Etihad Airways Product Marketing Strategy - Case Study Example

Etihad Airways Product Marketing Strategy Student’s Name Institutional Affiliation Elements of Etihad Airways Business Strategy Knowingly, a business strategy helps a firm to identify its customers as well as meet the varying needs of the clients. In view of this, the business strategy of the Etihad Airways comprises of several elements. Firstly, the strategy has clearly communicated its message of providing leading services in the airline industry. Occasionally, some corporations may fail to communicate their mission; hence, they find themselves liquidating their operations. Relationally, it is evident that Etihad Airways does not intend to curtail its operations in the aviation industry. The luxurious coaches, continuously trained employees and the strategic plans are some of the ways through which the company communicates its willingness to serve the public. Furthermore, the company has set realistic objectives, which conforms to its resource availability. Therefore, setting realistic goals implies the actualization of the strategic plans. Considering, for example, the management has decided to provide the clients with quality services and professionally develop its employees. Another instance is that of the company’s name or equivalently the brand enables build a positive public perception. The third element of the Etihad’s business plan is that of the situational and SWOT analysis. The SWOT analysis involves the identification of the strengths, weaknesses, opportunities and threats of a corporation while the situational analysis considers the prevailing environment. From the case study, it is evident that Etihad has identified both internal and external factors affecting its performance. Closely related with this is that the factors significantly influence the realized sales; hence, the corporation’s profitability. The SWOT analysis and situational analysis are helpful as they help one identify critical factors that may lead to the failure or success of the named organization. Within the Porter’s five forces and the four marketing mix elements, the writer precisely identifies the areas in which Etihad has competitive advantage. Moreover, one also points out the regions that Etihad needs to improve with an aim of retaining customers and realizing high sales. Fourthly, the business strategy has precisely defined its market segment in relation to its industrial operations. The database system of the pricing strategy suggests that Etihad maximizes on the economic class passengers within the aviation industry. The company gears its efforts towards building a vast customer base of these passengers to enable it realize high sales revenue. Critically, the corporation’s teamwork has a primary objective of satisfying the tastes and preferences of the identifying segments. Although competitors such as Qatar may pose stiff competition, it follows that Etihad Airways has a competitive advantage ion offering services with this class. Suggestively, the firm does not only identify its customers, but also provide goods and services that are unique to meet their various tastes. Consequently, the provision of unique services implies winning the consumers’ loyalty; hence, customer retention. Besides the aforementioned elements, activities are another component of the Etihad Airways business strategy. Visually, Etihad Airways actively engages in social and communities activities such as sponsoring football leagues to help create awareness of its existence. It is important to note that the corporation regularly updates its website with information to allow meaningful decision-making. For instance, the price database departments update the information at least six times a day; thus, providing users with relevant information. Etihad addresses its target market through other promotional and advertising activities; thereby, increasing the number of consumers. In fact, the internet, conferencing, public relation, promotion and advertising activities build on the company’s strengths and the needs of the target market. Collaboratively, these elements depict the unique status of the services and products that Etihad purposes to offer. Evaluation of the Business Strategy According to the writer, the Etihad’s business strategy is essential in communicating its status quo in the society. Of importance, the SWOT analysis helps in displaying the corporation’s areas of strengths and weaknesses that is vital in meeting the needs of the identified market segments. In reality, the threats and the weaknesses are significant in the determination of the competitive advantage as well as the underutilized potential. It follows that the government regulations inhibits the entry of the new investors into the aviation industry. Significantly, the four Ps of the marketing mix have helped in evaluating the probable consumers. On the other hand, the Porter’s five forces are important in highlighting the external forces that influence the corporation’s activities. These forces are significant since they determine the amount of the realized sales volume. In view of this, the competitive forces allow one to determine a firm’s position in a given market. Flowingly, the given business strategy focuses on the production of goods and services that target the client satisfaction both in the long run and short-run. With the development programs through staff training, the enterprise wishes to foster shaping of accountable and responsible staffs. Thus, the business strategy may lead one to conclude that this technique covers a vast region of the enterprise’s framework. Contrarily to the said, it follows that the given business strategy does not sufficiently meet the requirements of an ample method. Foremost, the business strategy has dealt so much into the consumers’ needs that it has forgotten to assist its staffs in their daily activities. The writer says that because he or she has found that the business model adopted does not recognize that employees are internal customers; hence, the management ought to recognize their diverse needs. The need for appreciating the employees’ needs is directly proportional to the quality of customer delivery service. Hence, it is prudent to mind about the workers’ concerns while trying to address the needs of the customers. Otherwise, the corporation faces the risk of curtailing its operations or experiencing high employee turnover. Furthermore, after the administration make up the strategic plans, the employees implement and actualize those policies. Another challenge with this business strategy is that it has failed to recognize that some competitors may pose threat due to unethical business conducts. Apart from the engagement in the sports and sport-related