Category: Emirates Airlines

Executive Summary

Emirates Airlines is one of the most profitable and rapidly developing airlines in the world. It is the part of the Emirates Group and headquartered in Dubai, the United Arab Emirates. The airline company develops according to norms and tendencies of the local and global aviation industry and markets.

At the macro-environment level, operations and the strategic development of Emirates are most influenced by political, economic, and technological forces. To guarantee the effective long-term performance, Emirates needs to address the increasing competition within the market and the negative impacts of political and economic factors.

In spite of using the successful strategy that is oriented to increasing the brand loyalty and quality of services, Emirates can face problems in the future associated with the lack of the appropriate diversification strategy. In this context, it is necessary to propose Emirates to focus more on adapting to market trends in terms of planning to address the larger group of customers.

The competition in the industry increases and recommendations for Emirates should also include the market expansion. This approach will lead to improving the policies regarding customer services and to appearing the budget routes for travelers from different countries. These recommendations are important to contribute to enhancing the company’s long-term performance.

Introduction

Emirates Airlines is one of the rapidly developing airline companies in the world. The aviation industry suffers from a range of political and economic obstacles and challenges today, and much attention should be paid to the strategy followed by Emirates to compete in the market.

The purpose of this report is to provide the results of the Emirates strategic case analysis with the focus on the PESTLE analysis, the Five Forces analysis, the SWOT analysis, and the Stakeholder analysis. The report also aims to identify the potential problems in the strategic development of Emirates and propose recommendations to improve the future performance.

Description of the Emirates

Emirates Airlines is the part of the Emirates Group headquartered in Dubai, the United Arab Emirates (UAE). The airline began to operate in the 1980s, and it is the ownership of the government of Dubai. Today, Emirates provides its services in more than 70 countries all over the globe, and its staff is more than 55,000 employees (“Emirates Home” par. 2).

The company has one of the largest fleets in the industry, and it focuses on applying the latest technologies to its development. In addition, during several years, Emirates realizes the strategy oriented to buying more aircrafts and expanding the fleet. It is possible to speak about more than 6 million of loyal customers using services of the company (Nataraja and Al-Aali 472). Therefore, Emirates is the leading airline in the Gulf region and the Middle Eastern region.

The success and profitability of the company depend on the effective policies adopted by the Dubai government and on the provided financial support for the company. As a result, Emirates operates in the context of the “open skies” policy promoted by the government of Dubai, and its commercial potential is constantly increasing (Oxford Business Group 28).

The company’s vision is based on the idea that customers need to receive high-quality services, and much attention should be paid to gaining the customer loyalty and developing the positive relationship with the community.

The PESTLE Analysis and Macro-Environment Levels

In order to evaluate the strategic management of Emirates, it is necessary to analyze macro-environmental factors that influence the development of the business focusing on political, economic, social, technological, legal, and environmental forces.

Political Forces

Despite the fact that the current political situation in the Middle Eastern region is discussed as unstable, these political forces have the limited effect on the progress of Emirates. During the decade, the company operated with references to the business and political agreements of the UAE with the countries of the Gulf region, the Asia-Pacific region, and the Western countries (Nataraja and Al-Aali 473).

The active political cooperation of the UAE with the countries from the mentioned regions contributed significantly to the development of the aviation sector. However, today trade opportunities for airlines are rather limited because different nations all over the globe changed their courses regarding relations within the aviation sector due to the complicated political situation.

Therefore, depending on the political situation in the region, Emirates had to change their business course, review activities according to recent trends in the open skies policy, and refer to the support of the Government of Dubai (“Emirates Home” par. 3).

Economic Forces

The UAE are discussed among the most rapidly developing countries in the Middle Eastern region. The economic potential of the whole country increases, as well as the income of the state’s citizens. As a result, more people choose Emirates to fly in the country, and they also use the air transportation for flights to the USA, the European countries, and to the Western countries (The Emirates Group 4).

The recent financial crisis caused by the political situation affected economies of developed and developing countries and the airline industry. However, Emirates tries to keep leading positions in the country and region while changing the marketing strategies and orienting to other consumer categories.

Social Forces

Emirates focuses on attracting multicultural employees in order to address needs and interests of all consumers. As a result, the issue of diversity is important for the company. In addition, the social situation in the UAE allows recruiting employees at comparably lower costs than it is in developed countries. The flow of migrants in the UAE is high, and the job in Emirates is discussed as one of the most attractive ones.

As a result, the company allows hiring employees with diverse backgrounds and spends more attention to spending resources on their training rather than compensation (Nataraja and Al-Aali 474). However, the level of benefits remains to be high in the region and corresponding with the social policies in the UAE.

Technological Forces

Emirates pays much attention to using technological innovations in the industry for improving the quality of customer services. Therefore, the company actively uses the latest innovations in the field, and the focus is on new technologies to support operations of the company globally.

The large technological base is important for Emirates because the company operates in many countries, and services in all regions need to be provided in time and in the most efficient manner (Oxford Business Group 32). As a result, the technological platform is expected to be developed, and the company’s leaders pay much attention to recent researches in the field and invest in the most promising technologies.

Legal Forces

Current legal policies and norms regarding operations of the airline industry in the UAE can be viewed as supporting the further growth of Emirates. The reason is that authorities reviewed their approaches to legal norms, tax policies, and laws regarding the operations in the industries supported by the government (“Emirates Home” par. 22). The positive consequences of this process are the creation of the more open airline industry and more possibilities for increasing the competitive advantage globally.

Environmental Forces

The UAE policies regarding the protection of the environment are rather strict, and Emirates is one of those companies that concentrates on the development of effective and working sustainable programs. Emirates regularly launch the environmental projects and participate in the governmental programs oriented to protecting natural resources in the country (“Emirates Home” par. 23). Environmental laws also influenced policies of Emirates regarding the waste management and decreases in the water and energy consumption.

The Five Forces Analysis

The Porter’s Fiver Forces analysis is important to study how specific features of the industry’s development can be used to increase the competitive advantage of Emirates.

Threats of New Entrants

Emirates operates in the airline industry while proposing the high-quality and even luxury services. The threat of new entrants in this industry is minimal because of the necessity to have significant capitals, propose differentiated services, and gain the customer loyalty within the short terms. As a result, new entrants can compete only in the sector while providing low-cost services and flights.

Bargaining Power of Supplier’s

The impact of suppliers in the industry is high because changes in suppliers’ prices and propositions influence the quality and costs of provided airline services directly. The main suppliers in this context are aircraft producers (Davahran and Yazdanifard 3). The costs associated with buying new aircrafts for the fleet are rather high for Emirates today.

Bargaining Power of Buyers

The impact of buyers on the industry development is also high because Emirates is directly oriented to satisfying needs and expectations of their customers. Changes in clients’ interests and attitudes influence the progress of the business because today more passengers choose low-cost services, and they are focused on discounts (Rahman, Azad, and Mostari 24). The customers also use advantages of the highly competitive market.

Threats of a Substitute Products or Services

High prices for tickets make customers choose the alternative variants of transportation. In spite of the fact that the threat of substitutes in the airline industry is rather low, it is high while discussing Emirates as the global company proposing the transportation services (Nataraja and Al-Aali 474). In this context, passengers often choose cheaper services while planning their business or holidays trips.

Rivalry amongst Existing Firms

The level of competition in the airline industry among the market leaders is high, especially with references to concrete regions. Customers can choose among different services proposed by a number of companies in the industry (Oxford Business Group 54). Therefore, the rivalry is intense in the UAE, among the airlines of the Gulf region, and in the Middle Eastern region.

The SWOT Analysis

The SWOT (strengths, weaknesses, opportunities, and threats) analysis is important to demonstrate what internal factors can influence the strategic development of the company.

Strengths

Emirates is the largest airline in the UAE that operates in more than 70 countries all over the globe. One of the main strengths of the company is the support of the government that resulted in many trade agreements for the company abroad. Thus, today Emirates is the widely known brand that has a feature of adapting to the market needs.

The brand is popular because of the company’s strategy to propose customers the high-quality services based on the work of the latest technology and skilled staff (The Emirates Group 8). The company refers to the development of the technological base using the most innovative fleet and infrastructure or supporting services; to the development of the diverse human resource base; to the strategic use of finances; and to the improvement of the brand recognition.

Weaknesses

The weaknesses in the strategy of Emirates are associated with the high reliance on the economic situation as the external factor and on changes in financial and oil markets. The current financial situation in the region also affected the progress of the company, and it had to review its industry for the following fiscal year.

In this context, Emirates depends not only on the changes in the national economy but also on changes in the global markets and aviation industry (Rahman, Azad, and Mostari 25). One more weakness is the limited application of the diversification strategy. The company does not serve needs of middle-class passengers while reducing the number of potential customers.

Opportunities

Emirates can develop and increase its competitiveness while focusing on entering low-cost markets, targeting middle-class passengers, and expanding services in the larger number of countries. In addition, strategic opportunities are also associated with using more advanced technologies in order to compete effectively in the global aviation market. The company can benefit while concentrating more on the liberalization of its main strategy to address the needs of new markets.

At the current stage, the company serves interests of high-income customers, but it is possible to pay more attention to the diversification and enter new markets while addressing expectations of new categories of passengers (Nataraja, and Al-Aali 480). This approach will allow widening the overall scope of services provided and the business’s impact in the world.

Threats

The main threats for the further strategic development of Emirates are the progress of the rival companies in the air transportation or aviation industry; the changes in the fuel prices influencing the economy of the UAE; and the worsening of the current political and economic crises globally influencing the buying capacity of customers.

Rivals of Emirates such as Gulf Air Company and Qatar Airways Group are also oriented to expanding markets, and the competition within the airline industry increases. More problems can be associated with the political, economic, and financial crises because any changes in oil prices affect the development of the business (Rahman, Azad, and Mostari 25). In addition, the unstable political situation can lead to appearing more obstacles for the development of the airline business oriented to high-income persons (Fig. 1).

Figure 1. SWOT Analysis.

Stakeholder Analysis

Stakeholders in the airline industry are numerous. For Emirates, the main stakeholders include the government, customers, suppliers, services providers, prospective customers, the press, the public, and the community.

The level of these stakeholders’ impact on the strategic progress of Emirates is different. The most influential are stakeholders that need to be managed closely because their levels of the power and interest are high. These stakeholders for Emirates are customers because their interests and satisfaction are the highest priority for the company.

The other influential group of stakeholders is those ones who also need to be kept satisfied, but their level of interest is lower in contrast to the power level. These stakeholders are suppliers. The power of the government is also comparably high, and the authorities’ interest in the progress and strategies of Emirates is also high.

Therefore, the government of Dubai and the UAE authorities need to be not only regularly informed on the progress of the airline industry but also be kept satisfied (“Emirates Home” par. 14). The service providers, including airports, also belong to this group of stakeholders in relation to Emirates.

The group of stakeholders that needs to be kept informed includes the prospective customers, the public, and the community because the increase in the brand recognition and the customer loyalty will directly lead to the increases in the number of passengers. The less influential group includes the press (“Emirates Home” par. 15). Although the public activities of Emirates are high, the company does not pay much attention to communicating with the press while choosing the other media to promote its services (Fig. 2).

Figure 2. Stakeholder Analysis.

Blocks of the Competitive Advantage

The competitive advantage in Emirates is based on traditional four blocks:

Efficiency

Efficiency is guaranteed through following developed recruitment and compensation policies oriented to decreasing labor costs. Another approach is the improvement of employee productivity with the help of enhanced training sessions.

Quality

The constant improvement of the provided services’ quality is a priority for Emirates. Much attention is paid to training the personnel and to guaranteeing the safety of clients during flights (Nataraja and Al-Aali 476).

Innovation

The innovation is another factor to explain the popularity of Emirates. The company follows the strategy of a pioneer in providing services while addressing individual needs of clients and improving the technological platform. Clients have opportunities to use private suites and entertainment systems on board. Thus, 60% of the company’s costs are associated with investing into the research and development department (The Emirates Group 4).

Customer Responsiveness

The customer loyalty depends on the fact that Emirates provides the most customer-friendly services in the industry with the high responsiveness while allowing easy check-ins and other advantages of the e-ticketing system and comfortable lounges (The Emirates Group 3). The customers associate Emirates with the high-class services, safety, innovation, and comfort.

Emirates Competencies

Emirates have many distinctive competencies, and their progress depends on providing the luxury services globally. The additional advantage is the high-skilled international personnel. Moreover, the company uses only the latest technologies to address the customers’ expectations (Nataraja and Al-Aali 476). Finally, the focus is on providing distinctive VIP services.

Emirates Differentiation Strategy

The company remains to be the marketing leader in the industry while applying the differentiation strategy and providing the high-class luxury services for the VIP clients and wider population (“Emirates Home” par. 16). The company differentiates in the market developing the close relations with suppliers of aircrafts, including Boeing, and it is concentrated on building the high-quality infrastructure while investing in airports and additional services.

Strategic Alliances

Emirates does not participate in airline alliances at the global level because of the specifics of their strategy. The airline develops the competitive advantage focusing on the independent positioning in the market to prevent the dependence on the alliance partners (“Emirates Home” par. 18).

Global Course

Emirates serves the needs of the market not only nationally but also globally. The company further develops the course for expanding the markets. At the current stage, the main focus is on entering the regional markets covered by the North American companies (The Emirates Group 5).

Potential Problems

In spite of the fact that the current strategy of Emirates is effective and leading to the company’s success, it is important to identify the potential problems in the strategic development of the business. The main problem is the possible inappropriateness of the current management and marketing strategies to address the needs of customers in the rapidly changing political and economic environments.

Although the strategies followed by the company today are rather efficient, the problem is in the fact that the airline industry and market can face significant challenges in the future if the economic crisis in the Middle Eastern and Western countries develops. In this context, more attention should be paid to the formulation of the effective adaptation strategy to enter more markets and to compete with rivals effectively (Davahran and Yazdanifard 3).

The other problem is the considerable dependence on the government’s support and oil prices in the global market. If the significant fluctuations in the oil prices and changes in the financial markets are expected, the aviation industry in the UAE is at risk of having high losses because the currently followed strategy is oriented to the context of the rapidly developing economy.

Recommendations for Improving the Long-Term Performance

Having analyzed the strategic growth of Emirates with the focus on the external environment and on internal forces, it is possible to propose certain recommendations for the company to address the potential problems in the future. The first recommendation is to revise the differentiation strategy and pay more attention to the diversification strategy in order to make the company’s approach more adaptable to the changes in the airline industry and markets.

At the current stage, Emirates focuses on serving the high-income passengers, but the discussion of the other group of perspective middle-income customers is also important. This approach will be efficient and provide positive outcomes while being connected with the approach of decreasing overall operational costs.

The other recommendation is associated with the necessity to address the increasing competition in the industry. The rivals in the airline industry market are active, and Emirates need to focus on expanding their services and selecting more routes because such approach guarantees the stable leading positions in the market.

Emirates needs to determine what new travel routes can be discussed as most beneficial for them in order to attract more customers as representatives of different income groups. In this context, the effective implementation of the diversification strategy should be supported by the company’s global expansion. These recommendations can be discussed as effective to contribute to the improvement of the company’s long-term performance.

Conclusion

Emirates remains to be one of the most successful airlines in the Middle East. In addition, the company works to improve the global brand recognition. At the current stage, the company is able to adapt the strategy to the influential external factors, but the problem is in the fact that more approaches can be necessary for the future. From this point, it is important to provide recommendations for Emirates regarding the improvement of the strategic development in the long-term perspective.

Works Cited

Davahran, Ngaveena, and Rashad Yazdanifard. “The Importance of Managing Customer Service, Safety Quality and Benchmarking of Airports and Airlines to Enhance the Performance and Customer Loyalty.” Global Journal of Management and Business Research 14.4 (2014): 1-9. Print.

Emirates Home. 2015. Web. <https://www.emirates.com/english/>.

Nataraja, Sundaram, and Abdulrahman Al-Aali. “The Exceptional Performance Strategies of Emirate Airlines.” Competitiveness Review: An International Business Journal 21.5 (2011): 471-486. Print.

Oxford Business Group. The Report: Dubai 2014. London: Oxford Business Group Publishing, 2014. Print.

Rahman, Khadiza, Sumi Azad, and Sabnam Mostari. “A Competitive Analysis of Airline Industry: A Case Study on Biman Bangladesh Airlines.” Journal of Business and Management 17.4 (2015): 23-33. Print.

The Emirates Group. Emirates Airline Overview. 2010. PDF file. 10 Oct. 2015. <http://www.theemiratesgroup.com/english/images/04_EK_Overview_tcm409-560539.pdf>.

Executive Summary

This research paper evaluates the application of CSR by Emirates Airlines. The research is motivated by the need to understand the possible gaps in the company’s CSR strategies, and hence determine the necessary adjustments that the firm should undertake.

Emirates Airlines appreciates the importance of operating in a social responsible manner in order to satisfy its internal and external stakeholders. In a bid to achieve long-term business success, the airline must improve its commitment to establishing a balance between its internal and external environments.

Therefore, the airline should ensure that it adopts a holistic approach in its CSR. The research paper analyses the various CSR activities and strategies that the organisation has integrated into its social responsible strategic human resource management practices.

The paper is organised into a number of sections. A brief company profile, the purpose of the study, and a statement of the research problem are outlined in the introduction section.

The literature review section entails a review of the available literature on the application of CSR strategies and activities in organisations while the methodology section outlines the research techniques used in collecting data from the field. Conversely, the analysis section entails an evaluation of the findings obtained from the study.

