Category: Airlines

Introduction

Internationalization has been the driving force behind E-business in the Arab airline. This case study focuses on the internationalization process and its role in creating an environment that can support E-business and E-commerce with respect to Emirates airlines.

E-commerce and E-business are, also, evaluated with respect to value creation. The essay is based on two models when analyzing the E- business and E-management. These models are Osterwalder and Pigneurs Nine Building Blocks framework, and Amits and Zotts Value Creation model.

The objective of the essay is to capture the connection between internationalization of Emirates airline, its E-business and E-management. This relation will be in terms of value creation and value delivery to the intended customers. The essay will not, therefore, expound on the internal mechanism of the firm.

Brief Description of the Case

The company that is under study is Emirates airline. The airline is based at Dubai international airport in Dubai. It is the chief airline in the area with about 2500 flights per week. The airlines operate in 122 cities of 74 countries. The company offers some of the world longest flights.

The Emirates airline is fully owned by the government of Dubai since it is a subsidiary of the emirates group. The company is subdivided into two segments where one of the segments handles good transportation whereas the other handles passengers. The company has 4 subsidiaries namely Arabian Adventures, Congress Solutions International, Emirates Holidays and Emirates Tours.

In the mid-80s, the company received backing from the Royal Air wing of about 10 million U.S. dollars. The company, also, received two aircrafts from the royal family. The company was required to operate from outside the government subsidies as a condition that was put across by the financers.

The first managing director was Ahmed bin Saeed Al Maktoum who is currently the chairperson to board of directors. In the consequent years, the company began expanding its routes and fleet of airplanes.

The airplane shifted its operational bases to terminal 3 in Dubai International airport. This terminal was created with a sole purpose of facilitating growth of the airline which was remarkably rapid.

The airline is ranked in the top ten lists of the most successful airlines by both revenue and kilometre coverage. It has risen to be the largest airline across Middle East basing on different aspects of development. The companies became the fourth large airline on handling passengers and total distance coverage in the year 2011. The company holds the third position on the side of freights schedule.

The airline was recognized by Air Transport world with the award of the airline of the year 2011. The reward is based on the effectiveness of the company in enhancing safety and commitment to operational excellence. In addition, the award is reliant on the financial status of the firm, customer service and pace setting.

Internationalization

The world is changing rapidly whereby the business models that were applied traditionally have become outlived. This is because companies are facing challenging and complex factors that affect their business. Over the last two decades, Emirates airlines have entered the global market at a high rate.

Before the beginning of this phenomenon, Emirates airlines participated in global trade but were limited to certain segments of the global economies. The main reason why globalization of Emirates airline has occurred is the liberation of the United Arab Emirate economy (Gupta, 2007).

In this country, the government has changed policies and laws that have allowed the company to be a participant in global trade.

As a result, the company has redefined its mission and strategic position to cater for the renewed interest of the investors. This has resulted to airline executives seeking of a larger market shares in the global platform.

Emirates airline stands to benefit from its globalization in various ways. First, the company will expand its market share. The expansion of the market will aid the company to enjoy economies of scale, larger consumer pool and other advantages.

The company will manage to benefit from numerous opportunities that are there in the gulf region. One key benefit that is available in the gulf region is the availability of capital. The combination of this fact and reality of the limited domestic market motivate the airline to seek global participation.

Additionally, the globalization process exposes the firm. This means that the organization will have a global appearance that will attract many skilled and multi-talented workforces.

The availability of this employee calibre fosters creativity and establishes absolute advantage to the firm. This is because the hired employees are among the best hence their creativity and innovation will be of global standards.

The company will, also, spread various business and operational risks among several regions. Risk management is one of the key tools that determine business success.

In this regard, the airline has established various subsidiaries all over the world. In addition, the company will capitalize on its core competencies in the new established markets.

The final advantage that accrues to the airline is that it will compete effectively in various fronts. As such, the airline will have a fair share of the competitors domestic market.

Global Expansion and Orientations

The global expansion of the emirates airline is faced by several challenges ranging from technological, cultural, economic and political categories. Similar to other company, the Emirate airline managers have to confront these challenges diligently. There are no standard ways of managing this challenge.

The solution that the managers adopt is guided by various factors. These may include corporate management culture, literature that relates to management of foreign-based subsidiaries, hiring consultancy firms, and any other method that is deemed appropriate by the management.

On a general scale, there are two prominent orientation models that determine how the managers will manage foreign based subsidiaries. Ethnocentric orientations focus on bombarding the subsidiary with beliefs and corporate culture that is associated evidently with the parent company.

Polycentric orientations stipulate that the managers will use the factors and that are in the country where the subsidiary company is located to develop a solution. Geocentric orientations stipulate that the managers will evaluate the factors that prevail in particulate regions and formulate a solution for the subsidiary.

Geocentric orientations will compel the managers to apply global best practices to generate a solution. The Emirate airline has adopted a matrix that combines geocentric, geocentric and ethnocentric orientations (Larimo & Vissak, 2009).

The company has applied these orientations because it does not wish to detach the subsidiaries from the parent company core. In addition, the company has to achieve global standards hence it will have two factors in the world-accredited methods.

In other words, the airline has given semi autonomy to the subsidiary companies so long as they do not violate the base guidelines.

Selecting Strategic Markets

Globalization has become the optimal mode of business expansion. However, there are various markets in the world but each is unique in its own way. This means that the company cannot enter a market before evaluating its viability and the resultant value to the company.

The company has obliged to the concept of direct opportunism. This means that the company has formulated a logical and systematic approach which includes creating airline routes to underdeveloped countries, electronic commerce, and customized services to higher end customers.

Market Entry Strategies

Market strategy differs in various industries. Furthermore, the firms ability to apply a given strategy is another key factor. This includes the firm orientation, availability of resources, product life cycle, competition pressure, experience of the firm and its share in the hosted market.

There are policies that exist in the hosted market to define the mode of market entry. Emirates airlines have opted for fully owned subsidiaries.

Competing in the Global Marketplace

The world economic formation is changing rapidly. This is evidenced by the emergence of multi-national companies from the countries that are termed as third world and under-developed. This has seen the global market reduce the effect of the western owned corporate.

The new entrants have brought new and unique way of doing business. In this regard, the traditional tactics applied by the western owned multi-nations are becoming redundant (Larimo & Vissak, 2009). This has compelled executives to generate effective policies that will counter the new form of competition.

This has given rise to a new phenomenon. The current global trade is now based on quality and pricing, as opposed to the previous setting where cartels existed.

The fundamental goal of the strategies is to win customers and retain them. The company has adopted the global strategy. This means that the airline has used worldwide system to escape competition.

Global Integration Strategy

A company has two strategies of operation in order to sustain a global competitive presence. Emirates airline has faced non-favourable factors from its home market (Larimo & Vissak, 2009). The United Arab Emirates lacks the market size that is large enough to give the company a home advantage.

Also, inefficient levels of technology are among the negative factors that have been seen as the drawbacks. However, the company has established a global presence through its globalization plan.

E-Business and E-Commerce Management

In the global market, E-business and E-commerce are critical in determining a company competitive advantage.

Their application of electronic commerce and electronic business model is a fundamental aspect in a rapidly changing business environment. The modelling of a social system helps the business to understand the relationship between various co-domains.

Ontology of E-Business Model

The ontology establishes a shared familiarity of a given domain through determination of the available elements in the distinguished subject.

The model is based on four fundamental essentials. Products and services offered by a firm, the firm infrastructure and partner network, the relational capital between customers and firm, and the financial segment of the firm.

Product Innovation

The product innovation domain deals with all matters that relate to the company products (Bullinger, 2008). The elements that are predominant in this domain are value proposition that a firm intends to avail to a given customer class. In addition, the firms capability ensures that the created value is delivered.

Value proposition relates to the value that a company is willing to offer to a selected class of customers. ICT has created various revolutionary opportunities that enhance value creation.

In addition, ICT has established methodologies of efficient value creation that Emirates airline needs to minimize its costs. This, therefore, commences the opening of 3 forms of airline distinctions that are unique in the market.

The first opportunity that has been created is an innovation by application of new and customized offerings. ICT has enabled Emirates to incorporate detailed information into the services they offer. Also, it has facilitated digital making of products.

The second window of opportunity is through the provision of services and goods at a lower price compared to its competitors. Cost savings that are realized through rationalized infrastructure management are transferred to the customers. This allows the customer to enjoy lower pricing for the product.

The final opportunity comes in the form of premium customers and customer relation excellence. This is because Emirates airline designs a complete new range of products that argue the core offering value.

The three windows of opportunity are enhanced, further, by decomposing the concept of value preposition. There are three main segments in this decomposition that include; cost elements entailing price, risk and effort, customers role and value preposition performance.

The company webpage is exceptionally informative in matters that relate to its products. Pricing, daily flights, destination, and other airlines that work together with Emirates airline are available.

The firm has, also, established an online checking system, online booking system, and a mobile phone service that serves as the information dissemination point. On various occasions, the airlines offer subsidence travel fees through promotions.

Target customer

The term target consumer refers to a given consumer segment that a product is aimed to reach (Clark & Osterwalder, 2012). Emirates airline creates value to some customer segments and subdivides market share in smaller and reasonable segments that have similar needs.

