Table of Contents
3.4 Social-cultural environment 8
3.5 Technological environment 8
4.1 Competitive situation analysis. 9
4.2 Direct and indirect competitors. 10
4.3 Analysis of Competitive Strategy and Position. 10
5.1 Internal competitive advantage. 11
5.2 External competitive advantage. 12
- Segmentation and targeting. 14
- Product strategy. 15
- Pricing strategy. 16
- Distribution strategy. 16
- Promotion strategy. 17
- Customer service relations activities. 17
- Conclusion. 18
- Recommendations. 18
1. Executive summary
Emirates Airlines is one of the best airlines in the world. It prides in the high quality services it renders to its customers. It is supported by the government hence easily beating it local competitors.
Both internal and external environments play a crucial role in its existence. Technological environment has been the most remarkable. With technology, it has been in a position to upgrade its facilities and services. This has made the services offered by the airline be of first class (see Appendix A, Figure 1
Entertainment in the airline is superb hence passengers enjoy their flights. Both internal and external competitive advantages have placed the airline in a very strong position to combat with its competitors.
Various strategies including positioning, promotion and price strategy has in a nut shell defined the capability of the management. Different promotions conducted by the airline have helped it reach many people. A lot of attention is given to luxury and entertainment as this forms part of the airlines competitive advantage.
2. Introduction
The Middle East is home to some of the best airlines in the world. Among them is emirates airline. Emirates has grown to become a highly recognized brand. It is one of the best and major airlines in the Middle East.
It operates around 2200 flights in a week across the UAE and Dubai alone. The headquarters of the airline is Dubai. It is here that most of its operations are coordinated. The airline is a part of the Emirates group. It is known for various reasons among them being the high quality of the product they offer to the market (The emirates, 2009). Quality of service is a major factor that the management insists on.
Also, the airline is well known to operate some of the longest flights world over (see Appendix A, Figure 2). It was established in 1985. This is after Gulf Air collapsed. It experiences a lot of challenges and these challenges can be linked to its huge success. The challenges vary from one domain to another. Entry of new airlines into the market is one of the many challenges. Mergers in the industry have also of late become very famous
. When such challenges appear, the airline must come up with new strategies to ensure that it remains strong and of influence in the industry. The airline concentrates so much on what it has to offer the market. On giving high quality services, it has been able to appeal to more customers both local and foreign and this has made it retain many of the customers (Crawford & Benedetto, 2008).
3. Environmental context analysis
3.1 Demographic environment
Demographic is the division of market into variables such as family life-cycle, age, gender, occupation, income, religion, race, education, generation and nationality. These factors become of great importance during segmentation of customers into groups.
- Age
Emirates Airline has no limitation based on age. However, segmentation according to age is done. This is so because there are different requirements for various ages. Segmentation according to age has been done under infants, children and adults. Under infants, people allegeable into this category are the aged 0-1 years.
These passengers are not charged. Most of them are carried either in a bassinet or on their parents lap. Some arrangements have been made to help in booking online (Rahman, 2014). Not all infants are allowed in the airplanes. Emirates Airline dictates that infants less than seven days old should not be allowed to board a plane unless on emergency cases. hildren are people aged between 1 and 11 years.
There are conditions for children between 6-36 months to be allowed to board Emirates Airlines. Among the conditions are that the children be held and restrained by their parents during takeoff and landing. There are discounts for these children as well as those aged between 2-11 years. Adults are considered as those between the age of 12 and above.
- Income
Customer behavior is such that they always go for products that are fair in price and are high in quality. If an organization is successful, it is most likely that it has offers its products at slightly lower price or the quality of its product and services is remarkable.
The price for the emirates is average. This makes it possible for customers earning an average income to afford the flight. Customers with a monthly income between 4000 to 10000 AED make the majority of the airline’s customers (Rahman, 2014)
3.2 Economic environment
The Emirates Airline is headquartered in Dubai. Dubai is one of the fastest growing cities in the world. There are numerous business projects that come up as a result of its growth. A good example is the development of infrastructure and the real estate sector. This has attracted many investors who bring in huge amounts of money.
