Marketing and Management Strategies of Emirates Airlines
Question:
Discuss About The Airline Marketing And Management Burlington?
This report is the analysis of Emirates Airlines which is operating in Dubai and completely owned by Dubai government. Emirates Airline is one of the leading airlines of Dubai aviation industry. Due to business operations across the world, Emirates Airline has strategic growth and development. The airline started its operations in the year 1985. In 2013, the airline became third largest commercial airline in all over the world. By the given case study “Emirates Airline: Connecting the Unconnected”, information related to business strategy, psychology, human resource, process of new routes selection, marketing factors and branding can be analyzed. Along with this, it is observed that airline is also managing the relationship with the Government of Dubai. The airline has adopted various tactics and strategies in order to grasp the opportunities in the geographical markets. Now, it is one of the famous airlines because of high number of local and international passengers (Alcacer& Clayton, 2014). This report provides the answers of questions including in the case study. The report focuses on the factors behind the success of Emirates Airlines. Further, it also describes the role of the country in the success of Emirates. Along with this, the report includes SWOT analysis on Emirates’ Dubai based hub-and-spoke model.
Behind the success of every company, there are some driven factors. Emirates Airline started its operations in 1985 and currently, it is the best airline in Asian Pacific region. The airline has received various prestigious awards especially for its innovation of in-flight entertainment systems for the passengers. The airline has also get popularity due to its Open Skies strategy.Along with this, the airline focuses on the efficient management of human resource and resources of other type that are necessary for supporting the airline to achieve the long and short term objectives. Airline also uses paradigm shift towards humanistic approaches that is helpful in treating the employees as the most crucial resources to achieve competitive advantage. The airline conducts various programs for the employees i.e. training, motivation and development in order to support them so that they can enhance their capacity to work effectively. The success of Emirates over the competitors is because of the strategies adopted by it (Fifield, 2012). For instance, the resource management strategy of Emirates is the key to sustain operation needs. There are various factors that are responsible for the success of Emirates Airline in all over the world. The airline has competitive advantage over its rivals in the industry. Those factors are as follows:
Emirates airline is the well-established airline having the strong network with the global destinations. Along with this, the airline is continuously investing in carriers and getting high level of profitability. This shows that company is capable enough to maintain the fixed costs as compared to its rivals in the market. Further, Emirates also has access to international marketing with the greater geographical coverage. So, airline is able to create high level of barriers for the new entrants because of high costs (Terpstra, Foley &Sarathy, 2011).
Factors Behind the Success of Emirates Airlines
This is the important for cost-intensive industry like aviation industry. Emirates airline provides quality services to the passengers at the affordable costs. By this, airline is able to create strong competition for the other airlines in the industry. For the new entrants, it is not easy to target the customers as Emirates is already meeting their demands at the affordable prices. Along with this, airline has adopted value-for-money principle. The airline is providing cheapest products and services and balances the price and quality ratio. This strategy is very efficient as comers are generally happy when they pay little more for that service that is working well for them. The pricing strategy of Emirates gives strong competition to other airlines in the industry (Wensveen, 2013).
Emirates Airline has differentiated itself from the other airlines by skilled staff, advanced technology and effective services. These factors are the key drivers for the success of Emirates Airline. The airline is aware about the importance of continuous innovations, not only in the staff and carrier expansion but also in providing quality services. It is famous for its technology development and talented staff coming from multi-culture background. The airline ensures that the services are meeting the requirements of the customers (Peñaloza, Toulouse& Visconti, 2013). For example, passengers and cargo are ferried at the set time on more strategic routes as compared to the rivals. Moreover, channels for communication are also maintained by airline for the customers in order to notify them about the airline schedules and prevent from inconvenience. Next, the airline is operating in various airports in major cities and towns in all over the world, especially in those areas that have commercial businesses reliant on air transport services (Alshubaily, 2017). Airline also focuses on opening new branch offices in various locations in all over the world in order to communicate its physical presence.
