-of-emirates-airline/> [Accessed 31 October 2020].

Emirates, 2019. Annual Report 2018. [Online] Available at: https://cdn.ek.aero/downloads/ek/pdfs/report/annual_report_2019.pdf [Accessed 07 Jan. 2020].

Rodrigo, 2012. Marketing Strategy Analysis for Emirates airline. [Online] Available at: https://writepass.com/journal/2012/11/emirates-airline/ [Accessed 07 Jan. 2020].

https://ansoffs.com/ansoff-matrix-of-emirates/

https://writepass.com/journal/2012/11/emirates-airline/

Accenture . (2016). Retrieved from ccenture (2016). Make Your Digital Connection: From Digital Strategy to Airline Strategy. [online] Available at: https://www.accenture.com/t20160524T005913__w__/us-en/_acnmedia/PDF-16/Accenture-Make-Your-Digital-Connection-From-Digital-Strategy-to-Airline

Avation week. (2020). Retrieved from https://aviationweek.com/air-transport/protectionism-wont-work-against-new-competition

MBA SKOOL. (2020). Retrieved from https://www.mbaskool.com/pestle-analysis/companies/18058-emirates.html