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The concept of strategic management emerged in 1970s and in the present dynamic business environment importance of strategic management has been increasing rapidly (Viljoen and Dann, 2003). Strategic management activities include development, communication as well as implementation of the strategic plan. Strategic management is consisted of five important constituents: vision, objectives, strategy, implementation and rectification. The principles of strategic management focus on considering different parts of an organization as whole. Strategic management considers the external environment of a firm and it focuses on gaining the competitive advantage. The vision of an organization helps in indicating potential of the company and the states which are desired to achieve in future. Therefore, the objectives are set which needs to be achieved by the company. The next step of the strategic management of the company is to develop strategy which will help in meeting the objectives (Hunger and Wheelen, 2000). Strategic management of an organization is responsible for designing a plan for implementing the strategies. Therefore, it monitors the planned activities so that the achievement of the goals is ensured.
The corporate strategy has a significant correlation with the strategic marketing strategy of the firm. It has been found that the marketing strategies are the integral part of the corporate strategy in order to achieve the organizational objectives (Anderson and Vincze, 2004). Strategic marketing is one of the most critical business functions of Emirates Group. Emirates group is a large organization and a significant organization in the travel, tourism and leisure industry. Presently, it has fifty business units along with associated companies and it is primarily based in UAE. The employee base of the company is greater than 62,000. Emirates airline is one of the leading global airlines and it is one of the key division of the group. Dnata is associated with offering services in the field of IT solution, travel, cargo, ground handling and flight catering (Theemiratesgroup.com, 2015). From the annual report of the firm it has been found that the company has been able to continue its growth over the years. The revenue of the company has increased by 13.4% and the operating profit is improved by 50.1%. In 2013- 2014, it was estimated that the capacity of the airline has enhanced by 32% and the profit margin has been increased to 3.9% from 3.1% in the previous year. These figures clearly indicate that the company has been able to manage its marketing activities efficiently for achieving consistent growth (Emirates United Arab Emirates, 2014).
The strategic marketing in the Emirates group is responsible for determination of appropriate pricing strategy, product strategy, marketing communication strategy, customer relationship management process for ensuring growth in spite of the global challenges (Fernando, Mat Saad and Sabri Haron, 2012). Strategic marketing has focused on integration of promotional activities through adoption of the social media. The positive economic benefits of the company are attributed to the strategic marketing management of the Emirates Group (Chernev, 2012).
Strategic marketing is a systematic approach that focuses on the designing strategies for the organization in order to ensure successful achievement of the organizational objectives (Viljoen and Dann, 2003). The procedures involved in the strategic marketing management can be discussed by studying the procedures in case of the Emirates Airline, key division of the Emirate group.
The first step of strategic marketing is to analyze the mission statement of the organization for analyzing the purpose of existence of the company. Emirates Group has significantly focused on the business ethics as the foundation of their success. The company has been providing care to the customers, employees, shareholders along with the community and environment (Jeffs, 2008). The company is committees for achieving highest standards in every aspect of operational activities. Additionally, it has been identified that the company has been emphasizing on maintain the global reputation for excellence in the industry. This clearly implies that the products and services of the company need to be differentiated, upgraded on order to retain the industry leadership in the global market (Anderson and Vincze, 2004).
The next important step of the strategic marketing procedure is the analysis of situation. Various strategic management tools are used by the management of the organization for analyzing the situation. In case of Emirates group, the management may use SWOT analysis for getting a preliminary overview of the internal situation through identification of the major strengths and weaknesses of the company along with the external situation through identifications of the opportunities as well as threats. Additionally, Porter’s five forces analysis can be conducted through getting an insight regarding level of competition, condition of the suppliers, customer analysis etc. PESTEL analysis is useful for analyzing the macroeconomic environment of the organization. It helps in analyzing the political, economic, social, technological, environmental and legal factors. PESTEL analysis is effective in order to determine business integration in new nation (Jeyarathnam, 2008). Situational analysis helps the company to recognize the factors which are important to consider at the time o development of marketing strategies (Capon, 2008).
One of the most important processes of strategic marketing management is to set marketing objectives which is aligned with the corporate objectives, values and mission of the company. In case of Emirates Group, extensive importance has been given to set SMART objectives for a particular period of time (Henry, 2008).