Market scope is defined as the limitation of the firm in competing with various market segments. In other words, Emirates will have to choose which segment it will target a product based on factors such as geographical location.

There are two main methodologies that are applied by Emirates in segmenting the market which are business-to-business model and business-to-consumer model.

These aspects existed before the innovation of the internet, but the internet has revolutionized the marketing aspect. It has reduced the reliance of manual procedure to popularize the airline products.

Capabilities

Emirates airline provides services basing on the value proposition which has sufficient competencies that support the intended value. Capability refers to the ability by a firm to apply various value exploitation patterns on an asset. This ability is evident in Emirates operation.

Firm infrastructure and partner network

Infrastructure Management

This pillar expounds on system configuration. The system configuration is essential in enhancing value delivery. This is done through configuration of activities in a firm. In other words, the interaction between value creations on the delivery of value describes the concept of activity configuration.

Emirates have a fleet or airbuses and other modern aircrafts. Their personnel are rigorously trained and well exposed to offer the best service. The work is subdivided into various job groups. The cabin crews handle customers when on the plane while the ground crew handles the customers when on the ground.

Each segment of the workforce is trained to work together with each other to enhance value creation and consequent delivery. The company has invested heavily in airport maintenance that is part of its infrastructure. The company infrastructure is aligned to handle the firm operation efficiently.

Activity configuration

Emirates airline creates value that every client is willing and able to buy hence tapping into an existing opportunity. The created value is based on the combination of internal and external factors, resources and processes (Read, Dunleavy & Ross, 2001). The value chain framework is used in explaining business models.

In this framework, features such as efficient customer response are elaborated and executed. Emirates airline has established an online query option that addresses raised questions within minutes. The entity has a well-established customer support desk that operates 24 hours a day.

These positions aim at identifying disruption of work flow since employees at the customer care desk will realize that the customer is experiencing unsatisfactory service.

Partner network

These networks are defined as inter-organization stable ties that are fundamental to the efficiency of the firm. In response to the pressures from cost, the network will facilitate vertical disintegration. This, therefore, will foster the realignments of the network members.

As a result, the Emirates will concentrate on core competencies that give its competitive advantage. In this regard, the airline has entered into partnership with Qantas airline. This partnership intends to commence 14 flights daily that will fry back and forth between Australia and Dubai.

The agreement, also, allows Emirates to carry out interior flights in Australia, shared lounge and frequent flyer advantage. The firm is, also, a member of the skyline group among other associations. This network has helped the airline to concentrate on its core competencies.

Resources and assets

Emirates airline requires resources in order to undertake activities of value creation. These resources are divided into intangible resources that include patents and copyrights, human resource that include people, physical assets. The airline has accumulated these supportive resources strategically.

First, the company has established a brand name that has a global presence. This has helped it to attract and capture the attention of many travellers.

Secondly, the company has an elaborate fleet of aircrafts that are designed to meet various consumer needs. In this regard, the company has bought and leased 169 aircrafts of which 113 are acquired on operational lease, 50 are on financial lease and 6 are owned by the airline.

The company has placed an order of 223 other aircrafts and identified 70 more aircrafts as an additional option.

Relational Capital between the Customer and the Firm

Information Strategy

Information strategy has three aspects in it. The first aspect will involve timely and effective gathering of customer information. The 2nd issue relates to utilization of information in supporting the relationship between the two parties of interest in the business.

Thirdly, the airline has to exploit the information from customers to facilitate the discovery of other business opportunities. Trade intellect, data removal and warehousing of data are essential to managers since they help the management team to understand the consumers consumption trends.

The insights that the managers obtains are applied in developing consumers positive feedback effect. The airline has a wide range of customers and differentiated segmentation of the market share.

Therefore, it has a strategic advantage over the competitors due to the efficient methods of collecting information from customers. This helps it to design customer driven products. Information strategy enhances the creation of personal relations between the company and customer.

This means that the airline generates customer profiles that are subjected to collective filtering. The customers view this as a signal to evaluate the quality of services offered to them.

The organization has an elaborate ICT system with a capability to monitor consumers request, demands and complaints. This is evidenced by the routing of airline. It is observed that the company dominates in flights that pass, originate and stop in Dubai.

In addition, its price offers to various destinations is an indication that the firm has not yet established a substantial market share that can sustain the goal of profit making without being supported by outstanding offers.

Booking patters are, also, applied in determining the company core routes defended from external competitions.

Feel and Serve (distribution channels)

This refers to the methods that Emirates airline accesses the market and the methodologies it applies in reaching its customers. The airline has to determine how to deliver the value proposition. These channels function by making appropriate amount of a particulate product available in a right market and time.

The internet has a capability to match the course of action instead of cannibalizing it. Through this channel, it is possible for the airline to realize increased margins of profits and increased new potential markets.

However, although internet availability increases the number of delivery of value channels, it also raises the chances of disagreements. This calls for efficient management of the channels.

Emirates airline has embraced E- business. This is because most of its operations are internet based with little activities being conducted manually. This is evidenced by the numerous advertisements that indirectly insist on online book. The company is in a continuous process of adding services online other than creating outlets.

In addition, the company has its flight schedule online. Since the airline creates value through transportation, the company has devised a method that is reliable in enhancing value delivery. The customers use a timetable to schedule their activities. This means that the customer will arrive at the airport on time.

In the plane, entertainment is customized to a customer access wide range of entertainment materials.

The company has prioritized customer satisfaction through effective delivery of value created. The value that the organization creates is safe and timely flights.

The company has put adequate measures towards establishing a good customer relation and guarantee on value delivery. The company online booking system is convenient and interactive. The customers get to select their flights by him.

In addition, the airline has facilitated a customer with an option to select whether to have a stopover in Dubai. Furthermore, the airline has created an additional option for those customers who may wish to subscribe to emirates outstanding offers.

These are some of the strategic steps that the company is undertaking to ensure its competitiveness.

Trust and Loyalty

The world has reached a level whereby it is possible to develop trust without the actual physical presence of another party. Various researches have been carried out with an aim of finding out the level of trust in cyberspace.

In general, researchers have concluded that the level of trust between trading partner in the cyber space is convincing. Customer loyalty has, therefore, been described as the resulting aspect of satisfaction, contentment and reliance.

The airline develops loyalty and capital relationship with customers by creating positive dynamism and transactional relationships, which play a prominent role in harmonizing the customer and airline interests.

Emirates airline stands to benefit from a good customer relationship which is the source of customer loyalty. The airline offers products that satisfy their customers. Therefore, it is likely to retain the market size and attract new customers gradually.

This is because the satisfied customers act as advocates of the company services and products. To attain the required level of competency and guarantee customer satisfaction, the firm has established a link between the airline and the customers where information can be passed easily and conveniently.

ICT has facilitated the creation of this link. The company will establish new and unique ways of value delivery and broaden the strategies of reaching customers through developed channels.

The business realizes that most of the current global transactions are based on trust and loyalty hence face to face interaction is being forced out.

The airline has maintained its domestic market even with the invasion by other international airlines. In addition, Fly Emirates is a national carrier to various nations. This shows that the company enjoys consumers loyalty from the domestic customers and other external markets.

Financial Aspect

Revenue Model

The revenue model will refer to the firm competency in converting the value created into revenue generating activities. Emirates airline has different revenue models that have different pricing models. The ICT based pricing strategies are applied to enhance the gathering of revenue.

In particular, internet provides an array of pricing strategy that is available throughout the globe in a fast and steady way. Through the internet, it is possible for consumers to compare prices.

The company has managed to convert the value created into financial gains. The company has reported increased customer traffic and higher rates of cargo handling. For instance, the company capacity increased to 35467 million ATKM while the load carried rose to 23672 million RTKM in the year 2011-2012.

The load factor rose to 66.7% while breakeven load factor increased to 65.9. All these indicate how the company has successfully converted the value created into revenue sources.

The company has, also, integrated other related businesses into its financial model such as engaging cab companies in delivering customers from the airport to the hotel, hotel bookings and Dubai high street scheme.

In the last financial year, the company revenue from this activity rose by 56.7% while the revenue from ordinary trading activities rose by 23.7%. This implies that clients are relying heavily on the airline services to enhance their travels.

Cost Structure

This refers to the amount of moneys incurred in value creation. This sets the price tag on all the resources employed. The airline will focus on its competencies and source of the non-competencies from third parties. Effective application of ICT by the airline helps to achieve the desired results at lesser costs.

The company over the previous years has realized growth in costs. Costs in its model are subdivided into two categories namely direct category and indirect category. The increase in direct category has been as a result of increment in activities which have been brought about by its innovative products.

The indirect category comprises of office overhead costs. The company has realized unstable rates of cost in the recent years. This has been attributed to higher credit card rates, losses from the exchange rates, increased online sales, and costs from the training deck crew.

Jet fuel is the main cause of instability in the level of costs. Since jet fuel does not have a fixed rate, the airline lacks control in influencing the costs of the jet fuel. However, the company has adopted a method that helps to cost share fluctuation with the client.

Analysis from an E-business perspective

Value Chain Analysis

The value chain framework is responsible for analysing value creation at the firms level. The framework identifies the airlines activity and determines the economic implication of those activities (Currie, 2004).

