Emirates Airline- Case Study Assignment

Assignment/Task Instructions are below and attached. Case for Emirates Airline in 2017 is attached as well that must be read to complete the assignment/task. Answer thoroughly the 5 questions below.

Task

Read the case “Emirates Airline in 2017”
Answer each of the following questions taking the role of the general manager and area managers:
Question 1: Which factors in the general environment have a significant impact on the international airline industry?
Question 2: What forces in the industry environment affect Emirates’ strategy? (Apply Porter’s Five Forces model). This additional information may help you:
An Economic Analysis of the Low-Cost Airline Industry (Links to an external site.)
Question 3: What internal resources and assets does Emirates have that may give it a competitive advantage? (Apply the Value chain and VRIN framework).
Question 4: How does Emirates compete? (Apply the generic strategic framework).
Question 5: How does Emirates’ strategy affect its financial performance? (Analyze three financial ratios).

ANSWER

General Environmental Factors

Generally, the economy has played a big role in shaping the success and the downfall of many international airlines. Depending on the price that an airline offers, customers settle on different airlines. The more travel airlines receive, the more profits it gains. Customers’ prefer airline that offers lower prices in return get high-class treatment thought the flight. Political factors have also shown how they greatly impact the international airlines. In some countries, airlines are given subsidies to ensure that their airlines offer low costs with higher services offered to attractmany customers hence gaining a high success rate. Despite that the airline will not get its profits from making flights, the government will always accommodate the airline by giving subsidies to ensure that the airline is running and offering extra service that cannot be gotten in other airlines at the same cots. Some airlines get support from the government that airlines end up rating high at customer satisfaction rates. Social factors also impact the internationalairline industry. Different customers have different satisfaction rates; there is a need for a company to understand how to satisfy different customers from different locations. By ensuring that all the services given are of high quality, international airlines end up competing, hence determine the success of international airlines.

Forces in the Industry Environment

Emirates’ strategy of success is offering exclusive services through the travel at a low cost. However, Emirate is receiving a great threat of whether the strategy will last for a long time to maximize its success in the market; factors such as the threat of products’ substitutes are high in the market.Other companies are trying to come up with substitutes for the service thatemirates offer better,exposing emirates to failure in the market as its customers migrate to the other airlines for a better experience. Competition rivalry within the industry is another threat that emirates is experiencing. In the earthling airline case, where they are modifying the services that emirates introduced 12 years ago, and in another case, the competition being set from the Singapore airlines; emirates is at great risk as many people are considering the Singapore airlines, which is setting up a high competition to emirates. In this case, emirates are at great risk of being thrown away from the competition if they do not come up with more advanced services. However, it is hard for emirates to include more services, it being that it does not receive subsidies from its government; hence it has to ensure that its making profits from the sales.

Internal Resources and Assets

A high organized Human resource management is among the internal resources that make emirates more competitive. During the hiring process, the Human resource department ensures that the employees who are more so the crew are of high quality and are given special requirements that they should meet to ensure that they are unique; for instance, they have to maintain asset weight, they have to wear creating grooming and also maintain their makeups and also have an average of 26 years as to other airlines that should have an average of 40 years. Customers in the airline will always want to be served with someone who is approachable and whom they are comfortable with. According to research, many people would want to be severed by a good looking person who seems younger. By achievingthe advantage that is managed by the HumanResource department, it makes emirates to be more competitive. Rareness such as onboard amenities like a shower on board, the crew that speaks various languages, and offering exclusive meals through the board even to the board’s back is among the other rareness that emirates offer, making emirates more competitive than other planes.

How Emirates Compete

Cost leadership is a generic strategy which Fly Emirates is using to get through the competition. Emirates offers more services at a lower price. Emirates ensures that it gives the customers a price that is lower than its competitors. Through the bargaining power of the customers, emirates end up being chosen as to their competitors. Throughout the world, customers compare different companies and what they are offering in return to come up with a better choice for them. Considering that Emirates seems to offer more services at a lower cost, the chance of it being chosen are high, which makes it more competitive in the market.

Differentiation is another strategy that the company uses for competition; it always ensures that its services are different. For instance, it does not just hire its crew members from one country but multiple countries, and they have to be speaking multiple languages. The company has strived to ensure that its brand is different from others; for instance, it offers the business class high-quality food, but it offers everyone onboard high-quality food, which makes many customers prefer it.

How Emirates Strategy Affect its Financial Performance

The strategy Emirates has implied in its operation impacts the financial performance by bringing in more flights resulting in high sales over the years. However, on each flight, the company can collect a smaller percentage of profits considering the customers’ services while onboard. Despite that, it receives huge numbers of boards; the company has a slow growth rate considering its pricing strategy. In comparison to airlines such as Singapore, despite that they receive fewer flights than Emirates, they record-high profits due to the high pricing they input for the same services emirates offers. However, its operating costs seems to be decreasing over the years that promise more operating profits as time goes by. However, the company experienced an increase in the value of its assets, which promises high profits as the liabilities reduce.