The last section outlines the conclusion and the recommendations that Emirates Airlines should consider in order to improve its CSR strategies.

Introduction

Emirates Airlines is one of the most successful air travel companies in the United Arabs Emirates (UAE). The firm was established in 1985 and it is owned by the UAE government. The airline’s operations are mainly based at Dubai International Airport, which serves as its hub.

It appreciates the significance of developing optimal competitive advantage in order to sustain superior performance. Subsequently, the company has invested a substantial amount of resources in order to attain competitiveness (Emirates 2014).

The airline is focused on continuous improvement of its fleet size and destinations in order to serve the local and international air travel demands. Currently, the company serves over 142 destinations, which is facilitated by over 230 aircrafts. It operates over 3,000 flights per week to over 70 countries.

One of the unique characteristics about Emirates Airlines entails its independent operations, as it is not a member of the major global airline alliances, viz. Star Alliance, SkyTeam, and Oneworld. Its independent operation was motivated by the need for optimal flexibility in responding to market changes.

However, the airline has entered a number of code-sharing agreements with different global airline companies in order to attain competitive advantage (Emirates 2014).

The airline has established two main divisions, which include Emirates Executive and Emirates SkyCargo. Additionally, the airline offers diverse cabin services such as economy class, business class, and first class.

In its quest to provide a high level of customer service, the airline has fitted its aircrafts with diverse in-flight entertainment system.

It has adopted the concept of global carrier and competitive pricing as its business model, which has remarkably improved its competitiveness against major international carriers such as British Airways, Air France-KLM, Qantas, and Lufthansa.

In addition, it has sustained its positive financial performance despite the prevailing economic changes. During its last financial year, which ended on 31^st March 2014, the airline’s net profit grew by AED 3,254 million (Emirates 2014).

Statement of the research problem

The global airline industry has experienced considerable growth because of an increment in demand for air travel over the past few decades. Consequently, the degree of competition within the industry has increased substantially. New investors are venturing into the industry by adopting diverse business models such the low-cost models.

Conversely, some industry players are adopting diverse expansion models such as the formation of joint ventures in an effort to improve their market performance. The industry is characterised by a high degree of volatility due to economic changes (Worthington & Britton 2006).

However, despite the high degree of volatility, airline companies have a duty to satisfy the needs of their stakeholders such as investors, society, employees, and the government. Thus, the importance of integrating optimal strategic management practices cannot be ignored.

One of the aspects that airline companies should focus on in their pursuit for long-term survival entails entrepreneurial excellence.

According to Zu (2009), the intensity of global competition coupled with technological evolution has led to the emergence of a new business paradigm. Zu (2009, p. 44) suggests that intangibles ‘are seen as a critical factor for the production and the source of sustainable competitive advantage and prosperity’.

Consequently, to achieve entrepreneurial excellence, organisations must sustain a high level of profitability in addition to being responsive to environmental, social, and economic issues.

The airline industry has been cited as one of the major contributors of air pollution. It is estimated that the aviation industry accounts for approximately 2% of the total manmade carbon-dioxide emissions. The respective industry players have adopted diverse strategies in an effort to minimise emission of greenhouse gases.

Cowper-Smith and Grosbois (2010, p.59) insist that there ‘is a growing interest in the scope and effectiveness of efforts undertaken by airlines to mitigate their negative impacts and to contribute to sustainable development’.

The Inter-governmental Panel on Climate Change (IPCC) projects that the total greenhouse gas emissions from the aviation industry is expected to be less than 3% by 2050 (Pricewaterhousecoopers 2014).

Therefore, to attain the desired level of excellence, airline companies should invest in corporate social responsibility (CSR), which involves the extent to which an organisation’s operations are socially and environmentally ethical.

However, some airline companies are investing in CSR due to increased pressure from governments and environmental activists, which means that their motivation towards CSR is not inherent.

Additionally, the likelihood of such CSR initiatives being ineffective is high. Furthermore, Amann (2013) asserts that investing in CSR due to external pressure might lead to the adoption an ineffective strategy that does not align with an organisation’s bottom-line.

Background and rationale of the study

The concept of corporate social responsibility is based on the stakeholder theory. Business operations are based on complex relationship with different components of society. Zu (2009) is of the opinion that stakeholders can influence businesses’ long-term existence positively or negatively.

In the contemporary business environment, organisations are experiencing pressure from political and economic changes, growth in ecological concerns, intense competition, and change in public values. Nevertheless, businesses have an obligation to meet the requirements and needs of their stakeholders (Zu 2009).

According to the stakeholder theory, businesses should not only focus on the economic dimension and ignore the other dimensions in their quest to attain sustainability.

One the contrary, organisations should adopt a holistic approach in their operations, which means that they should factor in the diverse categories of stakeholders in their strategic management practices.

Luthans and Doh (2012) assert that businesses interact with two main categories of stakeholders, which include the non-market and market stakeholders. The non-market stakeholders entail individuals who do not directly engage in economic exchange with an organisation.

However, they are affected by the operations of the business. Examples of non-market stakeholders include non-governmental organisations, activity groups, and the government. Conversely, the market stakeholders involve the parties that are directly involved in an organisation’s economic transactions (Zu 2009).

Some of the major market stakeholder entails employees, shareholders, creditors, and other parties within the supply chain such as agents, distributors, and suppliers.

Organisations in different sectors are adopting aggressive growth strategies such as market expansion in order to improve and sustain a high competitive advantage. Consequently, their scope of operation, and hence their impact on society is increasing substantially.

Luthans (2011, p.109) asserts that companies’ influence ‘on society has become so pervasive that they should discharge accountability to more sectors of society than solely their shareholders’.

Some of the major justifications for investing in CSR include gaining a moral appeal, attaining a high level of sustainability, and gaining corporate reputation (Armstrong 2010). Horrigan (2010) proposes that businesses have a moral obligation to operate ethically despite their performance.

Additionally, tying CSR activities to an organisation’s operations enhances an organisation’s competitive advantage. Therefore, it is imperative for organisations to recognise the importance of understanding the impact of their operations on diverse stakeholder groups.

Objectives of the research

This study intends to understand the significance of CSR amongst business organisations. The study will be based on a case study of Emirates Airlines. The main research objectives include

1. To assess Emirates Airlines’ CSR strategy and the activities that the organisation has designed in implementation of the strategy
2. To evaluate the effectiveness of Emirates Airline’s CSR strategy
3. To propose how Emirates Airlines can improve its CSR practices

Research questions

In order to attain the above research objectives, the study will be based on a number of research questions, which include

1. What are the major CSR strategies and activities that Emirates Airlines has implemented?
2. How effective is the corporate social responsibility strategies adopted by Emirates Airlines?
3. In what ways can Emirates Airlines improve its corporate social responsibility?

Research gaps

Over the past decades, most organisations have appreciated the significance of CSR in their operations. However, the application of CSR practices has mainly focused on external stakeholders.

The external dimension of CSR entails focusing on social issues such as climate change, poverty reduction, disaster relief and corporate community involvement. Therefore, internal application of CSR has remained relatively low.

Wells (2013, p.128) argues that CSR ‘is typically regarded as a macro-level activity with macro-level consequences, and thus it has received scanty attention within the micro-organisational behaviour’.

Therefore, it is imperative for organisations to adopt a holistic approach in order to succeed in attaining social objectives. One of the ways through which this goal can be attained is by transforming organisations into a CSR-oriented.

Limitations of the study

This research entails a case study of Emirates Airlines. Subsequently, the findings of the study do not apply to other firms in the airline industry. However, it is assumed that the findings of the study will provide insight to firms in the global airline industry on how they can attain sustainability by adopting a holistic approach to CSR.

Organisation of the study

This paper is organised into a number of areas. First, a literature review outlining the various CSR approaches and strategies that are applied by organisations is provided. The methodology section explains the techniques used in collecting and analysing data.

An analysis of findings obtained from the field is illustrated by providing a detailed illustration of the responses obtained and their significance and implication to Emirates Airlines.

The gaps in Emirates Airlines’ CSR strategy are also identified. A conclusion on CSR in Emirates Airlines and the strategies that the firm should consider are outlined.

Literature review

Considering the high rate of globalisation and the emergence of the knowledge economy, organisations cannot anchor their success on their philanthropic practices and ignore other relevant stakeholders.

Furthermore, no profit-oriented company can afford a decline in their financial strength by over-engaging in philanthropic activities. Subsequently, organisational managers have a duty to balance between its engagement in CSR and business activities in order to attain the desired level of synergy.

Prasad (2005) asserts that businesses must ensure that their CSR strategies are sustainable. Despite the stunning growth in appreciation of CSR as a critical managerial aspect that is worth investing in, most organisations experience challenges in the process of designing, implementing, and monitoring CSR activities.

Prasad (2005) is of the view that organisational managers can integrate CSR by adopting two main approaches as evaluated herein.

Stakeholder mapping

This approach involves a mechanism of identifying the diverse stakeholder groups coupled with how they are related to an organisation. Therefore, stakeholder mapping enables an organisation to gain insight on the importance of the diverse stakeholder groups.

One of the most effective models that organisations can adopt in mapping stakeholders entails the salience model, which focuses on the stakeholders’ ability to influence an organisation’s actions. Thus, organisations should determine the most important stakeholder to consider during the process of formulating CSR strategies.

Stakeholder engagement

Organisations should base their CSR activities on extensive consultation process with the relevant stakeholders. Dialogue between the organisation and stakeholders is fundamental in establishing understanding and mutual interdependence. An organisation can establish stakeholder engagement via different levels.

These levels include the passive, proactive, two-way, and the listening level. The passive level involves communication of an organisation’s activities to stakeholders through different mediums such as the media.

The ‘two-way’ level of engagement involves a dialogue between an organisation and stakeholders through a well-established feedback sharing mechanism. On the other hand, the proactive level entails a form of engagement that provides stakeholders with an opportunity to participate in the decision-making process.

The listening approach entails collecting the stakeholders’ views through interviews. Idowu and Louche (2011) argue that stakeholder engagement contributes to the development of CSR in an organisation as the stakeholders’ views and opinions are well understood.

CSR strategies

Armstrong (2010) argues that CSR strategy should be integrated within an organisation’s business strategy. Moreover, the CSR strategy should be closely linked with an organisation’s HR strategy.

This association emanates from the view that CSR strategy is aimed at entrenching socially responsible behaviour within and without an organisation (Armstrong 2010). Previous studies conducted shows that organisations can adopt two main categories of CSR strategies that organisations can adopt.

These categories entail the employee-oriented social responsible strategies and the external oriented CSR strategies (Wells 2013). However, the application of these strategies in managing CSR has varied significantly. For example, most organisations have over-emphasised the external component of CSR and ignored the employee-oriented CSR.

Wells (2013) defines employee-oriented social responsible HRM as a management practice that focuses on employees by integrating various policies such as work-life balance and optimal reward system. Internal CSR strategies are focused on promoting the level of productivity within an organisation’s workforce.

Thus, one of the areas that internal CSR strategies are concerned with involves improving the workplace environment. According to Chandrasekar (2011), the workplace environment directly affects the employees’ level of engagement and productivity.

Some of the strategies that organisations adopt in improving the working environment entail employee retention strategies. Idowu (2009) asserts that organisations have a duty to ensure fair and equitable remuneration, which explains why firms are increasingly integrating monetary and non-monetary rewards.

Organisations should ensure that employees are remunerated equitably and fairly. In addition to these internal CSR strategies, organisations are increasingly adopting job policies that enable employees to balance between work and life aspects.

The main work-life balance strategies that organisations have adopted include flexible working policies such as flexi and part-time working schedules (Urip 2013). Moreover, organisations have a fiduciary duty to ensure that their workforces attain their career development goals by investing in employee training and development.

Investing in employee training strategies plays a fundamental role in improving an organisation’s ability to undertake succession planning. Additionally, it also improves the level of employability amongst employees.

Amann (2013) suggests that it is fundamental for organisations to pay systematic attention to the concept of workplace integrity.

Additionally, Amann (2013, p. 444) asserts that there ‘is a real danger or risk that all other initiatives [and particularly external CSR orientations] might fall apart or be characterised as insincere and misaligned if workplace integrity is ignored’.

Furthermore, Wells (2013) emphasise that an organisation that ignores the internal component of social responsible human resource management [SRHRM] is likely to perform dismally with regard to external CSR.

This assertion is based on the simple concept of paying attention to in-house corporate responsibilities before diffusing CSR to external stakeholders (Amann 2013).

Unlike the internal CSR strategies, the external CSR strategies are interested in the wider community within which a firm operates. The external social responsibility strategies are concerned with improving the general welfare of the external organisational stakeholders.

Wells (2009) asserts that external CSR strategies have received extensive attention by organisations in different sectors. The external CSR strategies are concerned with three main issues, which include social, environmental, and community issues.

Some of the major external CSR strategies that firms have invested in entail climate-change mitigation strategies, poverty reduction strategies, and provision of relief.

Yilmaz and Kucuk (2010) assert that investing in CSR may lead to improvement in an organisation’s reputation, and hence it’s overall financial performance.

However, some critics contend that the extensive investment in external CSR may affect the internal stakeholders adversely especially employees. Wells (2013, p. 125) argues that hiring for ‘cognitive moral development and agreeableness, and recruiting CSR-specific staff may affect the employment opportunities for other employees’.

Moreover, a firm might incur a substantial financial cost in the process of undertaking CSR-specific training, hence affecting the training and development of other employees.

Furthermore, other critics argue that the involvement in philanthropic activities such as poverty reduction might negatively affect an organisation’s capacity to remunerate its workforce fairly and equitably (Wells 2013).

Therefore, despite the significance of external CSR strategies in improving an organisation’s corporate reputation and survival, it is imperative for organisational managers to establish a balance between internal and external CSR strategies.

Methodology

The objective of this research study is to explore the application of CSR by Emirates Airlines. In a bid to attain the research objective, the study has adopted mixed research design. Thus, the qualitative and quantitative research designs have been integrated.

Qualitative research design was selected in order to provide the researcher with an opportunity to undertake an in-depth exploration of the research subject within Emirates Airlines.

Therefore, the likelihood of gathering a wide range of data is high. In order to be effective in interpreting, condensing, and analysing the data collected, quantitative research design has been integrated.

In order to improve the credibility of the research, the study is based on primary sources of data. Data was collected by conducting interviews on a number of internal and external stakeholders at Emirates Airlines.

The internal stakeholders selected during the study included employees in different levels of management and their subordinates. Conversely, the external stakeholders mainly included Emirates Airlines customers and the public in Dubai. Simple random sampling was adopted in selecting the research respondents.

A sample of 100 respondents, which comprised the different categories of stakeholders, was constructed using simple random sampling technique in order to eliminate bias. The selection of the research respondents was based on the assumption that they were conversant with the CSR concept.

Questionnaires were used as the main data collection instruments. However, it was ensured that the questionnaires were designed effectively by eliminating ambiguity and errors in order to increase the rate of response. The data collected was analysed and presented using Microsoft Excel.

The choice of the Microsoft Excel software was motivated by its effectiveness in presenting research data using different methods and tools such as tables, charts, graphs, and percentages.

Furthermore, Microsoft Excel makes it possible to compare the respondents’ opinions, hence gaining insight on the perspectives regarding the subject under investigation. Therefore, adopting Microsoft Excel aimed at improving the effectiveness with which the data collected from the field is analysed.

Analysis

In order to be effective in implementing CSR strategy, it is imperative for organisations to invest in diverse CSR activities.

Armstrong (2010) asserts that organisations should integrate social activities, adopt progressive HRM practices, focus on environmental concepts, and engage in other activities that contribute towards the advancement of the society’s welfare. This assertion highlights the importance of incorporating both external and internal CSR strategies.

Findings of the study showed that Emirates Airlines is committed to attaining long-term sustainability. The respondents cited different strategies that Emirates Airlines has adopted in its pursuit for CSR.

Fifty seven percent [57%] of the respondent cited Emirates Airlines’ involvement in external CSR, while 43% of the respondents cited its involvement in internal CSR.

Graph 1

However, the respondents’ opinion on the firm’s involvement in CSR varied as evaluated herein.

External CSR activities

Thirty seven percent [37%] of the respondents cited the company’s sports sponsorship activities. On the other hand, 20% of the respondents cited the company’s investment in the airline foundation.

Graph 2

According to these respondents, Emirates Airlines has invested extensively in sports’ sponsorship within the UAE and other parts of the world. The airline has invested in different sports such as football, rugby, motorsports, tennis, horseracing, golf, and cricket. The sports sponsorship program has been in existence for over 20 years.

Football constitutes one of the fundamental sports in the company’s sponsorship portfolio. In order to be successful in sponsoring sports, the airline seeks the sponsorship rights from the relevant sports governing bodies such as FIFA.

When asked why the motivation behind the company’s investment in sports sponsorship, the respondents’ opinions differed. Ten percent [10%] of the respondents argued that the airline considers sports sponsorship as an important element in the company’s effort to connect with its customers.

Nine percent [9%] of the respondents argued that the firm’s extensive investment in sports sponsorship arises from the need to support the society’s interests, while 13% of the respondents cited the need to establish a strong corporate identity within the society.

Graph 3

The respondents were of the opinion that the firm’s commitment to sponsoring sports enables it to be part of major sports events such as FIFA World Cup. Therefore, this commitment has played a remarkable role in improving the airline’s global recognition.