With the growing of the city, many people move to this city to seek employment. Emirates Airline acts as their favorite means of transport. The Middle East region lead by the UAE has recently been on a mission to grow their economy. This has been very successful making the region to be more economically mature (The emirates, 2009).
As a result, people in this region are increasingly managing to book flights in and out of the region. With the growth of this region, many people are frequently visiting it for various purposes. Some for business while other as tourists. This has grown the economical environment under which the airline operates.
3.3 Political environment
Many regions in the world have been experiencing political dilemmas which in many cases have triggered war or created a poor business environment. Emirate airline enjoys support from the government. The government being a stakeholder creates a good environment for the airline hence offering it a lot of political goodwill. The government has entered into trade agreements with a number of countries.
With the agreements, the Emirate Airline having the support of the government becomes among the first organization to benefit from such trades. They are given access to such countries hence expanding their market. Goods and services from the countries that enter into such agreements need to be transported. Emirates airline having already accessed the country is used for transportation.
Because of transport of goods, the aviation industry has been most affected by these agreements. The Middle East Countries where the Emirates airline is headquartered has signed agreements with the U.S. and European continent as well. With these agreements, UAE has been opened to the world making it a crucial centre for world trade.
Stability of the region is another factor that has made Emirates Airline services be of high quality and preferred by many. Domestic politics plays a huge role in the existence and success of the airline (Emirates Airlines, n.d.). A good example is the fluctuation of fuel costs. All airlines are affected by a slight fluctuation in the prices. In 2005, for example, the country increased fuel prices by 7%. This greatly affected the airlines operations.
3.4 Social-cultural environment
The success or failure of businesses is highly influenced by the culture and social characteristics of a society. Emirates Airline operates mostly in the UAE. This area has in the recent past experienced high influx of foreigners who come in search of job opportunities.
As a result, the labor cost is low. A comparison between the U.S. and UAE shows that labor costs in most airlines is equivalent to 38% of the airlines’ operating cost while that in UAE is a mere 8%. With the fast flow of information, workers in the UAE are demanding a pay rise (Emirates Airlines, n.d.).
This is a social factor that the airline needs to constantly check on. Different people have different tastes.s a result, Emirates Airline has invested in a variety of aircrafts so as to make its entire customers comfortable when flying. The airline encompasses different cultures as it can be seen in the type of food served in the plane. The menu has a variety of cultures to ensure that most of the passengers are catered for during meal time.
3.5 Technological environment
Technology has enabled people to gather information regarding any airline in a matter of seconds. There is a lot of information in the internet concerning the various airlines. Customers can get the strengths and weaknesses of any airline and based on this make a decision whether to board that airline or select another.
Emirates Airlines has posted a lot of information online and has active accounts in various social media. With this, it is able to communicate with its clients constantly. Emirates Airlines has benefited from technological advancement in that many customers know that the airline prefers direct routes as compared to stopovers via internet. This way, it has been able to attract many customers. Technology has also made the airline’s operation be faster and more efficientEmirates Airlines, n.d).
The airline also has invested in the latest technology in the airline industry by buying Airbus A350-XWB. This will enable make progress in medium-to-long haul aircraft development. Technology has also helped the airline be the leader in innovation in the industry. Travelling in the airline, one can now make use of mobile phones as well as on-plane phones. This goes way ahead in making passengers feel contented.
3.6 Natural environment
Emirates airline has been involved in conservation of the natural environment. Some of the activities have been influenced by the internationally set standards that airlines help reduce pollution. The airline also is involved in recycling products. For example, it recycles uniforms of its employees hence saves on wastage of resources and helps reduce pollution.