Emirates Airlines has maintained its brand image by its quality services. Customers are loyal now and selecting Emirates while travelling in other countries. The customers become loyal due to product innovation, high quality and excellence services. The airline is providing excellent customer services in order to make them loyal. By implementing cost effective services and differentiation strategy, airline is able to enhance the customer base and gain the competitive advantage over the competitors in the market (Kapferer, 2012). Airline is able to attract potential customers by various advertisements through mass media, online and print media. In current time, social media like Twitter, Facebook and Instagarmare the important tools of communication for every company. Airline is using these tools to forward the organizational message to the target customers in such way that they would most like to understand. Along with the advertising, Emirates Airline has accepted customer relationship management programs to engage the customers with the business (Peck, Christopher, Clark & Payne, 2013).
Emirates airline has effective business operations and its business operations are major contributors to its success. The airline has implemented hub and spoke model in its’ business operations which is the major contributor to the success of airline. Airline has used this model in the business in order to operate across the world. Under this model, there is a single hub which is followed by all the destinations by which passengers are able to connect from different points. By this model, airline is able to operate the business smoothly. Business operation is the key factors which drive the airline to achieve competitive advantage over the rivals i.e. Turkish Airways, British Airways, and Qatar Airways etc.
Conclusion
Emirates Airline has adopted Open Skies Strategy in order to get access to some particular market. The business activity model adopted by Emirates is very unique and flexible to deal with the existing environments. The airline has very creative management and they always try to make the flight experience memorable for the customers. That is the reason; the airline is able to get significant growth and success in the industry. The airline focuses on the efficiencies in order to avoid the delays in order to retain the customers (Armstrong & Cunningham, 2012). It has applied the quantitative risk analysis which is correct risk estimation in the numeric form. Along with this, cited airline has also adopted TQM in the business operation processes. Emirates airline operate in both Airbus and Boeing and this is one of the few airlines operational with wide-body aircrafts. In present time, it is the largest operator of Airbus A380 carriers (Rashed, 2015). The objective by using Airbus and Boeing is to satisfy various interests of the consumers. Next, the supply chain of Emirates is multi-dimensional and is underpinned by total quality control that focuses on the various areas involving strategic and systematic management evidence based process of decision making, continuous improvement, and communication process. One of the important factors of cited firm is quality management practices and strategic management which are helpful for the airline to achieve the objective, mission and vision. The continuous improvement process of the airline includes deploying the creativity and analytical skills to in order to enhance the competitive advantage as well as meet the expectations of the stakeholders (Boone & Kurtz, 2013).
One of key decision for the organization is to select appropriate location for its business operations. This is the major factor to the success of the business. It is understood that location has important role in the profit and success of the company. One of the reason of the success story of Emirates can be directly traced back to the success of country i.e. Dubai. It is one of the fastest developingcountries all around the globe and represents a very lucrative market for the investment in the business. Dubai’s open skies strategy is the cornerstone upon which the country built its dynamic air transport center. Location strategy framework is helpful for the company to find out the suitable location in order to achieve the business goals and objectives. The company uses various criteria to select appropriate location for the business operations. In case of Emirates Airline, Dubai has crucial role in the success of the airline (Robehmed, 2014). Due to having location in Dubai, the airline has various benefits in the business. In the location strategy framework, there are some factors that support the continuous success and growth of the airline in Dubai. There are some particular factors that are the reason to select Dubai by Emirates for business process. The location strategy framework is discussed below:
A company has to deal with various challenges and barriers while establishing the business in a location. So, it is important for the company to analyze the cultural and governmental issues in that area. In case of Emirates Airline, the government of the country is providing financial support to it. The government has provided fund to the airline and support in its business operations. So, it can be said that government is the key factor behind the success of Emirates Airline (Porter, 2010).
Emirates Airline has adopted hub and spoke model in order to operate in the aviation industry. Based on the capability and capacity, Emirates Airline has efficiently capitalized on Dubai. The airline is able to target around 75% of the total population of the world in order to develop a growing and profitable hub based operational model. This model is beneficial for the airline in various operations i.e. grounding it on various locations, refueling on longer routes etc. By this model, the airline is able to deal with various challenges created by leading rivals operating in Dubai. So, the selection of Dubai is the beneficial for the airline as Dubai is major contributor in the success of airline.