For example, its association with the Asian Football Confederation [AFC] has enabled the carrier to gain significant market recognition in Asia. Additionally, the airline is remarkably visible in the European region due to its sponsorship of major European clubs such as AC Milan, Arsenal, Paris Saint-Germain, and Real Madrid.

According to these respondents, Emirates Airlines supports a particular sport upon establishing a new route in order to create optimal market awareness. In line with this strategy, the company has developed a strong presence in Europe through its naming rights of the Emirates Stadium.

Furthermore, the airline has also entered an 8-year shirt sponsorship deal, which commenced during the 2006/2007 season. The airline has also established the Emirates Cup, which is a pre-tournament that is usually hosted by the Arsenal Football Club.

In addition to football, the airline has sponsored major rugby events such as the 2007 Rugby World Cup in France and the 2011 RWC in New Zealand. The airline has also signed an agreement to sponsor 2015 and 2019 RWC in England and Japan correspondingly.

Emirates Airlines has been the core sponsors of the Dubai Rugby Sevens over the past two decades. The airline is also involved in sponsoring high profile tennis tournaments such as the US Open Series, Rodgers Cup, the Dubai Tennis Championship, and Internazionali BNL d’Italia [BNP].

Recently, the airline entered a 5-year contract, whereby it will serve as the official airline during the ATP World Tour (Emirates 2014).

Emirates Airlines has also portrayed its commitment to the growth of Formula 1 sports event by collaborating with F1. For example, in 2013, the airline presence was evident during the Formula 1 season in North America, South America, Asia, Europe, and Australasia.

For example, the circuit bridges were branded with Emirates Airlines’ logo and colour. Through its sports sponsorship, the airline has established a strong link with its customers. For example, the firm interacts with customers through different platforms such as the digital and mainstream platforms.

The airline has also incorporated horseracing as a component of its sports sponsorship portfolio. Some of the horse racing events that the airline sponsors includes the Dubai World Cup Carnival, the Melbourne Cup Carnival, and the Singapore Derby (Clark 2011).

On the other hand, 2% of the respondents cited the company’s involvement in cultural sponsorship. The respondents cited the airline’s commitment to the growth of culture and arts.

For example, the company has collaborated with the Dubai Summer Surprises, which is a major shopping festival, viz. the Emirates Airlines Festival of Literature and the Dubai jazz and film festivals.

The commitment to these festivals has played a remarkable role in improving its global recognition by providing consumers with an opportunity to experience diverse cultures (Emirates 2014).

Apart from sports and cultural sponsorship, 3% of the respondents were of the opinion that the airline has invested adequately in CSR by assisting the needs of children in different parts of the world.

When asked how, the respondents were of the opinion that the airline has established a foundation that is led by His Highness Sheikh Ahmed bin Al-Maktoum. The Emirates Airline Foundation operates as a philanthropic and humanitarian organisation that focuses on providing aid to children.

The objective of the foundation is to improve the wellbeing and quality of life amongst children in need. Some of the areas that the foundation focuses on include education, health, and the provision of shelter. Through its foundation, Emirates Airlines has improved the quality of life within the community in which it flies.

For example, the airline has established the Emirates Friendship Hospital Ship in Bangladesh in an effort to provide effective healthcare services to children in the rural areas (Emirates 2014).

From the above analysis, it is evident that Emirates Airlines has mainly emphasised sports sponsorship and promotion of children welfare in its CSR strategy. However, it is imperative for Emirates Airlines to expand its community involvement.

According to Fernando (2009), social exclusion is one of the major risks that can hinder an organisation’s ability to exploit available opportunities.

In addition to community, Emirates Airlines should invest in environmental protection programs as the occurrence of climate change due to environmental pollution can affect the airline’s competitiveness adversely.

Recently, the airline has illustrated its commitment to protecting the environment through its partnership with the Emirates Marine Environmental Group [EMEG, which is focused on protecting marine life.

Internal CSR strategies

The study shows that Emirates Airlines is committed to the internal component of CSR. Subsequently, the airline has integrated a number of strategies in order to attain optimal CSR. Seventeen percent (17%) of the respondent interviewed cited the company’s commitment to fair and equitable remuneration.

The respondents argued that the company has formulated one of the most competitive compensation packages. In their opinion, the airline has integrated a comprehensive reward system that entails diverse benefits, which include monetary and non-monetary benefits.

Some of the cabin crew employees selected in the study asserted that their salary scale is based on three main parts, which include the basic salary, flight per hour pay, and the overseas layover or night-stop allowance.

Therefore, the airlines’ cabin crew members receive benefits depending on the number of hours flied. Additionally, the salary scale also varies depending on the cabin-crew job position, viz. the first class, economy class, business class, the Pursur, and the senior flight attendants.

In an effort to improve the level of motivation amongst its employees, Emirates Airlines increases the salary scale as workers gain experience, which depends on their length of tenure within the organisation. This strategy has played a fundamental role in improving the rate of employee retention within the organisation.

Furthermore, 10% of the respondents cited other monetary benefits received at the workplace. Some of the benefits cited include the free accommodation, transport allowance, utility bills, and accommodation allowance to employees who opt to reside outside the company’s residential property.

However, the allowance varies depending on the job position. Employees in higher job positions receive higher allowances as compared to those within the normal crew job positions. The respondents also cited health insurance packages as one of the monetary benefits received at Emirates Airlines.

In addition to monetary benefits, 8% of the respondents cited diverse non-monetary benefits. One of these benefits cited include the provision of training and development. Conversely, 8% of the respondents considered in the study were of view that the firm has invested optimally in a comprehensive employee training.

The respondents asserted that the airline provides them with an opportunity to progress through their career path. A further 8% of the respondents interviewed said that they are pleased with the airlines’ work-life balance strategy.

According to Fernando (2009, p. 200), ‘organisations should strive to create a balance for their employees so that sacrificing personal lives may not become a pre-condition for a successful professional life’. Work-life imbalance increases the level of stress and reduces employee motivation due to lack of job satisfaction.

Consequently, the likelihood of an organisation experiencing loss of talent due to employee turnover is increased (Mallin 2009).

When asked how the airline has incorporated the concept of work-life balance, the respondents argued that it had integrated effective time management. Sekhar (2009) argues that effective time management is fundamental in providing employees with an opportunity to balance between work and personal issues.

Therefore, incorporating the concept of work-life balance plays a fundamental role in minimising job-related stress. The respondents argued that the airline has incorporated different policies to entrench workplace flexibility. Some of the policies cited include flexi-time, part-time, job-sharing, and telecommuting.

The flexi-time system allows Emirates employees to determine their most appropriate time to work, for example, between 10 a.m. and 5 p.m. The flexi-time system provides employees with a high degree of control over their work schedule. On the other hand, job sharing involves sharing of duties amongst part-time employees.

One the other hand, telecommuting involves working at home using an effective and efficient computer system that connect employees with the workplace (Morrison 2006).

Conclusion and recommendations

The case study highlights the importance of CSR in an organisation’s effort to attain long-term business excellence. The study shows that Emirates Airlines has recognised the importance of incorporating CSR in its strategic management practices. Its motivation to invest in CSR is driven by a number of factors.

First, CSR constitutes an important component in the airlines’ marketing strategy. Investing in CSR has enabled the company to penetrate new markets successfully. For example, the airline develops optimal market recognition by sponsoring various CSR activities such as sports, culture, and art.

Through its long-term commitment to sports’ sponsorship, the airline has interacted with different societies around the world. Consequently, there is a high probability of the airline improving its competitiveness in the global airline industry despite its volatility to economic changes.

Conversely, Emirates Airlines is also focused on improving the welfare of the society through its poverty alleviation, health, and education sponsorship programs.

Thus, the airline has gained a positive reputation in different societies. However, the company has only focused on the community and ignored the environment. Thus, it is imperative for the management team to improve its external CSR strategy.

The airline has also adopted effective internal CSR strategies, as evidenced by its investment in improving the working environment through effective reward management system and time management policies. This aspect has remarkably improved the rate of employee retention in the organisation.

Despite the efforts made, Emirates Airlines should incorporate the following elements in its CSR strategies.

1. It should balance its CSR strategy. Currently, the firm mainly focuses on sports sponsorship.
2. Environmental dimension; the airline should improve its commitment to protecting the environment by investing in programs aimed at minimising environmental pollution. The significance of adopting the environmental dimension in its CSR strategy arises from the strong link between the prevailing environmental conditions and the airlines’ long-term profitability. For example, the occurrence of natural events such as floods and bad weather due to climate change due to manmade activities can affect the airline’s operations, hence its profitability.
3. Training – the airline should invest in a comprehensive training program in order to instil knowledge within its workforce on the significance of participating in social responsible activities. This move will improve its workforces’ commitment in implementing best practices.
4. Networking businesses and CSR – Emirates Airlines should ensure that all the stakeholders within its supply chain are integrated into its CSR strategy in order to ensure that the CSR activities undertaken are not counterproductive due to lack of commitment from other parties.

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Introduction

Emirates Airlines or Emirates stands out as one of the leading carriers in commercial air transport worldwide. Since its establishment in 1985 in Dubai, the airline has grown to cover over 142 destinations globally (Emirates Group par. 2). It provides a range of integrated services, including regional and international passenger travel, postal, and freight transport. The airline is also a provider of in-flight catering and accommodation for passengers and IT services. It runs a fleet of over 217 Airbus and Boeing carriers with an active presence in 80 countries. This paper describes a marketing plan for the airline, including its principal products, SWOT and 4Ps analysis, key competitors, and future corporate strategy.

Description of the Services

Emirates Airlines is a business unit of the Emirates Group. It is mainly involved in commercial air transport services primarily in the Arab world and globally. Its business operations fall into three categories, namely, air transportation, in-flight catering, technology solutions. The air transport unit consists of passenger and freight services (Lohman et al. 207). Emirates Airlines runs over 1,500 flights weekly that interlink 142 destinations globally. The Emirates SkyCargo provides commercial shipment of freight to 130 airports in different regions (Emirates Group par. 4). The cargo can be regular consignments, postal mails, living animals, or perishable goods.

The airline, through the in-flight catering unit, provides catering services to corporate clients and teams. The company also offers consumer products, leisure, and hotel services to clients. Emirates’ ‘dnata’ service develops IT solutions for firms, supports freight operations, and travel solutions to business executives. The company’s Mercator provides a suite of technologies that support cargo handling, destination management, air transport safety, and in-flight amenities for other carriers. It serves six locations globally, including Asia, North America, the EU, the Middle East, parts of Africa, and Australia (Lohman et al. 206).

Marketing Manager Details

The Emirates Airlines’ chief commercial officer, Thierry Antinori, is the equivalent of the chief marketing officer. Antinori began his career at the airline as the vice president in charge of passenger sales division globally (Research and Markets par. 16). After two years at the helm, he ascended to the Chief Commercial Officer in 2013, a position he holds until today. His marketing career extends over 25 years in the commercial air transport sector. His current responsibilities entail managing Emirates’ commercial operations, destination management, and freight transportation, among others.

In Antinori’s assessment, the airline expands its coverage at a rate of 20% annually making the fastest-growing carrier globally. He attributes the growth to new market opportunities in North America, including Orlando and Florida, and the Dubai promotions. In his estimation, Emirates currently obtains 30% of its business from Asia, another 30% from European markets, and 40% from other regions, which makes its revenue model balanced (Emirates Group par. 8). ‘Emirates’ also obtains much of its North American business from travel agents. Antinori estimates that up to 80% of US clients using the airline book their flight via agents.

SWOT Matrix and 4Ps Analysis

SWOT Matrix

4Ps Analysis

The 4Ps, i.e., “product, place, price, and promotion” describe a firm’s strategies for competing in the market (Kotler and Keller 42). Emirates Airlines uses the 4Ps to improve its competitive position.

1. Product (Service) – the airline has installed the latest technology features, including TVs, audio systems, and communication gadgets. Clients can also book their flights online. In-flight amenities are also offered to individual and corporate travelers.
2. Place – the company operates 11 travel offices in different Emirates. It also runs over 122 branches in other cities globally serving customers from about 80 countries.
3. Price – the carrier employs the premium pricing strategy. Its ticket prices are higher than the industry average.
4. Promotion – it advertises through local media outlets, such as Gulf News, billboards, and product placement (Fly Emirates) in major sports to reach a wider audience.

Competitor Analysis

The global airline industry is experiencing a boom due to the growth in the travel and tourism sector. As a result, competition is stiff in this industry with players employing cost-cutting measures and low-cost carriers to win over customers. Emirates’ competitors include regional and international commercial air transport companies. In the UAE, it faces competition from Air Arabia, a carrier based in the Sharjah emirate (Research and Markets par. 17). This airline, which was launched in 2003, offers low-fare products ideal for the local UAE, Middle East, and African markets. Besides low prices, Air Arabia offers online reservations and maintains high safety standards. The airline through its ‘Payless, Fly more’ campaign projects itself as providing value for money to its customers (Graham et al. 394). It offers affordable options to attract new customers and encourage frequent traveling.

Another local competitor is the Etihad Airways established in 2003 by a royal decree. Etihad is the UAE’s national carrier with a staff population of over 2500. The company emerged the top airline globally in 2004 and 2005 (Graham et al. 396). Substantial investment from the government ensures that the company remains competitive during turbulent times. RAK Airways is another UAE carrier based in Ras Al Khaimah emirate. It was founded in 2006 to stimulate economic growth in the emirate, especially in the sectors of real estate and tourism. RAK primarily offers chartered plane services to corporate clients and tourists.

Besides local competition, Emirates Airlines also faces competition from a host of Gulf-based firms and international players. Kuwait Airways is a low-cost carrier that competes with Emirates in the region. Other regional competitors include Qatar Airways, Jet Blue, and Air India Express. Emirates Airlines uses a differentiation strategy to compete in this market. It has established itself as a luxury carrier with in-flight amenities, such as TV and audio systems. The aim is to attract elite and middle-class clients to drive their growth.

Detailed Plan and Strategy for the Future

Marketing Plan

This marketing plan would enable Emirates to expand its target market beyond the traditional segments. The airline can boost its passenger traffic by focusing on three client groups, namely, the tourism sector, the ex-pats in UAE, and transit passengers.

UAE’s Tourism Sector

Dubai stands out as a business and travel destination in the Gulf region. Corporate visitors and foreign investors need a luxury carrier to visit this city. Dubai attracts over 15 million visitors annually who come to do business or for leisure (Emirates para. 4). Further, the Middle East, which is the primary market of Emirates, is experiencing a boom in travel and tourism. Estimates indicate that the sector grows at an average rate of 5.9% annually (Emirates para. 4). Therefore, the airline should position itself to capitalize on the rising passenger traffic to expand its market share.

The Expatriate Community

Dubai, which is home to the Emirates’ headquarters, is a rapidly growing metropolis that attracts the expatriate workforce to meet its labor needs. It is estimated that up to 80% of UAE’s population is expatriate workers from various nationalities, including people from the West, Iran, and South Asia (Emirates para. 6). Emirates should expand its operations to these routes and nations to serve the expatriate community. Partnerships with other airlines and travel agents operating in particular markets could also help Emirates compete for expatriate travelers.

Transit travelers

Dubai is a transit point for passengers traveling between the EU and Australia. Emirates Airlines, which serves over 142 destinations in six continents, can take advantage of Dubai’s status as a connection point to succeed in this segment.

Strategy for the Future

The competition in the airline industry is stiff. Emirates Airlines needs a plan for modifying its 4Ps to compete effectively in existing markets and new segments. Market penetration would require infrastructural improvements and opening up of new routes to the Americas and China. The rationale is to offer luxury air travel to tourists visiting Dubai and Chinese destinations. Partnerships with local travel agents and airlines can help Emirates penetrate these markets. Providing private suites and lounges could also attract corporate clients. Emirates Airline also needs to diversify its products to penetrate the low-cost or economy class currently dominated by other players.

Implementation and Control

The implementation of this marketing plan will require the involvement of the Emirates’ executive management.

1. Product development – a board decision to establish a project to install systems that enable travelers to make and receive calls will be needed. It will also require collaboration between the carrier and telecommunication firms. The implementation of this project will involve the Chief Technology Officer.
2. Market penetration – this will entail opening new routes into China and launching a low-cost carrier. The operations manager and the finance vice president will implement this strategy.

Conclusion

An effective marketing plan evaluates an organization’s internal and external environments to recommend strategies for business growth. Emirates Airlines is a premier carrier for passenger, cargo, and in-flight facilities. The SWOT analysis reveals that it has internal capabilities that can help it exploit new growth opportunities. A robust strategy for this airline centers on market penetration and product development. Business actions in these areas can help Emirates maintain a competitive position in the global aviation industry.

Works Cited

Emirates. Airlines and Subsidy: Our Position. 2012. PDF file. Web.

Emirates Group. Leadership: The Senior Management Team. 2015. Web.

Graham, Francis, Nigel Dennis, Stephen Ison, and Ian Humphreys. “The Transferability of the Low-Cost Model to Long-Haul Airline Operations.” Tourism Management 28.2 (2009): 391-398. Print.

Kotler, Philip and Kevin Keller. Marketing Management. New York: Prentice Hall, 2011. Print.

Lohman, Guilherme, Sascha Albers, Benjamin Koch, and Kathryn Pavlovich. “From Hub to Tourist Destination–An Explorative Study of Singapore and Dubai’s Aviation-Based Transformation.” Journal of Air Transport Management 15.5 (2011): 205-211. Print.