In this framework, the business will determine its strategic business unit, critical business activity, product definition and establishment of activity value. In response to these concerns, the airline has devised adequate methods to address them.

A customer defines value as the amount s/he is willing to offer in the acquisition of value created by the airline. Consequently, the airline is deemed profitable because creates value that exceeds the cost incurred in creating it.

Innovation is a key and fundamental origin of value conception. The theory, further, suggests that Emirates will archive optimum value creation by application of technology in activities which are coupled with a strategic combination of companys resources.

This will result in transformation of the airline industry market resulting in occurrence of economic development.

Creation of virtual markets broadens the innovation space since it is not limited by boundaries. As the airline seeks to exploit new opportunity for value creation, it builds on the concept of virtual market with the aim of enhancing value creation (Funabashi & Grzech, 2005).

This is because these markets create new exchange mechanism and unique transaction methodologies. In addition, innovation is a driving factor in value creation that should not be viewed as the only source of creating value in the virtual market.

The airline has identified the key business unit to be transportation segment of the company. This has enabled the company to provide various travel packages that target different customers. In addition, the airline has developed various supportive services to enhance the experience of travelling.

Application of technological innovation is evident through various ICT supported activities such as booking and online checking of flight timetable. This has enabled the company to reach numerous global markets and serve them adequately.

The value of the business has been created through enhanced customer experience in travelling that starts from the enquiry desk to their arrival of their destination.

Firms resource bases

This view identifies a firm as a pack of capability and capital. RBV provides mobilizing resources and combines them in a unique manner that has to be built over a period due to the challenges that are possessed by market imperfection (Gupta, 2007). This aims at creating and preserving the value.

The concept of value sustainability is paramount since it is a motivating factor for the creation of value. A network economy is featured by choice possession of capital, and capability and capital regulation. Access to similar resources through the practical markets is relatively easy and enhances the maintenance of worth.

However, this model of doing business is extremely risky since the competitor can easily access alternative resources. Consequently, it is forcing out the competitive advantage that may have accrued to the firm.

The airline has laid a lot of focus in resource accumulation and efficient utilization. In this regard, the company is indeed a bundle of capabilities and resources. The company has established a team of dynamic employees coupled with a supportive board of directors.

The company has invested heavily in leasing substantial number of airplanes. In addition, the company has partnered to enhance competitiveness with other airlines. This has made it part of the global network economy.

To counter the risk of competition, the company has stepped up its advertisement in the virtual market. This is done with an aim of securing and extending the existing market share.

Strategic Networks

Strategic networking is defined as a stable relationship between organizations that offer strategic importance to the involved parties. These networks take several forms such as joint ventures, strategic alliances and long-term buyer seller relationship. This concept seeks to understand why and how these ties are established.

Also, it will reveal the methodologies that are applied to level the playing fields such that inter-firm relationship allows the involved firm to compete within the same market. The concept, also, checks how value is created and how the difference in a firms position affects the performance.

Network thinkers, whose background is in sociology, have narrowed on inferences of network configuration on significance design. Factors, such as centrality and solidity of the network, have been viewed as vital determiners of the set-up reward.

Network size and similarity in products has been proved to possess a positive impact on the performance of the involved firms due to availability of information that relates to that industry. Emirates airline is a member of the association within the airline business hence stands to benefit from the operations.

The emergence of networks whereby the hierarchical and market mechanism exist harmoniously has improved the forms of organizational arrangements that are meant to boost value creation (Jaksic 2012). As a result, executives have advanced to a level that goes beyond the normal innovative transactions.

In this method, the company is distinguished from an ordinal online business and is portrayed to be tapped from the traditional sources of business that exists in a given organisation. This means that virtual markets are exclusively new opportunities for value creation.

This facilitates by structuring the transaction of the organization in the novel way. These transactions are omitted in the network theory. This argument holds in the case of Emirates airline.

Transaction Cost Economics

Transaction cost economics seeks to understand the reasons why firms chose to internalize transactions that could be conducted in the market (Jaksic 2012). This structure postulates that a deal will take place when a product is moved across an interface that can be separated by technology.

In other words, this theory focuses on most efficient governance methodologies that Emirates airline uses with respect to a given transaction. The method evaluates exchange frequency, uncertainty, and assets that they are responsible for enabling the exchange.

The role of cost economics is to identify efficiency that relates to the exchange of transaction. In this regard, it helps Emirates airline to reduce the costs of doing business. Conception of value can be derived from shrinking of ambiguity, irregularity and intricacy. The form reputation helps in lowering the airline operational costs.

The business strategy has helped to improve the efficiency of value creation. This is because it has eliminated some costs that were previously involved in the running of the economies such are numerous booking points and expensive advertisements.

The ICT infrastructure supports the transaction cost of economics hence optimizing on capitalization of the value created. Furthermore, ICT is a value creation foundation.

Conclusion

The company has achieved global standards through its efficiency in value creation and delivery. In this regard, the company has managed to abide by the nine building blocks that have been developed in Osterwalder and Pigneurs Nine Building Blocks framework effectively.

The company, also, has scored high marks according to Amit and Zotts Value Creation model. This is an indication that the company is prepared to fight on a global scale.

The company has not been left out in the internationalization process that has been going on the Middle East. The company has established various destinations in the world as part of the gross internationalization process. In this regard, the company growth has been attributed to the recognition of its brand name.

This has resulted to increased attraction of customers. In addition, the customers have come from all over the world to evidence that the company has benefited from a larger market.

Recommendation

The company has realized unprecedented growth from internalization and developing new supportive services. However, there are other emerging airlines that are posing serious level of competition. The company should start to think about re-engineering their strategies so that they can diversify on their operations.

This should include customized classy airplanes that will serve higher edge business executives and celebrities, helicopters, and other forms of air travels.

Also, the company should include other supportive services such as liaising with more hotels and cab companies in order to offer an all-inclusive service.

Also, most travellers to Dubai have business intention hence it should come up with a bureau of suppliers and other sellers in the city so that their customers can access such information from the airline information database.

These additional services should be included in developing the company products. This will help the company to consolidate the market share in the future.

The company should enter with a bilateral agreement with the manufacturers. This means that the company will try to establish a good relationship with the manufacturers. The current state of the airplane manufacturing segment experiences many delays. This has resulted to slower expansion rate.

A partnership with a manufacturing company will benefit from timely development of airplanes that will accelerate the expansion and growth of the company. These advances will facilitate broadening of the airline and bring income to the airport. The techniques should be applied to facilitate development of the airline.

References

Bullinger, A 2008, Innovation and ontologies structuring the early stages of innovation management, Fachverlage, Wiesbaden.

Clark, T & Osterwalder, A 2012, Business model you: a one-page method for reinventing your career, Wiley, Hoboken.

Currie, W 2004, Value creation from e-business models, Butterworth-Heinemann. Oxford.

Currie, W 2004, Value creation from e-business models, Elsevier Butterworth Heinemann, Amsterdam.

Funabashi, M & Grzech, A 2005, Challenges of expanding Internet e-commerce, e-business, and e-government : 5th IFIP Conference on e-Commerce, e-Business, and e-Government, Springer, New York.

Gupta, P 2007, Enhancing enterprise competitiveness: (marketing, people, IT and entrepreneurship), Ahmedabad Inst of Management, Nirma University of Science & Technology.

Jaksic, M 2012, Innovative management & business performance symposium proceedings, University of Belgrade, Faculty of Organizational Sciences. Belgrade.

Larimo, J & Vissak, T 2009, Research on knowledge, innovation and internationalization, Emerald, Bingley.

Read, C, Dunleavy, J & Ross, J, 2001, ECFO: sustaining value in the new corporation, Wiley, Chichester.

Managerial Economics Assignment: Evaluation of the Airline Industry

The UAEs airlines are highly known in the world, as Etihad Airways and Emirate Airlines have been viewed as the best air transportation companies in the world (Rapoza, 2014). Meanwhile, Etihad Airways has been awarded and ranked as the best global airline recently (Rapoza, 2014). Nonetheless, it is still unclear whether the particular variables in the competition tend to drive the profitability of the companies and their recognition.

In this instance, the primary goal of this research paper is to evaluate the nature of competition in the airline industry while assessing the sustainability of the competitors in the market and their strategies applied to enhance their profitability. Simultaneously, the core risks and uncertainties will be analyzed while determining the variables influencing the overall functioning of the industry. In the end, the conclusions are drawn to summarize the critical findings of the paper.

Nature of Competition and Sustainability in the Market

The analysis of the nature of competition and the definition of the key variables affecting the sustainability of the companies in the market are the initial steps in the context of the presented research paper. The overall competition in the industry can be divided into sectors including the regular-premium (Emirates and Etihad) and coasters such as Air Arabia and Flydubai while having the operations in national (Rotana Jet) and international segments (Flanagan, 2015).

Meanwhile, the airline industry tends to grow due to the emerging nature of the country, while Emirates remains a leader in the market with a revenue of 82,636 (in AED) in 2015 (Graham, Papatheodorou, & Forsyth, 2016; The Emirates Group, 2016). Consequently, the second place is occupied by Etihad ($4,100 million) and others have lower revenues and share the rest of the market (Ishak, 2012).