Strategy development is one of the most important aspects of strategic management. In case of Emirates group, the company considers the implication of vision and value analysis, situation analysis for development of the appropriate marketing strategy. Development of the marketing strategy ensures that the strategic goals set by the organization are met effectively (Jeyarathnam, 2008).
The set of strategies are implemented in different levels of the organization. These strategies are expected to deliver the desired outcome and hence, needed to be monitored (Jeffs, 2008). Therefore, one of the important responsibilities of the strategic management department of Emirates Group is to evaluate the strategies in order to finds its effectiveness for the company and relevance to the pre-determined objectives (Clark, 2000).
Corporate strategy is considered to be the base of all other plans or strategy of the organization. It is evident that the strategic marketing activities have a significant association with the corporate strategy of the firm. Corporate strategy is developed on the basis of the vision, mission, values, culture and goals of the company. The functional strategy of the organization focuses on development of strategies related to finance, marketing, research and development, information technology, operations, human resource etc. All the functional strategies are developed for meeting the organizational objectives and aligning with the corporate strategy of the organization. Corporate strategy is the foundation of all the business strategies including the marketing strategy of the organization. Often the strategic marketing coincides with the corporate strategy for meeting the organizational objectives through marketing activities. The corporate strategy develops a generalized plan for the growth, development and future prospect of the company. On the other hand, strategic marketing uses various tools such as marketing mix, growth plan, customer relationship management etc by conforming to the organizational values to achieve the corporate objectives (Ungson and Wong, 2008).
In case of the Emirates group, corporate strategies are found to be developed at the strategic level of the company. The corporate strategy of Emirates Group has extensively focused on the growth and profitability. Additionally, it ahs focused on the determination of the organizational structure, managing the gearing ratio effectively and enhancing the value of the shareholders. Additionally, corporate strategy focuses on diversification, acquisition, merger, implementation of new technology, optimization of the cost for improving the overall profit margin of the organization (Heracleous, Wirtz and Johnston, 2004). On the other hand, the marketing strategy of the Emirates group has extensively emphasized on the development of efficient plan in order to sell the services of the company. First of all, emirate group considers the marketing mix and develops strategies for each element such as product, price, place and promotion. Marketing strategy is responsible for identification of the target market and presenting the product to the target audience for meeting the expectation of consumers. Pricing strategy determines the appropriate pricing technique so that the sales can be maximized. For example, during the lean season and advanced booking to a less demanded destination, Emirates offer huge discount seasonally (Park, Qu and Lee, 2011). Additionally, promotional strategies of Emirates group play a major role in communicating with the target market. Lately, it has integrated its promotional mix to the social media such as Face book, twitter etc. Appropriate implementation of the corporate strategy is dependent on the success of the functional strategies. Hence, the marketing department of Emirates has huge responsibility for ensuring the achievement of the corporate goals through implementation of the corporate strategy of growth (Mellahi, Frynas and Finlay, 2005). Emirates are planning to continue its growth through international business integration. For successful business integration of Emirates, effective marketing strategy is essential for influencing the purchasing decision of the target market (Kotler, 2000).
Strategic marketing management utilizes various tools as well as models for designing appropriate strategies for achievement of the corporate strategies. Porter’s Generic Strategy, Porter’s Five Forces Model, Boston Consulting Group Matrix, SWOT Analysis etc are the common tools used by various organizations in order to develop effective strategy for marketing to achieve the corporate goals. In case of Emirates Group, it is important to utilize various strategic marketing tools for developing new strategies for achieving sustainable growth across the globe for long term. Therefore, the strategic models need to be applied as well as the results will be used for designing, implementation as well as monitoring of the strategies. This section will focus on discussing the implication of different strategic models that are important for conducting strategic marketing activities in order to compete in the dynamic business environment.
First of all, SWOT analysis is considered to be one of the important tools which provide a preliminary idea regarding the potentials, drawbacks, growth opportunities and threats for the company. It is very important to conduct SWOT analysis regularly for identifying the major strengths of the company that can be capitalized for enhancing the sales of the company. Additionally, the identified weakness of the firm such as low presence in the airline market of United States and employee relations are needed to be revised (Anderson and Vincze, 2004). Additionally, emirates get a chance to identify the major opportunities that will support the growth objectives of the company. SWOT analysis will clearly indicate the threats so that the company can develop effective marketing strategies for combating with the threats (Capon, 2008).