Research and Markets. Emirates Airline – Strategic SWOT Analysis Review. 2013. Web.

The rivalry between Etihad Airways and Emirates Airlines is the subject of many debates. This is because of the cutthroat competition between the two companies. This competition exists despite significant differences in the business strategies of the two companies. This project seeks to investigate the nature and impact of this rivalry. The research question guiding the project is, “What are the marketing strategies of Etihad Airways and Emirates Airlines and how do these strategies influence the rivalry between them?”

The major components of this question are the need to decipher the market entry models used by both airlines, an interrogation of the elements that define the rivalry between the two airlines, and a peek into the future of the two airlines based on their current marketing models. These issues define the broad objectives that underpin the research project. In particular, the objectives of this project as stated in the project proposal are as follows.

1. To investigate the market entry models of Etihad Airways and the Emirates Airlines.
2. To investigate the defining elements and the implications of the rivalry between the Etihad Airways and the Emirates Airlines
3. To determine the long term prospects of the two airlines in relation to their existing marketing strategies in the context of their rivalry

Literature Review

A look into the definition of the term “marketing strategy” reveals several things. First, a marketing strategy is about marketing (Sahaf, 2008). A marketing strategy is specific to the marketing elements of a business concern. Secondly, a marketing strategy is about strategy (Sahaf, 2008). It is a long term and wholesome look at the way an organization organizes all the elements that constitute its marketing activities (Shaw, 2004).

Thirdly, marketing strategy is about the optimization of resources (Sahaf, 2008). Every business has several options relating to how it can deploy its resources. Each of these configurations seeks to optimize the returns that the business can attain from its marketing resources (Mongay, 2011). Fourth, marketing strategy is about profit (Sahaf, 2008). Every organization needs to generate surplus for it to remain competitive. Marketing is what assures the company of a sustainable revenue stream.

Porter (1980) developed a model that helps an organization to evaluate its competitive position. This model is useful for companies planning to enter a new market, or to expand its market share. The model is also valuable for companies whose market share is dwindling.

The five forces analysis looks at the threat posed by the arrival of new competitors, the threat posed by the arrival and availability of products that can substitute a company’s product, and the bargaining power of customers (Porter, 1980). The model also proposes that an ideal analysis of the competitive environment should consider the power of suppliers, and the pressure from rivals in the market (Porter, 1980).

Montgomery and Porter (1991) identified three forms of generic strategies that should guide the development of market strategies. First, a company can choose to pursue cost leadership as a marketing strategy (Montgomery & Porter, 1991).

Under this strategy, a company seeks to use economies of scale and efficiency to drive prices down to levels where its competitors cannot survive. Southwest Airlines made its mark on the American market as a low cost carrier by removing all frills from its services to focus on efficient operations (Hartley, 2007). It is a good example of the application of this principle in the airline industry.

Secondly a company can choose to pursue is a differentiation strategy (Montgomery & Porter, 1991). Under this strategy, a company must have a strong point that gives it an unassailable competitive advantage. This strength should provide customers with a unique value. A good example of this strategy is Google’s search engine. Google developed a search engine, which is now the leading provider of search services online (Byrne, 2011). Google differentiates itself as a provider of online software services.

The third strategy identified by Montgomery and Porter (1991) is niche strategy. This marketing strategy involves identifying a unique market segment and becoming the best-placed company to meet the needs of this niche. This strategy is risky if bigger competitors can meet the demands of the same niche at a lower cost. In reality, most companies pursue a mixture of strategies in order to maximize their returns (Sahaf, 2008).

While marketing strategies have a long-term perspective, they often change midstream to address strategic concerns such as the making of losses over a prolonged period. Market research is necessary before the development of a market strategy (Thomas, 2011). Failure to research the market can lead to huge losses caused by wrong marketing strategies.

Marketing strategy is also about the interaction of the four P’s of marketing. The four P’s represent Product, Price, Placement, and Promotion (Mongay, 2011). Product refers to the item or service that is available for sale. Price is the consideration expected from exchanging this item or service.

Costing strategies depend on whether the item is available in bulk, or in single units. Typically, the cost of an item needs to cover the cost of production, and the expected margin. Promotion refers to the efforts made to make consumers of the product aware of its presence.

At the same time, promotion aims at building demand for the product by highlighting the aspects of the product that can appeal to potential buyers. The fourth P is Placement. Placement refers to the availability of the product to the potential buyers. Elements of placement include the distribution plan, display at the point of sale, and the use of showrooms.

Methodology

This project utilized three main sources of data. The use of secondary data proved useful because of the international nature of the entities studied (Corson, Heath, & Bryant, 2000). The objectives of the research project required broad based information to cover the subject adequately. As such, there was a need to review literature from various sources to develop a comprehensive picture describing the rivalry between the two companies.

The reason for relying on secondary data came from the objectives of the project. It was not feasible to address the objectives of the project by collecting primary data. Analysis of secondary data required the use of careful scrutiny to find out credible and consistent information (Yu, 1998). In order to establish the validity and admissibility of the information collected, a literature review was necessary to find out the specifications of the information required (Corson, Heath, & Bryant, 2000).

Data from industry sources was the most valuable type of information for the project. Recorded interviews with the executives of the company and company reports also formed sources of credible information. Information from unnamed sources did not meet these standards. In addition, information from personal blogs, personal websites that had no peer review mechanisms did not meet the threshold (Johnson & Johnson, 2009).

The most important difficulty faced in the course of the project was finding the latest information relating to developments in the UAE airline industry. It was necessary to find the dates of the information provided to ensure the accuracy of the information collected. Online forums proved useful as passive sources of information on customer satisfaction.

Forums hosted by the two companies, and those dedicated to issues relating to the two companies proved useful in gauging the customer satisfaction levels of customers. They also illustrated the depth of the rivalry of the two companies.

The main sources of data used for the project were as follows. Published literature from trade magazines relating to the operations of the two companies, company reports and publications from the two airlines, and periodicals published by marketing analysts and aviation analysts.

The Market Entry Strategies of Etihad Airways and Emirates Airlines

In order to examine the market entry strategies of Etihad Airways and Emirates Airlines, it is important to define the use of the terms “market entry” in this section. The meaning of market entry used in this project is that of an ongoing process. When companies start, they need a market entry strategy. This need does not dissipate with growth. Rather, as the company expands its services and its customer base, market entry remains a fundamental function (Thomas, 2011).

Etihad Airways is much younger than Emirates Airlines. Etihad will celebrate its tenth birthday in 2013 (Cameron, 2012). Both airlines are pursuing very aggressive market entry strategies based on the prevailing economic outlook of the Gulf region. Some of the elements of the rivalry between the two airlines in relation to their market entry strategies include the acquisition of new aircraft, and the formation of partnerships with airlines in other regions of the world (Cameron, 2012).

Etihad Airways will start operations in Washington DC, Ho Chi Min City and to the City of Sao Paulo in South America within 2013 (IATA, 2012). In the same year, the company will receive 14 aircrafts to expand its fleet (IATA, 2012).

The company plans to expand its fleet by ninety new aircrafts. In addition to these efforts, Etihad Airways is pursuing relationships with Air Berlin in Germany and Virgin Australia to increase its profits (Cameron, 2012). Part of Etihad Airway’s attraction to Air Berlin came from the fact that the two companies have similar cabin design, which will enhance both brands.

Emirates Airlines on the other hand is pursuing similar expansion by forming alliances with other airlines. Currently there is a relationship between Emirates and Qantas from Australia (Cameron, 2012). Emirates Airlines, which vowed not to join any of the big three airline alliances, has pacts with airlines that are part of the alliances.

For instance, Etihad has a pact with Air France-KLM, which is part of the Sky Team alliance (IATA, 2012). The alliances are business relationships between several airlines, which work to coordinate their schedules in order to enjoy better customer loyalty. The airlines share frequent flier programs, and other incentives meant to keep customers within the alliance.

Based on Porter’s generic marketing strategies, the two airlines positioned themselves as niche players offering premium services. The target market for the airlines is the high-end segment. This strategy, combined with the strategic location of the two airlines in the fast growing region of the Middle East, is responsible for the growth that the two companies continue to experience despite their bitter rivalry. Emirates Airlines will become the largest Airline in the world by 2015 if it maintains its current growth momentum (Thomas, 2011).

Defining Elements and the Implications of the Rivalry

The scope of the rivalry between the two airlines comes from the similarity of their marketing strategies. Both airlines compete for the high-end market. Therefore, most of the marketing initiatives they employ tend to be similar.

For instance, both airlines landed in Japan for the first time on the same day (Wright & Underwood, 2010). This illustrates the intricate nature of their rivalry. In the last decade, many airlines in Europe became part of the three global airline alliances. The three alliances are Sky Team, Star, and One World (Cameron, 2012).

Both Etihad Airways and Emirates Airlines have not pursued membership in any of the three alliances. Rather, the two airlines are using different strategies to counter the impact of the alliances. Emirates Airlines is famous for its individualist attitude (Griffiths, O’Callaghan, & Roach, 2008).

It prefers organic growth and battling for market share, rather than forming alliances and partnerships with other airlines. As such, the recent alliance with Australian Qantas is an exception rather than the rule in the marketing strategy of the airline (Rivers, 2012). On the other hand, Etihad Airways bought equity in Virgin Australia and Air Berlin (Thomas, 2011). Etihad prefers to buy stake in established brands in markets that it does not want to commit operational resources.

This gives the company the advantage of local presence without brand building obligations. This is a faster way to penetrate a market and it offers the airline the opportunity to understand a market without the risks associated with fresh market entry. This fits with Etihad’s strategy of favoring growth over profitability in the short term.

The two airlines are scrambling for space in the international aviation markets. Both have set their eyes on the American, Australian, and Chinese markets. Etihad Airways is on track to launch flights to two cities in the Americas. The maiden landing of both airlines in Tokyo on the same day is symbolic of the market rivalry between the two players (Wright & Underwood, 2010). On the part of Australia, Etihad is part of Virgin Australia as a shareholder, while Emirates Airlines is working with Qantas to access the Australian Market.

Further East, the booming Chinese economy is leading to an increase in demand for international flights (Zhu, 2010). This demand comes from traders seeking markets for their products, and foreigners going to China to buy goods. In addition, a growing middle class in China needs flights to other countries where they can go to tour. All these factors serve to intensify the rivalry of the two carriers.

The acquisition of big planes, ostensibly to enhance the capacity for long range flights is also a common feature in the rivalry between the two airlines. Etihad has plans to buy up to ninety new planes from Boeing to increase its current fleet (Cameron, 2012). Fourteen of these will be ready within 2013. On the other hand, Emirates Airlines signed a deal with Airbus for the supply of 32 Airbus 380 Jumbo jets (Thomas, 2011). This focus shows a strong commitment to long-term growth in the wake of increasing demand for air transport.

The final element in the rivalry between Etihad Airways and Emirates Airlines is in the cargo business. There is increasing demand for cargo haulage across the world. This demand is strengthened by the increasing volume of cargo transiting via Dubai (Griffiths, O’Callaghan, & Roach, 2008).

The result is that the two airlines are responding to the growing demand by increasing their cargo fleet. Etihad Airways is increasing the cargo space in its new passenger aircrafts to enable it to take advantage of the cargo business that falls within its passenger routes. This is in addition to increasing its fleet of cargo jets.

Long Term Prospects of the Two Airlines

Despite the rivalry of the two airlines, both airlines have very good prospects. The two airlines are pursuing aggressive growth that will see Emirates become the largest airline in the next three years. The basic aspect of the rivalry between the two airlines is that they are not local carriers. They are international carriers. This gives both of them unique competitive advantages that rivalry alone cannot wipe off.

There is increasing demand for air transport across the world. This demand is strongest in Asia and the Australian region (Walker, Walker, & Schmitz, 2003). The demand for air transport in Africa is also growing. This means that the two companies are competing for new business, based on their unique competitive advantages.

The growth in demand for air transport comes from the increasing demand for goods and services from Asia. This demand is also growing because of an increasing number of tourists and traders from Asia and the Middle East, and increasing travel by students, researchers, and government officials to Asia and the Middle East (Walker, Walker, & Schmitz, 2003).

Secondly, the location of the UAE is strategic. The location of the UAE makes it an ideal hub for international travel. The fact that the leaders of the UAE used this location to position Dubai as a trading hub proves this point.

Dubai is an ideal replacement for European cities as a hub for international transport (Corson, Heath, & Bryant, 2000). This advantage, coupled with the fact that the UAE airlines have planes that can reach almost any point on earth, makes UAE’s geography and business positioning a strong competitive advantage. These advantages are available to both airlines.

The Emirates Airlines historically favored organic growth in its operations. The airline giant started operations with a single leased aircraft twenty-five years ago. The Emirates Airlines did not make any deals with other airlines to form partnerships and alliances.

The success of Emirates is proof that its business model is sustainable. This means that the airline is strong enough to go into the future. On the other hand, Etihad started with a larger fleet, and sought to gain market share rapidly. Etihad is more open to diversification. Its preferred model is buying a stake in local airlines to benefit from existing market conditions, without the additional burden of brand building.

This concept is similar to the one used by many international airlines that form part of the three global alliances. It is also a sustainable model on its own. Therefore, the fact that Etihad and Emirates are rivals at home does not mean that either of them is in any kind of disadvantage. In fact, their rivalry is causing them to pursue aggressive growth strategies, which is making then formidable airlines.

Finally, the two airlines enjoy strong government and private sector backing. The Emirates Airlines receives support from the Dubai government while Etihad receives support from several small backers in the Emirates (IATA, 2012). This support increases market confidence in the two airlines and makes them more secure at home.

These factors prove that the two airlines have a strong future ahead of them regardless of their rivalry. The question is not whether the two airlines can survive the rivalry. Rather, the question is which of the two airlines will emerge stronger.

Conclusions

The main difference between the two companies is in market fundamentals. Emirates Airlines has a history of profit making, because it grew organically by fulfilling market demand over the last twenty-five years. Etihad Airways on the other hand entered the market to take advantage of the lucrative market that came up in Abu Dhabi. The company is just about to start posting profits.

Several elements define the rivalry between the two airlines. The following five elements indicate the defining issues. First, the two are not keen on joining any of the three global alliances (Cameron, 2012).

Secondly, both airlines prefer to form partnerships with other airlines to increase their operations efficiency (IATA, 2012). Thirdly, the two airlines are showing strong interest in the Americas, Australia, and China (Wright & Underwood, 2010). Fourth, both airlines have very ambitious growth plans. Finally, both airlines are turning their attention to cargo business.

The fact that there are strong growth prospects comes from the increasing demand for air transport, and the strategic nature of the UAE as a transport hub. In addition, the two airlines have developed different but sustainable growth models and they both enjoy strong domestic support.

References

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Quality management frameworks’ contribution to Emirates Airlines’ success

With the intensified level of competition among organizations, quality has become a key management issue; and as a result, Total Quality Management (TQM) has become essential for many organizations that are pursuing sustainable competitive goals. Though introduced in the 1980s, the term had acquired a wide application by organizations by the end of 20th century. Even though the definition of this term is not easy, as there are multiple views as to what it means, there are some commonalities that result from various definitions. These include terms such as a customer and supplier relationships, top management support, and employee involvement (Ang et al., 2000).

Emirates Airlines apply Total Quality Management (TQM) to pursue its organizational growth and success in both national and international markets. Observance of top quality performance through TQM has recently helped Emirates airline achieve an ISO 9001 certification. This is because the company follows processes and procedures that are strictly examined and it does not entertain mistakes in the implementation of its functions. The company has endeavored to expand its business with the aim of becoming a leader the Airline industry (Ame info.com 2007).

To achieve such an accolade, Emirates airlines had espoused the tools of Quality Control Circle (QCC) and total quality management (TQM) as the foundation of its drive. Also, the company was driven by the consideration that people are the forces behind quality processes. Another exceptional strategy that Emirates has adopted is venturing into tourism and resort realm. This has been done through acquisitions and creation of scores of spas, resorts and focusing in quality controls – this has attracted a lot of admiration and also opened more business opportunities for the company. Besides, the company has capitalized on this opportunity by building a tourism business, which makes the company grow even further (Emirates Airlines n.d.).

To achieve this, Emirates Airlines recognize that each activity and each person affects and is in turn affected by others. TQM is, therefore, chosen as a strategy to improve competiveness, by enhancing the effectiveness across all processes and functions (Ambroz 2004). Nevertheless, as industries expand, the competition continues to heighten while, at the same time, the need for quality improvement is becoming more critical. Businesses that operates in scores of countries across the world, upholds the principle of TQM to ensure sustainable growth and competitiveness in the market (Godfrey 1997). Emirates Airlines has taken several steps to achieve high market share and to face the market competition (Silver Associates Inc. n.d.).

Quality control is the foundation stone of Emirates Airline’s basic accomplishment. This starts from devoted interest on how they take care for their customers in everything they do to the maintaining and creating a high-tech airline – they devote the highest possible standards in each aspect of their business (Business Week 2008)

The managements of Emirates Airlines recognize that the organizational services and products have no value if they do not include what the customers really want. Nevertheless, identification of the customer needs is not an easy task. This is especially because the customers’ needs and preferences differ, especially considering that Emirates Airlines operates across the world, making needs and preferences more diverse (Ambroz 2004).

