Question
Read the case on Emirates Airlines and write a report on the industry environment for this case and the operating environment.
Answer
Industry Environment Analysis:
Porter’s Five Forces:
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Bargaining Power of Consumers
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Low- Brand reputation of Emirates is irreplaceable and the company offers many flights (Dubai to San Francisco) that is not offered by other companies.
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Bargaining Power of Suppliers
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Very low- A large variety of suppliers present in the market, and the supply concentration: company concentration is very high.
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Threat of Substitutes
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Very High- People usually can opt for cheaper tickets for short distance flights and cheaper alternatives are available in the market.
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Threat of Substitutes
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Qatar Airways and Cathay Pacific are the competitors of Emirates Airlines that are not only limited in number but also fail to match up to the stature of Emirates.
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Threat of New Competitors
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Medium- Consumers are loyal to the brand reputation of Emirates Airlines, and beside high capital requirement to expand in Dubai also discourages companies from expansion here.
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Operational Environment Analysis:
Competitive Position:
Emirates Airlines already enjoys a competitive position in the domestic market of Dubai, simply because of its strong brand reputation and innovative consumer service. However, it does encounter moderate competition from Etihad Airways. As far as the international market is concerned, British Airways and Qantas Airways are enjoy equally strong brand reputation and can be good competitors as well. Since Emirates enjoys government shareholders, it can easily influence consumer purchasing decision of Dubai travellers.
Customer Profile:
Demographic Segmentation: The male expatriate workers, business travellers engaged in Dubai –Asia trade, are known for boarding the Emirates Airlines the most. The everyday flying public deserves comparatively less attention here.
Psychographic Segmentation: The travellers who wish to associate themselves with a brand, that offers luxury in the form of gourmet meals and entertainment, usually prefer Emirates over other airline companies.
Suppliers:
The small and medium organizations of Dubai are the suppliers of the company. In fact, it is interesting to note that the Emirates Flight Catering Innovation Portal is being launched for providing an additional way for us to communicate and collaborate with suppliers for mutual benefit
Human Resources:
A large number of employees ( approximately 28,686 people as per 2010 report) work with the company. The employees are usually hired from the low-wage nations and consequently they do not demand an exorbitant amount of money as wages, that accounts for the greater revenue earning capacity of the company. Hence, the problem of high labour cost as an impediment to the growth of the company is eliminated here.
Reference List:
Logothetis, M., & Miyoshi, C. (2016). Network performance and competitive impact of the single hub–A case study on Turkish Airlines and Emirates. Journal of Air Transport Management.
Mumtaz, S. H. (2017). Analysis of Mental Health Issues and its Implications On Cabin Crew at Emirates Airlines (Doctoral dissertation, Middle Tennessee State University).
O'Connell, J. F., & Bueno, O. E. (2016). A study into the hub performance Emirates, Etihad Airways and Qatar Airways and their competitive position against the major European hubbing airlines. Journal of Air Transport Management.