Porter’s five forces analysis is important for determining the marketing mix strategies as it significantly helps in the position of the suppliers, strength of the customers, level of competition etc. while integrating the business activities of Emirates in an international market, the marketing strategy is based on the results of the porter’s five forces analysis. When it is found that the market rivalry is high, Emirates has to focus on adoption of competitive pricing strategy and offering differentiated service. It has been found that the airlines market is continuously growing and becoming more competitive. Hence, it will be reflected in the market strategies of the company.
Porter’s generic competition model will be important as it will assist in identification of the appropriate strategy that will help in competitive advantage in the dynamic as well as competitive market. The product and pricing strategy of Emirates will be assisted by the utilization of the Porter’s generic strategies tool. On the basis of the corporate strategy of the company, it can identify the best strategy among cost leadership, differentiation, cost focus and focused differentiation (Chernev, 2012).
Emirates have adopted use of balanced scorecard for measuring the performance of the marketing strategies adopted by the company. This helps in identification of the major issues in the strategy as well as marketing performance of the organization (Drucker and Maciariello, 2008). Thus, application of various strategic tools significantly contributes in the strategic marketing management of Emirates.
Positioning is an important marketing activity that will help in identification of the market opportunity of problem and therefore development of a solution on the basis of extensive market research, market segmentation along with supporting evidences (Kotler, 2000). Strategic position is the position that is selected by the organization for meeting the marketing as well as corporate objectives. Positioning statement is formulated so that clearly state that the major purpose and key benefits of the product to the customers. Effective brand positioning is considered to be an important aspect of marketing communication (Park, Qu and Lee, 2011). Strategic positioning has significant association with the marketing tactics for every organization seeking growth. The strategic position clearly states the current as well as future position of the company. Therefore, it significantly influences the techniques for market analysis, selection of marketing strategies, methods of implementation of strategies as well as monitoring. The position statement of an organization is extensively associated with the marketing tactics that will ensure achievement of desired growth (Warren, 2008).
The link between strategic positioning and marketing tactics also holds in case of Emirates Group. The position statement of Emirates group is “The Finest in the Sky”. The long terms objective of Emirates Airlines is to carry about 70 million passengers to greater than 180 destinations by utilization of an advanced fleet of more than 300 aircraft. The major responsibility of the strategic management is to develop effective marketing plan that will be helpful in meeting the goals. It has been anticipated that the demand will grow across the globe. It has been found that Emirates collect relevant information as well as analyze it for supporting the growth plan of the company (Capon, 2008). The strategic position of Emirates has significant influence on various marketing tactics. The positioning strategy of the company is based on the internal growth plan; strategy for market penetration, development of products has significant correlation with the marketing tactics in Emirates. It has been found that the product strategy is an important aspect of marketing tactic which develop plan for the type, range and quality of the product. On the basis of the positioning statement of Emirates, the marketing tactics empathizes on providing superior service in comparison to its competitors. Additionally, the branding strategy of Emirates is significantly dependent upon the positioning statement. The leading airline brand has been focusing on the offering high quality service to its customer in order to achieve high level customer satisfaction as well as customer loyalty. It will also help in supporting the growth objective of the company. Additionally, the pricing and promotional strategy, terms of delivery, logistics management etc (Park, Qu and Lee, 2011).
Customer relationship is considered to be one of most important corporate strategies for achieving long terms growth in the competitive market. Relationship management is an effective strategy for managing the relationship with customers. It is associated with the direct response of the marketing campaigns that focuses on the retention of the customers by meeting the expectations of the customers. This concept pays less attention to the sales transaction and prioritizes the customer’s satisfaction so that customer loyalty can be achieved (Kothandaraman and Wilson, 2000). The corporate strategy of Emirates has suggested that it will focus on broadening the customer base for enhancing the revenue. Hence, it becomes very important to attract more number of customers as well as retain the customers (Chernev, 2012). It must be noted that the major aim of the relationship marketing is to develop effective strategies for retaining the customer base for supporting long terms growth of the organization. If the traditional transactional marketing approach is adopted by Emirates, it may attract significant number of customers but fail to retain them. Hence, relationship marketing has significant implication for Emirates (Weinstein, 2000).