In turn, not only the cheap airlines practice the short-distance flights but also have the connections with the long-distance locations, and these factors define their ability to be considered as one of the competitors for the rest of the carriers (Flanagan, 2015). Based on the information provided above, the primary diversification is based on the quality of the services and the additional features offered while the overall competition can be considered as intensive, as the companies from all sectors tend to aim at the increase of their market shares.

Meanwhile, the sustainability of the companies is affected by various factors including the satisfaction of the customers, safety, innovation, eco-efficiency, and other aspects, which are defined by the International Air Transportation Association (IATA) (IATA, 2016).

In this instance, the compliance with the aspects mentioned by IATA determines the Emirates success in the market, as it highly focuses on the eco-friendliness and development of the favorable conditions for the customers (Emirates: Emirates greener 2016). Nonetheless, other variables including the potential changes in consumer behavior have a dramatic impact on the size of the market shares of the competitors. Nowadays, the customers tend to scarify comfort for the lower price, as some users view the airlines as a mode of transportation without any need for the supplemental services (Middleton, Fyall, & Morgan, 2010). This aspect explains the growing popularity of the low coasters in the UAE airline industry and affects the distribution of the customers among competing firms.

Strategies to Increase Profitability

Based on the information provided above, the carriers tend to utilize sophisticated strategies to improve their position in the airline segment, as the competition and contest for the market shares tend to elevate the level of intensity. In turn, this chapter has a correlation with the influencers (variables) of the overall competitive environment such as changes in the regulations related to sustainability and safety, consumer preferences, and public image. In this case, Emirates combines the reliance on the recognition, security, and the environmental support (Emirates: Emirates greener, 2016). In turn, Etihad also uses a similar strategy while aiming at no diversification between its clients and vehement significance of comfortability with having a perception of one of the best airlines in the world (Rapoza, 2014).

As for the low coasters, they tend to rely critically on the changes in consumer behavior while attracting the customers with affordable prices by reducing costs in the maintenance of comfortability. For instance, Air Arabia is one of the most profitable representatives of this segment, and its slogan states More than Just Low Fares (Air Arabia, 2016, para. 1). The airline tends to highlight its ability to fly to numerous destinations for a low price with its slogan and attracts an extended variety of customers by this feature.

Lastly, Rotana Jet is one of the airlines, which diversifies itself from the competitors by limiting its areas of operations to the flights within the UAE (Rotana Jet, 2016). However, despite its initial focus, it tends to increase its coverage by enlarging the number of destinations (Rotana Jet, 2016). Its unique strategy helps the company to improve its profitability, as it is a pioneer in offering national flights.

Risks and Uncertainties in the Airline Industry

Despite the favorable conditions for the airlines development and its leading position in the world, various risks and uncertainties are currently present in the UAE and may affect the future advancement of the airlines. One of the risks is the modifications of the international agreements and political restrictions, which are aimed at the decrease of the power of the Gulf carriers due to the violation of the Open Skies Agreement (War on competition, 2015).

This matter might be discovered as a potential cause of the limitation of the flights destinations while questioning the future profitability of Arabic airlines operating at an international level. In turn, this factor has a substantial influence on the companies operating globally such as Etihad, Emirates, and Flydubai while domestic carriers like Rotana Jet will also experience adverse consequences due to the shift of the competition in the national market.

Another risk is the continuous increasing intensity of the rivalry, as the entry barriers remain low due to the globalization and an extended variety of markets (Cederhom, 2014). Meanwhile, this trend cultivates the development of the price wars by causing changes in consumers preferences, as the customers prioritize the price over quality (Middleton, Fyall, & Morgan, 2010). In turn, the clients choice is affected by the current crisis and economic disturbances simultaneously, as it tends to limit customers possibilities by having an effect on the income. A combination of these factors changes the overall functioning of the airline industry by leading to the rise of the low-coasters while causing the risk to airlines such as Emirates, Etihad, and Rotana Jet with a different pricing strategy.

Despite the currently escalating trend of the low coasters popularity, the consumers preferences remain vague due to the constantly changing factors related to the continuous technological progress (Das, 2015). This matter can be viewed as a potential threat, as it cultivates the development of uncertainty concerning the probable areas of the strategic direction. Meanwhile, it implies that the inability to adapt to the changes will be a cause of the loss of the market share.

Due to the dependence of the United Arab Emirates on the oil production, the currency and the economic condition are highly reliant on this part of the revenue (International Business Publications, 2016). This matter can play in favor of the competitors due to the co-dependence of oil prices and the currency exchange. Consequently, the fares of Arabic carriers are highly reliant on the exchange rates, and strengthening positions of Dirham will lead to an increase in fares. Meanwhile, the competing companies from China and Qatar will attract the customers by lower prices.

Lastly, the overreliance on the reputation can be regarded as the potential threat, as any presence of the negative feedback will affect the perception of Etihad and Emirates while highlighting the outstanding services of Qatar Airlines, the primary competitor in the premium segment (Rapoza, 2014). Despite the rarity of the occurrence of the adverse situations related to the UAE airline industry, this factor cannot be unnoticed, as Flydubais plane had recently crashed in Russia while substantially questioning the overall reliability of Arabic carriers (Hanih, 2016). This negative portrayal might lead to the development of the political sanctions and limitations of the areas of operations while building adverse perceptions among consumers.

Conclusion

In the end, the airline industry in the UAE is a highly competitive, as the companies tend to focus on the quality of the services while aiming at the worlds recognition. In the interim, the low-cost and domestic airline providers tend to develop new marketing approaches with the focalization of the particular geographical areas and cost-leadership strategies. In this case, changes in the regulations, consumer preferences, and flexibility of the competitors have a substantial influence on the nature of competition and define the necessity of the alterations of the airlines strategies for sustainability and growth.

Based on the factors provided above, the critical uncertainties are related to the intensified level of competition due to the low entry barriers, the absence of the adaptive nature of the companies, political instability, and the economic disturbances while highly relying on the companys image and quality of the services.

References

Air Arabia. (2016). Web.

Cederhom, T. (2014). Economic impact of travel and tourism industry. Web.

Das, R. (2015). Handbook of research on globalization, investment, and growth-implications of confidence and governance. Hershey, PA: Information Science Reference. Web.

Emirates: Emirates greener, cleaner, quieter A380s take the skies. (2016). Web.

Flanagan, B. (2015). UAE travelers can save some serious money with low-cost airlines. The National. Web.

Graham, A., Papatheodorou, A., & Forsyth, P. (2016). Aviation and tourism: Implications for leisure travel. London, UK: Routledge. Web.

Hanih, N. (2016). Too soon to determine cause of FlyDubai crash, says General Civil Aviation Authority. The National. Web.

IATA: Standards, manuals, and guidelines. (2016). Web.

International Business Publications. (2016). United Arab Emirates: Oil, gas sector business and investment opportunities yearbook. Washington, DC: International Business Publications. Web.

Ishak, S. (2012). Top Airline group revenue. Airline Business, 28(8), 44. Web.

Middleton, V., Fyall, A., & Morgan, M. (2010). Marketing in travel and tourism. London, UK: Routledge. Web.

Rapoza, K. (2014). Why UAE and Qatar have the worlds best airlines. Forbes. Web.

Rotana Jet. (2016). Web.

The Emirates Group: Annual Report 2014-2015. (2016). Web.

War on competition has caused airline industry uncertainty. (2015). Global Travel Industry News. Web.

Historical Overview

Our airline is a leading American air carrier, one of the main advantages of which is extremely low prices. Spirit Airlines is headquartered in Florida today, but our history began in Michigan in 1964 (Spirit Airlines History, 2017). At that time, we had an entirely different name. A little later, in 1980, our creators decided to call the service Charter One. The planes of Spirit Airlines had not yet transported their passengers in different directions throughout the United States by that time, and the key points were the West Coast, as well as Atlantic City. Nevertheless, later, in 1990, the territory covered by our company increased. In 1992, the owners of the transportation service called our unit Spirit Airlines, and this name is familiar to almost all Americans today.

Every year, the coverage of the territory, where our company carries out its flights, increases. In the early 21st century, Spirit Airlines established a separate direction outside of America and aimed at Puerto Rico. Rather soon, our company received the status of a very low-cost carrier, and our pilots began to make their flights to different parts of the US and beyond. According to Spirit Airlines History (2017), there are about 52 flight destinations today, including the Caribbean, as well as Latin and South America. Modern equipment with high-performance and safe aircraft allows us to name our air transportation service one of the most convenient in the world. Having passed a rather long way of development, Spirit Airlines has evolved from a small enterprise into a major carrier, which annually delivers hundreds of thousands of people to different parts of the globe.

Mission Statement

Our mission is to prove to people that even long transportations can be inexpensive and comfortable, especially when it comes to a large family. We are always glad to our customers and believe that passengers should consider flights by plane not only regarding speed but also convenience. Our liners leave a positive impression for all customers because we do not seek to maximize the benefits while making minimum efforts. Conscientious work and quality performance of duties is an indispensable condition for a pleasant flight (Zou, Yu, Rhoades, & Waguespack, 2017). Moreover, when it comes to traveling at the height of several kilometers, safety plays a key role. Our highly qualified pilots have long working experience and will be glad to see grateful passengers on boards of our planes.

