Include all internal and external analysis

1. Tina Sepehrifar
Ebrahim Alavi

2. • Financial Report
• Environmental Analysis
PESTEL Analysis
 Porter’s 5 Forces
• Inside Organizational Analysis
 The McKinsey 7S
 BCG Matrix
Porter’s Value Chain
• SWOT
• References
• Introduction
 History
 Today’s Situation
 Vision
 Mission
 Goals
 Volunteer activities
• Strategy
• Products
• M&A
Table of Context

3. 1959
• Dnata is established by the Dubai Government with just five staff to provide ground
handling services at the new Dubai International Airport.
1960
• Sheikh Rashid bin Saeed Al Maktoum opens the airport and implements innovative open-
skies policy.
1984
• Sheikh Mohammed bin Rashid Al Maktoum and Mr. Flanagan discuss launching an airline
in Dubai.
Introduction
- History

4. 1985
• Sheikh Mohammed introduces Mr. Flanagan to his uncle and future Emirates chairman
Sheikh Ahmed bin Saeed Al Maktoum.
• Mr. Flanagan embarks on ambitious mission to launch an airline with $10 million in five
months.
• Pakistan International Airlines agrees to wet-lease Emirates two aircraft.
• On October 25 Flight EK600 departs Dubai International for Karachi.
1987
• Deals are struck to fly into London’s Gatwick Airport, as well as Istanbul, Frankfurt and
Male, the capital of the Maldives.
1988
• Damascus is added to the Emirates route network, giving it a total 12 destinations in just 38
months of business.
Introduction
- History

5. 1991
• Emirates finally get a slot at the busiest international hub in the world – London Heathrow.
• As the airline celebrates its sixth anniversary, 25,000 passengers a week are being flown to
23 destinations.
• 1992
• Emirates becomes the first airline to install video systems in all seats in all classes
throughout its fleet.
• $2 million terminal exclusive to Emirates is opened at Dubai International.
• 1995
• As the airline celebrates its 10th birthday, it has a fleet flying to 34 locations in the Middle
East, Far East and Europe.
• Emirates Flight Training Centre opens.
Introduction
- History

6. 1999
• Emirates enters the hotel property market with the opening of the Al Maha
Desert Resort & Spa.
• Emirates Group’s workforce totals 11,000.
2003
• CAE and Emirates join forces to open the $100 million Emirates Aviation
Training Centre which boasts numerous full-flight simulators.
• Emirates shocks the industry at the Paris Air Show with the biggest deal in
civil aviation history - a staggering order for 71 aircraft at a cost of $19
billion.
• The A340-500 features revolutionary ice in-flight entertainment system –
including 500 channels in all classes, while every seat is equipped with a
phone.
Introduction
- History

7. 2005
• Emirates Group workforce totals 25,000 people from 124 destinations
around the world, making it Dubai’s biggest employer.
• Emirates orders 42 Boeing 777s in a deal worth $9.7 billion, the largest
Boeing 777 order in history.
2010
• Emirates SkyCargo operates the first paperless flight between Mauritius and
Dubai with all shipments carried processed electronically.
• dnata becomes the 4th largest catering provider worldwide.
2012
• Emirates joins Boeing in Seattle to celebrate the unveiling of its 1,000th 777.
The landmark aircraft becomes the 102nd to join Emirates’ Boeing 777 fleet.
Introduction
- History

8. • Emirates flies to more than 130 destinations in 70 countries on six continents
• More than 1,200 emirates flights depart Dubai each week, accounting for about
40 percent of all air traffic out of Dubai international airport.
Today’s Situation

9. • They now have a fleet of more than 170 aircraft. the company has
another 230 aircraft on order (worth about $84 billion) and is the world’s
largest operator of both the airbus 380 and Boeing 777.
Today’s Situation

10. Mission Statement
• We exist to become one of the top lifestyle brands in the world.
Vision Statement
• To make civil aviation safe, leading and sustainable.
Goal
• To reach on top by excelling at what we do.
Introduction
- Mission, Vision, Goals

11. • The Emirates Airline Foundation’s board of directors, made of Emirates
Group management, decides on what projects to target.
• Most of these projects are located at Emirates’ destinations where local
Emirates staff volunteers can participate and oversee their management.
• The foundation’s list of projects includes:
 The Emirates Friendship Hospital Ship, Bangladesh
 The Emirates-CHES Home, Chennai, India
 Supporting children with special needs, Dubai
 Kharja Charitable Society, Jordan
Introduction
- Volunteer activities

12. Introduction
- Business Model

13. • Differentiation Strategy
• Quality Control strategy
• Extensive Aviation Training strategy
• International Airline Information Technology Development Strategy
• Resort, Hotel and Tourism Strategy
Emirates Airlines Strategies:

14. One year of Action plan
Months Descriptions Department
responsible
Completion
expectation
January R&D of designing all
cabins
Design &
engineering
department
1 until 29 January
2011
February Improve the media
system in the first
class cabin such as
SMS, phone and e-
mail
IT department 1 until 15 February
2011
March R&D of buy or lease
of new aircrafts
Engineering &
purchase
department
1 until 30 March
2011
April Doing
advertisements to
introduce the
benefits that
customers can get of
flying in Emirates
Marketing
department
1 until 7 April 2011
May Update airport
system and
entertainment
system in flight
IT department 1 until 20 May 2011

15. One year of Action plan
Months Descriptions Department
responsible
Completion
expectation
June Training 50 crew to
improve their
performance
Human resource
department
1 until 25 June 2011
July Advertisements
campaign to promote
how easy to visa
pass to enter Dubai
if using Emirates
airline
Marketing
department
1 until 29 July 2011
August Checking out of
facilities pricing
Marketing
department
1until 27 August
2011
September Maintenance for 30
aircrafts
Engineering
department
1 until 30 September
2011
October Evaluating the sales
performance
Financial department 1 until 20 October
2011
November Secure the process
of e-buying
IT department 1 until 29 November
2011
December Set new promotions
strategies for 2012
Telecom department 1 until 15 December
2011

