Profitmaking Opportunities of Emirates Airline - Case Study Example

Emirates Airline Emirates Airline has been experiencing significant improvements, the most recent one being the acquisition of 150 new airplanes priced at $76 billion (Alcacer and Clayton 103). This is the largest order that has ever been made by an airline company. This Airline intended to use the new planes to expand its operations to new and low-competition markets. This success was realized in an industry that has few profitable firms and is attributed to several factors that functioned in favor of the Airline. First, the airline was established by the royal family due to the reductions that were being experienced with respect to air service in Dubai. This implies that any expenses such as the startup capital and funds to acquire the initial planes were provided by the government. This made it easier to start the Airline. Second, the Airline targeted the underserved markets and with the assistance of the government, it was able to establish a global presence because it was not concerned in servicing the local market alone because it was small. Dubai has also played a critical role in the success of Emirates Airline. Dubai’s location provided a strategic location for the Airline. This is because it acted as the nexus of various transit routes. Specifically, Dubai is between other markets of interest such as Asia, Africa, and Europe. Additionally, Dubai is located away from the congested airspaces such as the European Airspace. This made it easier for flights to connect at any time of the day. Therefore, a 24-hour operation was possible from Dubai (Alcacer and Clayton 105). Furthermore, Dubai’s weather is favorable. Besides the general heat and occasional fog, Dubai experiences relatively favorable weather which allows the Airline to operate free of weather related problems. This is in contrast to European companies, which deal with snowstorms that result in lengthy delays. Moreover, due to the strategic location of Dubai, it gets a large customer base from throughout the region. This makes Dubai the best location for the Airline to thrive. For more profitmaking opportunities, Emirates Airline decided to establish the hub-and-spoke model of operation that had various strengths and weaknesses. One of the strengths include that the model enabled the Airline to exploit an existing opportunity that was provided by the increasing flow of tourists in the country. This enabled the company to make additional profits by providing services to passengers who mostly travelled from Europe to Asia. In addition, the other strength is that this model was not adopted by most other airlines allowing Emirates Airline to operate as a monopoly in that manner. This pushed the company further with regard to high performance ensuring that it would realize immense success that it enjoys currently. However, the system had several weaknesses that include bringing congestion to the airport. This is because of the high number of transit passengers (Alcacer and Clayton 106). This led to straining of the airport’s resources with regard to the limited number of runways and human resources. The strategy that Emirates Airline has adopted is sustainable. One of these strategies is tapping the existing underserved markets. This is sustainable because it guarantees that there will be a constant flow of passengers and thus a better competitive advantage. The underserved markets provide an opportunity because they have large populations but limited flying options. This is also a reliable growth strategy for any organization so as to reduce competition and preempt the competition. This will also enable the organization to realize ensuing growth and long-term success. The hub-and-spoke strategy is also sustainable. This is because the services being provided currently will still be in high demand in the future especially for the organization. This is because it has already established a good brand name, which may work in its favor even if competition intensifies. Therefore, the company is certain that it will have a profitable future especially now that it has already acquired a large fleet of new planes. Just like all organizations, Emirates Airline is experiencing major internal issues that affect its level of competitiveness and that should be addressed through strategic planning. These issues include airport congestion. This is one of the biggest internal issues affecting the airline and that could lead to reduced competitiveness because it may lead to delays that would in turn affect its reputation. This could then lead to loss of customer base and reduce the organization’s profit making capabilities. While Emirates Airline remains the biggest company operating from Dubai Airport, there were at least 150 other carriers operating from the same space (Alcacer and Clayton 117). This congests both the runways and the facilities available. This problem can only be eliminated through strategic planning. Additionally, the organization is also facing leadership change, which may influence the competitiveness of the company. The Airline has been led by two presidents who used consistent styles to lead the workforce, which proved to be beneficial when considering the success of the organization. As the current president approaches retirement, there is no successor to take over the company. This is an important aspect that could lead to poor performance of the company and even its failure if not considered carefully. This is because the most appropriate leadership styles must be applied when leading the workforce. Strategic planning must take place before the appropriate leader is found. On the external perspective, the issues facing the company include competition. Although Emirates Airline is expanding to unchartered markets, other airlines are also expanding operations beyond regional bases. In addition, the competitors are also applying some of Emirates’ strategies in their operations leading to loss of competitive advantage. This is in spite of the idea that Emirates Airline welcomes competition. This may lead to reduced productivity if strategic planning is not applied in addressing it. Competitive advantage must be established for an organization to remain profitable in the modern competitive environment. In addition, anti-competitive claims maintaining that the organization is favored by the government are also not healthy for business. This is because such an allegation may lead to a conclusion that the organization’s success is not attributed to hard work but governmental support. Strategic planning can also help in showing that application of strategies has led to its success. Works Cited Alcacer, Juan and Clayton, John. Emirates Airline: Connecting the Unconnected. Boston, MA: Harvard Business School Publishing, 2014. Print. Read More