4. Competitive analysis
4.1 Competitive situation analysis
The airline is one of the most competitive industries globally. This can be attributed to the high profits the industry used to make. After realization that the industry was a good one to invest in, many other airlines entered the market to at least share what is available. Many new airlines have joined the market reducing the profits tremendously.
The low returns can be attributed to the high cost of competition. Internationally, different approaches have been used to cope with the high level of competition. The famous approach is mergers. Different airlines merge to consolidate customers and hence have control over the industry. If the leading airlines in a country, for example, were to join, they can control the airline industry in that country and can go to an extent of operating as a monopoly. In the Middle East, however, governments intervene and control the shocks that may result from competition.
4.2 Direct and indirect competitors
There are a number of airlines that share market with Emirates. The main competitors include Deutsche Lufthansa AG, Air France-KLM S.A, Etihad Airways and Qatar airline. Of these competitors, Etihad Airways acts as the direct competitors. The main reason for it being a direct competitor is that it competes with Emirates domestically.
When it comes to international market, Etihad also offers some competition. If Etihad gains more customers domestically, it is very likely that Emirates on the other hand will register a fall in the total number of customers. Indirect competitors of airlines include train companies, car companies and other forms of transportation. Locally, people also use cars. Cars such as Mercedes and Toyota Lexus act as indirect competitors for Emirates airline.
4.3 Analysis of Competitive Strategy and Position
For a business to be successful, it requires to be built on high informed competitive strategy and positioning. Competition can lead to the collapse of a business. Positioning of the business is also very crucial. If a business is located new the raw material, it saves transport cost. If the business is located new the market, it saves some costs as well.
This shows how important positioning is important. Emirates use various approaches in its competitive strategy. It ensures that the quality of services it offers to the market is of high standards. Another strategy is keeping the prices affordable to average earners and high-income earners.
This way, it appeals to a huge range of people (Emirates Airlines, n.d.). Buyers’ behavior is such that buyers are attracted to products that are of high quality and a favorable price. In line with this, the brand Emirates has successfully been able to attract many customers both in domestic market and international market beating its competitors with ease. The airline upgrades its services regularly ensuring that its passengers have a superb flight experience.
4.4 Position strategy
Emirates airline has place itself as the leading airline in UAE in terms of luxury. It also offers unique services such as refreshments at the airport as well as assistance in baggage handling and boarding. This ensures that it markets itself in the proper way. This way, it attracts more customers.
It also positions itself as the leader in provision of high quality products and services. In its ads, it represents itself as to give its customers world-class services and products. This way, it manages to strategically position itself in the market.
5. Competitive advantage
Emirates offers have both internal and external competitive advantages. These make the company to be the best airline in the market and also help differentiate it from other companies.
5.1 Internal competitive advantage
Emirates has adopted a unique business model that makes it very flexible. The model involves adoption of latest technology. This includes new aircrafts that are capable of travelling for long hours. Technology has also ensured that it offers the latest product available in the market. This way, the airline has been able to offer innovative products that are both unique and affordable in the market. With high levels of flexibility, the management easily tackles global economic challenges.
The airline is among the few to adopt long haul flights. These long haul flights have turned to be of benefit as they reduce cost. It has also been in the markets for a short time. This means that it has not been affected by challenges that faced other airlines before it was introduced. One of the challenges that faced the early airlines includes the entrance of new airlines in the industry hence increasing competition.
5.2 External competitive advantage
The government encouraged sharing of resources through the open skies strategy. This public policy has helped many organizations. Emirates airline has adopted open skies strategy. This is where a firm encourages competition with different market players.irates encouraged competition by sharing its Dubai airport with many other airlines.
The UAE government has played a critical role the success of the airline. The government monitors the airline’s operation to ensure that it lives to fulfill its objectives. Participation in various activities such as tree planting has given the airline a good reputation (Emirates Airlines, n.d.). With a good reputation, customers in most cases go for it at the expense of its competitors. In the Asian Pacific, employees do not demand high salaries. This is an advantage to Emirate Airlines as it reduces cost of operations.
