Emirates Airline Connected The Unconnected Case Study Analysis
Emirate Airlines was established in 1985, with an assistance of the Sheikhs of the United Arab Emirates, through the help of the Dubai government; however, an agreement with Pakistan made this possible. It is the part of the Emirates group. (Graham, 2010). Within 25 years of its establishment Emirates enjoyed great success and proved its capabilities after becoming the third largest airline in the world by capacity and the highest volume of international passengers. With the help of the business model the company profits increased and it started providing flights of less than eight hours.
This report revolves around the Emirates huge capital investments which it made in order to increase its capacity, as a result of which, the company faced various threats and opportunities in the global environment, in terms of political, economic, social, technological and legal implications. As the company started to grow geographically and increased its operations; many forces started to affect the company, such as: the threats from the new entrants and substitutes, competitive rivalry and bargaining power of suppliers as well as of buyers.
To achieve a competitive advantage; Emirates Airlines developed strategies and business models that are consistent with the company visions and goals. The main focus is on investment in technology, managing the human resources, marketing and branding, identifying new and suitable routes and association with government. This case provides insights into the strengths, weaknesses, opportunities and threats that the company has been exposed to.(Alcacer, 2014)
In the end, strategic analysis is covered to discuss the strategies developed by the company, to cope up with the marketing dynamics in the global environment as well as the local market. The purpose of the analysis is to find out the strategies that are suitable for the company and vice versa. The report also comprises of the company critical success factors.
- Q1- Please analyze the airline industry in the following steps:
- A1-Analysis of Emirate airline is carried out in the following steps:
Environment forces in the industry
Emirate provides its services to many developing countries and continents, such as; India, Iraq and Africa, where political instability is common, which can decrease the demand for flights. Moreover, the growing terror attacks that happened recently in Europe and in other parts of the world, can reduce the volume of flights. However, there are countries where travel is ban from few Middle-East countries, in such case demand will get affected.
UAE plans to invest in huge infrastructure, such as building main airports in Dubai and Abu Dhabi, which can play a major role in fluctuating the company demand. However, this is a great economic factor for the airline company to invest in technology to fulfill the customers demands. By building airports, economy will improve and tourist will be attracted, which would serve as beneficial opportunity for the Airline.
Increase in the population of developing countries is an opportunity for Airlines, as it will increase the volume of services. As the number of labors working abroad is increasing; airlines firms profits will increase, because these labors would need to travel to their homeland annually. Besides this, any infected disease, such as Covid-9 could pose a big threat to the company, which can reduce the number of passengers. Recently there was a ban on travelling because of the Covid-19, which lasted extraordinary effects over the profits of the Airline companies.
The frequent change in technology could have positive and adverse impacts on airlines. For example; now almost all the countries can afford cheap applications for meetings, which decreases the need of travelling to other countries for business meetings, and this was made easier and common after there the introduction of fast internet. However, there are benefits for Airlines as well, as customers can easily book their flights through applications or websites.
There are major environmental concerns for airlines as emission of carbon from flights is responsible for 12% of the carbon emission from the transportation industry, which is harmful for the environment. However, environmental uncertainties impact the company operations in case of hurricanes, snow storms, flooding and sand storms etc.
Different countries make models and associations to reduce the growth of trade by banning certain goods or using certain routes, for example: European and American countries were criticized for lobbying to harm the Gulf Airlines by using subsidies and renegotiation.
Porter five forces analysis
Five forces analysis is conducted to highlight the external threats and opportunities existing in the market, which impact the volume, revenues and profits of the company. This analysis is helpful for the company in determining its position in the market where it operates.
Threats from new entrants
There are low threats from entrants in this industry as there are high barriers of entry. Huge capital investment is required to enter into the market and to compete with the firms, and not every firm can take such aggressive decision. Airlines need to purchase latest air crafts and huge machinery to be stable in the market. Besides this, latest technology is required to maintain massive databases and for customers satisfaction…………………………………..
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