In Emirates, relationship marketing is based on the principles of customer experience management. It emphasizes on enhancing the interactions with customers in order to foster improved brand loyalty. The business communication channels are evolving and it has a significant impact on the relationship marketing of the Emirates Airlines. Presently, Emirates has a particular database for managing the customer relationship. Knowledge-driven in-Flight Service (KIS) helps in running the flight which is run during the flight for maintaining the profitable lasting association with the clients through delivery of satisfaction. This system will help to keep a track of the customers’ previous trips. This database will help to know about the personal preference of the passengers regarding seats, wine and food. The gathered data is extracted for offering better service to the customer (Weinstein, 2000). Additionally, Emirates has significantly focused on gathering relevant information regarding the customer expectation (Bennett and Barkensjo, 2005). These data re analyzed for using enhancing the quality of service and making significant changes in the marketing strategy. Hence, it can be inferred that the decision making process of Emirates is significantly dependent on the relationship marketing (Emirates, 2012).
The relationship marketing in Emirates has enabled the organization in providing more customers centric as well as personalized service to the passengers. As relationship marketing strategy of Emirates has emphasized on catering the needs of the customers, it can be stated that relationship marketing has extensive contribution in delivering superior service to the customers for meeting their expectation (Cravens and Piercy, 1994). Consequently, it has been found that the relationship marketing will effectively retain large number of customers in Emirates. Additionally, the frequent flyer program of Emirates has been an important part of the relationship marketing. The crew of the airlines tends to invest more for the loyal customers enrolled in this program for delivering personalized service. The relationship marketing of Emirates has significantly emphasized on the up grading the customer service for achievement of the business growth objective of the organization. Thus, the relationship marketing of Emirates has been providing significant strength to the organization for meeting the corporate objectives (Firdaus and Kanyan, 2014).
The Emirates Airlines of UAE is strategically targeting the African market in the upcoming decades. This will help the organization to grow by 40%. According to Sir Tim Clark, President of Emirates Airlines, this focus would help to create a Dubai Hub Africa. The reason behind tapping this market is that the Dubai Government recognized that the African market is still an untapped market in Africa and Emirates Airline can instrumentally support the region’s growth. The fleet investment of Emirates in Africa tops around $7billion with operating costs of around $2billion. It presently operates in 10 different destinations. The Emirates group is currently focusing on increasing the commitment and investment in Africa. The group is planning to add up around 10 more destinations in the coming decades and have planned to add 8.5million seats in the African market. Further, the geographical location gives the African travelers an opportunity for short times of traveling. By 2020, the group has decided to reach out to 1.5million visitors every year. Emirates have decided to channel traffic through its Dubai Hub. According to the survey of Sabre, there are 1185353 estimated bi-directional O&D passengers from UAE who are demanding Emirates flight (Maslen, 2013).
Source: (Maslen, 2013)
As far as the impact of environmental factors remains constant the position of Emirates Group would remain constant. The growth advantage can be determined by the scale or size, the competitors’ differentiation and also booming trading names. For being a successful organization, the Group needs to focus on the tactics and strategy that work well in harmony for providing best possible level of return surrounded with efficiency. Both tactics and strategy should be designed based on the situational environment. The firm needs to consider more than the business structure, it additionally needs to take a fitting position inside the business. This situating will focus the game changer a firm can have, specifically minimal effort or separation against focused degree at the wide or restricted business sector (See below figure)
Source: (Mindtools.com, 2015)
The positioning of Emirates in the expense authority quadrant is attained to not just through economies of scale in examination, advancement and advancement additionally through learning, information and involvement underway and operational methodologies and in addition the way it deals with its establishments.
There are various marketing options for Emirates to grow in the African market. The BCG Matrix (Boston Consulting Group) as shown below is one of such options that would help to create as strategic view of their business that can be utilized in various decision making aids.