6. SWOT analysis
6.1 Strengths
Emirates is a part of Arab Alliance. This alliance is responsible for promoting and organizing how safety measure will be observed in Arab airlines. It also enjoys being the first airline coming from Arab counties to have active online booking services. This has made it easy for customers to book flights while miles away and at home.
Many customers do not like flights that make stopovers. The Emirates has long haul flights. This ensures that customers who do not like stopovers enjoy their flights too. Passengers are also offered self check-in services at Dubai airport.
Employees are the most important people in an organization. With them, customers would not get products of their desire. Emirates recognize this and reward its employees accordingly (Dubai’s Terminal 3 opens, 2008). It also offers them training and performance programs. It also sponsors various games hence improving on its reputation.
6.2 Weaknesses
Emirates has been making huge profit. In the financial year 2011-2012, Emirates airline made revenues amounting to AED 62 billion. However, these profits could even be more could it check on its cost of operation. It has a high cost of operation owing to the fact that it is young and hence on the process of investing on more aircrafts. The high cost of operation also arises from the fact that it is at a constant process of implementing new technology.
Emirates is headquartered in Dubai. Dubai is a growing city, but not the capital city (Emirates Airlines, n.d.). This in itself is a weakness as the capital city offers some advantages including corporate meetings held in the capital by international representatives. Abu Dhabi is the capital city of UAE and hence airlines headquartered there are more privileged. It also experiences some weakness being a young airline. This means that it has little experience of the market dynamic characteristic.
6.3 Opportunities
There are numerous opportunities for the Emirates considering that it is still a young airline. The per capital income in UAE is growing at high rates. This puts the airline at good position to expand its customer base. The government being a partner will make huge investments in the airline. This gives the airline an opportunity to grow.
The population of the world and of UAE is at an upward trend. With a growth in population, the airline has more opportunities to receive many passengers. Tourists in UAE are increasing annually. This give the airline an opportunity to venture into new markets as it brings tourists to the UAE (Emirates Airlines, n.d.).
6.4 Threats
Fuel prices fluctuate with time. Increase in fuel prices risks the airline in experiencing loses. Airline industry is a very competitive industry. Mergers have of late been the in thing and airlines that do not for mergers receive fierce competition.
Government policies and regulations change drastically. This affects the operations of airlines in the country. The airline faces the threat of low cost airlines. its competitors have adopted the use of low fares as their competitive advantage, Emirates airline’s fares being relatively higher is thus put at risk of losing some of its clients as they go for cheaper services.
7. Segmentation and targeting
Market segmentation is dividing the market into groups. Each group has distinct needs, behavior or characteristics which call for a different marketing mix and strategy. On the other hand, market targeting involves evaluating the different segments and choosing one or more to enter.
There are two main segments used by Emirates Airline. These are Demographic and geographic. Demographic is sub-dived age, gender, family size and life-cycle and income. Age is categorized into infants, children and adults. Geographic segmentation includes Europe and the Americas, Asia, Australasia, Middle East, and Africa (Emirates Airlines, n.d.).
The target markets vary depending on segmentation. Life style, the target market is single and family lives who live in Dubai. On income segmentation, the target is people who earn between 4000 and 10000 (Emirates Airlines, n.d.).
Location segment has the target as people who come from Middle East, Africa, Asia Pacific and western countries. Age segmentation has the target as people between the age of 18 and above. However, recently, a campaign targeting children was done and turned out to be very successful.
8. Product strategy
The product for Emirates should not in any case be confused for physical items such as aircrafts. The product for the airline is simply all the services offered to the passengers. In this case, it can be concluded that the airlines’ product include safety, seat availability, convenience when it comes to airport proximity, on-time reliability, departure, ground carrier’s image and in-flight cabin services among several others.
