Growth Strategy of Business Class in Air Arabia - Term Paper Example

? Air Arabia Growth Strategy of Business in Air Arabia Air Arabia is recognized as one of the leading low-cost airlines in the UAE headquartered in Sharjah. It is true that the Air Arabia is considered as the first and largest low cost carrier. The organization started its operation in the year 2003. Despite several competitive advantages the organization faces huge competition from its potential competitors like Fly Emirate regarding the business performance of business class. This part of the report will develop a growth strategy for the business class in Air Arabia to attract the passengers of business class segment. There are four types of growth strategies, such as vertical integration, horizontal integration, concentration and diversification that can be adopted by the management of the organization in order to grab the market share of this particular market segment. It is important for the organization to consider diversification growth strategy in order to improve the performance of business class segment. The organization is already focusing on the concentration strategy as the organization maintains its low cost strategy for the passengers of economy class segment (Abed, Hellyer & Vine, 2006). In addition to this, the organization does not face any kind of management problem. Therefore, the organization should avoid the adoption of both horizontal and vertical integration strategy. Therefore, it would be effective for the management of the organization to consider diversification strategy in the business operation process in order to improve the performance of the in-flight business class segment. First of all, the management of the organization needs to consider some important aspects before the implementation of diversification growth strategy in the development of business class segment. The management of the organization should ensure the just-in-flight comfort to all the business class passengers. It is true that inadequate in-flight passenger service and poor operation management processes are the major concerns for this business class segment. It is important for the organization to ensure effective training and development programmes for the employees in order to maintain high efficiency and superior quality in the customer service management process. It is highly important for the organization to ensure appropriate space for each and every passenger in the business class segment (Doganis, 2005). Effective care and follow up of the passengers in the flight can help the organization to meet the satisfaction and needs of the target customers. Now-a-days, each and every passenger is preferring high quality customer service from the airlines against their paid ticket fare. The business environment around the globe is becoming highly competitive as the demand for differentiated valuable products and services is significantly increasing among the people around the globe. Therefore, the leading organizations are trying to expand their business operation activities in several emerging global market places. Therefore, the organizations are developing aggressive business operation strategies for global market place in order to increase the market share and financial stability of the firms. Therefore, the organizations motivate their management team to handle the global business operation activities by assuring effective facilities. The leaders of the leading global organizations used to offer facility like travel in business class and stay at five star luxurious hotels for better global business performance. On the other hand, the countries of UAE is achieving significant economic growth rate due to presence of several leading organizations. The regions of these countries are enriched with enormous oil and gas resources. Therefore, UAE is gaining significant economic growth rate as the oil and gas are considered as the major energy resources in this world. Therefore, the business activities of several leading organizations are increasing in these regions as the organizations are trying to capitalize on the potential business opportunities that are available in these regions. These favourable social and economical aspects will help the Air Arabia to ensure significant growth rate in the business class travel segment as the demand for these services is significantly increasing among the top level management of the organizations. Therefore, it will be effective for the organization to develop effective strategy for the growth of the business class segment (Furey & Friedman, 2012). It is important for the organization to develop an effective multicultural diverse workforce as the organization has to increase its global operational market area. Several passengers will try to experience the service of the Air Arabia. Therefore, it is important for the organization to develop a multicultural workforce in order to increase the skill and efficiency of entire workforce. In addition to this, this multicultural workforce will improve the knowledge sharing process among the employees (Holloway, 2012). It is true that the business class passengers used to travel too often to different global destinations. Therefore, availability of a strong and talented multicultural workforce will help the organization to provide effective solution to a developed problem or issue. The income and travelling frequency of the corporate managers is increasing due to globalization. It has been discussed that several emerging countries