Competitive Analysis of Emirates Airline

Emirates Airline is an institution owned by the government of Dubai of Dubai Investment Corporation in the United Arab Emirates. The airline is a service provider of entertainment systems for in-flight and off-flight including first, economy and business classes. It comprises of ground services that consist of making available different lounges for the business and first class. Further, they also provide convenient chauffeur-driven vehicles from and to the airport.  Emirates Airline has 3,400 airlifts a week operating across six continents. The airline offers a wide range of services that are in high demand by the majority of consumers mostly in Europe and Arabian countries during long and short holidays. The high demand for travel services benefits consumers by providing amenities that are irresistible to other competitors. The company has improved services to counter other competitors in the market, thus keeping an admirable profile to their consumers. Majority of their target market includes the business and the middle class. The high prices of services have overlooked the lower class as a result of increased cost of advertisement, development, and provision of high-quality products.  In the recent past, the airline has grown rapidly with significant improvements standardizing prices for their consumers. Emirates airlines support team interacts with their consumers to provide quality services. This write-up will conduct a market research and analysis for Emirates Airline.

Emirates company has its headquarters based in Dubai. The airline focuses on clasping the interests and priorities of ‘business class’ customers and people in the upper middle class as the buyer persona. Emirates airline have a plan to establish a strong market position globally. The company offers services at a fee affordable to the upper ideal class and the middle class. The services offered throughout the travel and safety measures are commendable. Ideally, the company focuses on customer satisfaction to promote customer loyalty.

To define the goals of the content, the researcher will focus on three aspects of competition including, environmental context analysis, SWOT analysis, and competitor analysis.

Environmental Context Analysis

            In the economic arena, the airline industry incurred losses following the economic downfall. The aviation industry had to undergo a severe price-cutting. The Emirates is, however, a strongly established company and hence it survived and optimized its operations. As a result of the economic depression, the company acquired more capacity and managed to maintain its fixed costs. The company has now managed to access international markets and establish itself in more geographical locations.

The aspect of the demographic environment is crucial for Emirates. The airline industry is witnessing rapid changes since the world has become interconnected by technology. The number of buyer personae has also increased due to increasing number of immigrants, tourism and business people. Emirates and its competitors are constantly struggling to meet the needs of the growing market. To benefit from this opportunity, Emirates has been offering customized services to their customers with consideration to factors like gender, religion, and age.

Emirates has embraced the use of latest technology and this guarantees its success to a large extent. The emirates understand the importance of updated technology in the business and are currently pursuing the 5-star airline standards. The company has booked stands for its airplanes of the most recent Airbus and Boeing. The company is confident to spend on technology purchasing an asset worth $60 billion. The company has been exploiting the best technology to enhance profitability, a case example being the signing of a telecommunication company to provide mobile phone network coverage. Emirates focuses on dispensing exceptional services in the airline industry like facilitating the use of mobile phones while on a flight. The company has adequate resources at its disposal and ensure that investments of the resources enhance its performance on a global radar. It has been among the best airlines and awarded multiple awards for the performance.

The political and legal environment is required to acquire legal permits to travel through the air. In Dubai, where the Emirates is located, such legal requirements do not exist. The opportunity presented to Emirate enables the company to penetrate world markets like Australia, New Zealand, and America. Emirates has been utilizing the opportunity and has recently obtained more landing rights of Europe. Local airlines perceive the company as a threat to the competition.

Competitor Analysis

Emirates does business in the same industry with other companies like Gulf Air Company, British Airways, Air France and Qatar Airways Group. These companies pose both direct and indirect competition. To elaborate the concept better, it is necessary to assess Porter’s Five Forces. Emirates utilizes a strategy in which the airline is a function of its environment and delivers services that reflect inherent thinking within the carrier planes. Using Porter’s five forces will assist to evaluate the current position that the company holds.