In addition, it is not easy to meet customers’ expectations since a number of them differ from the levels of expectations. To counteract these challenges, Emirates Airlines persistently draw information together, which helps them remain at par with the customers’ wants (Emirates Airlines n.d.). This is achieved through data collection methods such as market surveys, focus groups and customer interviews, just to mention but a few. Businesses are guided by the principle that they are in business because of their customers and, as such, they must focus on their interests and ensure that these customers are satisfied (Ambroz 2004).

Continuous improvement also remains a center focus on Emirates Airlines’ strategies. This is contrary to the traditional systems that assumed that a company that is successful and has achieved a certain level of quality does not need further improvement. Ambroz used an analogy that describes this concept when he maintained that the Japanese “believe that it is better to take frequent small doses of medicine than” (149). The Continuous improvement, which was referred to as Kaizen by the Japanese, requires “the company to continually strive to be in good health through learning and problem solving” (Babbar and Aspelin 2004, p. 56). Although the management of the Businesses believes that the company cannot achieve perfection, they take measures to ensure that the performance is evaluated and improvements made where necessary. To ensure continuous improvement, Businesses can pursue two different approaches. That is, bench marking and the plan-do-study-act (PDSA) cycle (Environmental Protection Agency 2006).

Emirates Airlines is undergoing turbulent economic times in today’s world and for them to survive; they should be ahead of the set benchmarks. Breakthrough in technology and performance excellence is the most dominant requisites for companies to succeed. Emirates Airline has not been left behind as they have reinforced their global airline realm of information technology into a major profit making area, which is charged with software development for the industry (Barney 2002; Environmental Protection Agency 2006). Use of their skillful programmers and knowledge to develop an information technology organization to assist the global airline industry is an outstanding strategy that adds value to their business (Emirates Airlines n.d.).

Notably, technology and innovation are critical driving forces that Emirate has used to grow internationally. Indeed, the company pioneered in offering seatback leisure to the passengers without discrimination on classes. Another area of technological advancement, for Emirates Airlines, is use of Danware’s NetOp complex skills that help international companies cut down on cost and time of providing top-notch technological support (NetOp n.d.).

Six sigma includes reduction of defects, reduction of cycle time and ensuring customer satisfaction. To achieve process improvement and variation reduction, this methodology attempts to implement a measurement based strategy. The methodology is hinged on two models; that is, DMAIV (Define, measure, Analyze, Design and verify) process and DMADC process. The first process focuses on existing processes that fall short of set specifications by putting extra emphasis on incremental improvement. On the other hand, the former process tends to develop new processes. Emirate Airlines endeavor to offer persistent customer experience internationally. For instance, its global e-Ticket system is widely available and helps more customers access this efficient service. Also, “electronic ticketing benefits both the customer and the airline by providing greater convenience, reduced processing time, simplified operations and faster check-in” (Scoop Business 2008. p. 5).

Six sigma is a recently discovered management approach, with little of its information having been written so far. Great research is required to develop an in-depth understanding of this methodology, in order to separate facts from fiction. The techniques for the practice of this methodology are similar to other management approaches; however, its practice totally represents a new structural improvement approach. It helps Emirates Airlines by providing them with a structural switch that enables them to act more organically, in unveiling new ideas of enhancing improvement and operational mechanisms improvements (Barney 2002; Environmental Protection Agency 2006). It further employs many mechanisms that promote the conflicting demands of exploring and controlling improvement efforts (Silver Associates Inc. n.d.).

Structure method is used by six sigma methodology in the process of improvement. The DMAIC (define, measure, analyze, improve and control) method is one of the structured methods of the six sigma methodology that help in identification of the main cause of problems, when used at the MFG and SERV. A Cause-effect charts, FMEA and statistical process control are part of the standard quality tools employed through this method, and they are part of the tools used in problem identification and diagnosis.

Improvement specialist is an element that involves training of employees. The trained employees act as intermediaries between the senior managers and individuals working in the improvement projects. Their main responsibilities include serving as instructors who provide assistance and mentoring services. The aviation education of Emirates airline is an essential tactic that helps in accomplishment of its objectives. The company persistently adds and maintains airline skills within its workforce, as well as building an immense track record as it also educates other employees in the industry (Silver Associates Inc. n.d.).

Performance metrics can be classified either as financial or customer-oriented metrics. In MFG and SERV, sigma performance metrics were employed at multiple levels of the organization and in the administrative, service and manufacturing processes (Schroeder et al, 2008). They also stated the importance of customer requirements for being part of the six sigma. The customer oriented metrics takes into account the importance of understanding the customers’ current needs and their future desires. This has the effect of designing new products and services to meet customers’ requirements; this is a fundamental aspect of the six sigma methodologies known as Critical to Quality (CTQ) characteristic. The financial metrics of the six sigma methodology are determined by the financial personnel present in Emirates Airlines and reveals the financial benefits of the project (Schroeder et al. 2007; Silver Associates Inc. n.d.).

Quality management frameworks applied by Emirates Airlines

For an organization like Emirates Airline to thrive, a thorough research, detailed studies and investigation of the factors to engineer its success are considered. The management of this company continually monitors its competitors and the changes that occur in the internal and external environment with the aim of tackling these issues.

Consequently, frequent evaluation of the strategies, approaches and the resources currently in the business is a crucial aspect as it aids in predicting the future position of the company even in the face of competition. Moreover, it is a key factor in determining the company’s strengths and helping in eradicating their points of weakness. The management has championed the excellence of Emirates Airlines by their innovative contributions to the airline industry, and these have helped in maintaining its status during the highs and lows of the industry (Emirates Airlines n.d.)

The Airline’s corporate strategy exhibits the essence of multiplicity to its customers and other stakeholders by serving a variety of markets across the world. Emirates Airlines is proud of their zealous and committed staffs who work hard to meet the organizational goals. It makes sure that its services are unique and enjoyable for the customers. This is done through convenience, safety and comfort measures in all its services. Emirates also focus on good leadership to ensure its strategies are successfully executed. Being a leader in the airline industry is one of its strong focus strategies (Silver Associates Inc. n.d.).

The management facilitates the expansion of the business to be able to cater for many people, therefore, increasing its profit margin. In addition, customer-focused strategies are one of its ways of marketing that is very effective (Environmental Protection Agency 2006).The implementation of the 24-hours customer service by the management has helped in catering for a wider variety of clients. It has also helped in immediate resolution of clients’ concerns and needs over a range of destinations all over the world. Furthermore, this strategy has propelled the airline to market leadership, and overall competitiveness in the industry.

Although the company is faced with a tasking mission of serving the whole world, it does not concede its customer-focused strategy in each of all the countries. The company’s diversity management approach enables it to meet the clients’ needs and demands in the global market. However, their diversification can at times act as a point of weakness while the existence of other companies that provide affordable and quality air travel services in the airline industry are potential threats (Emirates Airlines n.d.)

Emirates Airlines also ensure continuous improvement by identifying specific companies, which are considered to have very good practices, and then study them for the purposes of benchmarking. They identify a successful company from any industry with a specific practice that is admirable and uses it as a benchmark to measure and evaluate its own performance (Godfrey, 1997).

Emirates Airlines adopts part of the TQM philosophy that empowers the employees to identify quality problems and seek ways to tackle them. Apparently, this is a remarkable shift from the old concept, when the employees feared identifying problems because they had no much authority on their disposal (Environmental Protection Agency 2006). Employees who identify problems are highly rewarded, and hence encouraged and motivated.

They are given a degree of authority to make decisions with the aim of enhancing the quality in the hotel processes. Plenty of incentives are offered to those employees who uncover problems within the organization. The organization highly values the input of the workers and considers their effort as key in achieving high quality in services provision. An extensive and continuous training is offered to the employees to ensure they are capable of performing their duties effectively and are capable of maintaining quality services (Eckes 2000; Emirates Airlines n.d.).

Six-sigma quality management, its benefits and problems

Benefits

Use of Six sigma techniques bring about process metrics and structured techniques in a bid to achieve organizational goals for the airline. In addition, this methodology helps predications to model their business strategies to achieve critical improvement efforts, speed business results, accumulate resources to take advantage of the available opportunities and lastly to oversee that improvements are sustained.

Six Sigma contributes to employee involvement: the employees are actively involved in the process of business improvement in their teams, which is created to increase the value for their customers and also improve business process. Since the employees are involved in execution of these plans, they really benefit through recognition of their contribution of their efforts on the bottom-line business results, and also recognition for the efforts of other departments and employees towards the business success (Emirates Airlines n.d.).

Six sigma leads to reduction of costs for the Airline, especially the ones concerned with reduction of time due to process improvements, as well as through reduction of the loss that could result from cases of rework. Six sigma is also very important as it leads to customer satisfaction. This is because this process is concerned with an emphasis on customers’ requirements and needs, as well as providing them with a very high value, which contributes to their satisfaction. Customer satisfaction is associated with numerous positive aspects including customers’ entertainment while travelling with the airline (Eckes 2001).

The techniques for the practice of this methodology are similar to other management approaches; however, its practice totally represents a new structural improvement approach. It aids organizations by providing them with a structural switch that enables them to act more organically, in unveiling new ideas of enhancing improvement and operational mechanisms improvements. It further employs many mechanisms that promote the conflicting demands of exploring and controlling improvement efforts (Environmental Protection Agency 2006; Barney 2002; Environmental Protection Agency 2006).

Six sigma can be seen from two different structural dimensions: structural exploration that is rooted in communication and boundary spanning roles, and as structural control, which has its interest at the control theory. Though six sigma methodologies are skeptically claimed to lack discriminative validity over prior approaches to quality management, many organizations, however, are continuously adopting them to enhance their performance

Problems

Application of Six Sigma and lean manufacturing in Emirates Airlines is challenging because of its emphasis on process goes against the benefits of creativity and innovation. Innovation in an organization is not possible without production deviations, insufficient studies, unusual solutions and redundancy, all of which contradicts with the principles of Six Sigma (Breyfogle & Cupello 2003).

The cost of implementing as well as the initial cost of six sigma techniques can be very harmful because it is very huge for the Airline. Analyzing and retrieving the essential information to carry out the kind of questions required for a successful six sigma cannot only be time consuming, but also very costly. It is extremely difficult to achieve this with sigma since it will result to overreliance on certified and trained six sigma professionals. This will require the company to seek services of consultants and build division within the organization at the expense of creating synergy. Furthermore, sometimes not all employees are utilized at their expertise (Barney 2002; Environmental Protection Agency 2006).

References

Ambroz, M 2004, ‘Quality system as a product of the empowered corporate culture. The TQM Magazine.vol. 16 no. 2, pp. 93-104.

Ame info.com. 2007, implementing an integrated approach to total quality, Web.

Ang. L, Davies, M & Finlay, P 2000, ‘Measures to assess the impact of information technology on quality management’, International Journal of Quality and Reliability Management, vol. 17, no.1, pp.42-65.

Babbar, S, and Aspelin, D 2004, ‘TQM it is as easy as ABC.’ The TQM magazine, vol. 6 no. 3, pp. 32-38.

Barney, MF 2002, The New Six Sigma: A Leader’s Guide to Rapid Business Improvement and Sustainable Results, Prentice Hall, Saddle.

Breyfogle, FW, Cupello, JM & Meadows, B 2003, Managing Six Sigma: A practical guide to understanding, assessing, an implementing the strategy that yields bottom-line success, John Wiley & Sons, New York.

Business Week 2008, Emirates Airlines, Web.

Eckes, G 2000, Six Sigma for everyone, John Wiley & Sons, New York.

Eckes, G 2001, The Six Sigma revolution: How General Electric and others turned process into profits, John Wiley & Sons, New York.

Emirates Airlines n.d., Emirates Airlines Web site, Web.

Environmental Protection Agency 2006, Crown Equipment Corporation eliminates chromium, McGrin, New York.

Godfrey, G, Dale, B, Marchington, M & Wilkinson, A 1997, ‘Control: a contested concept in TQM research’, International Journal of Operations & Production Management, vol. 17 no. 6, pp. 558-573.

Harvard Business Review March 2007, Managing Differences: The Central Challenge of Global Strategy, Web.

NetOp n.d., Emirates Airlines, Dubai, Web.

Scoop Business 2008, Emirates Airlines 100% E-Ticket Enabled, Web.

Silver Associates Inc. n.d., Emirates – Program Planning and Strategy, Web.

Travel Daily News 2008, Emirates calls a world first, Web.

Introduction

Emirates airlines acquired the services of Hollywood celebrity Jennifer Aniston in order to become the company’s latest brand endorser. It is an interesting partnership because UAE’s flag carrier is the most successful and well-respected airline company in the world (ACC Global, 2017). Aniston on the other hand is one of the most recognizable faces in the world. It is easy to understand the Emirate’s decision based on Aniston’s popularity and global appeal (The National Staff, 2016). However, she is not the only one blessed with those attributes. Without a doubt, there are more than a dozen female celebrities that are also as easily recognizable as Aniston (Kloppers, 2017). It is therefore interesting to figure out the reasons for hiring her from a marketing and brand management perspective. After studying her latest TV commercial and appreciating its purpose and intended message with regards to the Emirates airline’s brand and overarching marketing campaign, one can argue that the company’s hiring of Aniston was driven by the need for a brand resonance and brand association.

Background

UAE’s flag carrier took the top prize at the SkyTrax 2016 World Airline Awards (SkyTrax, 2016). It was not the first time for Emirates airlines to earn the said distinction. Aside from garnering acclaim from some of the toughest award-giving bodies on the planet, the airline company was also cited for having the best inflight entertainment system, one of the best Business and Economy sections, and cabin staff in the world. Kenneth Rapoza (2014), writing for Forbes magazine enabled ordinary mortals the inside story that helps explain Emirates rise to the top. The author pointed out that in a business class flight from New York to Abu Dhabi he was treated to a dinner prepared by a world-class catering service under the supervision of celebrity chef Wolfgang Puck (Rapoza, 2014).

In addition, he enjoyed the rest of the trip sleeping on a chair that reclines flat while cocooned in a thick and comfortable blanket (Rapoza, 2014). It is not enough to appreciate Emirates airlines’ corporate advantage based on onboard amenities alone. It is also important to consider the big picture or the context of the larger experience using this airline company. For example, the UAE government spearheaded an ambitious project to build the world’s biggest and most advanced and aesthetically pleasing airport in order to augment the experience of using the services of the said airline company. In addition, it is also of critical importance to make a connection between Emirates’ customized commercial jets and the opulence of the UAE from man-made “archipelagoes shaped into palm trees” to the world-renowned architectural wonder called the Burj Khalifa (Mouawad, 2011). In other words, it is difficult to ignore the company’s intended message, compelling the world to acknowledge that the airline company exemplifies luxury and top-of-the-line service.

Jennifer Aniston shot to worldwide fame through the TV sitcom, Friends. The said sitcom is considered not only of the most financially successful TV productions of all time, but it is also an iconic brand that cuts through cultural and language barriers. The sitcom made her into one of the most easily recognizable female celebrities on the planet. Aniston leveraged her TV celebrity status into movie royalty power. Her popularity and the global appeal was enhanced even further when she married Brad Pitt, one of the most influential and sought after celebrity in today’s global market. When her marriage to Pitt ended, she earned legions of fans as the world emphatized with her plight.

Thus, there are only a few people on this planet that captured the imagination of the general public the same way she had. There are two things to remember about Aniston in the context of brand endorsement capabilities. First, she had a gift of comedy, and just like others blessed with a great sense of “comic timing” she has the ability to make people laugh and at ease (Walden, 2016). More importantly, she had this aura of “the girl next door” and yet she makes women all over the world believe that it is not an impossible dream to become like her (Walden, 2016). Her magnetic power lies in her ability to make people believe that they can relate to her and that they are able to reach her level no matter how lofty it may seem at first.

Possible Answers

Strategic Brand Management and Brand Equity

It is important to point out that Emirates airlines wanted not only to sell a particular product but also to create a brand. Brand equity is synonymous with creating brand value and for the brand to acquire an instant recognizability factor.

Customer-based Equity and Brand Positioning via Integrated Marketing Communication

Customer-based equity aims to increase cutomer loyalty. A successful marketing campaign insulates the airline company from competitive marketing activities. At the same time, it is possible to increase profit margins. In other words, demand remains the same even as prices tend to increase.

Brand Resonance and Brand Value Chain by Understanding Market Performance

Brand resonance translates to greater customer attachment to a particular product. It is easier to achieve brand resonance if customers are able to relate to the brand endorser. In this regard, the brand ambasador creates a positive feeling within the consumers (Kardes, Cronley, & Cline, 2011). It is also imperative to figure out a way to gauge the company’s market performance.

Brand Association and Co-Branding

Brand association is made possible through brand imagery and the need to make connections to the original idea linked to the product (Kardes, Cronley, & Cline, 2011). It is possible to enhance brand association using the principles of co-branding merging the brand carried by Emirates airlines and Jennifer Aniston as a top celebrity endorser.

Building Brand Equity and Brand Elements through Effective Marketing Programs

Emirates airlines must build brand equity by creating a marketing campaign that is memorable, meaningful, likable, and transferable. The marketing program must not only produce positive ideas and feelings, it must also cut through cultural and language barriers.

Capturing Customer Mindset

There is a need to find out what customers are thinking when they see the Emirates brand or an aircraft carrying the company’s logo. If the association is not favorable to the company, it is imperative to find a way to alter that mental association.

