Connecting the Unconnected Harvard Business School – Case Study Pradeep Bhat Strategy Assignment MIP – Politecnico di Milano 1. In an industry where profitable firms are scarce, Emirates has delivered solid growth and solid financial performance for years. Why? What is behind Emirates’ success? Ṝecently, on May 20th 2014, the Air French – KLM announced their results showing record losses. The strategy of alliance between two struggling airlines is yet to prove its success. Meanwhile, in a complete contrast, The Emirates Airlines have passed a massive order of 32 Airbus 380 super jumbo jets at the Berlin Air show 2010. Today, Emirates has a total of 140 orders for the Airbus 38010 and is the largest operator of A380 crafts around the …show more content…
Twice a day, once from 12 a.m.–2 a.m. and again from 6 a.m. – 8 a.m., a spike of passengers deplaned from points west for a two-hour window to connect to their east-bound flights. These spikes strained the airport’s capacity, but they were essential to allow connecting passengers the widest possible choice of connections from points east to west13. Emirates’ growth into new markets produced some additional peak-period hiccups. - Strategic Expansion: The strategic move of placing a planning department to forecast major growth regions and placed orders for the number of new planes it expected to use. Once the planes were confirmed, the planning team examined the overall fleet, the available craft currently in use, and how many planes remained. This base was then used to determine whether to add capacity to existing routes or launch a new route. If case of the former option, Emirates determined whether to add new service to an existing route or to swap out a service’s existing plane with a larger and newer craft. Emirates relied on only three types of aircraft, because of which planes could be deployed onto existing routes to supply much more easily to match the demand. - Strategic Alliances with Manufacturer: Existing plane models with Emirates in the end of 20th century, could only fly distances of up to 14 hours, due to which they were not able to connect to the key potential
* Complete all housing design and renovation projects no more than 8% over the established baseline cost or schedule
Cost leadership, because the demand of aircrafts requires Bombardier to create more operationally efficient and fuel efficient aircrafts due to the rising level of demand of low cost carriers.
Expanding its travel, catering and freight divisions to protect it from the peaks and troughs of its core airline business.
Dominating the commercial aircraft market for decades, Boeing is considered to be the most highly competitive U.S aerospace industry. “U.S. firms manufacture a wide variety of products for civil and defense purposes and, in 2010, the value of aerospace industry shipments was estimated at $171 billion, of which civil aircraft and aircraft parts accounted for over half of all U.S. aerospace shipments. The U.S. aerospace industry exported nearly $78 billion in products in 2010, of which $67 billion (or 86% of total exports) were civil aircraft, engines, equipment, and parts” (Harrison, 2011). However, its position of influence has lessened in recent years. This is due to its main competitor, Airbus, who in recent years has made significant
Production Capacity always limited in this business. A backlog could drive potential customers to Airbus.
Soon enough the problem resulted in less and less airplanes in the sky flying and how were people supposed to get around
To attain competitive gain, organisations can differentiate their merchandise and services from their competitors they can also choose to lower their costs in order to compete with other contenders. By aiming their produces to a wide-ranging target, they are essentially covering most of the marketplace or if they choose, they can decide to concentrate on a narrower target within the market (Lynch 2003). While doing so may reduce their market range it essentially reduces their other competitors. Porter stated that there are three generic strategies that an organisation can follow to achieve competitive gain over other organisations. These are:
The fourth step into the creation of executable strategies relies in the alignment of resources, purposes, and strategical thinking contemplations into reality. The rationale of this step is to create
• Expand their service area in order to satisfy demand. People Express originally only had one small terminal for their use, in order to keep costs down. Now, the airline was growing and would have to make accommodations to serve a much larger population and provide a larger selection of routes. For example, the case states that:
* To achieve organizational growth in terms of profits, passenger number, source market and destination portfolios
Even though it may not reduce cost as much, advance technology does improve Emirates operations. After much innovations of 21st century technology, Emirates establish its first A380 airbus fleet in 2010 and still expanding. Not only it accommodate a huge number of passengers, the plane, but it also uses Biofuel and quieter noise volume with thrust reversal engines, giving its passengers great flight experience.
Airbus predicts that there would be demand for more than 1500 super jumbos over the next 20 years that would generate sales in excess of $350 billion. And they could sell as many as 750 over jumbos over the next 20 years with a break even on undiscounted cash flow basis with the sales of only 250 planes. There is a huge profit in this business if Airbus succeeds in the industrial launch of A3XX jumbo jets.
Competing through alliances in the airline industry: The AIR FRANCE- KLM/DELTA AIR LINES JOINT VENTURE
The success of Emirates can be attributed through a combination of marketing mix which emphasize on excellent customer service, product and equipment. In addition, Emirates is known for its commitment to the highest standards of quality in every aspect of their business, providing premium service be it in first, business or economy class. We will look into a few P’s of the marketing mix that Emirates currently employ to become one of the most profitable
Accordingly, the corporation can capitalize either to buy over any of the existing airways or transfer a section of its fleet to the budget jetliners. In this context, the rear one is preferable to distribute the available resources. Ultimately, it must manipulate and screen the execution of the scheme.