For every company, environmental factors are important for the success in the business. In the airline industry, it is crucial to analyze the environmental and factors while selecting the location. In case of Emirates Airline, the climate and ecological factors in Dubai are in the favor of the airline. In the country, there are good weather conditions that make the airline free for its operations.
This is one of the important factors in the location strategy framework of Emirates Airline. It is analyzed that the growth rate of tourism in Dubai is increasing continuously. The government of Dubai is focused on enhancing the flow of tourists by eliminating the visa procedure and conducting various promotional campaigns. It is observed that the receipt of tourism is calculated around $10.4 billion that is higher than other countries. This fact reveals that the selection of Dubai is beneficial for Emirates Airline. In order to travel and departure in Dubai, most of the travelers use the flights of Emirates Airline. Thus, it is clear that Dubai has crucial role in the success of Emirates Airline (Taverner, 2010).
The costs are reduced by relatively low landing changes by the cited firm at Dubai Airport. The average age of the flights is six years that decreases fuel and maintenance charges. So, the cited firm is benefitted by the fact that there are no corporate taxes in Dubai.
One of the greatest assets of Dubai is its improved connectivity. Passengers can be linked to Dubai from 25 cities having the population of more than 10 million people. This has benefitted Emirates Airline along with this; Dubai has direct passenger flight connection to 149 cities having the population of 1 million people. By these factors, it is clear that Dubai has significant role in the growth and success of Emirates Airline.
By 2020, it is assumed that the cited company will fly 70 million passengersand the Emirates is planning for adopting the progressing plans for the right infrastructure in order to assistance and capitalize on passengers’ growth. The same year, Dubai is expecting to welcome 20 million tourists. This consists of sizable ehnacement in airport capacity which focuses on the increase of airspace, stand and terminal areas, airfield in order to house 60% more aircraft stands by 2018. These are the key factors for the success of Emirates Airline (Emirates, 2014).
For achieving growth and success in Dubai aviation industry, Emirates Airline has adopted various business strategies and model like cost effectiveness, excellent customer services and hub and spoke model etc. These strategies and models are very beneficial for the airline to develop its business in the industry. In order to analyze the hub and spoke model, SWOT analysis will be helpful by considering various factors i.e. strength, weakness, and opportunities and threats (Chernev, 2012).
Emirates Airline is the leading airline in all over the world in terms of its revenue, carrier size, and number of passengers. Being one of the fastest growing airlines, the growth rate is 20% annually. By implementing hub and spoke model in the business, airline has established single hub and that is followed by various departures. By this model, travelers are able to connect by the single hub among various points. In case of Emirates Airline, the business and operational models are the key factors of success. Due to implementationof hub and spoke model, the airline has achieved significant growth and development in the airline industry over past few years (Shaw, 2011). Along with this, this model is also beneficial for the longer route flights that can be managed by the hub i.e. Dubai. It is observed that there are two important factors of hub and spoke model i.e. hub or Emirates Airline and aircraft carriers. This model of Emirates Airline is helpful and supportive for achieving the competitive advantage over its rivals in the airline industry.
Although, the hub and spoke model is used by Emirates Airline across the globe but there are some issues and weakness that must be addressed by the airline. The weakness are overcrowding airport during peak and seasonal times and ineffective human resource operations at the Dubai hub. These weaknesses are affecting the business operations of Emirates Airline. Further, there is high operating cost because of the huge investment in buying new aircrafts.y-
Due to hub and spoke business model, airline has various business opportunities in the competitive business environment of aviation industry. This model is supportive in the development of airline and selection of Dubai as the airline and tourism hub. Along with this, the model is also helpful to manage various business operations in order to enhance the capabilities to grow the business. Further, there are various economic benefits that can be achieved by the airline with the help of this model. Travelers are able to connect with the hub and get exact timings of the flights. In free times, they can do shopping in the country and it can enhance the domestic revenues. By this way, this model has positive impact on the business and provides opportunities to enhance the economy of nation (Zhang, 2016).
