SWOT Analysis of Emirates Airline - Case Study Example

Name: Professor: Course: Semester: Date: Table of contents 1.0 Introduction…………………………………………………………………………….3 2.0 SWOT analysis………………………………………………………………………….3 2.1 Strengths ………………………………………………………………………………..3 2.2 Weakness ………………………………………………………………………………..5 2.3 Opportunities ……………………………………………………………………………6 2.4 Threats ………………………………………………………………………………….6 3.0 Direction of the company in the next ten years………………………………………7 4.0 Conclusion……………………………………………………………………………...7 References ……………………………………………………………………………….8 SWOT analysis of Emirates Airline 1.0 Introduction Emirates airline has been building on delivering high quality services, coming up with an operational and service approach of a sincerely global provider and with exclusive pride as one of the youngest in the airline industry with advanced fleet that is loyal clients worldwide (Temporal, 2012). Today, emirates airline boast of more than 30 million passengers per year and flies 120 destinations in 78 countries with a fleet of 190 aircraft. The airline is currently the world’s largest operator of Boeing A380 and Boeing 777 (emirates.com, 2013) The purpose of this report is to analyze the SWOT matrix in relation to emirates airline to get a clear picture of where the company should be in the next 10 years in terms of growth boosted by innovation trends in the company. This will be done under the appropriate sub-headings. 2.0 SWOT analysis 2.1 Strengths Emirates airline has dedicated a lot of resources and emphasis on quality control as its core strategy to beat competition. From the creation and maintenance of the airline fleet, to keen attention on the treatment of the customers in all aspects of the business, all things are done with application of high standards (El Namaki, 2007) Emirates have been sponsoring sports events and clubs like Arsenal football club in the English Premier League. The company considers sponsorship as a crucial marketing strategy that will increase brand awareness and position the company as global brand in its strategy to penetrate the global market (Emirates.com, 2013). Even though the company is operating in a region known for terrorism activities, it has a comprehensive approach to tackle the problem through a well developed policy to address the issue (Butler, 77). Emirates controls up to total of 42% of the Asia-pacific aviation market meaning it is firmly positioned to compete in the market.They provide in flight entertainment facilities which include email services for clients, text news and won several awards from the entertainment association (Butler, 77). The Airline has used the fleet cost economies strategies where the airline operate an wide body fleet leading to a lower unit costs compare with other airlines operating combined wide/ narrow body fleets. This makes it possible for emirates to use these aircraft cargo capacity to increase its overall revenue and profits, especially when an economic downturn adversely impacts the customer number or when customer business passes through a seasonal trough. Emirates airline nearly operates in all parts of the earth which ensure that all customer have asses to it. It operates in almost 100 cities in the world and server 2400 passengers in a week. Emirates airline is strategically located airline as it lies between west and east of Asia which makes it possible for them to connect the Far East and the west. This is a key trade route in the world (Delfmann 2005). Extensive aviation training is a key strength to the Emirates airline success since this strategy does not only add and keep key aviation talent but also forms a huge footprint as it trains other people in the airline industry. The brand recognition and image created by this business segment is a valuable strategy (Graham& Papatheodorou, 2012). The company is fully owned by the United Arab Emirate government as a result of this, when trade treaties are being signed, they are likely to get a preferential treatment from the government. Emirates have continually received direct and indirect financial and non-financial support from the government of Dubai and this given them a competitive advantage over their key competitors (El Namaki, 2007). They have a strong management team which come up with effective strategies and help the company to have a competitive advantage over its competitor coupled with high research and development which ensures that they keep at pace with the market.The company has valuable physical resources such as air planes, Resort and Hotel which exceed Dh71 billion mainly in Dubai and Abu Dhabi airports and this has enabled the company to offer fast and quality services to its customer which has created customer loyalty. Now more over the company has invested more in technology; for example, it was the first airline company to offer E-ticketing to its clients (Jiang, 2003). This has enabled the company to have a cost advantage as compared to its competitor making it to have a competitive advantage (El Namaki, 2007). 