Source: (Valuebasedmanagement.net, 2015)
In the event that the right choice is made and the products & services chosen attains to a high market share, it turns into a star. Stars have high market share in high-development markets. Stars create expansive money streams for the business additionally obliges huge integrationtures of cash to maintain their development. Stars are frequently the focuses of expansive consumptions for publicizing and innovative work to enhance the products & services and to empower it to build a prevailing position in the business. Cash cows are specialties units that have high market share in a low-development market. These are generally products & services in the development phase of the products & services life cycle. They are normally entrenched products & services with wide shopper acknowledgement, so deals incomes are generally high. The technique for such products & services is to put minimal expenditure into keeping up the products & services and redirect the substantial benefits created into products & services with all the more long haul profit potential, i.e. starts and question marks. Dogs are organizations with low piece of the overall industry in low-development markets. These are generally cash cows that have lost their market share or the question marks the organization has chosen not to create. The prescribed system for this business is to discard them for whatever income they will produce and reinvest the cash in more appealing business (stars and question marks) (Goel, 2009). Having utilized the Boston Consulting Group framework above, it ought to likewise be noted that the BCG network experiences constrained variables on which to support asset allotment choices among the organization making up the corporate portfolio. The BCG grid is best utilized, then, as a starting point yet surely not as the last determination for asset designation choices as it was maybe initially expected for Emirates business position (Iatrou and Oretti, 2007).
The strategies help the organization to underpin its success. Strategists have a huge measure of both scope and obligation in creating and adjusting the vital choices of an association. The incalculable choices needed of these directors can be overpowering considering the potential outcomes of mistaken choices. One approach to manage this unpredictability is through categorisation; one categorisation plan is to arrange corporate-level method choices into three separate sorts or terrific systems. These fabulous techniques include endeavours to extend business operations (development methods), diminish the extent of business operations (conservation procedures) or keep up the present state of affairs (soundness methodologies).
All the more particularly, development techniques are intended to grow an association's execution, generally as measured by deals, benefits, item blend, market scope, piece of the pie or other bookkeeping and business sector based variables. Regular development techniques include one or a greater amount of the accompanying:
With a concentration strategy the firm endeavours to attain to more noteworthy business infiltration by getting to be exceedingly effective at adjusting its market with a constrained product offering. By utilizing a vertical integration technique, the firm endeavours to grow the extent of its present operations by undertaking business exercises earlier performed by one of its suppliers (backward integration) or by undertaking business exercises performed by a business in its channel of dissemination (forward integration) (Shaw, 2011).
A diversification strategy involves moving into distinctive markets or adding diverse products to its blend. On the off chance that the markets or products are identified with existing item or administration offerings, the method is called concentric diversification. On the off chance that development is into services or products disconnected to the company's current business, the enhancement is called conglomerate diversification (Hoffman, Bateson and Hoffman, 2006).
Further, the marketing mix concept is a timeless technique that the Emirates need to focus on for categorising different strategies. By concentrating on the service marketing mix, Emirates can reap and adopt different strategies. Failing to adhere to this concept may become a huge failure or disaster for the Emirates. This service marketing mix is the activity that helps the organization to deliver, communicate and create customer value. The marketing mix mainly consists of 4P’s Product, Price, Place and Promotion. Since marketing is a very sophisticated stream, the service industries have further added physical evidence, process and people. Thus Emirates need to focus on all the 7P’s of service (Sharma, 2008).
External environment of a business has significant potential to influence the business activities of an organization. The wave of globalization has influenced various organizations to integrate their business operation into the international market. In this case, analysis of the external environment is given extensive importance (Hitt, Ireland and Hoskisson, 2005). Business strategies for international market are developed on the basis of the analysis of external environment. Additionally, it has been found that the external environment is dynamic and various components of the environment changes with time. The company needs to keep an eye on the changes in the external environment as it will influence the marketing strategies of the company (Henry, 2008).