The product can be defined as the total experience a passenger gets while travelling using the airline. The product strategy includes fleet and schedule related product features, punctuality where passengers are assured of arriving to their place of destination at the stipulated time (Crawford & Benedetto, 2008).
The application of cabin configuration and use of classes of services also acts as a good product strategy. Another strategy is through customer service related product features. Here, strategies such as point of sale service, reservations and overbooking, product quality regulating and In-Flight services are applied. There are numerous fleets of Emirates. These include Emirates A380, Boeing 777-300ER, Boeing 777-200LR, and Airbus A340-500 among several others.
The in-flight services are made bearable and appealing by incorporation of various services. These services include entertainment and leisure facilities, good food served during the flight and other services such as In-Flight Lounge for those travelling first class in A380 fleet. High quality transformation of information, communication and entertainment in during flight is yet another product strategy applied by Emirates (Rahman, 2014).
9. Pricing strategy
There are a number of strategies adopted in the aviation industry. These include fare action, introductory fares. System excursion-fare sales, target segment pricing, flight-time specific pricing, value added pricing, zone pricing and adjusting rules and restrictions. At Emirates, a mix approach on its pricing strategy is adopted.
Value-added, however, comes out strong among other strategies. The premium prices for Emirates are much higher than some of its competitors (Tripadvisor, 2014). However, it uses value-added tactic to justify its price through unlimited services rendered to its passengers. Another pricing strategy used by Emirates is peak and off-peak season pricing. Prices are hiked in festive seasons such as Christmas, Eid and Diwali because already, there are many customers.
10. Distribution strategy
Distribution in this context refers to the process of availing tickets to customers. Tickets have for as long time been distributed through travel agents, but today they can be accessed online. Most bookings for Emirates are done by its sister company Dnata (Airliner World, 2010). With this company, customers are happy to know that they are dealing with the same company hence feel safer.
This marriage between Dnata and Emirates increases revenues for the Emirates as well. Emirates also use online services to distribute tickets. Today, most of its product can be accessed via internet. The booking of seats, checking of available flights as well as flight time table can be done online.
11. Promotion strategy
In the airline business, promotion strategy involves public relations, trade promotions, sales promotions and In-store Displays. In advertisements, Emirates Airlines releases a number of multi-media advertisements using some of its popular taglines.
The taglines include: Fly Emirates. Keep discovering: Fly Emirates, in six continents and Fly Emirates, to over 100 destinations. (see Appendix A, Figure 3). It also uses TV advertisements. Through in-flight media, it is able to entertain its customers while also sending appealing messages about the airline. Through open skies, Emirates keeps magazine readers updated on what is new about the airline while also entertaining them. Through promotions, it enhances public relations.
The airline has been involved in numerous debates that affect aviation industry. It also enhances relations between Europe and Dubai (Tripadvisor, 2014). Among all promotions, sponsorship has been the most successful and has appealed to many. Emirates sponsor a number of games and teams. This is in both UAE and all over the world. It has sponsorships in many games including football, rugby, horse racing, tennis, golf, Australian Rules football and cricket (see Appendix A, Figure 4).
12. Customer service relations activities
Customer service is vital for every business. At Emirates, this is a crucial department and is handled very seriously. Clients are treated with utmost respect by very professional customer cares. To ensure customers receive value for their money, the airline ensures that all services given by the airline are of high quality.
This can be confirmed by the many awards the airline has worn. It has been voted as the best airline in the world severally and this is owed to the quality of service it offers. Customer retention is very important. First time passengers are treated specially to attract them to use the airline once more. Regulars are also encouraged in different ways to keep using the airline. Entertainment has been very successful in retain customers.
13. Conclusion
Emirates airlines has a lot that it offers the market. From In-flight entertainment to long haul and many other services that act as the product for the airline. The airline is favored by the environment in which it serves. Both internal and external environments have huge roles in the success of the airline.