activities, the corporations’ strategy ought to be more influential say charity walks and community projects. Overall, the strategy has limited innovation; thus, need for improvement. The Competitive Strategy that best Suits with What Etihad Airways is doing After a critical analysis of the five competitive forces, it follows that the Etihad Airways activities aim at dealing with the rivalry among the existing competitors. Importantly, the corporation has decided to raise the number of its crafts to more than fifty-six, which is the current cardinality. The Emirates Airlines and the Qatar Airways already have more destination than the Etihad Airways. These competitors also claim to be offering services that are of high quality; thereby, strongly competing with the Etihad Airways. It is important to note that the businesses in the aviation industry have to accept prices from the craft manufacturers; thus, the business strategy is vital in establishing a competitive advantage. Although Etihad can make adequate profits in the market, it is significant to note that even its competitors are also making such considerable profits. In addition, the cost of switching from one aviation service provider to another is low, which suggests that the bargaining power of the buyers is critical. The development of the business strategy precisely aims at identifying the company’s strong regions to allow maximization. On the other hand, developing employees means that the firm wishes to be unique in comparison with the competitors. The need to maximize on the coral economy class passenger stems out of the willingness of establishing a considerable proportion of market segment. In fact, 86.8% of the customers of Etihad Airways are Economy class passengers. The intention of the management to raise the number of destinations is also an indicator that competition is a crucial factor in the operation of the Etihad Airways. The board of director ensures that the company’s website has updated information, which is vital in making an informed decision. Additionally, Etihad offers a wide variety of in air facilities and on the ground services that gear towards securing a better stake in the airline industry. Deductively, the business strategy of the Etihad Airways focuses on competitors’ effects to enable secure a competitive advantage (Simmonds, 1982). Etihad Managers and the Strategic Management Tasks According to the writer, the management board of the Etihad Airways has performed fairly; thus, the need to improve its duties execution. In relation to this, the management has succeeded in the planning tasks as it has strategized the way it purposes to achieve its high profit and high number of customers. The promotional and advertising activities are some of the forms that the company management has adopted in realizing its goals. Closely related with this is that the administration has opted to use the employees to foster customer service delivery through staff’s training. The organizing task is ambiguous since one cannot visualize the management team diving duties among the departments. Although the IT department regularly sends updated information, the other departmental roles are not precise. The organization of the company’s resources has taken place only to a small extent; hence, a failure. Fortunately, it is evident that the management body closely works with the human resource department to help organize training and recruitment. Therefore, the staffing role is in order. The fourth task of the strategic managers is leading where the managers ought to coach the employees (Peter & Olson, 1990). From the business strategy, one has little knowledge relating to the manner in which the administration communicates, motivates and encourages workers. Thus, the leading mechanism has taints. Finally, the management board has failed to identify a corrective measure that would assist in the identification of an anomaly. Within the business strategy, the managers have failed in the controlling role, as they do not have mechanisms of detecting deviations nor correcting them. Inductively, the managers fairly perform. Assessment of the Company’s Marketing Strategy A helpful marketing strategy does not only assist in realizing high sales volume, but also allowing customers get value for their money. Considerably, this marketing strategy has elements of biasedness as it only focuses on customers at the expense of exploiting the employees. It is important to note that a suitable strategy would involve all the primary stakeholders to allow two-way execution of duties. Even though the management may coerce the workers to provide optimal services, the workers may fail them particularly if they receive no any incentive. The strategy has failed to appreciate the existence of the non-quantifiable substances such as the employees’ self-sacrifice and goodwill. The other way in which this strategy has failed is that it has paved a limited room for innovation particularly relating to the customers’ needs. Significantly, people are living in the information era that signifies the need for one to develop methods that match with the consumers’ needs. This strategy does not provide a digital platform where the clients would meet and share ideas with like-minded people. Apparently, such a platform would assist Etihad in the identification of the consumers’ needs and conduction of thorough research activities. Concerning this, the improvements entail availability of social media such as facebooks, twitter and whatsapp. The other improvement call for the recognition of quality aspects say through the ethical leadership model. Industry’s Attractiveness during the Case Period It follows that the existing environmental conditions do not favor the entrance of a new investor within the airline industry. Logically, the prevailing aviation services providers do not fear the effects of new entrants. Therefore, the Etihad Airways stands a better chance to benefit from the realized sales. Increasingly, the number of airline travellers is rising; hence, pushing the demand upwards. About this, the corporation has many chances of making large profits from the in air facilities and on the ground services. Considerably, the Porter’s five forces show that the consumers are price takers, which implies that the market is under underutilization. Regularly, Etihad, Emirates and Qatar Airways have communicated drastic rises in the number of turning up customers indicating the industrial market is attractive. Besides, the government has assured the Etihad Airways of continued support. Collectively, the airline industry is attractive; hence, Etihad ought to endeavor to utilize all the available opportunities. The Company’s Competitive Strength In the entire case period, Etihad