The Strategy and Methods Used by Etihad Airways - Case Study Example

Operations and Maintenance at Etihad Airways Name Institution Date Table of Contents Table of Contents 2 Strategy and competitive advantage 2 Product design 4 Quality management 4 Process design and capacity planning 5 Location 6 Layout and job design 7 Supply chain management 8 Inventory and aggregate planning 9 References 10 Strategy and competitive advantage The strategy used by Etihad Airways has enabled the company to win several awards in the airline industry. They are driven by four principles: Avoiding of undifferentiated superiority Provision of inspiration to individuals by satisfying all the needs of different customers regardless of their financial conditions Provision of luxurious treatment to the customers Promoting Abu Dhabi These principles are achieved through segmenting the market and targeting the profitable segments before introducing the products. The location of the company gives it an advantage over most of the airline companies. The company also has a private terminal at the Abu Dhabi international airport which provides a competitive advantage over the other companies. It is also well equipped in terms of using modern information technology concepts and hence an advantage over the competitors. Its unique design of cabins has also played an important role in winning the support of the customers (Etihad Airways, 2012). Forecasting Forecasting is an important concept in the airline industry. It is used to determine the number of customers that the company may have over a given period of time or within a new market (Flyvbjerg, 2005). The company may also base the forecasting depending on the events and occasions within the area of operation. This is due to the nature of business in the airline industry. The company also uses the results for the purpose of making important decisions with regard to pricing and moving to new markets. The use of trend projection method is an example of time series projection method used by the company. This method is based on the events and the experiences of the company with regard to the products and services. The company also uses statistical methods of forecasting. These methods are based on mathematical analysis and require interpretations. The forecasting methods used by the company are usually well analyzed for the purpose of avoiding errors which may compromise the quality of the results. The company has a group of qualified economists who are responsible for conducting the research and forecasting. The company was least affected by the global recession due to its efficient methods of forecasting. Product design The main product that is offered by the company is the transportation services. The company has a well designed method of enhancing its products. The company has divided the services into different segments for the purpose of satisfying all the customers. The company has designed a method that ensures the customers are well satisfied with the services. The first class which is also referred to as the diamond class offers services which are luxurious and fully equipped. These services are however expensive as compared to the others and is reserved for customers who can afford it. The other customers can also use other class which affordable and economical depending on their financial capabilities. However, the company also reviews its services from time to time depending on the needs of the customers. New and unique designs are usually implemented from time to time to fully satisfy the customers. It is through the design of unique products and services that the company has been able to maintain its customers (Morris, 2009). Quality management Quality management is an important aspect of the operations of the company due to the sensitive nature of the sector. The quality management practices are for the purpose of enhancing the safety of the passengers, proper and efficient handling of cargo and also for customer satisfaction. The company recognizes the importance of maintaining high stands of services as poor quality of the services may lead to accidents which may be fatal. To achieve this, the company utilizes the total quality management where every process is accountable. Each department has to ensure that the services are of high quality and standards. It is for this purpose that every airplane has to undergo thorough inspections before any flight. This is for the purpose of ensuring that accidents are prevented and the safety of the passengers is enhanced. The company keen on ensuring that the customers receive high quality services. A customer care department has been established by the company for the purpose of handling all the issues and complaints of the customers. A feedback mechanism is also present for the customers to rate the services and make recommendations on how it can be improved. These measures have played an important role in improving the quality of services offered to the customers. It is through these efforts that the company was awarded the quality certification by cargo 2000. This was the first time an airline company in the Middle East won the award. This is an indication that the company is quite sensitive in the area of quality management. The use of total quality management system is beneficial to an organization as it ensures that all the processes are streamlined (Kohlbacher, 2009). Process design and capacity planning The process design used by the company is mainly for the purpose of improving the services offered to the customers. This is done through the modification and improvement of the existing practices. The company was able to automate some of its services that were carried out manually through this process. This has played an important part in improving the rate of service delivery by the company. It is possible to make bookings online without visiting the location of the company. This reduces the costs as and it is also convenient to the customers. This service was as a result of process design carried out by the company. The process design in the company also puts in lace measures that address the regulatory process, the market and the competitive challenges that may face the company in the future. The design process in the company is also flexible for the purpose of accommodating the future changes. The capacity planning process involves determining the production capacity for the purpose of meeting the demand. The demand for the services of the company is not constant as some seasons may register high demand while others may register low demands. This depends on external factors like holidays and festivals which involve a lot of traveling. The match strategy is applicable in the company due to this fluctuation in demand. Meeting the demand is one of the main objectives of the company and past records are at times used for making predictions. It is also a common practice for the company to carry out research in the market that helps to determine the capacity and the demand. This method is important for an organization as it ensures that adequate preparations are put in place to