Emirates Airlines business environment is based on an “open policy”, which sustains the company’s continuous growth. The “open policy” sets both the business relationships in which the company is engaged and the internal working environment, which gathers 57.000 employees all over the world (Emirates Annual Report 2010 - 2011).
The current paper treats the strategic positioning of Emirates Airlines, aiming at preparing a strategic plan for the company based on the analysis of the internal and external business environment of the company. In addition, this paper also proposes to examine the approaches of the company to the strategy evaluation and to propose future strategy for Emirates Airlines and also to analyze it in comparison with another major United Arab Emirates airline company, in terms of commercial operations. The competitive company with which Emirates will be compared is Qatar, another 5 stars, award winning Airline Company from UAE.
1. Emirates Airlines Business Environment Analyzed through Strategic Positioning
In the meantime, the paper primarily needs to identify what strategic positioning represents for a company, in order to properly analyze Emirates Airline’s business environment in accordance with its organizational business strategy.
Johnson, Scholes and Whittington define the strategic positioning as determining the impact on strategy of the company’s external and internal business environment, considering the expectations and the impact that its stakeholders have on this environment (13). Based on this definition, the paper will need to elaborate both the internal and the external environment of the Emirates Airlines.
Externally, Emirates Airlines is an award winning international cargo division, reaching US$ 15,6 billion in the financial year 2010 – 2011, with 23 years of continuous profit. It operates with a fleet of more than 170 aircraft, managing over 120 destinations in over 60 countries around the globe, permanently expanding its network with new, challenging destinations. Weekly, the Dubai airport operates around 1000 flights, which represents approximately 40 per cent of the total flights that take place in and out of Dubai International Airport of Emirates (Emirates Airlines, official website).
These figures indicate a serious competitor in the airline industry. Emirates is a permanently growing company that operates on a dynamic, permanently changing market. Regarding this aspect, there should be mentioned that the company has obtained profits in the previous year also, although 2010 – 2011 financial year was represented by uncertain and insecure politic and economic context, which affected the business environment. The previous year was also the year of natural catastrophes that hit Japan and New Zeeland and it caused the disruptions of flights all over the world because of the ash cloud of the Eyjafjallajokull volcano, or the abundant snowfalls from the Western Europe, United Kingdom and Unites States (The Emirates Group Annual Report 2010 – 2011, 8).
The company follows, as stated, an open business environment model. It considers the right of every airline company to operate without restrictions on free routes and airports. This is why, its approach to business is based on transparency and on permanently improving its services for satisfying its customers, exploring all new opportunities in this purpose (The Emirates Group Annual Report 2010 – 2011, 3).
As an airline company, Emirates activates on the luxury segment, aiming to provide its customers with unforgettable experiences. While its main activity is assuring commercial air transportation services, the company targets to offer its clients an integrated flying experience, at the best quality standards. As a parenthesis, Emirates Group includes the commercial transportation services of Emirates Airlines and combines them with the cargo, catering or the ticket reservation services of dnatta, a different entity, but with the same management vision (The Emirates Group Annual Report 2010 – 2011, 4). Hence, both companies are combined for delivering integrated services for their clients.
In fact, the company’s business positioning was recognized through the awards that it wan in the tourism industry. As such, Emirates Airlines received the Leading Hotels of the World Awards, the overall Commitment to Excellence Award or the Conservation Award in 2010, at Beijing, for Emirates Hotels & Resorts. Emirates was also awarded at the Environment category (The Emirates Group Annual Report 2010 – 2011, 11), which indicates that the company is committed to the environmental sustainability. As such, the company is aware of the impact of carbon emissions are causing on the environment and this is why its aircraft is formed of low – emission, low noise pollutant fleet (Emirates official website).
In terms of internal organizational values, the company is “fostering a culture of respect”, sustaining the needs of its employees and stakeholders. Moreover, its business ethics altogether with the shared values represent the company’s assets, which will guide the company on future growth, as the company’s Annual Report from 2010 – 2011 indicates (11). The company promotes a multicultural working environment, as prove being the members of its staff, who represent more than 160 nationalities, hence, diverse cultures. This giant team of 57000 employees is aligned to the company’s values, for delivering luxury services to Emirates’ clients on all activity levels. This is why they are considered the company’s main asset (The Emirates Group Annual Report 2010 – 2011, 11).
The company’s leadership team represents another strong point in the internal business environment of the company, being considered the key of the company’s strategic positioning and business performances, because of its experience and market approach. Actually, the company’s success is a result of a stewardship and servant leadership style, as the managers empower the employees with authority to make the decisions they consider best for specific situations. Of course, the company’s employees are permanently trained and stimulated to think creatively and to be permanently engaged in the realities of the airline industry that might affect their company. The continuous adaptability to the industry in which it activates and to take the challenges and fructify them into business opportunities represent the company’s engine of going further and always delivering high quality services on a market that is characterized by change and that is dependent on the social, economic, politic, even cultural aspects.
2. The Process of Strategic Planning
Strategic planning processes imply a company’s potential to adjust its business to the industry in which in activates, by making decisions, or allocating resources for following an imposed business strategy, meant to align the organization to the standards of its market. Steiner sustains that there is “no such thing as a the strategic planning system” and that all companies should design their own strategic planning, customized on its needs and its objectives, without copying or adopting a given model (12).
