Emirates Airline Harvard Case Solution & Analysis

Porter’s 5 forces models

            Porter’s 5 forces model is very important for any company analyzing their competition in the industry and also their business strategy development.

Bargaining Power of Suppliers

            The main suppliers of the Emirates are Airbus and Boeing companies. The power of suppliers is dominated by Airbus and Boeing in the airline industry. The competition between the giants of the airline manufacturer is very high, but for Emirates the best supplier would be the one who provides the best products in the best prices. The study shows that Emirates own aircraft from both Airbus and Boeing.The changing oil prices also put negative effects on Emirates. Thus, the bargaining power of suppliers is high.

Bargaining Power of Buyers

            Emirates is popular for its services and facilities provided. The fares vary according to the services provided and the routes also. The customers of Emirates doesn’t bargain much on the prices or fares. Emirates is not a very budget airline and is one of the luxurious airlines. The buyers of Emirates do not take part in bargaining over the prices of fares and also lowering it down. Travel survey concluded that above 60% of the travelers preferred the Emirate Airlines over the other airlines and this survey was conducted in 2008. Whereas, the buyers have a choice to change their airline when their flights are connected and there are many choices for the buyers. Therefore, the bargaining power of buyers is moderate.

Threat of New Entrants

            Heavy investments are required in the aviation industry in the form of capital and infrastructure. The purchasing, renting, owning and maintaining the aircrafts and hangar and it’s also required expensive activities. The industry is also regulated by the IATA, therefore, working with IATA is also not very easy for the new entrants follow it.Moreover, the brand loyalty also plays a role as the customers have gained the trust and prefers Emirates and gaining the market of the Emirates is very difficult. As the new airlines should also have to face difficulty in attracting new customers as there are other giant airlines as well. Therefore, the threat of new entrants is very low for Emirates.

Threat of Substitutes

            The substitutes for travelling by air are travelling by road, rail or sea. It is impossible to travel the long distances via road, sea and rail. The flights are offered by many other airlines such as Cathay, Etihad and Qatar airways, but they are not the direct substitutes of Emirates Airline.Therefore, the threat of substitution is low.

Intensity of Competitive Rivalry

            There are many other airlines working in the aviation industry. The competition between Emirates and other airlines is very high. For instance, if we consider the route from Dubai to Hong Kong there are airlines other than Emirates which are flying on these routes. Whereas, Cathay Pacific is also considered to be well reputed airline and thus, the fares and the services are also very feasible for the travelers. Therefore, intensity of competitive rivalry is high.

Key Success Factors

            Every company has key factors through which it is being differentiated from other companies and also those factors works as a foundation for the company. Similarly, Emirates also has its key factors which took it on the peak of success and through which it is now one of the largest airlines in the world. The following are the key success factors of Emirates Airline,

Differentiation

            The first and the main key factor of the Emirates is the differentiation. Differentiation in the airline companies can be achieved via offering the latest and modern services like the royal treatment, big seats, advancements aircrafts and the online ticketing. In the same way Emirates is different from other airlines, as the services provided in Emirates is up to the standards, the big seats, latest technology in its planes and good management. All these things helps Emirates to differ from other airlines and also helps it to attract new customers.

Strong Brand Name

            The strong brand name is the key success factor for any company. Similarly, Emirate’s brand image is very high, and it has loyal customers from all over the world. The strong brand name of Emirates makes it possible to achieve the sales and profits and also the brand recognition among its customers. It is proved that the companies with strong brand names, gives their customers privilege like Emirates does.

Alliances

            Establishing the alliances with other companies in terms of material, expertise or monetarily, always proves to be a handy practice for the company. In the same way Emirates have also alliances with different companies by sharing the resources via the strong network and also gaining the benefits from the wide range of customer’s network..................................

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