Analysis

After reviewing principles associated with strategic brand management and figuring out the possible reasons behind the hiring of Aniston’s brand endorsement services, one can make the argument that she was chosen for the purpose of brand association and brand resonance. This assertion was based on the personal and professional history of Jennifer Aniston as well as how the target market perceived Emirates airlines. It is of critical importance to point out the significance of Aniston’s “girl-next-door image” in conjunction with the way the target market associated Emirates airlines with ideas like sophistication, opulence, and luxury. Thus, it was important to find a brand enorser that makes people feel at ease, makes them want to try the Emirates brand, and not feel intimidated by the world-class airline.

Conclusion

One can make the argument that Emirates airlines wanted to increase its market share in the Business and Economy sections of the airline market. People associate the words luxury, sophistication, and opulence to Emirates airlines. Thus, it was a clever marketing strategy to hire Aniston, because people relate to her. She exudes charm, grace, and high class, however, she makes people believe that they can attain her status with the right amount of attitude and hard work.

References

ACC Global. (2017). Competitive advantage. Web.

Kloppers, J. (2017). Brand ambassadors in the age of social media.Web.

Mouawad, J. (2011). Emirates ambitions worry European rivals.Web.

Repoza, K. (2014). Why UAE and Qatar have the wold’s best airlines. Web.

Skytrax. (2016). Top 10 airlines of 2016. Web.

The National Staff. (2016).Friends star Jennifer Aniston is Emirates brand ambassador. Web.

Walden, C. (2016). Why the world cares when Jennifer Aniston says she is fed up. Web.

Introduction

Strategic human resource practices require a business firm to focus on creating value in their internal functions to increase their competitive edge in specific industries they operate in.

This requires a firm to link its organisational culture with its operational structure and business objectives to attain positive outcomes (Boxall & Purcell, 2008, p. 67).

Emirates Airlines is one of the largest companies with operations in the United Arab Emirates and other parts of the world. The company’s vision focuses on sustaining strong leadership to enable it to formulate fresh ideas to keep it competitive in the industry.

The company’s mission focuses on corporate responsibility by participating in different community programs that have tangible communal benefits in different parts of the world.

The purpose of this report is to highlight different aspects of strategic human resource management in Emirates Airline and how they have enabled the company to attain positive results in its operations.

This paper will discuss an overview of strategic human resource management practices in Emirates Airlines and provide an analysis on how they help it execute its objectives in the industry.

Approach to Management

Strategic HRM principles which focus on giving a firm organisational effectiveness to make it more competitive in the industry have been implemented by Emirates Airline.

The firm’s HR systems offer all employees positive working environments that allow them to utilise their talents to improve performance (Boxall & Purcell, 2008, p. 71).

The organizational culture is closely aligned with its mission where employees participate in making crucial decisions which are reviewed and implemented within a short time.

The firm’s operational systems are flexible and this ensures that various crucial functions and duties are performed in different locations to save on costs and time.

Since it is a transnational organization, the firm has a less complex organisational structure which allows all employees to interact freely. The company’s resourcing practices focus on developing its own talent pool and sourcing experienced employees through the internet, recruiting agencies and the media.

Advertising of employment opportunities by the company is done through traditional media and recruitment agencies which the firm partners with. Employees are drawn from 160 different nationalities and they are given equal opportunities to build their skills and talents in the firm.

Adverts target employees with different types of skills who are able to perform a wide range of functions in the firm.

More importantly, the firm constantly looks at changing patterns in the industry that are likely to impact on its operations and updates its employment practices accordingly (Bamber, Gittell, Kochan & Von Nordenflycht, 2013, p. 55).

Some of the external pressures the firm has to consider when changing its HR policies include: legal environment, costs, technological changes, political factors and cultural factors that directly impact on its operations.

The firm’s management team confers with employees before policy changes are implemented and this allows both parties to share ideas about benefits and risks that are likely to be experienced by the firm.

Internal HR Management

Performance management processes enable leaders in a firm to set goals to be achieved by all employees in their workstations to register quality outcomes.

The airline encourages its employees to feel at ease whenever they are at work and this motivates them to focus more on the task at hand. Since the firm observes dynamic work practices, employees interact easily with managers to make them aware about different issues they are facing.

The firm mainly relies on long cycle performance management systems which allow it to use personnel appraisal methods with different criteria to evaluate employees.

Periodic reviews are undertaken and employees that attain positive results are awarded yearly bonuses, travel benefits and promotion opportunities (Bamber, Gittell, Kochan & Von Nordenflycht, 2013, p.60).

This approach allows managers to take note of different factors in the operating environment that affect overall organisational performance negatively.

The firm’s resource base is updated through both talent management and succession planning strategies. During training, employees are equipped with multiple skills to allow them to understand different duties they are expected to execute in the firm more effectively.

This makes them suitable for different functions the firm specializes in to make them more competitive in their work responsibilities.

More importantly, the firm has strong training procedures for new and old employees that increase their awareness about specific work responsibilities they are expected to execute (Exter, 2013, p. 87).

Flexible induction policies reinforce a positive work life balance in the firm and as a result, they get inspired to attain positive results in their workstations. This approach encourages employees to take the initiative to improve their own performance in the firm.

Communication, Employee Engagement and Organizational Culture

The main language that all employees use for communication is English. This allows people in the organization to interact with one another freely to form strong relationships that improve results.

The inclusive diversity policies in the firm have increased the level of integration and cohesiveness thereby allowing all stakeholders to focus more on organisational objectives.

The firm relies on both online and traditional communication platforms to engage with its employees in different locations (Nankervis, Compton, Baird & Coffey, 2011, p. 67).

Since workers perform their duties in a relaxed environment, the firm encourages them to increase their interest in other external activities that are beneficial to their development.

This allows them to exploit their talents in a dynamic organizational environment because existing structures encourage mutual exchange and collaboration.

The firm’s overall practices have elements of both clan and rational cultures. Clan culture is practised through employee collaborations to achieve customer service excellence in these functions; ticketing, onboard services, baggage handling, communications and customer care services.

Therefore, information sharing and team work have made it possible for the firm to stay ahead of its competitors in the industry because of the additional value offered to customers.

Rational culture is used by leaders in the firm to engage employees to improve the way internal systems are designed to improve overall performance.

As a result, middle management teams guide workers on the importance of adhering to high operational standards to elicit positive reactions from customers (O’Connell & Williams, 2011, p. 52).

Therefore, managers are able to gather information to understand various issues that are likely to affect workers’ performance in the firm.

Employees in the firm are encouraged to interact with their colleagues outside the workplace to make them appreciate their diverse cultural backgrounds.

Employees are also encouraged to participate in various corporate responsibility activities and this has improved their perceptions towards the firm’s corporate values and ethical principles.

Employees are encouraged to volunteer in corporate social responsibility events where they get to learn more about the importance of sustaining positive relationships with all stakeholders.

Therefore, this has brought about a high performance culture in the firm which rewards and acknowledges people for their positive contributions to the firm (O’Connell & Williams, 2011, p. 57).

Leadership Style and Change Management Processes

Leadership is a key function which every business organization must take seriously. The leadership style which is used by the airline is a combination of paternalistic and transformational leadership.

The firm’s leadership has infused new ways of thinking into existing organizational practices which encourage employees to use critical thinking skills to perform their duties. Most of the senior executives in the firm have worked there for a long time and they are able to anticipate different challenges before they occur.

In effect, they use knowledge-based theories to make proactive decisions which sustain the firm’s competitive advantage in the industry.

Since the Dubai government is a strong stakeholder in the airline, some of its leaders confer with management to find out the impact of external policies on the firm’s operations (Wensveen, 2007, p. 98).

The leadership model adopted by the firm focuses on both results and general behaviour to inspire employees so that they can become more diligent in their duties.

The firm was forced to change its recruiting practices several years ago to cut down on operational costs. A majority of its employees come from low wage countries and this has allowed the firm to focus on other strategic functions to increase its competitive edge.

Additionally, the implementation of an aggressive growth strategy has increased the number of global destinations it flies to (Hayton, Biron, Christiansen & Kuvaas, 2012, p.70).

More importantly, the firm was among the first airlines to place orders for the Airbus A380 as part of its fleet modernisation program to help it fly its passengers to long haul destinations.

All these growth plans have necessitated a change in the HR strategy because the firm focuses on constant process improvements to sustain its brand value in the industry.

Kotler Eight Step Process

Step 1: The firm’s first CEO Maurice Flanagan instituted excellence policies in 1985 after being chosen by Dubai’s rulers to start a globally recognized airline.

Step 2: Hiring procedures focusing on hiring expatriates from Western Europe and the U.S. Expatriates have served in senior executive positions for more than two decades and this has helped the firm to develop its internalisation strategy.

Step 3: A change vision focusing on equipping employees with high quality customer service, communication skills was instituted by the airline to achieve its strategic objectives.

Step 4: Employees were exposed to a new working culture which allowed them to understand the firm’s vision in the industry and how it was going to be achieved.

Step 5: Adoption of learning centred approach to improve performance and to streamline various functions. Improvement in hiring practices to bring about cultural diversity at the workplace.

Step 6: Performance management and reward systems for technical, customer service and other employees in the organisation to improve internal and external operations.

Step 7: New expansion plans that enable the firm to use modern aircraft for long haul flights to increase connectivity and to provide high levels of comfort to customers.

Step 8: The firm has instituted a corporate responsibility plan that encourages its employees to engage with external stakeholders to make them understand its long term vision.

Change Implementation Processes and Innovation in the Company

The firm has focused on bringing transformational changes that are aligned to evolving overall brand strategies. As a result, employees’ perceptions towards change management processes are more positive because they know there are many opportunities they will gain in the future.

Effective stakeholder management policies have been implemented to encourage all stakeholders to participate in organisational activities. This approach has allowed the firm to increase awareness about its short term and long term objectives in the industry (Hayton, Biron, Christiansen & Kuvaas, 2012, p. 117).

Managers inform employees about specific changes that are implemented in the firm and how they conform to its long term goals. As a result, this encourages employees to work harder to attain positive results in their duties.

The company uses constant learning processes to make its internal as well as external practices more competitive. Since it has more than 62,000 employees, it has diverse workplace strategies that make employees feel that they are appreciated.

Therefore, all employees understand the role they play in the firm and this has stimulated positive thinking in different departments (Taneja, 2004, p. 112). The firm also relies on technology to boost various outcomes achieved by individual employees in their respective workstations.

In addition, employees are allowed to propose new changes in their workstations to improve the quality of results obtained from different work processes. Work systems in the firm are designed to encourage flexibility and teamwork to allow employees to become more creative in their duties (Storey, 2007, p. 76).

This approach encourages employees to propose new ideas which are forwarded to managers for review. As a result these innovative practices have helped the company to achieve a higher degree of service excellence out of its operations and this has strengthened the quality of its brand in the industry.

Conclusion

The firm has a less complex organisational structure that favours quick decision making. Additionally, it relies on technological solutions such as video conferencing to conduct meetings between its managers who work in different locations.

Employees rely on mobile technological solutions to schedule flights in accordance with flight plans of different destinations to minimise delays.

Moreover, the firm’s employees use enhanced technical support systems that rely on high quality mobile technologies to perform other important functions (Lock, Fattah & Kirby, 2010, p. 10).

It is also one of the first airlines that offered electronic booking, onboard multimedia entertainment and other value added services to its customers.

More importantly, the firm has a full time research and development department that identifies specific areas of its operations which need to be improved to boost its performance in the industry.

The airline’s recruitment and performance management processes are closely linked to its long term business objectives and they have increased its competitive edge in the industry.

The airline’s brand has increased in value because it allows employees to use technological tools to make both internal and external work processes more efficient. In addition, the airline has a simple management structure that encourages employees to share information about various work processes easily.

This has helped the firm to avoid duplicating employee responsibilities at the workplace and as a result, it has managed to reduce unnecessary costs. Lastly, work systems in the firm are innovative and they encourage employees to be more creative in their work duties so that they attain good results.

References

Bamber, G.J., Gittell, J.H., Kochan, T.A., & Von Nordenflycht, A. (2013). Up in the air: How airlines can improve performance by engaging their employees. Ithaca, NY: Cornell University Press.

Boxall, P., & Purcell, J. (2008). Strategy and human resource management. Basingstoke, UK: Palgrave Macmillan.

Exter, N. (2013). Employee engagement with sustainable business. New York, NY: Routledge.

Hayton, J., Biron, M., Christiansen, L.C., & Kuvaas, B. (2012). Global human resource management casebook. New York, NY: Routledge.

Lock, H., Fattah, A., & Kirby, S. (2010). Airline of the future: Smart mobility strategies that will transform the industry. San Jose, CA: Cisco Internet Business Solutions Group.

Nankervis, A., Compton, R., Baird, M., & Coffey, J. (2011). Human resource management: Strategy and practice. Mason, OH: Cengage Learning.

O’Connell, J.F., & Williams, G. (2011). Air transport in the 21st century: Key strategic developments. London, UK: Ashgate.

Storey, J. (2007). Human resource management: A critical text. Mason, OH: Cengage Learning.

Taneja, N.K. (2004). Simpli-flying: Optimizing the airline business model. London, UK: Ashgate.

Wensveen, J. (2007). Air transportation: A management perspective. London, UK: Ashgate.

Introduction

Emirates Airline is a constantly expanding international airline company. With a history of over 30 years of successful flights, it has become synonymous with exceptional quality of luxurious transporting services. As for now, it is the third most powerful company in the global airline industry measured by capacity. However, measured by international passengers, it is the most popular and successful one ranked first in the list of the global airline leaders (Alcacer and Clayton 1). The secret of its meteoric expansion is customer-centrism. It is associated not only with improving the quality of provided services but also the focus on upgrading aircraft so that they are more comfortable and fuel-effective, thus flights are more enjoyable and ticket prices are more moderate.

Still, it is essential to point to the fact that regardless of the current-day propelling success, the path towards the global leadership and recognition was lengthy and cumbersome. The company was founded in 1985. It is based in Dubai, United Arab Emirates. Since 1985, there were several stages of the company’s growth and expansion. The first one dates between 1986 and 1993. During this period, the company was engaged in active purchasing of aircraft and entering new markets. During the first two years of operation, it managed to serve 11 destinations. Emirates Airlines is one of the companies that avoided drops during the early years of its operation, outperforming regional competitors easily and constantly increasing its revenues.

By the beginning of the second stage of its development, the company’s revenues increased by more than $100 million annually, which made it one of the fastest expanding airline companies. During the second stage of its expansion, Emirates Airlines faces a significant challenge precluding it from further global development – the possessed aircraft could not cover distances longer than 14 hours of flight. Therefore, the third phase of development began with the overall upgrading of aircraft so that longer flights became possible. Since 2004, Emirates Airlines continued to inject funds in expanding aircraft basis and entering new markets (Alcacer and Clayton 7). As for now, the company operates a fleet of around 260 aircraft, including Boeing 777 and A380 (“Emirates Fleet Details and History”). With 152 destinations around the globe and more than 55 thousand employees, the Emirates Airlines is recognized as the Most Valuable Airline Brand, and it is unlikely that this honorary rank to one of its competitors (“History”).

Nevertheless, regardless of the successful history of the company’s operation, it is essential to be aware of the market it works in as well as the specificities of its business environment. Therefore, the paper at hand aims at investigating the issues mentioned above. A special focus will be made on conducting PEST and SWOT analysis to obtain a better understanding of the company’s environments as well as reviewing the most influential competitors of Emirates Airlines and currently deployed growth strategies.

PEST Analysis of the Company

Conducting PEST analysis is essential for obtaining a better understanding of the specificities of the market of the company’s operation. The need for carrying it out is motivated by the necessity of understanding factors that may have either a direct or indirect influence on the company’s further development and affect its performance. This analysis covers four groups of factors: political, economic, social, and technological. All of them will be reviewed below.

Political Factors (P)

This group of factors is associated with the political environment of the company’s operation, including legislation and overall political climate inside the country of origin as well as at regional and international levels. In the case of Emirates Airline, the impact of political factors is critical due to the specificities of its operation. Therefore, it is possible to state that there is a profound influence of both national and international legislation. Speaking of the national legislation, it was already mentioned that the company belongs to the Dubai government. For this reason, the impact of the national legal framework is diminished because there is always a real opportunity for creating an advantageous atmosphere for the company’s operation. Still, the company is very sensitive to any changes in the national legal frameworks (Cook and Billig).

However, the same cannot be said about the international legislation, as even the slightest changes in global legal frameworks may have a devastating influence on the company’s performance. In this case, it is essential to point to the fact that the operation of Emirates Airline is governed by numerous legal provisions. Some of them include bilateral “Open Skies” agreements and universal treaties. In this way, terminating contracts with any of the United Arab Emirates’ partners (countries that signed the “Open Skies” agreement) is potentially connected to a drop in revenues as well as an increase in operational costs. More than that, it is critical to mention that international regulations are becoming stiffer, especially after the 9/11 terrorist attacks. From this perspective, Emirates Airlines is forced to correspond with all airline legal provisions and monitor any changes in the legislation.

Regardless of the flight-related legislation, the company has to consider any changes in employment-related provisions. In this case, it is essential to state that the national (UAE) standards that have a direct impact on the company’s operation should comply with the international employment norms because the majority of cabin crew are foreigners. Therefore, any amendments to these provisions may be connected to changes – both negative and positive – in operational costs due to expanding staff base. Here, it is essential to point to the fact that, according to the current international standards, maximum in-flight duty time for any crewmember should not exceed 15 hours. It means that in case of a possible decrease in this figure, the company may face additional challenges, even if the decreases are slight and insignificant.