In case of Emirates various external factors have significant potential to reorient the marketing strategies. Emirates Airline is present in 40 countries and the external environment is different for each of the nations. First of all, if there is a change in the legal framework and regulation relevant to the business operations of Emirates, it may affect the cost of service which will affect the marketing strategy of the organization. Economy of the nation plays a major role in determination of the marketing strategy of Emirates. If it is observed that a nation is encountering economic downturn, Emirates must consider it for re-formulation of the marketing strategy. In difficult times, Emirates need to decline the price for making it affordable for the present market situation. Additionally, the company can adopt some cost cutting strategy for offering discounts (Hitt, Ireland and Hoskisson, 2005). Though social factors play a major role in determination of the marketing strategies, it must be noted that social changes do not take place suddenly. However, in order to deal with social changes, Emirates need to reformulate their product as well as promotional strategy on the basis of changing demand as well as psychology of the customers (Park, Qu and Lee, 2011).
Technology has an important influence on the development of marketing strategy especially in case of place and promotional strategy. It has been found that the along with the advancement of technology the marketing strategy of Emirates need to be changed. (Kotler, 2000) For example, increasing dependence on web technology must be capitalized for communicating with the target audience. Emirates have been present on the popular social media sites for networking with the social media users. It has been using social media for undertaking promotional activities. Additionally, the online booking has provided greater convenience to the customers (Jung, 2014).
Competition is one of the important elements of the external environment for developing the marketing strategy of Emirates. If there is a change in the level of competition, Emirates need to change the marketing strategy. For instance, if the level of competition enhances, the company needs to differentiate its products as well as pricing strategy needs to be changed in order to increase the customer base even in the competitive market. Hence, it can be concluded that the external environment has significant influence on the marketing strategy of the company (Mellahi, Frynas and Finlay, 2005).
Marketing strategy of an organization has major role to play in ensuring success of the firm through achievement of corporate objectives. The marketing strategy changes over time and it is very important to identify which strategy needs to be changed and why. Hence, analysis of the marketing strategy of Emirates will be helpful in identification of the strengths as well as weakness of the marketing strategy of the company. The strength of the marketing strategy will be capitalized and on the other hand, weaknesses of the strategy will help in the improving the marketing strategy that will ensure achievement of the corporate objectives of Emirates.
Though the marketing strategy of the company has been found to be effective in achieving the organizational goal, weakness is recognized which is important for improving it.
The company has to pay significant is based in United Arab Emirates. It has been observed that the nation has been encountering significant growth opportunities. It is important to analyze the emerging themes for responding to it by reformulation of the marketing strategies. UAE is becoming the international business hub and the business tourism has enhanced in UAE. The company must focus on development of innovative marketing strategies for capturing the growing number of international customers. Additionally, it has been found that increasing number of competitors have been intensifying the level of rivalry in the airline market (Hunger and Wheelen, 2000). It is evident that Emirates is one of the leading airlines of the world. However, it must consider the new competitors for development of the marketing plan. It needs to be noted that the presently Emirates has been planning to enhance its customer base across the globe. In United Kingdom, the company has a significant market base and operating successfully over the years. The marketing strategy of the company needs to be changed along with the present economic condition of United Kingdom. In the Asian market, Emirates airline has been operating successfully. Additionally, it has been reported that the company is experiencing significant growth in Australian market. Moreover, Emirates has focused on exploring the Australian market through making significant investments. All these international activities will be affected due to the global emerging themes. Extensive growth in number of the internet users and dependence on web has enabled the customers to access the global airline market. They also get a chance to compare the services, price and values offered by different airline service provider before making purchasing decision (Doyle, 2000). Hence, Emirates need to reformulate their marketing strategy for achieving sustainable growth in the international market (Mellahi, Frynas and Finlay, 2005).
Another important emerging trend is globalization. Various organizations across the globe have been focusing on integrating its business activities to the foreign countries. This trend also holds in case of airline industry. Consequently, the competition in the international market has been intensifying. It has become important to consider the international player and their presence in the international market for designing the marketing strategies (Hitt, Ireland and Hoskisson, 2005). It must be considered that the marketing strategies of Emirates must be competitive as well as growth oriented. Additional emphasize must be given on the attracting more number of customers as well as retaining those in order to achieve the objective of enhanced customer base. Additionally, it has to focus on adoption of effective promotional strategies in order to communicate with the target market regarding their quality of service, discounts, key features and benefits of the service etc (Drucker and Maciariello, 2008). Additionally, the company must focus on adoption of competitive pricing in order to achieve sustainable growth in the increasingly competitive market.
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