The first force refers to the threat posed by new competitors joining the industry. For Emirates airlines, new entrants do not pose a major threat since the industry has a very low entry barrier. Further in the Middle East, investments, expertise/ technology and prime admittance barriers can be purchased with ease. Power supply represents the second forces and Emirates appears to be protected from this threat. The major power suppliers in airline industry are Airbus and Boeing. The two suppliers reflect an obviously serious competition. According to (Davahran, et.al, 2014) there is a higher probability that the suppliers will incorporate vertically. The power of buyers is an important aspect in Porter’s model. There is a very low power of buyers who would invest in an airline company in the Middle East. Emirates is relatively safe from this threat.

Also, the availability of substitute services in the industry increases the level of threat for the Emirates. However, the current situation reflects that the level of threats that would emerge from similar services is quite low. The low levels are indicated when one considers the distances within the region and the increasing growth rate of the area which an indicator that development is taking place. The last forces in Porter’s model are competition from rival companies. The airline industry is quite competitive and also well advanced. The cost of competition can directly cause a decrease in profit margins. A prolonged period of operation under stiff competition has the potential to ruin the profitability of the industry. However, operation in the Middle East is somewhat different since the government intervenes and provides security to Emirates profit margins.

Emirates Competitive Strategy

A competitive strategy can be conceptualized as skills and abilities that are implemented to ensure that a company survives in the market and does so with ease. Strategies can be termed as sources of competences. For Emirate, the company has access to adequate resources ranging from flight, employees, finance and office equipment. Unlike most companies, the Emirates airline is advantaged to have sources and afford threshold competencies, for instance, online booking provisions, on-time delivery services and point to point routing.

The competitive advantage for Emirates is the working dedication and determination to implement a differentiation generic-based approach. The company is dedicated to providing high-quality services to widen their customer loyalty and so out win other competitors, Emirates is also determined to create a pattern and culture in their operations that reflect that of a leading company (Davahran & Yazdanifard, 2014). Some efforts that reflect a leader-company have been noted including being the first company to provide big TV screen and introducing the e-ticketing system in the industry.

Emirates airline has embraced market segmentation and used it for own benefits. Segmentation provided Emirates a competitive advantage. The company has a rare opportunity to have its training done using the best technology called plane simulator. Such changes have been implemented to ensure that the company is a leader and help it maintain this status.

SWOT Analysis

Emirates is among the fast-growing airlines globally. The upcoming firms look up to Emirates as an icon and work to achieve a status that can compete with the company. To understand the company strengths, weaknesses, opportunities and threats, is significant to analyze the company using a SWOT analysis table (SWOT analysis on Emirates Airlines., n.d.)

Strengths

Weaknesses

Opportunities

Threats

Support from the government in Dubai

Stiff competition

Ability to purchase newsies fleet

Changing policies of governance

High customer loyalty

Does not cater for budget travelers

More destination that implicates a growing market share

Entry competitors who assume the company’s model

The high rate of employee satisfaction

High cost for brand maintenance

Multiple branches globally (72 countries)

Relies on international moving traffic

            The researcher chooses to focus on Emirate’s market segmentation and targeting. The firm tailors its service to a target audience of people who possess a high purchasing power. The target audience falls in the upper-middle or upper class. Segmentation is done using occupation and income level. The company perceives that people in the target audience have expendable money and can afford to pay the rates offered by Emirates. In occupation, the company offers its services to the business class and working class. The business class is offered to business travelers and regular seats given to the working class. Marketing strategies for both groups differ with the working class being ‘offered a chance travel and have a unique experience. For the business travelers, the focus is on selling prestige, confront and efficiencies like non-stop flights or eloquent spaces. It is important to be conversant with the segmentation as it guides the stargazes for positioning, branding, promotion and pricing services to ensure that the target audience consumes it.

Marketing Plan

The marketing plan that would yield the bests results for Emirates should involve different strategies like positioning and product strategy.

