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Emirates Airlines Zayed University

BUS310-502

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Table of contents

Executive Summary ……………………………………………………………. 4 Introduction

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Environmental Context Analysis ………………………………………………… 5-6 Competitor Analysis ……………………………………………………………... 7-8 SWOT Analysis …………………………………………………………………. 8-9 Segmentation and Targeting……………………………………………………… 9 Positioning Strategy ……………………………………………………………..

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Product Strategy ………………………………………………………………..

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Pricing strategy ………………………………………………………………..

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Distribution strategy ……………………………………………………………. 11-12 Promotion strategy ………………………………………………………………. 12-13 Customer service and relationship activities ……………………………………. 13 Conclusion ………………………………………………………………………

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Recommendations ………………………………………………………………

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Appendices ………………………………………………………………………

List of Tables and/or List of Figures: 2

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Strengths Dubai government support

Weaknesses High competition

High employee satisfaction

High cost to maintain brand image

Wide area of business activity (72 countries)

Dependent on international moving traffic Not catering for budget travelers

High customer loyalty

Opportunities Continuously purchasing newest fleet available Increase number of destinations grows market share

Executive Summary:

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Threats Competitors within the region following the same model Change in governmental policies

Emirates Airlines is an organization in the UAE that is owned by the government of Dubai's Investment Corporation of Dubai. It provides services of flight and in-flight entertainment systems which also include economy, business, and first classes. Emirates airlines furthermore consist of ground services such as providing separate lounges for first and business class as well as a complementary chauffeur-drive from and to the airport. Emirates functions across six continents with nearly 3,400 airlifts a week. Emirates airlines offer a service that is in demand by many consumers and especially in Arab countries for their frequent travels around the world, mostly Europe, during vacations short or long. Due to this huge demand of travel service Emirates have gained an advantage by providing many irresistible amenities. They try their best to perfect their company and image to win against some threatening competitor such as Gulf Air Company and many others. This airline has a lot of advantages because of image and good service but it has some disadvantages as well. Emirates targets mainly middle class and business class people and tend to somehow overlook the lower class because of the high price they pay for development and advertising. It has grown rapidly throughout the years and is still improving by providing offers for the customers and settling on fair prices. They also listen to their customers complaints and try their best to fix it.

Introduction: Emirates is an airline started in Dubai located in the United Arab Emirates. Emirates Airlines expects to clasp the interest and prioritizes business class customers and the upper middle class. The company plans to build a strong market position in the world. Emirates airlines aims to offer its service at a good price to meet the demands of upper middle class and the middle class due to their astonishingly favorable service and safety and their willingness to listen and fix their customer’s complaints.

Environmental Context Analysis 4

Demographic Environment: The need of airline industry is growing rapid as the world has become a global village. The number of immigrants, business traveling, and tourism is expanding in the Asia pacific region. Therefore, all the airline service providers’ including Emirates are in a constant struggle to fulfil the growing needs. Emirates have customized its services to its customers according the age, gender, religion, and other demographic features. Economic Environment: The aviation industry worldwide suffered a lot during the major economic down fall, resulting in liquidations of numerous airline firms, reduction in airline travel networks and levels of service and IATA gave a approximated net losses 9.4 billion US dollars in the year 2009. Globally, the Aviation industry stared severe price-cutting and downsizing. But the Emirates due to its well-established strong network agreements over international destinations were not only able to survive but also optimized it operations. The Emirates now have increase its capacity while still able to keep its fixed costs at a similar when compared with other competitor. An emirate is able to access the international markets with bigger geographical coverage. Socio-cultural Environment: Socio-cultural factors can also effect on strategies of development. It was real challenge for Emirate because both global and domestic markets where Emirates function have large cultural multiplicity. Since the countries like U.K Australia, Canada, America and Dubai, are multi-cultural so the customers possess different moral values, education, attitudes, and religion. Because of this diversity, Emirates turned itself in a dynamically vibrant airline. Now the Emirates possess the competitive advantages of operating in regions where the tendency of air travel is enhanced by social diversification. Political and Legal Environment: For air travel, aviation companies need to acquire license to fly through the air space of the counties but in case of Dubai there is no such requirement, it is an open market. Due to Dubai policy of opening up it skies, the Emirates was able to compete with the large stair line of the 5

