Emirates Airline Strategic Audit and Recommendations

Document Type:Report

Subject Area:Audit

Document 1

Today, Emirates Airline has more than 2,000 flights each week, from Dubai international Airport, serving 157 destinations in 55 countries across the world. Emirates Airlines is one of the best airline carriers in the world in revenue generation and large number of passenger fleets. As a result, the organization had been awarded in numerous occasions for its outstanding air travel services. In 2011, the organization was crowned the title of “Airline of the Year”. Emirates is a major market target by airplane manufacturers due to its enormous and reliable purchasing power of aircrafts. As a result, Emirates Group must always ensure high levels of competency so as to sustain its growth and expansion in the global scene. Proposed Mission and Vision Statements Vision To be a global leader in providing quality, convenient, and affordable airline services.

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Mission The Emirates Airlines aims to be the leading global (3) airline by offering quality, convenient (7), and affordable services (2) to our customers (1), and value creation to our employees (9) and our communities (8), by incorporating ethics (6), sustainability (5), and technology (4) in all our operations. The new mission and vision statements provides highlights the objectives of the Emirates group in its operations (9-factor matrix) 1. Customers 2. Industry Sales growth rate 2. Operating income margin 3. Net income margin 3. Administration and marketing expenses divided by total sales 3. Current ratio 1. Organizational chart Source: (Emirates. Emirates Airlines staff comprise of individuals with high qualifications and experience. It top executives have advanced experience in the aviation industry, with competent skills in organizational strategic planning and revenue generation. The organization adopts a decentralized structure to ensure quality and efficiency in each area of operation.

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Operations Map Source: (Emirates. • The marketing strategy incorporates a mechanism for enhancing its customer relationship through its Knowledge-driven in-Flight Service (KIS) and other systems that ensure efficient and reliable customer database organization. Such programs ensure proper tracking of customer information and easy identification of market trends which are helpful in making strategic decisions in the organization. • The marketing strategy also incorporates various promotional strategies for each particular market segment especially on social media networks. Such measure ensure continuous marketing of its products and services in the easiest and cost effective manner. Weaknesses of the marketing strategy The following points highlight the weakness of Emirates marketing strategy that need to be improved for higher chances of achieving its organizational goals. The company reported high profits in the fiscal year that ended in 2016, which marks over 20 years without reporting losses.

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History of acquiring firms such as Travel Republic Ltd. and Alpha Flight Group for fair prices. Cargo revenues account for 15% of all revenue from the Emirates segment. Emirates has aligned itself with high-level soccer teams and the US Open Tennis Tournament, providing excellent marketing on a global scale. Does not offer full size beds in cabins for higher end customers. Slow to enter the USA market. Not a publically traded company. IFE Matrix The total weighted score shows that Emirates Group is still in a better position to use its internal resources and improve on its several weakness. The score also proves that, its internal organizational culture and structure are supportive and well-coordinated towards employee and organizational development. Its differentiating strategy involves proving affordable tickets and reduced tickets to light travelers.

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It focus its resources and capabilities to a specific market segment with a perceived market gap. Opportunities 1. The U. A. Through 2020, the USA will remain the single largest market for domestic passengers at 710 million annually. Threats 1. The main airline competitor in terms of quality services, pricing, and overall market performance is the Singapore Air 2. Women are traditionally not allowed the same access to upper level jobs in the Middle East as men. Fuel is a major component in the profitability of the Emirates Airlines, therefore, increase in fuel prices is a big shortcoming in its operations and overall profitability. This presents the airline with numerous skills and ability to reach as many customers as possible • The cosmopolitan culture helps the organization offer effective customer services from all over the world. Culturally diverse workforce is one of the Emirates competitive advantages in the global airline industry for it facilitates customized services to majority of its customers from different cultures in different countries Technological • Emirates Airline has technology as an integral part of its operations, which makes its services modern and classic.

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It is known to procure the modern aircrafts at all times (Buhalis, 2004). • The Airbus A380 is one of the latest aircrafts in the market that has earned Emirates glory from its customers and the airline industry in general. The Airbus A380 consists of the most modern technological components compared to the rest of passenger aircrafts. • Besides its venture in the luxury air services, the firms that offer relatively low prices act as substitutes for Emirates Airline 4. Threat of Rivals • There are 37 competitor airlines serving Dubai • For the last 10 years Middle East has the highest rate of airline industrial growth • There various exits barriers that are embedded in fuel and capital costs • The diversity of competitors in the market present stiff competition for Emirates Airlines. They comprise of international, domestic and global flight airlines.

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Threat of New Entrants • Emirates Airline experiences brand equity because it is a renowned player with heavy marketing and high brand value. • New entrants are unlikely due to high switching and/or sunk costs. Using the Dnata segment, the Emirates should consider acquiring catering service in the United States (W6, W9, O5, O10) 3. About 10 of the newly ordered aircrafts should comprise of pure suit design and accommodation with full size beds (W7,O4) ST Strategies 1. Hire a large number of women managers for the New York City operations (W1, T2) 2. A long-term contract with Quantas should be prolonged and allow the connection of European based flights to Dubai (S10, T1,T8) 3. The number of flights to the United States should be increased by about 200% by the year 2019 (S2, S5, S9,T7) WT Strategies 1.

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THE GREAT STRATEGY MATRIX The most profitable social class of target for airlines is the middle class. Therefore, Emirates Airlines has a strong competitive advantage with its high end customers in the Business and First Class categories. Marketing Mix 1. Marketing Penetration (Improving In-flight Services) Emirates Airlines should sustain or improve its products and services’ market share. In this case, the company should establish mechanism for protecting its market dominance in the existing airlines market. Emirates Airlines operates on very high costs because of high-end technologies, modern aircrafts, and customized services. By improving and developing its operational activities will help in controlling and reducing its costs by a significant proportion. Emirates Airlines should implement effective and efficient maintenance and flight scheduling to facilitate cost-effective and optimum utilization of resources. It can also incorporate technology, e.

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g. A. E in future. Its current pricing strategies has facilitated its profitability while providing quality services and long haul flights. Emirates Airline adopts the free market principles, and does not have any merger or alliance. Its independence creates a competitive opportunity to provide effective and quality flight services over the years. In Applications of Digital Information and Web Technologies, 2009. ICADIWT'09. Second International Conference on the (pp. IEEE. Ayish, M.  Strategic Management Journal, 37(2), 257-261. Buhalis, D. eAirlines: strategic and tactical use of ICTs in the airline industry.  Information & Management, 41(7), 805-825. Demil, B. Collaborative strategy:: an analysis of the changing world of international airline alliances.  Tourism management, 22(3), 229-243. Grimme, W. The growth of Arabian airlines from a German perspective–A study of the impacts of new air services to Asia.  Journal of Air Transport Management, 17(6), 333-338.

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Parameswaran, M. G. Jacob, I.  Strategic brand management: Building, measuring, and managing brand equity. Pearson Education India. A. Matzler, K. Ring, L. J.  Strategic marketing. F. The changing dynamics of the Arab Gulf based airlines and an investigation into the strategies that are making Emirates into a global challenger.  World Review of Intermodal Transportation Research, 1(1), 94-114. Peppard, J. Ward, J. Slack, N.  Operations strategy. John Wiley & Sons, Ltd. Theemiratesgroup. com. Does Spatial Dispersal Continue Post-Financial Crisis? Analysis of Global Air Transport Network 2011-2015. Vespermann, J. Wald, A. Gleich, R. Aviation growth in the Middle East–impacts on incumbent players and potential strategic reactions.

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