With the opportunities, there are some threats also that must be analyzed to stay competitive in the industry. The threats can impact on the business operations and the success of the airline. There is disruption in the flights and that can the reason of delay in whole hub. So, it is important for the airline to adopt effective operational management in order to manage the hub. Along with this, there is the connectivity issue that can impact on the customer services. Along with this, connectivity threat can also impact on the brand image of Emirates Airline in all over the world. Increased oil prices also highly affect the cost of operations as oil cost is also a big issue in the success of airline.
Based on the analysis of Emirates’ case study, it is observed that Emirates Airline is still a success story. Emirates Airline has established itself as the pioneer in the airline industry and has set a new standard for other competitors. It is one of the leading airlines in terms of revenue, number of passengers, fleet size and quality of services. The continuous growth and success of Emirates Airline has created competitive pressure on other airlines across the world i.e. Qantas Airlines and Qatar Airways etc. There are some factors that are reason behind the success of the airline i.e. leadership, customer services, business operations, selection of location and strategic decision making process etc. One of the remarkable factors that differentiate Emirates Airline from other airline is its strong financial performance. The airline has done significant expansion and investment in infrastructure. Despite of facing various hardships in the industry, the airline has proved itself to be highly profitable (Mouawad, 2011).
In terms of customer services, airline has installed entertainment and video systems for all the seats. Emirates airline is one of the airlines which has allowed the passengers to use mobile phones to make in-flight calls. Along with this, airline has implemented the growth strategy and it is continuously using the strategy so as to stay competitive in the market. Key focus of airline is on providing excellent services to the passenger and customers. In 2016, airline was awarded as the World’s best airline. Next, the biggest flying fleets are Boeing 777 and Airbus A380 that provides comforts to the customers. Over the years, the airline has built up a loyal customer base. The success portion of the airline can be credited to the appearance of the hub city i.e. Dubai as the financial hub and global tourist. The amount of tourists has enhanced significantly over the last decade and they prefer to travel by Emirates (Airport Council International, 2018).
Another key factor of Emirates’ success is zeal to expand the business by adding more destinations for enhancing the global network. The Airbus A380 is the largest passenger airplane and that was the focal point of the business expansion. Emirates Airline was the largest buyer of A380 and that enhanced the growth of the airline. Since 1985, Emirates Airline is fully owned by the government, has developed as the world’s largest by passenger miles flown. The airline has represented the future of mass air travel. In the era whole various global flights are trying to sustain themselves, Emirates airline has filled its planes, raised the fares and continuously turned the profit. The airline is riding high on globalization. Due to the risk taking strategy, airline is able to prove itself among the customers (Nelson, 2016).
Now, Emirates Airline has command up to 39% of market share of aviation industry. In the global aviation industry, airline has achieved significant growth and development over its rivals. The airline has achieved success in the market because of its effective and competitive pricing strategy that creates a pressure on the competitors in the market. So, it is observed that Emirates Airline is experiencing a continuous growth and development in the industry in Dubai (Grimme, 2011).
Conclusion
From the above report it can be concluded that objective of the above report is to analyze the key success factors of Emirates Airlines. It is observed that the success of the airline is attributable to its strength along with the ability to explore the opportunities available in the market. From the overall discussion, it is observed that the business operations of Emirates are vibrant that includes number of areas, strategic management, evidence based decision making process and communication. Along with this, Dubai has key role in the success of Emirates. Dubai has promising political environment, presence of new modern airport, new technologies, prospective social environment, globalization, growing population and evolving technology with innovative environment. Furthermore, marketing strategy of Emirates is the source of achieving competitive advantage. The airline is on the right way of securing its market share by the differentiation strategy. By hub and spoke model, airline is able to selection appropriate location i.e. Dubai which has important role in the success of Emirates Airline.
References
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