Emirates Airlines is following the same business model that it did since it started functioning, because, as its Annual Financial Report 2010 – 2011 states: “After all, why change something that works?” (17). The company is committed to always remaining connected to the changes that occur on all levels, adjusting its business on all these changes, by permanently considering how they might affect its business and how can it benefit from those changes. Moreover, Emirates is adjusting its business in order to comply with the shifts that might influence its operations. As the company describes it, its strategy planning is “knowing when to zig and when to zag”, in other words, it involves a whole decision making process of: adding flights, opening new destinations, managing the forces of nature, redeploying equipment (The Emirates Group Annual Report 2010 - 2011, 15), or anything needed for assuring a smooth development of its business.
Proposing a strategy plan for Emirates Airlines is not an easy task, since the company already integrates such a planning. If there is something that the company could do, that it is not already acting upon, is to generate its own opportunities. The company is a leading actor on its market and it could influence the airline industry, by setting new standards, by creating new needs, in order for it to satisfy its customers and other stakeholders. As it activates on a very competitive market, the competitors would rapidly react to the imposed standards, and the company could create, generate its status quo, having the advantage of being the initiators of the needs that it has identified, and knowing best to answer those needs. This would contribute to the company’s expansion strategy, as it could propose new routes for its customers and also design new travel needs, in terms of services, for instance.
3. Appropriate Future Strategy for Emirates Airlines
In its quest of celebrating a new year of continuous growth, in terms of revenues and business operations, Emirates Airlines needs to think its expansion strategy and its whole business vision for 2012 – 2013. In this respect, it needs to formulate its approaches based on the political, economic, social, technological, legal and environmental (PESTLE) context. Hence, in designing these approaches, it needs to adapt to the nowadays realities, for continuing to mitigate, to avoid and reduce the risks, while transforming the challenges into opportunities.
Because the economic instabilities are still a constant in Western Europe and United States, the company should focus on the emerging areas for expanding its operations. The political insecurities from the African countries and from specific regions of UAE could represent serious risks for the company’s operations, as well as the continuous increase of the oil price. Nonetheless, as the company is continuing to invest in the low – carbon emission fleet and on the low fuel consumption, this can actually represent an opportunity for Emirates in terms of environmental sustainability. With the ongoing technological development, the company should invest in adapting its fleet with the newest technology in communicating with customers, and in facilitating their communication with business partners, friends, family, etc. Nowadays information and communication means has evolved unimaginably and Emirates Airlines’ clients are sophisticated people that need to be permanently connected to the newest technology, devices and gadgets. Emirates must set a lifestyle for its customers, wherein technology would have its defined role. The company is very much engaged in the 21st century, but what it needs to do for assuring its expansion before its competition is to anticipate the markets’ evolution, both in terms of aviation industry and in forecasting how the PESTLE context could affect its business.
4. Comparing Emirates Airlines and Qatar’s Commercial Operations
The commercial operations represent the company’s main activity, which generates its main income and profit. Emirates Airlines’ sales commercial operations are based on a strategic implementation of an annual business plan, which takes into consideration the needs of the market, as the economy develops. The company is permanently connected to the moment, to “now”, establishing local strategies for approaching the areas in which it operates, or in which it could encounter a new line for opening its operations.
Qatar Airways, Emirates’ competitor on the UAE market implements its strategy on the commercial operations is based on a similar implementation. Qatar also has modern fleet and proposes luxury services for its customers, aiming, just as Emirates, to expand its route, while remaining competitive on the markets wherein it already activates, by continuing to provide its 5 stars services. Qatar proposes more customized services for its customers, including cargo and executive lines, which allow customers the flexibility of determining their spending value while flying with Qatar (Qatar Airways official website).
On the other hand, Emirates is developing on the hospitality marketing, in the hotel and leisure retail markets, in food and beverage operations, as well as in consumer goods and catering services (The Emirates Group Annual Report 2010 – 2011, 132). Nonetheless, Qatar also includes hospitality services, mostly as a leisure time between flights, or at arriving or departing, for creating a different flying experience. Just like Emirates, it also possesses duty free shops and it provides ground handling and distribution of alcoholic drinks services (Qatar Airways official website).
As observed, this is a highly competitive market, wherein it is difficult maintaining a leadership position, just because the competition is also professional driven, focused on performance and luxury. In this context, Emirates Airlines needs to continue offering professional services and to bring something extra to its business.
As such, a five years strategy could be to introduce entertainment facilities in its airports, so that people can relax while playing a video game, watching a movie, or creating their own music (on guitars, pianos, and other musical instruments). In terms of resources, it could introduce offices at the board of its fleet, for providing its customers the proper environment for working while travelling. For a quality plus, the offices could be equipped with video – conferencing devices. In these 5 years the company could implement these strategies in several key points that could be permanently monitored for evaluating their success. If the customers would respond well and this would lead to constituting an added value for the company, it could become its competitive advantage and it could be extended to other operating points.
The paper evaluated Emirates Airlines business strategy, focusing on its positioning and strategic planning, while continuing to target its expansion. The paper also suggested a strategic plan for following this aim, based on the organization’s business model. Based on Emirates competitors’ resources, the paper suggested the permanent updating of its resources, anticipating the customers’ needs and creating new needs for them.
Emirates, Emirates. Retrieved from http://www.emirates.com/english/about/emirates.aspx. N.d. Web.
Johnson, Gerry, Scholes, Kevan & Whittington, Richard. Exploring Corporate Strategy: Text & Cases. Edinburgh, Pearson Education Limited. 2008. Print.
The Emirates Group. Annual Report 2010 – 2011. Retrieved from http://www.emirates.com/english/images/EK-AR-10-11_tcm233-750566.pdf. N.d. Web.
Qatar Airways. The Qatar Airways Group. Retrieved from http://www.qatarairways.com/global/en/group-companies.page. N.d. Web