Vision Statement

We believe that it is better to bring our central concept to our clients only in practice. We do not set unattainable goals. Our Spirit Airlines has acquired the status of the most affordable carrier not in vain as passengers who trust us and have used our services for several decades confirmed this title. Transport corporations, as it is known, achieve a competitive advantage in business due to the opportunity to provide customers with the best offer (Elian & Cook, 2013). Our service guarantees people the chance to quickly and get from one point to another safely, and, judging by the feedback from grateful passengers, we do our job successfully. New liners, friendly service, a whole range of services are all that we are happy to offer our customers as additional proof of the responsibility that we adhere to.

Core Values

We realize that we should continually develop our capabilities and focus on the problems of other carriers to avoid them for our passengers to be satisfied with our companys service and use it regularly. Throughout the entire existence of Spirit Airlines, our corporation specialists have developed some core values that all our employees are steadfastly observing (Spirit Airlines History, 2017). Thus, it is worth noting several target areas.

Availability. We do not want our services to be affordable to just wealthy people. In todays world, every citizen should be able to reach any destination, and we are happy to give people this opportunity. The more people learn about the convenience of our service, the better.

Security. Certainly, low prices are a good advantage. However, it is equally important for passengers to feel secure and protected during the flight. Our company works with several dozen modern airliners, which are equipped with all necessary means of protection and are safe.

Comfort. If a passenger feels well on board the aircraft, his or her impressions will only be positive. Our trained staff of Spirit Airlines is making every effort to ensure that people entering the aircraft understand that stewards are happy to help them. We do not strive for the ideal; we provide comfort.

Organizational Objectives

Our clients should know that we continue to develop the range of services. Our plans include the constant expansion of flight directions, as well as equipping the company with more advanced facilities that meet all modern standards of quality and safety. As Calkins (2015) notes, passengers should realize that Spirit Airlines is not only a beautiful name and low prices but also a large complex of universal services, which include charter and global transportation. If people are confident in the quality of our work, it means that all our improvements have not passed in vain.

References

Calkins, T. (2015). Spirit Airlines: The power of a clear strategy. Web.

Elian, J., & Cook, G. N. (2013). Spirit Airlines: Achieving a competitive advantage through ultra-low costs. Journal of Aviation/Aerospace Education & Research, 23(1), 23-34.

Spirit Airlines History. (2017). Web.

Zou, L., Yu, C., Rhoades, D., & Waguespack, B. (2017). The pricing responses of non-bag fee airlines to the use of bag fees in the US air travel market. Journal of Air Transport Management, 30, 1-11.

Introduction

The American Airlines (AA) is a plausible case study organization for linking the theory on diversity management and its roles in fostering the performance of an organization with actual reality on the ground. The organization operates an intensive domestic and international air transport networks.

Being in the managerial position, I play critical roles in ensuring that the organization excels in terms of achieving its key objectives, hence its performance, by enhancing cute management of these diversities (Dobbs, 1996, pp. 351-367).

The failure of the organization to campaign for the management of diversity in terms of gender, race, age, community values, sexual affection, income levels, work experience, parental status, religious beliefs, ethnicity, religion, and physical abilities among its key stakeholders-suppliers, employees, and customers-is the central cause of the witnessed problem of workforce diversity. Overall, it translated to poor performance within the organization.

Identity of the problem under study

Organizational diversity here refers to the myriads of differences existing among people working in the AA with regard to the aforementioned parameters like gender, race, amongst others. On the other hand, workforce diversity management refers to a comprehensive managerial process for developing an environment that works for all employees (Kellough, 1990, pp. 557-566).

Workforce diversity is a problem that not only bothers the AA but also the workers themselves. This follows since mishandling of the various diverse affiliations of people impairs their morale.

To the AA, this is an immense disadvantage to its productivity since reduced workforce morale impairs negatively its profitability due to reduced workers output. Workforce diversity is a problem here to the extent that its inappropriate management results to low workers altitude towards work. Failure to manage organizational workforce diversity in the AA is not a symptom of another more fundamental problem.

The fact that the organization employs these people of valid diversities is the root cause of the problem of managing cutely the diverse workforce in order to enhance the performance of the organization (Kellough, & Elliott, 1992, pp. 1-13). This challenge follows because the organizations workforce is diverse in terms of the beliefs upheld, which again stems from the cultural differences of the organizations pool of stakeholders.

Literature Review

An increasing number of scholarly studies from different researchers like Kearney, Gebert and Voelpel (2009) gave support to the claim of the challenge of workforce diversity management. These researchers studied eighty-three different groups from different organizations for their tendency to engage in and enjoy effortful cognitive endeavors (p. 584).

The three researchers found out that education and age diversity had a direct relationship to the outcomes they anticipated where a teams quest for recognition was remarkably high. Organizations depend on work teams to realize various solutions that are vital for success of the organizational business. For optimal output, it is essential that these work teams work in harmony. This calls for the teams to uphold common work ethics and norms.

However, this is a challenge upon noting that, in the globalization age, such work team members are diverse with respect to age, skills base, ethnic or race, and nationality amongst other diversity parameters. As the researchers inform, both the elaboration of task-relevant information and collective team identification mediated a moderating effect of need for cognition on the relationship between both types of diversity and team performance (Kearney, Gebert, & Voelpel, 2009, pp.581-598).

On the other hand, scholarly work by Eden et al (2011, pp. 1103-1118) supported the analysis of the problem. They integrated psychological and sociological perspectives in their research on the value that ethnic diversity has in an organization within the contexts of community diversities. Therefore, based on the expositions made by these scholarly sources, there is a need to check in depth the problem of workforce diversity management in a bid to tell how any organization, leave alone the AA, can manage it to enhance its productivity.

Analysis of Problem

Incivility is one of the direct causes of the problem. Existing census data and performance indices coupled with patient surveys applicable in 142 hospitals within the United Kingdom places a heavy argument that ethnic diversity within an organization relates to decreased patients civility (Cornwell & Kellough, 1994, pp. 265-270).

However, according to Eden et al., the degree to which organizational demography was representative of community demography was positively related to civility experienced by patients and ultimately enhanced organizational performance (2011, p.1103). Biasness is another direct cause of the problem. The finding by Eden et al. suggests that biasness in intergroup work members manifested in the form of incivility perceptions toward an out-group member acts as an impediment to the performance of an organization.

Discrimination is yet another direct cause of the problem facing the American Airlines. If there is no acceptance of diversity in an association, at times it results to varying intensities and sorts of discrimination. The discrimination that exists includes disability, race, sexuality, sex, religious conviction, financial status, and cultural conditions.

There are numerous leadership and organizational behavior concepts in the problem of workforce diversity. The first one is presumptions and Stereotypes. If the management team of the AA dispenses individuality to a whole group instead of evaluating every person on his/her own virtues, there will be challenges since conceptions are naturally inaccurate and based on unfair stereotypes. The second is Harassment. Attitudes implying denial can result to harassment to other people who are different from those provoking this conduct.

The third is Exclusion. For diversity plans to flourish, it is significant for the AA to eradicate organizational propensity to reject people for reasons that do not concern the job (Pitts, & Jarry, 2007, pp. 233-254). The fourth is High turnover rate. It is expensive as every time an employee leaves the AA, he/she must spend time and money on employing latent fresh interviews, hires, and consequently, training fresh workforce.

Possible solutions

The American Airlines should employ diverse people. Actions against the challenge of diversity management include:

• To structure the myriads of the American airlines stakeholders differences into a form that does not serve the purposes of distinguishing the corporate citizenship and diversity. The organization deserves to deploy innovative strategies. This would leverage community involvement, diversity, and corporate citizenship across the entire organization in the endeavor to facilitate the existence of a harmonious work environment thus fostering the performance of the core business of the organization such as procurement, sales, advertising, and marketing (Riccucci, 1997, pp. 35-41).
• Best practices affiliated to management of employees diversity as among the core organizational behaviors need facilitation through hiring targets for leadership trainings on diversity and development of resource networks for employees without negating the consideration of diversity issues at the highest ranks of the organizations management.
• There is a need to resolve the challenge of conflicts of interests among customers, suppliers, and community of the American Airlines that emanate from differences in diversity among these stakeholders. The organization needs to put into place strategies like policies that would enable the organizations management to understand the community, customers, and suppliers as block (Von Bergen, Barlow, & Theresa, 2002, pp. 239-251). This measure needs to be highly acclaimed at the organization since it can make the organization acquire global competitiveness in terms of service delivery.

Reference List

Cornwell, C., & Kellough, E. (1994). Women and Minorities in Federal Agencies: Examining New Evidence from Panel Data. Public Administration Review 54(3), 265-270.

Dobbs, M. (1996). Managing Diversity: Lessons from the Private Sector. Public Personnel Management, 25(3), 351-367.

Eden, K. et al. (2011). Why organizations and community diversity matter: Representativeness and the emergence of incivility and organizational performance. Academy of Management Journal, 54(6), 1103-1118.

Kearney, E., Gebert, D., & Voelpel, S. (2009). When and how Diversity Benefits Teams: The importance of team members need for cognition. Academy of Management Journal, 52(3), 581-598.

Kellough, E. (1990). Integration in the Public Workplace: Determinants of Female and Minority Representation in Federal Agencies. Public Administration Review, 50(4), 557-566.