could favorably compete to earn revenue of around AED 10.9 billion suggesting a significant position in the industrial market. Mostly, such a huge sales volume stems out of a corporation’s strengths and opportunities. The assurance of government support implies perpetual business operations regardless of the financial condition. However, it is risky for the government to bail out such a corporation because it would communicate bad message to the public. In addition, Etihad has won many awards as one can feel its effects both locally and internationally. The education center ensures that the employees have the right skills to foster the service delivery. Moreover, the partnership agreements are sign of commitment and willingness to serve diligently. Suggestively, the education centers would provide research areas. Agreement with the Analysis of the Competitive Forces The Porter’s model provides a list of analyzing the external competitive forces. Regarding this, the writer does not fully agree with the analysis since it has overlooked crucial factors. Although the model has pointed out that the threat of new entrants is minimal, it follows that the firm’s expansion activities pave way for the new entrants due to the increasing number of passengers. The other point is that the analysis of this model with the case study heavily relies on the size of the corporation; hence, it does not provide sufficient information for making a relevant decision. Actually, the Qatar Airways and the Emirates Airlines directly compete with Etihad Airways because of their large size. Precisely, the small size of this corporation limits its operations. Other things that the model would have considered include the probability of price-sensitive customers switching to cheaper aircrafts. Importantly, the competitors may also be engaging in unethical business practices to deprive Etihad of its customers. Unluckily, the competitive forces do not indicate such practices. In this case, the writer would improve analysis of the competitive forces by considering customers’ switching and unethical business conducts. Agreement with the SWOT Analysis As the figure has tabulated, the strengths, weaknesses, opportunities and threats of Etihad Airways are evident in the analysis. The researcher categorically has arranged the data to allow understanding and easier interpretation. In many cases, the SWOT analysis emphasizes on the strengths and may fail to give a sufficient list of threats and weaknesses. Consider, for instance, the strength that the Abu Dhabi government finances and supports the corporation poses a crucial threat in the future. Obviously, such financial support stems out of some stakes usually political matters. Thus, the company may find in jeopardy since the political ground is unpredictable. Similarly, a financial meltdown such as that of 2008 may strike the country, which indicates ruining the company’s activities. Secondly, the rising need for digitizing operations adds to the list of the weaknesses and threats yet the management has not factored this. Issues Confronting the Company One of the issues that confront Etihad Airways is that of competition since the competitors offer considerable degree of competition. Considerably, the company has secured a market share of around four percent in the global market. A thorough analysis also shows that the corporation has problems in endeavoring to meet the needs of the passengers. With the increasing demand, Etihad Airways has decided to expand its operations in the regional and oversea markets. Eventually, the management team finds itself requesting delivery of about one hundred and thirty aircrafts yet it is highly likely to face delivery problems. The other issue is that of limited size of the employee number in comparison with firms in the same industry. Etihad Airways is also unable to utilize the business class market where it has competitive advantage. Lastly, the corporation’s intents of expansion create room for new entrants. The management ought to worry of failing to meet the needs of the concerned stakeholders and through the required form particularly digital means. They should also worry of reduced since the industry is seasonal as well as political stability such as insecurity and terrorism. Values and Business Strategy Foremost, the value of customer satisfaction leads in the list as Etihad Airways strives to provide consumers with quality services. The second value is professionalism and integrity that is evident in the availability of the education centers. Occasionally, the centers equip employees with the appropriate skills to help them in serving the customers. The training programs gear towards producing all-round workers who ethically conduct themselves since they fully comprehend their roles and responsibilities. The third value is that of the client loyalty coming from the continued support and provision of client-driven services. Healthy competition is evident in the manner in which the corporation has strategized its plans (Simmonds, 1982). Social responsibility is another value because the company takes part in sponsoring of football matches. Evidently, these values help in establishing a vast customer base, maintaining consumer loyalty and maximizing the shareholders’ wealth, which match with the strategic plans. Evaluation of the Given Recommendations The provided recommendations provide Etihad with ample ground of establishing a wider market share. One notes that the recommendations are forward-looking because they have pointed out the likely threats related with the business issues. Such recommendations are useful because they help the management in the development of more realistic control programs. Furthermore, the recommendations plead for the management to provide avenues for innovativeness and innovation. Therefore, the writer suggests that the administration consider those recommendations. In addition, the researcher requests that the management digitize its operations to enhance relevance. Another thing is that Etihad has to appreciate that the political stability, natural calamities and security concerns in the different countries influence the rate of airline travel. Inductively, the transport system is seasonal; hence, the business strategy needs to factor this. In brevity, the business strategy ought to have a control mechanism to enhance reliability and relevance. Furthermore, control procedures require regular check-ups; thus, meeting the needs of not only passengers, but also other stakeholders for perpetual growth and survival. References Peter, J.P., & Olson, J.C. (1990). Consumer behavior and marketing strategy. 2nd ed. Homewood, IL: Irwin. Simmonds, K. (1982). Strategy & marketing: A case approach. Oxford: P. Allan. Read More