Besides regulation provisions, other legislative issues should be mentioned. For example, the company should pay specific attention to reaching agreements with local airports it cooperates with, especially in case of lengthy flights when the aircraft does not return to Dubai. In this instance, the issues under consideration are the availability and costs of parking slots, landing and take off technological support, and emergency recovery plans. That said, the slightest changes in destination airport provisions and agreements are of extreme significance for the successful operation of the company and may have a direct impact on its further development.

Finally, there is an extremely powerful impact of any instability in the political environment. It is true for national, regional, or international conflicts because it increases risks of unstable operation of the company. More than that, it is associated with passenger safety issues. However, it is paramount to mention that Emirates Airlines is among those companies that manage to avoid the detrimental impact of regional conflicts. For instance, during the Gulf War, the company never ceased providing its services. Nevertheless, the influence of political instability is still critical due to the psychological factor, i.e. returning tickets for refunds that may result in increased losses.

Economic Factors (E)

Economic factors make up the second group of factors that predetermine the development of Emirates Airlines. In this case, it is essential to mentions that being founded and operating in a highly developed country – the United Arab Emirates – is one of the aspects that helped the company reach its current economic condition. Still, it is imperative to mention that there are two critical determinants when it comes to identifying the role of economic factors in the company’s business environment. The first one is the economic development of Dubai. It is stated separately instead of pointing to the UAE economy as the whole because the company is based in Dubai International Airport only, not across the state. Therefore, any changes in the development of the Dubai economy are directly connected with the changes in the economic activities of Emirates Airlines. More than that, it is essential to point to global changes in the airline industry. Making a special focus on this economic factor is important because these are the overall trends in the industry that determine the operation of all airline companies, and Emirate Airlines is not an exception.

Nevertheless, regardless of laying stress on the importance of the Dubai economy, it is essential to point that the effect of the UAE economy should as well be considered. There are two perspectives to estimate it. To begin with, due to the economic stability and sustainable economic development of the UAE economy, its currency is stable. In this way, UAE Dirham-USD fluctuations are insignificant. This aspect is important because all prices are determined in Dirham, while the rest of the world purchases tickets paying in dollars. It means that due to the stable currency, ticket price in dollars is relatively unchangeable so that there are no dramatic shifts in service costs. Another aspect of the UAE economic development is connected to the specificities of the economic environment. In the UAE, GDP per capita is high, while the unemployment rate is low. It means that UAE citizens can afford to cover high ticket prices and are not forced to search for low-cost alternatives.

However, in the case of estimating economic factors, it is paramount to point to a particular duality in their influence. As stated above, both the development of the Dubai economy and the changes in the international airline industry has a direct influence on the operation of Emirates Airline. Therefore, even though the Dubai economy is constantly growing and becoming more powerful, there are some negative changes in the industry connected to the increased risks of on-board suicide attacks.

Another significant economic factor is the fluctuation of fuel prices. Even though, as for now, the company pays special attention to upgrading its fleet and purchasing fuel-efficient aircraft, this process is timely. Therefore, the impact of fuel prices on ticket prices is powerful because fuel-related transportation costs make up more than half of the ticket price (Cook and Billig). The same can be said about the changes in food and beverages. Even though these expenditures cannot be compared to fuel-related costs, it is essential to point to the fact that the company offers only high-quality and premium food and beverages to its passengers. From this perspective, any alterations in this group of expenditures can lead to ticket price changes.

Finally, it is paramount to point to economic aspects of technical support of aircraft and the operation of airports. In this way, any delays in departures or emergencies are associated with extreme loss. In this case, it is connected to both brand issues – the impact of the company’s image and the desire to travel with it – and safety-related challenges. Here, even though the role of delays in departments is essential, the influence of catastrophes or emergencies during flights is even more critical due to the risks of ruining brand image and high post-crash costs. However, it is imperative to state the Emirates Airlines is among those companies that managed to avoid victims in crashes. As for now, there were only 3 incidents of aircraft crashes over 32 years of operation that point to the professionalism and reliability of the company.

Social Factors (S)

One more aspect of the business environment is social factors. This one can be viewed from perspectives. To begin with, it is essential to point to the increasing population both globally and in Dubai. Speaking of Dubai, it is associated with the increased part of foreigners in its population. Still, in both cases, the increase of population is connected to the potential expansion of the customer base and attracting new clients. From this perspective, any changes in family planning policies may have a negative influence on the company’s incomes due to the potential reduction of the global population. The same is true for changing the national regulations of migration that might limit the flow of immigrants. In this case, any changes are as well extremely important because the majority of cabin crew members are foreigners, i.e. the immigrated to the United Arab Emirates for employment and will be forced to leave in case of adopting unfavorable migration policies.

Another significant economic factor is the role of the cultural and social needs of the company’s passengers (Katsioloudes and Abouhanian). Focusing on the peculiarities of cultures and ethnicities is the foundation of providing services. The specificity of the company is a special educational course aimed at teaching cabin crew members to address the culture-specific needs of passengers, thus improving customer satisfaction with the provided services. For instance, Muslim passengers should not be offered drinks and snacks during the holy month of Ramadan because it is perceived as an offense. More than that, during each flight, all culture-specific needs represented in common food and beverage preferences are addressed. It is true about both snacks and alcoholic drinks that are selected separately for each destination based on the peculiarities of the local culture.

Technological Factors (T)

Finally, another important determinant of the business environment is technological factors. As for now, the impact of the newest technologies on the operation of the company is powerful. It can be explained by the overall introduction of the newest technologies in everyday life, and this trend is as well popular in the airline industry. As for now, Emirates Airline is known as a company that is successful in incorporating technological advancement on-board, including inflight entertainment, Wi-Fi, different IT systems, and teleconferencing. Moreover, senior management pays special attention to the constant improvement of the fleet, purchasing more technologically advanced aircraft. At the same time, the company has introduced online services for purchasing tickets, selecting snacks and beverages, and airport check-in.

Still, it is paramount to point to some of the recent policy changes that may have an unpredictable impact on customer satisfaction with the provided services. For instance, around a month ago, Emirates Airlines adopted a technology ban provision. According to it, any devices larger than smartphones are banned onboard. Passengers are obliged to pack them before leaving the gate and entering the cabin. Among the prohibited devices, there are laptops, electronic books, cameras, tablets, portable DVD players, traveler scanners and printers, etc. (“Electronic Ban Services,”; “Help Centre,”). Nevertheless, this rule applies only to passengers traveling from Dubai International Airport to the United States. Also, the company offers a tablet loan service to stay connected in case of necessity. This new policy is connected to the changes in the US legislation, specifically adopting the provision limiting the use of electronic devices on-board for passengers traveling from the United States to the Middle East countries. It is the new US security directive – the so-called Trump’s travel ban – that points to the influence of politics on the business environment (“Emirates Introduces Laptop and Tablet Handling”; Zhang). Major PEST factors can be found in Table 1 provided below.

The Main Competitors: UAE, Middle East, and International

Even though Emirates Airline is a well-known and globally recognized air company, its ticket prices are high for ordinary passengers. It means that it is reasonable to review different competitors. In this way, both the luxury segment and low-cost airlines should be perceived as rivals. The reason for the inclusion of luxury segment companies is evident, as Emirates Airline is one of the companies belonging to this group of companies. As for the low-cost service providers, they should be mentioned because, in the case of common destinations, middle-class passengers are more likely to give preference to cheaper journeys if the difference in the quality of provided services is insignificant. Besides, three groups of competitors will be reviewed – UAE, Middle East, and international. A complete list of competitors is provided in Table 2 below. Still, it is essential to note that regardless of the long list of competitors, choosing one of them is a matter of individual preferences. Therefore, the most powerful ones will be addressed in the following subsections.

UAE

The most powerful competitor in the United Arab Emirates is Etihad. Even though it is small and young, the company is becoming increasingly powerful both regionally and internationally. As for now, it has around 90 destinations (Alcacer and Clayton 18). Nevertheless, because it was founded in 2003, this figure points to the increased risks of potentially outperforming Emirates Airlines in the future. It is as well government-owned and operates in the luxury segment. Therefore, it is the major UAE-based rival.

Middle East

In the Middle East, there are two main competitors – Turkish Airlines and Qatar Airways. The first company is one of the most influential regional air transportation providers. The main difference from all Middle East carriers is the fact that it has a large domestic passenger base that is the foundation of its growth. Also, Turkish Airlines has 249 destinations (more than 200 of them are international) which makes it more advantageous compared to Emirates Airlines, especially keeping in mind that it is also a premium segment carrier. As for Qatar Airways, it has 188 destinations. It is as well a government-owned company with the constantly increasing the fleet (Alcacer and Clayton 16). In this way, just like Turkish Airlines, it is powerful and its operation imposes significant risks for the Emirate Airline’s growth.

International

The major international competitors are AirFrance (more than 200 destinations in 93 countries), Lufthansa (193 international destinations in 81 countries), British Airways (around 250 destinations on six continents), and Singapore Airlines (160 destinations on six continents). Because all of these airline companies offer more destinations compared to Emirates Airlines, they are a significant threat. More than that, they belong to the group of the most luxurious airlines, as well as offer middle-class services, which makes them even more threatening.

The Market – SWOT Analysis

SWOT analysis is one of the common techniques deployed for estimating a company’s market position because it helps identify both internal and external factors that may have an impact on the company’s operation and develop long-term strategies for managing its activities. The focus is made on four aspects: strength, weaknesses, opportunities, and threats. They will be reviewed in detail in the following subsections.

Strengths (S)

Emirates Airline possesses numerous strengths. To begin with, being backed up by the Dubai government is what helps the company become even more powerful. Due to it, the company obtains the resources and support necessary for further growth. In particular, it is what was beneficial for becoming globally recognizable which is another strength. Furthermore, the quality of the provided services is exceptional that contributed to the continuous expansion of the customer base. The same is true about efficient branding and marketing strategies that are valuable for attracting new clients. More than that, the focus on technological advancement that is beneficial for outperforming competitors and constantly improving organizational performance. Finally, Emirates Airlines is the company with high operational costs that makes coping with emergencies easier due to the availability of necessary resources.

Weaknesses (W)

Regardless of significant strengths, there are as well some critical weaknesses that should be mentioned. To begin with, ticket prices are high that makes it complicated for medium-class passengers to afford to choose the company’s services. From this perspective, the customer base is smaller than it could be based on the company’s potential. What is even more critical is that Emirates Airlines is forced to take more aggressive steps to increase its market share (compared to its competitors) due to high ticket prices. Besides, the environment of operation is highly competitive. Therefore, there is always the need for implementing new techniques for outplaying rivals. Besides,

Opportunities (O)

Although there are some critical weaknesses of Emirates Airlines, the company still has some opportunities for becoming more powerful. First and foremost, it may become more influential by entering new markets and introducing new destinations. Even though nowadays, it has 152 destinations, launching new ones will be beneficial from the perspective of attracting new customers and increasing incomes. More than that, Emirates Airline may be interested in creating a medium-cost segment for the most popular destinations. The idea is to copy the business model of most regional air companies – do not offer free snacks and premium alcohol in the medium-cost segment. It will reduce some operational costs, thus helping to decrease ticket prices and attract more passengers. Finally, continuing to invest in fuel-efficient aircraft is another opportunity for further growth due to the potential reduction of fuel consumption, i.e. expenditures for satisfying fuel needs.

Threats

Still, in addition to some promising opportunities, there are some challenging threats. Due to the operation in a highly competitive market, the most critical threat is the rise of its competitors. It is especially true for Middle East companies that are actively cooperating with Dubai Airport – Emirate Airline’s hub. At the same time, there is a risk of being outperformed by the most powerful international competitors, especially in the countries of their hubs because citizens of those states are more likely to choose domestic airlines instead of foreign ones. Furthermore, there is a significant threat connected to the changes in fuel prices that may result in increased ticket prices. Finally, due to the dependence on the national government, as well as the criticality of following all international legislation norms, any changes in legislation may have unexpected consequences for the company’s operation (see Table 3).

Growth Strategies

Achieving the current recognition and economic state might have been impossible without crafting efficient growth strategies and using them masterfully. Emirates Airlines is a company known for a unique strategic mix that is designed to satisfy its specific needs and bring it to the leading positions in the global airline industry (see Figure 1 below). The core of the company’s growth strategy is the focus on its planes. It can be viewed from two perspectives. First and foremost, it is the focus on the constant upgrading of the fleet that is helpful for the company’s growth. Furthermore, they are constantly replaced with more fuel-efficient aircraft that help reduce operational costs, thus increasing revenues.

As for now, Emirates Airline possesses more than 200 aircraft, and this figure is constantly increasing, as the company orders the newest crafts all the time. Comparing it with two crafts that were available in 1985, the growth is spectacular that proves that this strategy is fruitful. Also, senior management of the company limits the range of purchased aircraft that is beneficial for optimizing pilot work and customizing passenger experience (Alcacer and Clayton 7). More than that, there is only one hub – Dubai International Airport. Even though it may seem inconvenient from the perspective of international business, it is more beneficial to locate all of the airplanes in one place that is easier to reach and monitor and sign contracts for parking around the globe than create hubs that will be complicated to control due to being located far from the regulating center.

Another efficient growth strategy is the focus on expanding customer capacity. It is achieved by the creation of unique customer experience when on-board – culturally-and ethnically specific treatment as well as valuing and satisfying any culture-based needs of the passengers. More than that, special attention is paid to making journeys more comfortable by introducing new services on-board, such as entertainment and the introduction of the newest technologies, as well as increasing the number of premium and luxury amenities to make traveling experience unforgettable (Alcacer and Clayton 10). In addition to laying stress on customer experience, Emirates Airlines is constantly working on entering new markets and offering new destinations. This strategy is inseparable from the two mentioned above because the increased number of routes is potentially connected to the expanded customer base and the need for a larger quantity of aircraft (Alcacer and Clayton 9).

ConclusionFinally, the senior management of Emirates Airlines recognizes the criticality of marketing as one of the deployed growth strategies. It has been used since the foundation of the company in 1985. In marketing, the special focus is made not only on the exceptionality of the provided services but also on promoting the city of Dubai believing that the increased inflow of tourists is inseparable from the expansion of the customer base. More than that, it uses globally famous sports events (for instance, Cricket World Cup) for increasing awareness of the brand. As for the ad campaigns, they center on assuring potential customers that all of their needs will be addressed properly due to the expertise of cabin crew and numerous luxury amenities offered by the company (Alcacer and Clayton 11).

To sum up, regardless of some critical weaknesses and potential threats, Emirates Airline is a powerful and well-branded company. Being internationally recognized and deploying efficient growth strategies, it has increased chances of becoming even more popular, although it operates in a highly competitive business environment. Still, it is critical to state that the company should not give up its uniqueness and make the further focus on cultural specificities of its passengers, as well as search ways to enter new markets, to attract more clients and outperform even the most influential national, regional, and international competitors.

Works Cited

Alcacer, Juan, and John Clayton. “Emirates Airline: Connecting the Unconnected.”Harvard Business School. 2014. Web.

Cook, Gerald N, and Bruce Billig. Airline Operations and Management: A Management Textbook.Routledge, 2017. Google Books, Web.

“Electronic Ban Services.” Emirates, 2017, Web.

“Emirates Fleet Details and History.” PlaneSpotters. 2017, Web.

“Emirates Introduces Laptop and Tablet Handling Services for US Flights.”Emirates, 2017, Web.

“Help Centre.” Emirates, 2017, Web.

“History.” Emirates, 2017, Web.

Katsioloudes, Marios I, and Arpi, K. Abouhanian. The Strategic Planning Process: Understanding Strategy in Global Markets. Routledge, 2016. Google Books, Web.

Zhang, Benjamin. “Emirates Is Cutting Flights to the US Because of Trump’s Travel Policy.”Business Insider. 2017, Web.

Introduction

Background

Emirates Airlines was established in 1985 in the United Arabs Emirates (UAE) and it has become the largest airline companies in the Middle East. The firm is wholly owned by the UAE government through the Dubai Investment Corporation and it has established its presence in different markets across the world. The firm operates in over 76 countries and over 3,400 flights per week (Sambidge 2013). In a bid to satisfy the market, the firm operates both cargo and passenger carriers.

The Emirates SkyCargo division is responsible for handling cargo. In 2012, the airline ranked fourth with regard to the total number of international passengers carried. Additionally, Emirates Airlines ranks as the longest non-stop commercial carrier in the world. The airline is focused on delivering a high level of customer satisfaction.

One of the areas of emphasis relates to the provision of excellent level of service. The airline operates a mixed fleet, which is comprised of Boeings and Airbuses. Its effectiveness in delivering high quality services has not only enabled it to develop a strong brand name, but also in becoming a market leader.

Emirate Airlines is cognisant of the significance of developing a strong level of customer loyalty by providing customers with high quality services. Subsequently, the firm has adopted flight catering as one of its customer service tools in its business model. Jones (2004) contends that flight catering is a large industry. Furthermore, the industry is characterised by a high degree of complexity. Despite this aspect, airline companies are increasingly using flight catering as a marketing tool (Jones 2004).

Optimal operations management is vital in an airline’s efforts to stimulate its productivity. Therefore, operations managers should understand the link between various management aspects such as capacity management and organisational performance. Such an understanding equips managers with sufficient knowledge on how to deal with issues that emerge.

Slack, Chambers, and Johnson (2010, p.2) define capacity management as ‘the set of work processes associated with the provisioning and management of IT infrastructure resources, such as servers, printers, and telecommunication devices, used to support business processes in a cost effective manner’.