Kellough, E., & Elliott, E. (1992). Demographic and Organizational Influences on Racial/Ethnic and Gender Integration in Federal Agencies. Social Science Quarterly, 73(1), 1-13.

Pitts, D., & Jarry, E. (2007). Ethnic Diversity and Organizational Performance: Assessing Diversity Effects at the Managerial and Street Levels. International Public Management Journal, 10(2), 233-254.

Riccucci, N. (1997). Cultural Diversity Programs to Prepare for Work Force 2000: Whats Gone Wrong? Public Personnel Management, 26(1), 35-41.

Von Bergen, W., Barlow. S., & Theresa, F. (2002). Unintended Negative Effects of Diversity Management. Public Personnel Management, 31(2), 239-251.

Some of Demings points that can be helpful to Kingfisher Airlines during times of crisis include elimination of waste in all functional areas. This is very important because it emphasises on maximum utilisation of available resources. This means that the organisation can be able to save some money that could be used in buying resources to replace those wasted (Bedi, 2004).

The human resource department should come up with a strategy whereby employees are scheduled in a way such that to attain maximum productivity. In fact, under-utilisation of employees can be dangerous since it leads to wastage of man power. This happens when tasks are allocated more workers than required. Therefore, Kingfisher Airways should make sure that they retain just enough employees.

Another important point is consistency because it creates a sense of reliability to customers. Regardless of economic situations, Kingfisher Airlines should work hard to ensure that it remains consistent in service provision. The management should consider all options to make sure that they keep their promises to customers. In fact, they should consider outsourcing from other players in the market rather that cancelling flights without proper notices.

Inconsistency leads to frustrations among customers, and this turns out to be disadvantageous for the organisation. Since customers prefer organisations that will offer quality services at all times, they may decide to ditch Kingfisher Airlines for its competitors. This is dangerous because if customers shift their loyalty to other players in the market, chances are high that the organisation may lose its popularity hence falling.

The attitude of supervisors towards workers is another point that should be considered by Kingfisher Airlines during times of crisis. This means that employees need to be handled in a humane manner regardless of the situation facing the organisation. This means that supervisors should engage workers in dialogue regarding issues affecting their company (Berwic, 2000).

They should reach consensus on matters pertaining their compensation instead of threatening them. In addition, workers should be made aware of the importance of having them to work on shifts.

Commitment from the top management is another strong point that can help Kingfisher Airlines. This is very important because managers can save the organisation from collapsing only if they are committed. They can come up with powerful decisions aimed at making sure that the Airline survives regardless of the impact of the crisis. By doing this, Kingfisher Airlines may stand better chances of surviving and remaining profitable. They should act swiftly in order to retain their loyal customers.

Jurans quality spiral in the context of Kingfisher Airlines

Jurans quality spiral focuses on all aspects that organisations should consider in order to improve the quality of their products and services. This includes carrying out a market research to find out what customers expect from the organisation. For instance, Kingfisher Airlines should conduct a market research aimed at finding out what passengers expect from their company.

This is very crucial because, through accepting customer feedbacks, the company can be able to focus on areas that need improvement. Market research can help the airlines company to come up with an appropriate pricing strategy hence setting prices that are acceptable by customers. Customers prefer flying with companies that offer quality services at affordable prices.

Product development and design should be considered by Kingfisher Airlines to make sure that it comes up with services desired by customers. This helps organisations to maintain their growth trends since customers keep on returning for their pleasant services which means more money for their companies.

It is important for Kingfisher Airlines to design several products aimed at reaching customers from various segments. For instance, they may have a section for very important personnel who prefer privacy hence making sure that such individuals remain as their customers (Nembhard, 2008). On the other hand, they should have sections that can accommodate the general public hence capturing the low income earners who may wish to fly with the airlines company, as well.

Kingfisher Airlines should make sure that it has a marketing administrative support that will be tasked with marketing responsibilities. This is very important since people need to be made aware of the Airlines Company and services offered to their customers. This is very important because loyal customers will get a chance to be reminded of the company.

At the same time, new people will learn about the company, and they may decide to try the Airline whenever travelling. Marketing administrative support helps to identify types of promotion to be offered in order to attract more customers. For instance, they may decide to give discount on air tickets during given holidays hence increasing the number of customers willing to fly with them.

The company should make sure that their customer services remains very hospitable and responsive. This is important because customer issues need to be prioritised in any organisation in order to remain preferable. Kingfisher Airlines should make sure that its customer service is very effective. This means that their crew must ensure that customers remain satisfied, and customer complaints should be taken seriously. This helps in building customer loyalty hence translating to increase in profits of the organisation.

Assess if quality circles would be helpful in making the airline better in quality

Quality circles refer to groups of workers who volunteer to discuss matters affecting them in their work places. Quality circles work in some industries and fail in some others. This depends on the sensitivity of involved procedures and steps required to improve the current situation (Panella and Vanhaecht, 2011). According to the nature of Airlines industry, it is very hard for quality circles to work for this company.

This is because some issues facing Kingfisher Airlines can only be solved by decisions made my managers. Therefore, there is not much that employees can do about any situation or challenges they face. For instance, the crew can only present their challenges to their supervisors who forward them to their seniors.

This happens because they have limited abilities to impose changes to improve their working conditions. In most cases, organisations prefer involving all parties in seeking solutions for their challenges. This is important because ideas from different people are considered hence helping to come up with concrete solutions. Quality circles may not be appropriate for this organisation because they only few people are involved in discussing challenges they face in their departments.

For an organisation, running Airlines, there are many departments, and they work hand in hand. Therefore, a meeting held by few people to discuss challenges facing their department can be of no importance to the organisation. This means that challenges in any department should be addressed by all parties to ensure that they do not have impacts on other departments. Kingfisher Airlines have to make sure that managers are involved in decision making regarding challenges facing workers in various departments.

They have to consult before coming up with any conclusion regarding actions they have to take. This makes sure that all decisions made by managers represent interests of all departments hence improving on transparency and accountability. In case managers need to allocate funds to deal with the challenges, they have to consult experts for more advice.

This is because experts come up with the exact amount of cash required to make sure that the issue is solved. Although quality circles promote confidence and trust among employees, the strategy may not work out for an organisation such as the Kingfisher Airlines.

Poka-Yoke devices that can be used by Kingfisher Airlines to help its employees in avoiding errors

Poka- Yoke refers to devices or methods that can be used by people in order to avoid making mistakes. In fact, Poka-Yoke is a Japanese word which means mistake proofing. Kingfisher Airline should come up with devices that can help its workers to avoid making mistakes. This is very important because workers in the service industry need to be cautious in order to ensure that they do not make mistakes that can keep customers away (Panella and Vanhaecht, 2011).

This means that devices such as alarm clocks or cockpit communication systems should be installed in planes to remind the crew what need to be done. This is important because individuals may get tired hence losing concentration and quality services have to be rendered regardless of how tired a worker may be. Therefore, Kingfisher Airlines should make sure that there are devices programmed to remind workers to check the quality of their services.

The pilot may also use a given device to keep on reminding him of his responsibility. For instance, he may set up an alarm so that after some time he has to check the operating systems and ensure that all is fine (Foster, 2004). This is very important because he may forget to check on some aspects due to fatigue or reduced concentration. When the alarm goes, he can remember to do what he had forgotten hence avoiding making mistakes.

A mistake made by the pilot can be fatal since it can cause a plane clash leading to loss of lives. In fact, Poka- Yoke devices should be used in offices where customers book for their airlines or report for arrivals and departures. This can be set in a way such that any time a door is opened, a certain sound is produced communicating to the workers.

This may be to remind them to receive customers in a hospitable manner and offer any assistance they may require. This is very important because customers will receive humane reception every time they enter into Kingfisher Airlines offices hence becoming loyal to the company.

How Taguchis quality loss function can be applied in making sure that all the flights of Kingfisher are always on time

Taguchi came up with a function of minimizing loses by high percentages. He argued that, in many organisations, loss occur due to poor planning before beginning running the project. In fact, he argued that changes should be done at the design stage because little cost is incurred.

This means that people should take time to test their products at the design stage to minimise loss. For instance, if an organisation is designing a product and they notice some faults at that stage, they can modify it without incurring any cost (Taguchi, 1999). If they ignore such changes and introduce the product to the market, if customers notice the fault the organisation may incur a lot of expenses to rectify the error.

Therefore, Kingfisher Airlines should make sure that quality of its services and products is checked at the design stage. For instance, they should carry out a lot of tests to find out customer response to services before officially launching them. This is important because may have a chance to modify their products and services in accordance with customer expectations. This can be done after analysing customer feedbacks hence ensuring that the products and services conform to such expectations.

This is very economical for the organisation because products, which seem to be less preferred by customers, may be left out of the system hence acquiring only those that sell in the market. In fact, the Airline should make sure that they consider quality of their different products before launching them. For instance, they should test services to be offered to various classes of passengers to ensure that they meet the promised quality requirements.

This is important because it eliminates instances where customers are offered poor quality services. This may cause protests from sections of customers hence affecting credibility of the organisation (Foster, 2004). In addition, Kingfisher Airlines should struggle to make sure that it has qualified employees to make sure that they design perfect products and services for their customers. This helps in assuring managers that loss due to poor design will be kept at minimal hence increasing profitability of the Airlines Company.