have adopted open door policy in order to gain significant economic growth rate. In addition to this, global tourism industry is achieving significant growth rate. People who love to visit several attractive tourist spots generally prefer business class segment for the purpose of travelling. Tourism industry is becoming one of the most important economic growth drivers for several developed, developing and third world countries (Aharoni & Nachum, 2013). These factors and aspects are indicating that it will be effective if Air Arabia considers business class diversification growth strategy. Differentiated and customized customer service in business class segment can help the organization to increase the loyalty of the customers towards the brand (Roll, 2005). It is true the expectation of types of service and amenities in a flight used to vary from a passenger to another passenger. It is important for Air Arabia to target a different segment of target customer groups apart from the economic class segment. Implementation of diversification strategy and introduction of differentiated customer service will help the organization to develop potential client base. Fly Emirates and Fly Dubai are the major potential competitors of Air Arabia. Both the competitors have long haul operation and specialized in business class service. Day-by-day, the demand for this business class segment is increasing among the corporate executives, managers, organizational leaders, potential investors of a firm and the tourists. Therefore, it is highly recommended that the organization should adopt the business class growth diversification strategy in the business operation process (Kleymann & Seristo, 2004). Demand for executive or business class is also increasing significantly in the regional places. It is true that the organization maintains effective business operation performances within the low cost airline market. The low cost airline industry is becoming highly competitive as the number of potential competitors within the similar industry is increasing a t a rapid speed. It is always important for the leading organizations to think and act differently in this competitive business environment in order to survive and manage business profit effectively (Lyons, 2010). Each and every leading airline in this global market place is focusing on both cost leadership and differentiation strategy to provide quality and valuable passenger service in low price. The industry has become highly saturated as several organizations are trying to develop pricing strategy according to the purchasing power and nature of global economic environment. Recently the global economy is passing through a critical stage (Flouris & Oswals, 2012). Recent financial crisis and global economic recession affected the global economic environment. Therefore, it is important for Air Arabia to focus on differentiated market segment. High quality diversified and customized service for the business class passengers will help the organization to avoid the risk of high market saturation and intense market competition. Considering the involvement of the competitors in this segment, it is important for the organization to consider the high quality attractive amenities for the business class passengers. Each and every passenger in this target segment always tries to experience better service and caring comparing to other previous airlines. It is highly important for the organization to maintain the low turnaround time process and fast moving process. Frequency between the two flights needs to be minimized by the management of the organization to ensure effective business class performance. Luxury airline industry is also becoming highly competitive as different organizations are trying to provide unique services and high quality of traditional foods to the passengers in different countries. It is true that several leading luxurious airlines used to ensure high quality entertainment amenities such as different video station and audio station seat systems in order to attract the customers towards the brand (Kangas, 2003). Air Arabia should try to offer customized customer service to the passengers of different age and genders. The organization can offer differentiated welcome gifts to kids and teenagers to ensure value added business class passenger service. Availability of comic books, games and other funny items will automatically attract the children along with their parents. Air Arabia should adopt the growth strategy of business class diversification and enhance different types of customer service management processes in order to become one of the leaders within the industry. References Abed, I., Hellyer, P., & Vine, P. (2006). United Arab Emirates yearbook 2006. New York: Trident Press Ltd. Aharoni, Y., & Nachum, L. (2013). Globalization of Services. London: Routledge. Doganis, R. (2005). The Airline Business. London: Routledge. Flouris, T., & Oswals, S. (2012). Designing and Executing Strategy in Aviation Management. London: Ashgate Publishing. Furey, T., & Friedman, L. (2012). The Channel Advantage. London: Routledge. Holloway, S. (2012). Straight and Level. London: Ashgate Publishing. Kangas, K. (2003). Business Strategies for Information Technology Management. New Delhi: IGI. Kleyman, B., & Seristo, H. (2004). Managing Strategic Airline Alliances. London: Ashgate Publishing. Lyons, C. (2010). The Unofficial Guide to Dubai. New Jersey: John Wiley & Sons. Roll, M. (2005). Asian Brand Strategy. London: Palgrave Macmillan. Read More