world. Emirates now is able to enjoy the advantage of the global market from entering worldwide destinations like Australia, America and New Zealand all because of the recent contracts on complete air traffic rights from the respective countries. Aviation deregulation has enhanced airline organizations to improve open route entrance and exit of airplanes, work on reasonable fares and travel services. Additionally the liberalization in aviation industry is growing. Therefore, the competition is turning out to be more and more challenging. Recently, Emirates Airline was successful in obtaining more landing rights in states of Europe which is seen as major threat by the local airliners. Numerous carriers have said the Emirates airline due to getting fuel subsidies from it local government possesses a serious competitive advantage over their airlines. Therefore should not be given license (Davahran, et.al, 2014). Technological Environment: The use of latest technology is a grantee of success in the commercial aviation industry. The never ending requirement for technological progresses in order to gain competitive advantage and enjoy opportunities in the profitable business market is dream of the every airline. The Emirates airline is also completely aware of the importance of technological advancements in it industry. That’s why it is pursuing the 5 star airline standards. Emirates have recently given an order for a book stands for its 244airplanes of the latest Airbus and Boeing, having a net worth of 60 billion US dollars. It is current the youngest and would become one of the most advance fleets of the entire international commercial airlines. The Emirates airline recently signed a mobile phone network coverage contract with a telecommunication company, in order to give its customers the facility to use their mobile phones while they are on the plane. For several years of its existence, the Emirates airline has also been awarded many performance awards like having the Best Global Airline Website, and technologically most advances airline of the world. Natural Environment: Natural environment and maintaining the level is the foremost responsibility of Emirates airline. This airline thus works at its best in order to maintain its environment by providing best working environment to its employees Competitor Analysis 6

Direct and Indirect Competitors The companies like Gulf Air Company GSC, Air France, Lufthansa AG, British Airways, and Qatar Airways Group are main direct competitors and major threats to the Emirates Airline business. Indirect competitors are countless local airlines in different countries which associated with its competitors (Davahran, et.al, 2014). Porter’s Five Forces The strategies of Emirates airline sever as a function of its environment where it works and delivers the services of inherent strategic thinking within it carrier planes. The porter’s five forces will give a detail overview of the current state of the company. 1. Threat of New Entrants: the current scenario shows that existing airline industry has a low entry barrier. Investment, the prime admittance barriers, is freely present in the Middle East and expertise and technology can be easily purchased. 2. Power of Suppliers: The two leading suppliers are Airbus and Boeing and competition between them is obviously visible. Also, the probability of a supplier incorporating vertically is not very probable. 3. Power of Buyers. The haggling power buyers of airline industry in the Asia Pacific region is very low. 4. Availability of Substitutes: The number of Threats are quite limited taking into account the distances in the region and the fast growth is that is a symbol of development of the area. 5. Competitive Rival Situation: The airline industry is termed as one of a highly competitive as well as highly advanced industry that can also gain low returns due to the cost of competition that is supposed to be high. This in the future can ruin the entire situation of the industry and can also spread the disaster in low cycle parameters too. On the other side, Middle East provides a very different story and this is all because of the government interventions. Competitive Strategy and Position Analysis Strategic capabilities termed as the skills as well as abilities done in order to accomplish the stage so that a company can easily survive in the market. It is further categorized into two classes i.e. resources and competences. 7

Emirate is embedded with threshold resources that comprise of various office equipment, flights, head quarter, employees and last but not the least its finance resources. Emirate on the other side has some main resources too that are operating in the form of management team, run by Ahmed Bin Saeed Makhtoum CEO & Chairman of the stated company. Like resources, this company does have threshold competences as well which comprises of online booking procedures; operations related to on time delivery and point to point based routing. The core competences consists of IT development and management along with route and no frill strategy. Competitive Advantage Emirates Airlines id working with enthusiasm in order to properly implement differentiation generic based strategy by providing high quality and fully equipped services in order to gain benefit and potential outcomes among their competitors and on the same side to get a good and remarkable place in the market so that can termed as Leader Company. For this specific purpose the emirates airlines was termed as one of the 1st Airline in the world who offered big TV screen in all its all airline and this company also introduced e-ticketing system in UAE for the very first time. With the help of segmentation of market this company gained another major competitive advantage too. This is the only company operating in UAE that is actually providing training by best ever technology i.e. plane simulator. The aim of these changes is to make this company one of the leader company (Davahran, et.al, 2014).

SWOT Analysis: Emirates Airlines is one of the fastest growing airlines in the world, becoming a pioneer in the industry around the world as a model to follow and compete with. The company has its own set of strengths, weaknesses, opportunities and threats that needs to be highlighted, as illustrated in the table below: Strengths Dubai government

Weaknesses High competition

support High employee

High cost to maintain 8

Opportunities Continuously

Threats Competitors within

purchasing newest

the region following

fleet available Increase number of

the same model Change in

satisfaction

brand image

Wide area of business

Dependent on

activity (72 countries)