References

Bedi, K. (2004). Production and Operations Management. London: Oxford University Press.

Berwic, D. M. (2000) Continuous Improvement as an Ideal in Health Care. The New England Journal of medicine, 320(27), 53-56.

Foster, T. (2004). Managing Quality: An integrative approach. New York: Prentice hall.

Nembhard, H. B. (2008).Editorial: Statistical Quality Control in Healthcare. Quality engineering, 20(4), 402-403.

Panella, M. & Vanhaecht, K. (2011). Care Pathways and the cost of poor quality. International Journal Care Pathways, 15(1), 1-3.

Taguchi, G. (1999). Role of S/N ratios in Multivariate Diagnosis. Journal of Quality Engineering Forum, 7(6), 63-69.

The size of an aircraft has a profound effect on airline unit costs. The larger the aircraft, the lower will be its operating cost per passenger (Williams 2001). European low-cost carriers in the recent past have enjoyed tremendous growth. Notably, well established low-cost carriers (LCCs) have proved to be more resilient across the regions, despite the differing economic as well as market dynamics. However, the strong performance posted by the players of low-cost sector can be said to have been short-lived as a past examination of the last two years shows that there are casualties of declining in LCC industry with major indicators for this trend being Slovakia based Sky Europe, the UK based Flyglobespan and MyAir of Italy which were major casualties during 2009 financial meltdown. Having set the stage for the assignments scope, this paper aims at analyzing the low-cost carriers and their networks in the European airline market.

The profitability trend of the European LCC has been on the constant rise despite several problems associated with the industry. Despite the hard economic periods experienced in the last two years, some players in the market, such as Ryanair as well as Easy Jet continued to operate profitably even when most competitors in the larger airline industry were reporting a massive nosedive in profits especially during the 2008 to 2009 economic crunch. The impressive performance has been enabled by the LCCs continued ability to attract passengers in huge numbers and keeping other operating costs associated with airline bureaucracies low.

When the LCCs industry is examined, it can be established that it is a high active industry. The year 2010 recorded a high number of passengers who preffered to use the LCCs as opposed to traditional airlines. This may have been caused by the absence of complex pricing and regulation limiting passengers, such as those associated with traditional airlines. These reduced bureaucracies have continuously been the main selling points for the LCC industry.

Another area that makes LCCs have a better profitability trend is their cost structures. A rough estimate shows a 40-60% difference in unit cost between LCCs and the classical network airlines. The major cause of such cost difference includes higher productivity among the LLCs. LCCs are fringe-free airlines that have higher sitting capacities and lower human capital hence making them more profitable. The airlines also use less crowded secondary airports to ensure that costs are driven down while at the same time, there is no too many unnecessary personnel.

The described cost advantages allow LCCs to fly side by side and withstand any reaction from the classic airlines of tit for tat price competition. This new demand makes it easier for direct connection between smaller cities possible. Before the proliferation of LCCs into the airline market, smaller cities were accessible only from major hubs.

Another reason why the LCC industry has been growing is Changes in passenger behavior. Economic growth, business confidence and an increased desire to travel are the key impetus for the growth of the sector across Western Europe. The increasing trend of leisure travel than business travels also boosts the sector.

After liberalization of Australian domestic airline market in early nineties, there were new entrants into the low-cost airline industry where companies such as Compass airlines as well as Compass Mk II pioneering this industry. Just like their European counterparts, Australia has ventured in low cost carriers with the establishment of Jetsar and Tiger airlines. The Australian Jetsar faces challenges which include fluctuating fuel costs just like any other industry player. This drives strategic change in operational cost. Recent worldwide credit crisis and fluctuating fuel prices have resulted in collapse of unprecedented airlines leading to industrial uncertainties. In addition to fluctuating fuel prices Australian Jetsar and Tiger airlines faces increased competition of new entrants in the market. This has led to changes in business strategies of the airlines to ensure that routes remain viable.

The significant stake occupied by Low-cost carriers in Europe cannot be overlooked especially the market share for Easy Jet and Ryanair, whose targets are beyond the broad current networks. As a result of liberalization of the airline industry, more players are bound to enter into the market. Therefore, there is need for current players to keep on innovating to newer strategies that would guarantee continued profitability and success.

As a recommendation, LCCs must device avenues that will ensure that their costs are lowered since the industry growth has reached its maturity stage. There is also a need to device new avenues for revenue generation. For instance, Ryanair has pioneered this strategy where it has adopted various revenue streams with 16 percent of its income being derived from sources such as credit cards, hotel bookings, car booking and finally retailing. There is also a need for low-cost airlines to come up with measures that will ensure that adequate response is given to the narrowing strategies between the low-cost carriers and their rivals.

Employee Performance

The benefits that SAS offers its staff are quite promising; especially, the assistance to the members families that the organization provides (Employee and retiree services, 2016) leaves a profound impact. As an employee, I would look forward to working for the company that values the parts of their employees lives that truly matter to them.

The innovation promoted by SAS may solve one of the greatest business issues of the 21^st century, i.e., the imbalance between family and work. For instance, it may suggest a compromise that will satisfy both the company and the employee. However, it needs further improvement so that the family members could be convinced to make an effort.

Employee Layoffs

Employee layoffs have a variety of adverse effects on the staff. Particularly, the sense of insecurity concerning their jobs deserves to be mentioned. In addition, the remaining employees may become unmotivated seeing the lack of justice in the company. Finally, the increased rivalry rates spurred by layoffs and the fear of being dismissed may affect the process of information sharing and, therefore, bring the performance rates down.

Moreover, the inconsistencies in the information management process can affect the companys revenues significantly. In addition, the increased rivalry will create the environment, in which the staff may find it hard to evolve; as a result, the firm will collapse.

Although I am likely to feel rather awkward when laying off an employee, I will try to make sure that the staff member to be dismissed accepts my arguments and at the same time does not feel discouraged. Therefore, I will make it evident that the company appreciates their efforts but is in a tough economy and needs to make hard choices. Moreover, I will display compassion and understanding. Thus, it is likely that no major conflict will erupt.

Performance Appraisals

The reasons for the companies setting goals, assessing performance, and providing feedback to the staff to succeed concern the rapid increase in employees motivation that the specified changes trigger. For instance, active use of feedback analysis is what makes Apple so efficient (Alexander, 2016). Moreover, my personal experience of working as a managers assistant shows that the success of a project often hinges on the clarity of the goals and the managers encouragement.

According to Alan Chapman, the founder of BusiessBalls.com, performance appraisals are priceless because of the rapid increase in staffs motivation rates that they permit (Chapman, 2016). |The specified form of feedback, in its turn, is only possible after a careful review of the progress made by the staff. Therefore, performance measurement plays the key part in delivering performance appraisals. The feedback that managers give the company members, in its turn, sets the stage for providing a performance appraisal.

Performance Measurement

First and most obvious, I will make sure that the freezer is locked hermetically so that the pace of the melting process could be slowed down. Afterward, I will put up a sign saying that the store is temporarily closed, contact the local electricity service immediately to learn about the cause of the accident and the amount of time that it can be addressed in, and wait for the issue to be resolved.

Two or more performance measurement tools permit an all-embracive assessment of every aspect of the companys functioning, which is obviously a benefit. However, the introduction of two different assessments may become far too time-consuming and trigger a slowdown in the firms operation. For example, the analysis of the staffs reports and the assessment carried out by supervisors is likely to take an impressive amount of time and financial resources.

Training Assessment

There is no secret that time pressure is one of the key factors causing stress among new staff members. Thus, it is imperative that the issue concerning the time pressure and the tools that it can be addressed with is the most important topic to be covered. In addition, the issues of professional responsibility and the companys quality standards need to be brought up to make sure that the new staff will follow the firms quality standards.

To locate the vendor for the staff training, one will have to consider the characteristics thereof such as the compliance with the letter of the law, the understanding of the need to promote the concept of lifelong learning to the staff, and the compatibility of the firms standards with the ones of the vendor.

Training Effectiveness

The significance of collaboration, training, and IT skills, which the Southwest Airlines view as the focus of their training program (Southwest Airlines: Employee education takes flight, 2003), can be considered a rather reasonable way of motivating the employees to attain success in the course of training. It can also be recommended that the concept of information management as an essential part of the IT-related processes should be incorporated into the training program.

Presentations as training methods may take little time, yet they do not provide essential details. Case studies, in their turn, allow seeing the processes from the inside yet cannot be applied to every problem of the kind. Unlike case studies, simulations provide the staff with an opportunity to make their choices when facing a specific problem. Discussions, in their turn, do not provide actual experience but help clarify a range of misunderstandings before an actual issue emerges. It is suggested that a combination of simulations and discussions should be used in a company to provide the staff with the necessary experience and give them a chance to talk about the aspects that they have troubles understanding.

References

Alexander, A. (2016). Apples mission statement. Web.

Chapman, A. (2016). Performance appraisals. Web.

Employee and retiree services. (2016). Web.

Southwest Airlines: Employee education takes flight. (2003). Web.

