Case study on Emirates

Abstract

Strategic planning enables entities to develop effective ways to realise opportunities presented in the external environment. This paper assesses Emirates’ external environment in its decision to offer flights to New Zealand in 2003. Through Porter’s five forces and SWOT analyses, the paper finds out that New Zealand offered a credible market for Emirates entry. For instance, it provided the opportunity for the entity to earn marginal revenue by using aircraft that remained idle in Australia as crew rested. The major challenge for Emirates however was a high competitive rivalry on the short haul distance. To minimize the effect of such rivalry, Emirates should focus on its long haul market by promoting the New Zealand destination in Europe. Such a strategy would avoid a situation where Emirates would need to engage in price wars to compete effectively with Qantas and Air New Zealand in the trans-Tasman industry.

Keywords. Strategic planning, Porter’s five forces, Emirates Airline

To sustain growth in a dynamic business environment, entities seek to expand to new frontiers that offer opportunities for growth. Evaluation of the external environment helps in developing appropriate strategies for success. This paper evaluates the opportunities and threats that Emirates faced in its expansion to offer flights to New Zealand as presented in the case study by Stanik, Smith and Erakovic (n.d.). A brief background of the case is presented first, then an analysis of the opportunity and challenges that faced the entity in its expansion to New Zealand conducted.

Company Background

Emirates is an international airline owned by the Dubai government (one of the seven Emirates of the United Arab Emirates – UAE) and part of the Emirates group. Its main business is commercial air transportation. It was established in 1985 with two leased aircraft that served its three destinations – Karachi, New Delhi and Bombay (Emirates, 2011a). Subsequently, the expanded its routes, initially, within the Indian sub-continent but eventually to Europe on purchase of its first two Airbus aircraft in 1987 (Emirates, 2011; Stanik, Smith & Erakovic, n.d.). By April 2004, the entity was operating in 53 countries, flying to 73 destinations (Stanik, Smith & Erakovic, n.d.).

To support such expanded routes, added its fleet with its aircraft including planes such as Boeing and Airbus that allowed it to offer services to longer destinations (Emirates, 2011a). Its fleet was among the youngest in the global airline industry by 2004, thus saving the entity the costs it would otherwise incur on maintenance and repairs. Additionally, to ensure a high quality service, Emirates continues to hire human resources to meet its staffing needs. For instance, by the end of 2005, the entity had a workforce of 25000 persons drawn from 124 countries (Emirates, 2011a). By matching the opportunities to its resources, Emirates was able to remain profitable even during the recent financial crisis when many airlines recorded losses (Emirates, 2011b).

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