A significant aspect to note in positioning strategy is the progress that Emirates has made since 1985 when it had two aircraft and currently it has 171 aircraft with the largest number of Boeing 777s and A380s (New brand campaign by Emirates., n.d.). The company positions itself as one that possesses the most recent technology in the airline and exceptional performance indicated by the world-wide trophies won by the company. As such traveling with Emirates incorporates one to share in the glory of the company not as a guest but as a partner.

In product strategy emphasis to avoid perceive the customer who uses the company’s services but as an opportunity to experience a new aspect of life. The plane is sectioned into three; the first class, business class an economy class. Facilities and services offered in each section differ significantly. The strategy includes services like a free chauffer driver for first and business class. The product/service is individualized for each customer such that the travel becomes a learning opportunity coupled with entertainment interaction with different cultures. The pricing strategy is tailored such that it addresses the complex dynamic of availability, customer demand and competitors offer. The different prices for different sections in the plane are explained and justified as well.

When assessing distribution strategy, emirates utilizes multiple strategies for distribution. One approach is the use of intensive based distribution links which is offered generally during summer or winter and at very low rates. The company benefits as such offers may boost the actual demand for its services. Exclusive distribution is useful when allocating tickets to tour operators and travel agents. These companies assist in advertising Emirate’s services. Lastly in selective distribution, targets specific customers and operators (Emirates Airlines in Travel and Tourism., n.d.). The company benefits as it uses external channels for distribution who market the company to a monopoly market. Promotion strategies are customized in line with the company’s brand identity and image. Promotional messages are very inspiring to the customer. The company has administered a very diverse mix when advertising which enhances its image and public relations.

The marketing strategy for all pieces in segmentation in the company depends heavily on the customer-company relations. Marketing each piece of the content would include an emphasis on customer appraisal of the company, collecting loyalty points and redeeming them periodically, insist on the added value when flying with Emirates. The purpose is to illicit internal satisfaction, develop trust and make the customer anticipate the experience.

Key Performance Indicators

Flight operation as a KPI would need to achieve a maximum mileage of 80% to achieve profitable returns. However, according to (Our Company., n.d.), external factors like change in the number if plains or plights can tamper with this indicator factor. Promotional sales and forecast in the specific segments would help to understand the segment that yields more profits and effect necessary changes. Also, financial perspective would be crucial identify the profitability in each segment and hence make a more informed decision when adjusting operations in the society.

Emirates is a fairly successful company and it plans to achieve a leadership position in the industry. The company is geared towards establishing a strong market position and out-do its competitors. The plan to achieve this is through enhancing customer services. Using segmentation of the market is a key content for the company as it will help Emirates focus achieving the goal.

References

Boyd, B., & Hollensen, S. (2012). Strategic management of a family-owned airline: Analysing the absorptive capacity of Cimber Sterling Group A/S. Journal of Family Business Strategy, 3(2), 70-78. 

Davahran, D., & Yazdanifard, R. (2014). 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).

Direction, S. The remarkable record of Emirate Airlines: Product differentiation and cost control deliver exceptional performance. Strategic Direction, 28(3).

Emirates Airlines in Travel and Tourism. (n.d.). Retrieved December 3, 2014, from http://www.euromonitor.com/emirates-airlines-in-travel-and-tourism/report

Emirates | SWOT Analysis | BrandGuide | MBA Skool-Study.Learn.Share. (n.d.). Retrieved December 3, 2014, from http://www.mbaskool.com/brandguide/airlines/534-emirates.html

New brand campaign by Emirates. (n.d.). Retrieved December 3, 2014, from http://www.emirates247.com/business/new-brand-campaign-by-emirates-2012-04-02-1.451755

Our Company. (n.d.). Retrieved December 3, 2014, from http://www.theemiratesgroup.com/english/our-company/our-company.aspx

SWOT analysis on Emirates Airlines. (n.d.). Retrieved December 3, 2014, from https://traveldeconstructed.wordpress.com/2013/12/02/swot-analysis-on-emirates-airlines/