Barnhart and Fearing (2012) further postulate that capacity management in the service industries such as the airline industry is challenging due to the unique nature of the services provided. One of the challenges relates to management of demand and supply, and hence the companies’ capability to sustain their quality standards. Capacity management issues hinder firms’ ability to attain their productivity target.

Problem statement

Emirates Airlines is facing diverse challenges, which might affect its competitiveness in the Gulf and the Middle East regions. One of the main sources of challenge relates to intense competition. The airline’s competitors such as Air France/KLM, Delta Airlines, and SkyTeam are evaluating their competitive strategies in an effort to counter the Emirates’ market dominance (Mahadevan 2009). Demand for commercial aviation has grown at a high rate over the past few decades.

The growth has arisen from a number of factors such as the adoption of open-sky agreement s and increased deregulation of the airline industry by governments.

Increase in the consumers’ disposable income across the world coupled with the high rate of globalisation has also contributed to the industry’s growth as individuals explore new opportunities in other countries. In 2009, the UAE was selected to host the 2020 World Expo in Dubai. The event, which will take 6 months, is expected to attract over 25 million visitors (The Emirates Group 2014)

The level of consumer confidence towards the airline industry has grown remarkably. Most consumers consider air travel transport as a safe mode of transport. Wald (2011) asserts that demand for air travel will continue to grow. Emirates Airlines plans to fly over 70 million passengers across the six continents by 2020 (Sambidge 2013).

The transformations in the domestic and the international air travel industry present a major opportunity for Emirates Airlines to improve its competitive advantage. However, this aspect will depend on the company’s commitment to engage in capacity management and flight catering. The firm has to ensure that its catering department offers customers with high quality food and beverage products.

Scope of the study

The study will analyse all the capacity management for all Emirates flights. Furthermore, the study will also forecast the airlines future capacity with regard to seasons, years, and new flights.

Rationale of the study

The global air transport industry is facing a mixture of challenges and opportunities originating from the external business environment. One of the challenges relates to the volatility of fuel prices. Furthermore, travellers are becoming sophisticated by demanding high value for their money.

This phenomenon has arisen from the desire to gain a new and unique experience. Therefore, airline companies are not only faced by the challenge of satisfying the market demand, but also meeting the customers’ level of satisfaction. There is a high likelihood of Dubai attracting a large number of visitors during the 2020 World Expo event. Emirates Airlines should perceive this aspect as an opportunity to augment its competitive edge.

The intensity of competition in the UAE airline industry has increased remarkably. Industry players are adopting diverse business models in an effort to improve their competitive edge. An example of such model includes the low-cost model, which is designed to increase the number of passengers carried.

It is important for Emirates Airlines to develop an understanding on how it can improve the capacity of its flight catering in order to supply the existing and new flights without compromising the quality of its products or services. This move will enable the firm to exploit the business opportunity successfully.

Objective of the study

This study intends to identify the gap within capacity management of flight catering at Emirates Airlines considering the expanding capacity of aircraft and other services over the few years. The study also intends to recommend the best capacity operations to be implemented.

Limitations of the study

The study mainly relied on secondary data from reports and other publications derived from online sources. However, only credible sources such as peer reviewed journals, articles from credible databases, and books were used, thus assuring the credibility of the information collected.

The study did not utilise primary results, which limited the ability of the researcher to expound the issues under investigation. However, it is assumed that the information gathered from the literature review and the case study is sufficient to illustrate the concept of capacity management in flight catering.

Literature review

Capacity management practices in flight catering

Firms in different industries are experiencing challenges in their pursuit to attain long-term survival. The high rate at which change is occurring in the business opportunity poses a threat to the firms’ operation. Changes in the service sector are the major precursors for firms to adjust their operations.

The industry players should focus on two main aspects, which entail revenue maximisation and optimal capacity utilisation. Ingold (2005) argues that the need for capacity management in the contemporary service sector cannot be underrated.

Yield management

One of the most effective strategies that airline companies should focus on in their quest to adopt capacity management in their flight catering is yield management. Jones (2004) contends that yield management is one of the most widely used capacity management strategies in the airline industry.

According to Withiam (2014), the concept of yield management entails the different strategies used by service firms to assist them in realising their desired level of revenue from operations. Withiam (2014, p.2) defines yield management as ‘the process of allocating the right capacity or inventory unit to the right customer at the right price and at the right time to maximise revenue or yield’. Yield management strategy is mainly concerned with three main capacity management issues, which include

1. Inventory control
2. Control of availability
3. Pricing strategy

Inventory control component is concerned with ensuring that the necessary resources such as employees and aircrafts are availed. On the other hand, control of availability is concerned with managing the number of seats in the aircrafts, while pricing strategy entails setting the price of the service at an acceptable margin.

The pricing strategy in yield management also entails integrating different prices for different products. For example, airline companies may design their catering services to meet the diverse categories of classes such as economy, business, and first class travellers.

Capacity forecasting planning

The integration of an optimal capacity forecasting technique is critical in the airlines’ effort to promote their future success. Capacity forecasting entails modelling an organisation’s future capacity requirement in order to meet the prevailing market demand. The forecasting process entails assessing an organisation’s IT services, the existing facilities and infrastructures, and the quality of the workforce. Hernon and Altman (2010) assert that the level of service provided by airline firms affects the demand for air travel.

Jones (2004) further asserts that flight catering is a complex operations management aspect. The flight catering production unit may be comprised of more than 800 employees and producing over 25,000 meals every day. The catering process is further complicated by the number of flights from the main hubs especially in large airlines companies such as Emirates Airlines. In a bid to perform flight catering successfully, it is imperative for airline companies to understand the approximate number of passengers and their respective needs.

Therefore, airline companies should conduct continuous market research in order to understand the passengers’ behaviour. Understanding the passengers’ needs plays a critical role in the companies’ efforts to produce and develop products that meet the customers’ specific needs. For example, the airline company can forecast the possible type of customer within a particular route, thus giving the airline insight on the type of drinks, food, and equipments to incorporate in specific routes.

Bon and Veen (2009) contend that capacity-forecasting planning is essential in flight catering in a number of ways. First, it forms the basis through which an organisation can plan for its short-term and long-term projects in order to balance the demand and the supply sides.

According to Hellermann (2006), forecasting the demand in flight catering is important in determining whether a particular airline has the capacity to address the needs of the targeted market segment. Capacity forecasting planning in flight catering minimises the likelihood of dependency on outsourcing some services from external flight catering providers.

One of the ways through which this goal is achievable is via assisting the airline companies in identifying the prevailing business opportunities and underused capacities, hence the need to consolidate the two issues. Therefore, the airline company can minimise the cost that it would have incurred by hiring external flight catering services.

Food safety and quality system

Ensuring a high-level safety and providing high quality products is a critical element in capacity management. Safety and quality should not be ignored in the airlines’ effort to manage capacity in their flight catering processes. Klassen and Rohleder (2002) argue that food-borne diseases account for a significant proportion of the total number of mortality cases recorded in the general population. Airline companies serve a large number of travellers from different countries.

Based on the growth in demand for air travel across the UAE, which arises from the 2020 World Expo in Dubai coupled with the Emirates Airlines’ intention to establish new routes, the firm will be faced with the challenge of ensuring that the travellers are catered for adequately. Therefore, airline companies have an obligation to ensure that passengers are not exposed to food-borne diseases. Emirates Airlines’ intention to serve over 70 million customers by 2020 will require the firm to improve its food safety and quality processes.

In a bid to meet this requirement, airline companies should establish a strong relationship with a broad spectrum of stakeholders such as food suppliers, airline companies, and caterers. Airline companies should also integrate food safety experts throughout the food production process.

Furthermore, the flight catering system should adhere to the principles advocated by the Hazard Analysis Critical Control Point (HACCP). The principles advocate for a flight caterers to undertake a comprehensive hazard analysis, establish the critical control points, and the monitoring system. Airline companies should also institute a mechanism to confirm the effectiveness of the HACCP (Taneja 2004).

Theoretical and conceptual framework

The business environment is undergoing a high rate of revolution arising from different factors. For example, customer needs are changing at a remarkable rate (Graham, Papatheodorou, & Forsyth 2010). The air travel and leisure industries have been affected. Previously, the industry was relatively small and flights were mainly short-haul.

The literature review section shows that a high likelihood of Emirates Airlines achieving its growth and market leadership objectives in the global airline industry due to the prevailing market trends.

The aviation industry is experiencing a high rate of growth arising from increment in the consumers’ disposable income, high rate of globalisation, and liberalisation of the airline industry in both developed and developing countries. Matching demand and supply improves service firm’s ability to deliver the desired level of services. Subsequently, the firms can achieve their productivity targets.

Adopting the ‘coping’ strategy is one of the strategies that firms in the service sector such as airline companies can integrate to improve their capacity management practices.

Huo, Moynihan, and Ingraham (2003) assert that the ‘coping’ strategy is most appropriate in situations characterised by dynamic market changes such as ‘being slack’ or ‘being busy’. The coping strategy entails adjusting the change and the level of operational strategies. One of the ways through which organisations can integrate the coping strategy is by improving their forecasting and capacity planning capabilities.

Airline companies should establish clear resource productivity targets. Furthermore, it is also imperative for organisational leaders to integrate clear service quality targets by integrating the concepts of benchmarking. One of the areas that airline companies should focus on relates to customer satisfaction.

Subsequently, a firm can set the benchmark based on quality of services provided. Benchmarking increases the likelihood of an organisation to attain performance excellence. Hernon and Altman (2010, p.49) argue that should ‘resources decline, the approach is to look for ways to do the right things smarter, rather than to continue the routine processes that contribute little to service quality or customer satisfaction’.

In addition to the above aspects, it is critical for an organisation’s operations manager to understand the potential bottlenecks its quest to deliver optimal services. The coping strategy advocates for operations managers to identify and understand potential failure points in their organisations’ service delivery process. Currently, Emirates Airlines does not have adequate flight catering ability to address the prevailing market changes. Subsequently, it is imperative for the airline’s operations manager to adjust its flight catering capacity.

Case study analysis; Emirates Airlines

Emirates Airlines appreciates the importance of integrating effective capacity management in its flight catering processes. The firm has established a flight-catering department in its quest to improve the customers’ level of satisfaction. The firm’s commitment towards improving its competitive edge is illustrated by a number of aspects as illustrated herein.

State-of-the-art flight catering facility

Emirates Airlines has implemented a fully-fledged state-of-the-art flight catering facility. The EKFC department provides meals to passengers travelling on the airline. The food production facility is a 607,778 square foot facility, which ranks as the most sophisticated and modern catering facility globally (The Emirates Group 2014). In 2013, the facility was considered the largest in the world with regard to volume throughput.

The facility does not only serve Emirates Airlines’ passengers but also other airlines such as Air France, Virgin Atlantic, Swiss, and Singapore Airlines (Oracle 2014). The integration of the state-of-the-art facility was stimulated by the need to improve the airlines’ flight catering processes. Emirates Airline’s aircrafts have turnaround duration of less than 30 minutes. Subsequently, the flight-catering department has to ensure that the cleaning of the plane and replenishing the necessary inventories such as food and beverages.

In a bid to meet this requirement, the airline has integrated an automated system to aid in the entire process by adopting an integrated application known as The JD Edward EnterpriseOne, which is Enterprise Resource Planning (ERP) software (The Emirates Group 2014).

The software has played a critical role in improving the airline’s ability to deliver value to customers by minimising the cost of flight catering. The application is multi-dimensional as it provides customers with a wide range of database choices hence enabling the firm to meet the diverse customer needs.

The ERP software has played a remarkable role in improving the effectiveness with which Emirates Airlines serves its customers. For example, the airline serves over 125,000 meals daily to over 340 flights. The firm recently upgraded the JD Edward EnterpriseOne 8.10 to 9.0 in an effort to achieve system stability (The Emirates Group 2014). This move improved the airline’s flight catering efficiency beyond the industry average requirement.

For example, the firm ensured that the meals were ready 4 hours before the flight. Furthermore, the monthly food cost variance was reduced significantly to $100,000 from $500,000. Subsequently, the firm attained a profit of $4.8 million (Oracle 2014).

In addition to the food production facility, Emirates Airlines has also implemented a modern laundry facility known as Linencraft (The Emirates Group 2014). The facility has the capability of cleaning over 80 tons of laundry daily. The integration of these facilities has remarkably enabled the company in its quest to enhance a high level of health and safety on both its clients and employees.

Human capital

Emirates Airlines undertakes over 300 different flights daily to various parts of the world. Furthermore, the airline intends to increase its destinations by entering new and emerging markets across the world. The Dubai World Expo further increases the potential for future growth. The Emirates Group (2014) posits that the expo is expected to attract over ‘25 million visitors, which presents a high number of travellers into the UAE within the six months duration of the Expo’.

In a bid to exploit this opportunity for growth, Emirates Airlines should consider the most effective strategy to adopt in order to provide optimal flight catering services. Currently, the airline’s flight catering department employs over 6,500 employees who are charged with the responsibility of producing over 125,000 to 150,000 meals daily (The Emirates Group 2014).

This figure represents a remarkable growth from 1975 when the department was established. At its inception, the Emirates Flight Catering department produced an average of 2,000 to 2,500 means daily (The Emirates Group 2014).

In line with the firm’s commitment to deliver a unique in-flight experience to customers, the airline ensures that its flight caterers are experts coupled with customising its in-flight catering employee recruitment program. For example, caterers such as chefs are selected by taking into account their cooking techniques and the flight destination.

This selection method has played a critical role in improving the effectiveness with which the in-flight catering department meets the customers’ tastes. For example, Japanese chefs enable Emirates Airlines to meet the Japanese travellers’ needs by producing a range of sushi for the diverse Japanese routes. Similarly, chefs from other nationalities also advise caterers on how to meet their respective customer needs (The Emirates Group 2014).

Conclusion

The global airline industry faces a myriad of opportunities and challenges arising from the external and internal business environment. On the other hand, one source of opportunity that the industry players should consider relates to the rising demand for air travel. This report identifies capacity management as one of the most important elements that airline companies should consider in order to attain long-term survival.

Some of the factors that explain the prevailing market changes in the airline industry include high rate of globalisation, increased liberalisation of the airline industry, increase in the consumers’ disposable income, and growth in the level of consumer confidence towards the airline industry.

These changes are likely to increase the volume of air traffic. The Expo scheduled to happen in Dubai in 2020 is expected to attract over 25 million visitors from different parts of the world, which presents an enormous opportunity for Emirates Airlines to achieve its profit maximisation objective.

This report cites a number of elements that airline companies should consider in the quest to undertake capacity management. One of these elements includes yield management, which emphasises the significance of adopting effective revenue maximisation and ensuring optimal capacity utilisation.

Additionally, airline companies should undertake capacity-forecasting planning in order to understand the extent to which they can cope with the market changes. Ensuring a high level of food safety and quality is also cited as a major element that airline companies should integrate in their capacity management in order to improve their competitive advantage with regard to flight catering.

Considering the anticipated change in the UAE airline industry, it is imperative for industry players to adjust their capacity management techniques. The report identifies coping strategy as one of the most effective capacity management strategies that airline companies can adopt as it improves the effectiveness with which companies can better their ability to address the prevailing market changes.

Recommendation

Emirates Airlines has adopted flight catering as one of its operational aspects in the pursuit of competitive advantage. In order to improve its competitiveness, it is imperative for Emirates Airline to improve its capacity management in flight catering. The airline should consider the following issues:

1. New product and service development – this study highlights a high probability of increment in the degree of complexity amongst airline passengers. This situation may arise from the high rate of globalisation, the airline’s entry into new markets, and increase in demand for air travel. Such complexities are likely to present a challenge in the Emirates Airlines’ flight catering processes. In order to deal with this challenge, Emirates Airlines should integrate the concept of new product and service development. The products and services developed should be customised to meet the customers’ needs.
2. Integration of information technologies: Emirates Airlines should invest in continuous improvement of its flight catering facilities and technologies. One of the areas in which the airline should improve relates to Enterprise Resource Planning systems. The ERP software will improve the effectiveness with which the airline undertakes capacity-forecasting planning. Emirates Airlines should also improve the level of satisfaction amongst its customers. The airline can attain this goal by integrating Customer Relationship Management software. The software will assist in understanding the customers’ needs and the prevailing trends. Furthermore, the CRM software will enable the Emirates Airline to identify gaps in its flight catering processes by understanding the passengers’ sentiments with regard to its flight catering processes.
3. Flight catering training program- in a bid to achieve its customer satisfaction objective in its flight catering processes, Emirates Airlines should integrate a comprehensive employee-training program. The program should focus on equipping its caterers with sufficient knowledge and skills on how to deal with various aspects that affect the passengers directly and indirectly. For example, the airline should train its caterers on how to prepare meals that exceed the customers’ expectations.
4. Supply chain management- to cope with the rising demand for air travel, Emirates Airlines should focus on improving its supply chain to enhance the efficiency and effectiveness of its food production unit by integrating a high level of collaboration with suppliers.

Future research

Changing passenger needs is one of the major challenges that airline companies should take into account in their operations management. In a bid to address this challenge, it is vital for airlines to evaluate the most effective capacity management strategies. However, one of the issues that operations managers should take into account is uncertainty. Airline firms should consider how to factor in the element of uncertainty in their capacity planning processes in order to improve their flight catering ability.

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