counter the demand (Stevenson, 2007). Location Etihad Airways is an international company located in Abu Dhabi at Abu Dhabi international Airport. The Airport is operated by the Abu Dhabi Airports Corporation and it is considered a major airport in the region. It serves thousands of customers both local and international. The location of the company plays an important role in the market. It may offer a competitive advantage over the other companies. Etihad Airways thus enjoys a competitive advantage as its location is conducive and accessible to most of the travelers in Abu Dhabi. The location of the company is accessible to the customers due to the availability of good roads leading to the airport. This makes it easier for the customers in the other cities and regions to easily access the company. This has played an important role in the growth and development of the company. The nearness to the customers is also an important aspect of competitive advantage. Abu Dhabi has important tourist’s attraction sites. The country also receives many other tourists from different parts of the world. The company is located in an area that is close to most of the tourist attraction sites and hence giving it a competitive advantage. It is easy for the tourists to access the services of the company and hence the convenience of the location. A part from the tourists, the locals can also access the company easily due to its popularity. The location of the company is also strategic and it is able to receive goods from the suppliers easily. Since the company also deals with cargo, the location is convenient for the dispatching of cargo. The location of a company thus influences the operations of the company as well as its competitive advantage (Nahmias, 2009). Layout and job design The layout of the company is for the purpose of ensuring that the operations of the company are run smoothly. The company governed by the board of directors headed by a chairman. The board of directors guides the company using the articles of association and the legislations of the company. This is for the purpose of decision making when formulating the growth strategies of the company. The board of directors is usually appointed on a fixed term. The board pf directors are also assisted by professionals who are from the executive and audit committee. Their main duty is to make recommendations to the board. The company also has a chief Executive Officer who is charge of implementing the policies and strategies of the company. This layout is important for a large organization as the decision making process may be complex. The job design in the company is for the purpose of satisfying the personal needs of the employees as well as the needs of the company (Jacoby, 2009). The job design in the company is also aimed at cautioning it against the external influences brought about by the competition in the market. The duties and responsibilities of each employee are included in the job design. The qualifications required for each job in the company is clearly specified together with the remunerations. Etihad Airways has one of the best job designs in the UAE and it has always maintained its productivity due to the good job design. The company always ensures that the job design motivates the employees. This plays an important role in increasing the production of the employees. Organizations with poor job designs always end up with conflicts between the managers and the employees (Schroeder, 2007). Supply chain management The supply chain management at Etihad Airways is for the purpose of monitoring the goods from the time it is dispatched to the point of collection by the customers. This is because the company also deals with cargo and it has established a department to deal with the issues of supply chain. The company uses software for monitoring the movement of the goods that it handles. This is quite efficient in terms of reducing inconveniences to the customers due to delay or other logistical problems. The department has a qualified manager who supervises the process and ensures that the customers are fully served. The use of software to manage the inventories is also an important aspect of supply chain management. The use of modern technological concepts is important for a company as it reduces the cost as well as increasing the efficiency (Krajewski, et al, 2005). Etihad Airways also introduced a new concept in 2008 for the purpose of managing its supply chain. The company introduced a tracking system for the goods using an SMS system. The customers are able to monitor their goods through sending a message to a specified number provided by the company. This returns the results showing the status of the goods. This concept also enables the customers to monitor a large shipment of their goods. The involvement of the customers has been useful to the organization in terms of winning the trust of the customers. The se of the modern technology in the supply chain management has also increased the efficiency of the company in terms of the supply chain. Inventory and aggregate planning Etihad Airways adapted the use of the new information technology for the management of its inventory. The Company uses the technology known as Amadeus Altea for the purpose of managing its inventory control in order to maximize on the revenue for each seat. This move was initiated by the company after it signed an agreement with a leading company in the provision of IT services. The modernization of the inventory management by the company has also been useful to the company in terms of saving time and costs of operation. Time is always considered an important concept of inventory management. The aggregate planning is an important concept of operations and management in the company. This process is important for the company as it prepares it for the future seasons with high number of customers. This process is usually done in the company by analyzing the available resources and determining whether it will be adequate during the high peak season. It thus assists the management to plan in advance for the requirements. This process is also important for the company in terms of eliminating bottlenecks which affects the operations and management. A thorough market research by the company is always common during this process. The process is essential for organizations in terms of responding to sudden changes in demand and thus eliminating potential problems for the company (Rosemann, et al, 2010). References Etihad Airways, (2012). National Airline of the UAE. Retrieved on 23 October 2012 from, Flyvbjerg, B. (2005). How Inaccurate Are Demand Forecasts in Public Works Projects? The Case of Transportation. Journal of the American Planning Association, 71, (2), 131-146. Morris, R. (2009). The fundamentals of product design. AVA Publishing. Jacoby, D. (2009). Guide to Supply Chain Management: How Getting it Right Boosts Corporate Performance. Bloomberg Press; Kohlbacher, M. (2009): The Effects of Process Orientation on Customer Satisfaction, Product Quality and Time-Based Performance. 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