2.2 Weakness Rising fuel costs are a major undoing of the emirates company. The rise in fuel prices is reducing the profit margin of the company leading to realization of insignificant profits that may not sustain the company in the long run if not well taken care of. Budget travelers make quite a sizable chunk of travelers for airlines all over the world. Emirates airline is not catering effectively for this group.The company does not have presence in other regions of the world and may consequently suffer from nay destabilization in its major concentration of the Middle East (Delfmann , 2005). 2.3 Opportunities The company has the potential of linking up of the Asian continent with the rest of the world through positive marketing. As the Asian economies get strong, trade and commerce between the region and the rest of the world will increase and so will the need to travel and airlift cargo to the rest of the world. The company is in a strategic position to act as a link (Doganis, 2001).As the Asian and Middle East economies grow, a wealthy business class is emerging who the company should target with innovative new generational and advanced aviation services. Dubai airport is an extremely good hub which can allow emirates to profitably serve secondary destinations as well as connect such places via its global Dubai hub (Directory, 2007). The emergence of Dubai as a holiday destination and business destination positions the airline as a major beneficiary of tourism and business travelers from across the world. The company can take full advantage of this (Graham& Papatheodorou, 2012). 2.4 Threats The company is fully owned by the state and this poses a threat of it being influenced by policies coming form the government. In the face of a dynamic and competitive airline business, this may pose a threat to the airlines competitiveness. There is real threat from major airliners in the Middle East region with a good financial backing like the Gulf and Etihad. Low cost carriers such as Jazeera airways and air Arabia are significantly lowering the market share and posing a threat.There is a rising fuel cost which is affecting the airline industry and this is a threat to all operators although government financial and resources backing may neutralize the threat (Delfmann, 2005).Terrorism in the Middle East is very high and the airline maybe a target of terrorist attacks which may have massive implication on its client base (Hitt & Ireland, 2010). 3.0 Direction of the company in the next ten years From this SWOT analysis it is evident that competition in the industry is very, airlines offering almost the same products. In such a market the strategy that can be adopted is to innovate on service delivery and not the product itself (Barney and Hesterly, 2008). emirates has innovatively changed the way the service is delivered through cutting fuel costs and ensuring high quality service to satisfy its client base through e-ticketing and lean management. The fact that the company is also targeting the global market means that in the next ten years, emirates airline will be a major player in the aviation industry with vast concentration in the Asia Pacific region which is currently experiencing an economic boom. 4.0 Conclusion Emirates has done a good job leveraging on the resources available to t and the strategic position geographically to take advantage of the opportunities available to it through innovative service delivery in the aviation industry. In the next ten years the company should be in the league of the biggest airlines in the world controlling large traffic the world over and especially in Asia. However, some threats such as rising cost of fuel and terrorism paint a not so bright future but measures such as enhancing security practices can be taken to turn these threats into opportunities. References Barney, J. B., and Hesterly, W. S. 2008 Strategic Management and Competitive Advantage Pearson Prentice Hall. Butler, G.F., Keller, M.R. 2000 Handbook of Airline Operations. Aviation Week. Delfmann , W 2005, ‘Strategic Management in the Aviation Industry ,Ashgate Publishing Ltd., pp 229-230. Directory: 2007 World Airlines", Flight International, 2007-04-03, p. 77. Doganis, R. 2001 The Airline Business in the 21st Century. Routledge, New York, El Namaki. S 2007 Emirates Airline in a League of its own Retrieved on 17th March 2010 from http://www.micm-canada.org/Emirates_Apr07.pdf Graham, A., & Papatheodorou, A. 2012, Aviation and tourism: Implications for leisure travel Jiang, H. 2003 Application of e-CRM to the Airline Industry, Ausweb. Hitt, M., & Ireland, D. 2010. Strategic management: Competetiveness and Globalization, Concepts, Cengage Learning Temporal, P.2012. Asia’s Star Brands, John wiley & Sons Read More