international moving

High customer loyalty

traffic Not catering for

destinations grows

governmental policies

market share

budget travelers Segmentation and targeting: To grow Emirates Airlines’ name in the international market, the target audience that they address are people with high purchasing power and are in the upper-middle to upper class of the population. The segmentation is done through income and occupation. In terms of the income segmentation, the upper-middle and upper class have the desired amount of expendable money and are likely to pay for the fares offered by Emirates and look for the type of services and benefits the flight experience offers. The occupation segmentation categorizes the audience into ‘business class’ and ‘working class’ to divide the target audience and know what percentage is more likely to fill which section of the plane. The business class seats are advertised to business travelers, while the regular section would be for the working class, both having different communication strategies. The working class would need to be inspired to pick Emirates and pay a high price for a leisure trip by highlighting the different services offered that make the experience unique. For the business class, where the price is relatively inelastic, the communication is aimed at the prestige, trusted commitment and efficiency that the flight with Emirates offers (more spacious, non-stop flights, uncompromised quality). Identifying these within the UAE and across the different countries that Emirates flies to is important in order to know how to position the brand and at what price are people willing to use the services by the airlines. It also helps to decide on the most effective promotion methods to attract the audience and identify the effective distribution locations. To guarantee the feeling of premium traveling, Emirates has a dedicated terminal in Dubai Airports, offering the VIP treatment even before the customer gets into the plane. Such aspects allow Emirates to justify the premium that it charges in comparison to its competitors. Positioning Strategy:

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Since 1985 Emirates airlines grown rapidly from just having two aircrafts to 171 widebody aircrafts including the world’s largest fleet of Boeing 777s and A380s. Emirates is one of the largest airlines in which it is trying to position itself as a lifestyle brand, it is not just offering a transportation from a place to another but a full experience and connection of people’s hopes and dreams. According to Emirates247, Emirates is “a fast-growing international airline with one of the youngest fleets in the sky and more than 400 awards for excellence worldwide.” Another way in which Emirates airlines position itself and make itself well-known and preferable to many passengers is by the skywards service. According to Emirates, they mention that skyward programme is an award winning programme in which it costs nothing to join but will change the way the people see the world forever. People could earn points “miles” and spend them with emirates or other partners. It can also enhance the travel experience in which they could update their flight experience and so on. Product Strategy: With Emirates airlines a customer is not only a flight attendant who travels with Emirates airlines, Emirates airlines cares about every need customer to make it an unforgettable experience. There are 3 different classes in the airplane which are First class, Business class, and Economy class. Each of these classes has different facilities and services provided to the customers. To begin with, First class and Business class passengers are offered a complimentary chauffeur driver to pick up the passengers from their home or hotel to the airport, as well as driving them from the airport to their final destination. This facility is available in over 70 countries around the world. In Dubai, First class passengers are provided with a Mercedes vehicle while Business class customers are provided a luxurious Volvo car. Moreover, In the Dubai airport there are both a First class lounge and a Business class lounge for their passengers. Passengers would enjoy a direct boarding to the airplane through those lounges as well as having free Wi-Fi access, a wide selection of food and beverages, and much more. Moving on to the flight itself, all the passengers are offered with different and exclusive facilities depending on their class in the airplane. Each passenger of the First class is provided with a private suite in the airplane in which they have a personal mini-bar and they could convert their seat into a fully flatbed as well as having a vanity table and mirror. First class passengers would also enjoy a fine dining experience throughout the flight. Another facility available to the First class passengers is 10

a Shower Spa which includes a selection of Bvlgari toiletries and signature Timeless Spa products. The Business class cabin also lets the passenger have a fully flat bed. Because the business class is specifically designed to meet the needs of their business passengers such as businessmen, writers, musicians, and much more, the facilities and services available are a side table to work on and an in-seat power for the laptop. And finally, Emirates airlines is not only taking care of the First and Business Class passengers but other passengers in the Economy class as well. The food that is provided to the passengers is inspired by the destination. There are also Wi-Fi services in the airplane as well as in flight entertainment for all the passengers. Emirates inflight entertainment is called ICE which stands for Information, Communication, and Entertainment. What is meant by information is information about Dubai, the flight, as well as catching up on news and sports during the flight. Communication is the service of Wi-Fi, data roaming on mobile phones, and SMS and phone calls through the in-seat airplane phone. And finally Entertainment, passengers enjoy over 1800 channels of different languages. They could watch TV shows, movies and video clips, listen to music, and play games. Pricing strategy Emirates gained one of the best advantages by operating at ultra-efficient airport that is providing tax free environment and it is also working on low labor cost too. Airline from 1980 are introducing best ever dynamic pricing based strategies that is then adopted by Emirates. This therefore allows airlines to best manage the proper seat capacity and by this highest prices can also be managed. At this point of time, dynamic pricing is termed as a complex methodology that is related to availability, customer demand as well as competitor pricing too. Distribution strategy In the marketing term, the customer along with product and service arenas needs proper distribution channels in order to generate optimal outcomes. The best ever distribution strategy is thus termed as one of the most important feature in order to attract customers towards this company. Emirates therefore follow different distribution based strategies. The term intensive based distribution links to the low offer rates of Emirate tickets. This is an offer especially for winters or summers and is at low rates too. This kind of offers is generally offered by various ticket channels that are available on Emirate websites too. Emirates 11

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