It has a lot of competitive advantages both internal and external. It is this advantages that make it outshine its competitors. The airline is supported by the government. This acts as a strong pillar behind the quality of service it renders to customers (Crawford & Benedetto, 2008). The management of the airline is always on toes as competition in the industry is very stiff. Having won numerous awards in the last five years, it shows that a lot of energy is used in advertising the airline and in renewing its facilities while bettering services.
14. Recommendations
14.1 Recommendation 1
Emirates is on a mission to increase the number of aircrafts. This has led to the increase in operational cost. To reduce operational cost, the airline should improve maintenance processes and also maintain the aircrafts
14.2 Recommendation 2
The airline faces the threat of low cost airlines. To respond to this strategy by its competitors, it should not lower its fares as well, rather, it should offer new low cost brands to act as subsidiary of the emirates.
14.3 Recommendation 3
UAE is growing fast as a world tourist region. To fully capitalize on this, the airline should extend its routes to fetch more clients.
14.4 Recommendation 4
Technology marks the difference between first class airlines and other airlines. Emirates should not relent on the use of technology. It should in fact contact a technology company that would ensure that it is always in the know of what is new and good for business.
14.5 Recommendation 5
Fuel prices are a challenge to most airlines. Having come from a region where fuel is plenty, Emirates should strategize on how to get fuel at a lower price. This can occur by buying larger stock in case there are speculations of fuel price hike.
15. References
The emirates. (2009). A380 Entertainment | Emirates A380 Economy Class | The Emirates A380 | Our Fleet | Flying with”. Emirates. 2 June 2009. Retrieved 5 May 2014.
Airliner World (2010). Emirates – 25 Years of Excellence: Building a global network, pp. 28–37. Stamford, UK: Key Publishing. October 2010
Crawford, C. M., & Benedetto, A. D. (2008). New Product Development Management (9th ed.).
Dubai’s Terminal 3 opens. (2008). Retrieved May 5, 20148, 2010, from http://www.businesstraveller.com/news/dubais-terminal-3-to-open
Emirates Airlines. (n.d.). How we fly our planes. Retrieved May 5, 2014 8, 2010, from http://www.emirates.com/english/about/emvironment/how_we_fly.aspx
Emirates Airlines. (n.d.). The Emirates Story. Retrieved May 2nd 2014, from http://www.emirates.com/english/about/the_emirates_story.aspx
Emirates commits further to India. (2009). Retrieved May 5th, 2014, from http://www.ameinfo.com/198449.html
Emirates earns Dh752m profit. (2009). Retrieved 5thMay, 2014, from http://gulfnews.com/business/aviation/emirates-earns-dh752m-profit-1.52379
Emirates Named Airline of the Year for 2011 by Air Transport World – Airline News”. etravelblackboard.com. Retrieved 5 March 2011.
Rahman, S. (2014). Emirates begins brand overhaul. Retrieved on 4th May 2014 from http://gulfnews.com/business/aviation/emirates-begins-brand-overhaul-1.1001096
The Sunday Times (2006). Emirates boss heads for bigger goals, Times Newspapers Ltd., London.
Tripadvisor. (2014). Emirates flight pricing & sales strategy. Retrieved on 3rd May 2014 from http://www.tripadvisor.co.uk/ShowTopic-g1-i10702-k5689509- Emirates_flight_pricing_sales_strategy-Air_Travel.html
Rehmat, S. (2013). Comprehensive Marketing Presentation on Emirates Airlines. Retrieved on 5th May 2014 from http://www.slideshare.net/Sheikh_Rehmat/comprehensive- marketing-presentation-on-emirates-airlines
- Appendices
16.1 Figure 1
Figure 2
Source: Comprehensive Marketing Presentation on Emirates Airlines (Rehmat, 2013)
Figure 3
Source: Comprehensive Marketing Presentation on Emirates Airlines (Rehmat, 2013)
Figure 4
Source: Comprehensive Marketing Presentation on Emirates Airlines (Rehmat, 2013)