This airline that named as Emirates is one of the most important key for corporation in the group of Emirates. As we mentioned in the above paragraph, Dnata is another largest travel organization in the Middle East that includes more than 8,000 staff and employees that manage and handle different passengers, ramp, cargo and technical support service for a huge number of airlines in Dubai International Airport, and next to Emirate Airline, it is known as a luxurious airline among all flight service industries and has a growing profitable activities.
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Porters fives forces model is an excellent model to use to analyze a particular environment of an industry. It is a definition of five forces in the competitive environment that shape all the organization and markets that are operating in the business environment. This forces lead the company the analysis and define everything of the intensity of competitors that how they can create profitability and make their industry attractive. The use of this method in the airline industry makes a framework for the company to show how the airline industry should be structured and caused profit for them.
Emirates’ strategies are a function of the environment where it operates and the product of intrinsic strategic thinking from within the carrier. The environment could be viewed in terms of Porter’s five forces i.e. threat of entrants, power of suppliers, and power of buyers, substitution effect and rivalry:
Threat of New Entrants: It seems, to all appearances, that the airline industry is a low entry barrier industry. Finance, the prime entry barriers, is readily available in the Middle East and technology and expertise are purchasable.
Power of Suppliers: Boeing and Airbus are the two main suppliers and competition among them is probable, observable but not abominable! Also, the likelihood of a supplier integrating vertically isn’t very likely.
Power of Buyers: The bargain in power of airline industry buyers in the Middle East is quite low.
Availability of Substitutes: Threat is really limited given the distances in the Middle East and the fast pace that is becoming a symbol of the area.
Emirates’ strategic behavior, within this kind of environment, runs parallel to Ansoff’s product market strategies Matrix. Some of Emirates’ strategies include penetration strategies, product development strategies, market development strategies and even a recent element of diversification.
Identifying Competitive Dimensions
Suppliers who are responsible for the key resources that formulate the finishing of manufactured goods can comprise an important influence on the competitiveness all industry, mainly around the lead point in time and accessibility of the product at the same time its final price or cost. The consumers are the main cause of profits in an industry; they are the solution in influential overall magnetism or attractiveness.
When good quality of information is provided to them, the price sympathy, absorption of geographic and the switching costs or overheads will influence the revenue of a competitor into the marketplace. Formerly once an alternate product becomes offered in the market, the benefit enjoyed by the earliest mover will decline a lot, especially if they both have similar features and prices level. Furthermore the perfect position for all competitors is to contribute in a market place that is located closer to each other. The advantage of barriers to entry is that once you are on the exact side of the barrier this may lead to an efficient base of competitive improvement and advantage and therefore it boosts the attractiveness of an industry as an overall. Factors that verify the stages of attractiveness consist of, the level of competition between companies, the level of involvedness and complexity occupied economies that are scaled, enjoyed by already existing competitors and last but not least the level of investment required to grow and to become a possible competitor.
The fast enlargement of travel transportation in the Middle East, attached with the appearance of worldwide division airlines, such as Emirates airline which is the main topic we are discussing about and two of its competitors Etihad and Qatar Airways, has resulted in a unexpected growth in travel industries. “according to the organizers of MENA Travel Catering 2006, the international travel industry increasing its focus on Dubai and the Middle East, the exhibition and conference attracted considerable interest from key industry leaders and regional players” (writer,2006)
Emirates have taken the superior position for the service quality survey, it was chosen out of seven airlines that are operating. Researchers analyzed that the consumers are finding confines towards flight booking all the way towards their check-in progress, belongings drop, when boarding and plane surroundings such as flight services that includes beverage and food and entertainment that satisfy them throughout the flight, lastly not fearing when it’s time to take their personal baggage and belongings.
Emirates Airline scored 92.3 percent, followed by one of its competitors Etihad Airways that scored 91.5 percent.
PROFITABILITY
To understand and achieve profitability we need to understand the structure of the industry and the competition within it, since the airlines industry in the UAE is an oligopoly, there are only few firms that are UAE based:
1. Emirates airlines
2. Etihad Airways
3. Air Arabia
4. FlyDubai
5. RAK airlines
And this is due the high entry and exit barriers, Outside the UAE are countless and there is competition globally and from the countries in the gulf region.
The competition is intense because all of the firms offer the same experience so the main strategy of emirates is differentiation and more focused on uniqueness giving the customer the best experience is a must and emirates airlines created that by applying the ultimate service and that is found in there service and its 1 of the few airlines in the world that has its own terminal in its based country, there are many airlines such as Qatar airways and Lufthansa that represents the competition along the threat of substitutes of Many other airlines that are low cost based such as Jazeera Airlines (Kuwait) ,Al- Saeeda Airlines (Yemen) and Nas Air(Saudi Arabia)
Emirates airlines’ 2009 end year Financial statement, the company’s revenue totaled 43.5 billion AED and net profit of 3.5 billion AED, and was on the top 10 fastest growing airlines in the world as 2009, the revenue was somewhat effected after its yields were hit by the global economic crisis and swine flu.
Air Arabia’s revenew as stated in the 2009’s end year financial statement totaled 1.972 Billion AED with net profit of 452 Million AED
And Jazeera Airway’s revenew as stated in the 2009’s end year financial statement totaled 680 Million AED with net profit of 60.5 Million AED
This put Emirates airlines in an intense environment locally and regionally but with the rate of growth the company is experiencing will ensure that it will always keep making profits and attract investors.
CONCLUSION
The business should be protected from outside threats, indeed, but that possibility is still blurred and the truth behind a healthy competition is lurking among the shadows. Therefore, the business that can make it through the market is identified as the market leader.
The competitive advantage is no sense if the business is unique. The ideal way of competing is challenging your own business against the challenge of the competitors.
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