1. A fortress hub is a location where large amounts of airline traffic concentrate, and a single airways company controls most of that traffic.
2. More than 90% of the passengers at the Charlotte airport use American Airlines, and the average domestic fare is $407.30, which is 21% more expensive than the national average. Furthermore, the price is decreasing, but at a significantly slower rate than at other airports, which are experiencing a similar trend.
3. Lower prices benefit passengers because they have to spend less money on transportation, assuming the company in question upholds the same quality standards as before the reduction. The increased attractiveness of airline travel to passengers leads to an increase in traffic, ultimately increasing the benefits for airports from parking, retail, and ticket fee revenue.
4. Charlotte is the most profitable American Airlines hub, but it does not have significant growth potential. Lowering the prices would attract more local travelers and reduce the number of people who bypass the airport because of the high fares. Furthermore, it could be done without affecting the service quality due to the high initial profit margin.
5. If competition reduces the level of service, the major airlines that have to deal with other companies now may kill the hub. The loss of corporate flight traffic would have a massive influence on the airports profitability, as the potential local traffic is often not enough to maintain the standards established by previous, large-scale patterns.
6. The costs of air service development include the construction of new gates and accommodation spaces, including lobbies and restaurants. The benefits include an improved ability to handle traffic and better customer satisfaction due to lessened crowding and shorter restaurant lines. Charlotte is constructing nine new gates and expanding its overcrowded areas in a nine-years rebuilding plan.

• Critical analysis of the macro-environment impacting on the Indian airline industry.

The Indian airline industry is passing through difficult times as is the worldwide airline industry. But as any other major industry of the country, even the airline industry is influenced heavily by the events occurring in other sectors of the Indian and world economy. Globalization has led to a significant rate to the interdependence of world and local economies. This is also true for different sectors of the economy. As we can see from the case study, the Indian airline industry relies heavily on the business companies thriving internally and their relationships with partners, especially in the Middle and Far East. The flow of goods transported from the Indian airlines industry from India to the world and vice versa (import-export relation) has been growing the last decades (Timmons, 2009, pg. 1).

Basically, the problem is a productivity one and the lack of credit, or the flow of cash (liquidity) by the carriers. The impact of the financial crisis into the real economy has led to a slowdown of the production rates of cheap goods from business companies in India and neighboring China. This slowdown has impacted the exports of these countries, part of which is the airlines industry. Also, the impact of the financial crisis has led to unemployment problems which have resulted in a constant decreasing number of passengers for the carriers.

Many of the new carriers that had entered the market required crediting from different financial institutions in order to have the necessary resources in investing to expand their capabilities. The financial crisis has impacted negatively this sector and now it is more difficult to have a crediting institution that wants to credit, to invest, in the Indian airlines industry.

• Analyze the Indian airline industry as described in the case.

As shown in the case study described by Dr Salma Ahmed & Yasser Mahfooz, we see the clear intention on part of the carrier companies to respond to the negative impacts described above by mergers, acquisitions and liquidations. This is clearly demonstrable by the moves that Jet Airways has performed during the last years. Its movement toward the acquisition of former Air Sahara, now JetLite, is a factual demonstration of this strategy. In order to be strong in the face of different crises that can happen you have to get your company to become a cash cow in the marketplace. In other words, this is the market position most aspired by companies. It is when the company has a significant part of the market share, it has a large capital and slowly generates profits from the vast different products and services on offer. This way, even if one sector, product or service, of the company has difficulties, the other compensate for the loss of the first. This way the company will be able to resist to crisis resulting from the macro environment and be steps ahead of the competition. The same can be said for the other carriers who in response to Jet Airways have begun talks with each other in order to come out with a strategy against the dominant positioning of Jet Airways. Basically, this means that in order to survive and prosper the small companies have to merge in becoming a big company.

This situation will limit competition to two or three major companies which will divide the majority of the market share making it very difficult for new starting companies to enter in the market and compete equally with the existing ones.

• Identify the core competencies that provide Jet Airways with competitive advantage and how Jet Airways can overcome existing or impending problems that they may face in the future.

As I have already mentioned above, the acquisition of Air Sahara by Jet Airways was a strategic achievement by this last company. This way it expanded the reach to clients and consolidated its market share, positioning. Two other important aspects that provide Jet Airways with competitive advantage are its agreements with different non-Indian airline carriers and the expansion of products and services the company has been performing the last years. The reservation service that is run online facilitates their ticket booking. Another service is the City Check-In facility for passengers that fly domestically and have only hand baggage. This helps eliminate the waiting time in rows at the airport for the check-in. Another important customer-facilitation service offered by Jet Airways is the Interactive Voice Response. With this new technology the company made payment and ticketing service easily accessible to its clients.

A final service that has impacted the ability of the company to be ahead of the competition is its Kiosk Check-in facilities. This service enables passengers carrying only to proceed directly for security check and thus experience a hassle-free check-in. all of these factors together have given to Jet Airways a competitive advantage in the market toward other companies.

But there is a difference with the competencies of Kingfisher Airlines. From the merger with Air Deccan the new company born has managed to cut some of its costs. These costs are mainly technical and engineering costs related to maintenance and security of the aircrafts. Another different advantage from Jet Airways is that the company is born out of two previous companies with different focus: Air Deccan was a major domestic player in the market while Kingfisher was a major international player of the market. After the merger, it is expected that Kingfisher will focus more on the international routes while Air Deccan will give it a wider domestic reach. Also Air Deccan plans to continue as a low cost carrier while Kingfisher will function as a full-service carrier expanding the company in both markets, domestic and international.

Anyway, regarding the future shock or problems that can have Jet Airways will be able to manage them without suffering major consequences. The reasons for this lies in the explanation made above regarding the market positioning consolidation of the company. With the formation of Jetlite from the merger with Air Sahara it has ensured greater liquidity because it has expanded its capabilities. This merger combined with the applying of new technological innovations in offering new services that serve as facilitating tools for the passengers, with be an important tool in resolving different future problems, or shocks, that can result in the market.

References

Timmons, Heather. Indias airline industry runs into turbulence. The New York Times Newspaper. 2009. Web.

Introduction

It is worth noting that the air transportation industry is highly competitive and complex due to a number of reasons. In addition, many enterprises have been striving to share leadership among themselves for many years (Cummings & Angwin, 2015).

Air New Zealand is an example of the way effective management and leadership have brought the mid-level company to the group of large-scale leaders through a considerate attitude toward marketing strategy. The purpose of this research paper is to analyse the New Zealand airline industry, evaluate the market potential of Air New Zealand, and discuss the risks associated with its marketing strategy.

Alternatives Within the Strategy

Despite the opportunities that the company attained through the use of viral technologies, the risks discussed above are significant. Therefore, it is essential to identify alternative solutions within the strategy chosen by the enterprise. From the point of view of managing consumer demand, viral marketing has ensured the distribution of certain information through social networks and other services; nonetheless, the company also needs to consider traditional promotion methods including advertising (Bolke, 2014).

It will allow making certain that consumers receiving an information message will obtain it from both disinterested parties and on behalf of the affiliated side. In addition, relying on viral marketing, the company needs to use other methods of positioning and brand promotion, which will mitigate the possible risks described above. For instance, the enterprise might consider employing a positioning strategy that will stress the factual assessments from the side of customers.

That is to say, the airline should determine the perceived value of its services for the clients and highlight its particular characteristics. Thus, the company will be able not only to raise the awareness of customers but also increase its target audience.

In addition, the companys marketing strategy implies the use of an unpredictable tool, the control of which is difficult to organise. Consequently, the company needs to use viral marketing as one of the ways of direct marketing in order to be able to receive feedback from potential customers and respond to it (Taneja, 2014). In this regard, given the current strategy, it is essential for the company to comprehend the predictability of the result when launching further campaigns.

Apart from that, to reinforce its current approach, the airline company could use the elements of Point of Difference strategy. Its essence lies in the idea that Air New Zealand should focus on the characteristics and benefits that potential customers will associate with this particular airline (Taneja, 2014). It suggests that they will positively evaluate the brand and distinguish it in this price category. Thus, using viral marketing, the company will be able to emphasise both real and symbolic benefits the enterprise brings to its consumers.

Conclusion

Thus, it can be concluded that Air New Zealand is a major national carrier of New Zealand. This is the countrys largest airline, and its flight geography is extensive. The company has been able to attract attention and receive a positive evaluation of millions of customers through the effective use of viral marketing (Fleisher & Bensoussan, 2015). Nevertheless, the companys workforce runs the potential risk of being considered unprofessional due to the recent YouTube video it has launched. Therefore, the company should review the ways to boost its reliability and employ a strategy that will allow building customer loyalty.

References

Bolke, S. (2014). Strategic marketing approaches within airline management: How the passenger market causes the business concepts of full service network carriers, low cost carriers, regional carriers and leisure carriers to overlap. New York, NY: Anchor Academic Publishing.

Cummings, S., & Angwin, D. (2015). Strategy builder: How to create and communicate more effective strategies. Hoboken, NJ: John Wiley & Sons.

Fleisher, C. S., & Bensoussan, B. E. (2015). Business and competitive analysis: Effective application of new and classic methods (2nd ed.). Upper Saddle River, NJ: FT Press.

Taneja, N. K. (2014). Designing future-oriented airline businesses. Farnham, UK: Ashgate Publishing.