16. • Master the art of me-time
• Savour gourmet meals whenever
you please
• Reawaken your senses in the
onboard Shower Spa
• Meet the world at 40,000ft
• Your window into new worlds
• Experience a seamless journey
from start to finish
• Feel pampered in First Class
Products: First Class Flights

18. • Arrive inspired
• Taste your way around the world
• Meet the world at 40,000ft
• Your window into new worlds
• Experience a seamless journey
from start to finish
• Enjoy extra comforts on your
journey
Products: Business Class Flights

19. • Experience a journey in a class
of its own
• Taste the flavors of your
destination
• Your window into new worlds
• Boredom is grounded
Products: Economy Class Flights

20. • Emirates SkyCargo is a cargo airline based
in Dubai, United Arab Emirates. It is the air
freight division of Emirates, which started
operations in October 1985, the same year
Emirates was formed. Since then it has
been the main cargo division of Emirates,
and the anchor cargo airline at Al Maktoum
International Airport, its main hub.
Emirates. SkyCargo operates dedicated
cargo flights to 20 destinations in
15countries from Al Maktoum International
Airport, and through the Emirates
network has access to additional 79
destinations.
Products: Sky Cargo

21. • Passengers may check-in between 2 to 48 hours prior to flight departure.
This may be done over the counter of at the lounge within the airport.
Self-service kiosks are also available at Dubai International Airport, as
well as at certain stations of the Dubai Metro.
Products: Airport Services

22. • Recently Emirates started a new service called “Emirates Holiday”. It is a
new way to inspire holiday - fascinating destinations, unique hotels and
all the little things that come together to create unforgettable moments for
a family.
Products: Emirates Holiday

23. • Emirates Skywards is a frequent flyer program that lets you accumulate
points in different ways and it also enhances your travel experience with
a wide range of services and benefits.
• Emirates Skywards Blue
• Emirates Skywards Silver
• Emirates Skywards Gold
• Emirates Skywards Platinum
Emirates Skywards Frequent Flyer
Program

25. • Entertainment
 Music & Radio
 Movie
 TV
 Games
• Information:
 Airshow
 News and sport headlines
 Onboard cameras
• Communication:
 Stay connected
 Wi-Fi in the sky
 In-seat phone, SMS and email
 Mobile phone and data roaming
 Seat-to-seat messaging
Inflight Entertainment: ICE

26. ICETV Live: real time news and sport
• Watch the news or cheer on your team – up to eight channels of live TV
on select Boeing 777s
 Sport 24
 BBC World News
 Sky News Arabia
 CNN International
 CNBC
 NHK World Premium
 Euro news
 Al Jazeera English
Inflight Entertainment: ICE

27. M&A
Emirates is currently not a member of any of the three global airline
alliances – Oneworld, SkyTeam and Star Alliance. In 2000, however, the
carrier briefly considered joining Star Alliance, but opted to remain
independent of the three alliances.

28. Financial Report:Revenue
42.5 42.5
52.9
61.5
71.2
87.8
96.5
0.0
20.0
40.0
60.0
80.0
100.0
120.0
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Revenue in billion AED

29. Financial Report:Passengers
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Number of Passengers in millions

30. Financial Report:Market Share

31. Outside
Organizational
Analysis
PESTEL
Porter’s Five
Forces

32. PESTEL Analysis

33. • Emirates airline is owned by Dubai’s government which this will help it to
follow the regulations of government.
• Emirates has signed the agreements with countries in Asian Pacific also
other countries about facilitate trade. These agreements have opened up
Emirates to the world.
• Wars and terrorism could affect the company negatively.
• Deregulation and “Open Skies”
PESTEL Analysis-Political

34. • Fluctuations in the fuel prices creates hurdles for the company to
generate more profits. More than 40 percent of all expenses are related
to jet fuel.
• The potential investments in Dubai of the tourism industry and the
business world will encourage more people to visit it.
• Economic conditions around the world, specially the countries where the
airline flies, could affect the company.
• The Dirham is pegged to the U.S. dollar so currency fluctuations are not
significant.
PESTEL Analysis-Economical

35. • There is rapidly increasing world population and in this way increasing in
number of tourist and educated people.
• The company has maintained its social and cultural diversity by offering
its airline services to various societies, religions and traditions who are all
interacting at one place. The company’s workforces also try to adapt
itself according to the social/cultural environment they operate in.
PESTEL Analysis-Social

36. • teleconferencing decreased the need of physical and face to face business
meetings which directly affects on the sale of the company and decreased
the passengers.
• A development in technology will help the company to improve aircrafts
facilities and fuel in order to reduce the environmental impact of the Emirates
operations.
• Emirates develop the online ticket purchase to make it conveniences for
customers.
• Technology has also brought inflight entertainment services to a higher level.
• Technology has made inflight communication services possible.
• in august 2013, emirates became the first airline in the Middle east to
provide Google now cards for their passengers who book via emirates.com.
PESTEL Analysis-Technological

37. • Airbus 380 aircraft is friendly with environment. This kind of aircraft able
to consume less of fuel and emissions.
• Natural disasters like earthquakes and volcanic eruptions are a threat to
this business
PESTEL Analysis-Environmental

38. • Department of International Government Affairs, preparing the ground
work for conducting negotiations for Air Service Agreements, by
establishing links with other states and provides a necessary platform for
the successful implementation, of an International Air Transport System.
The department also serves as a point of contact for international and
national aviation authorities and looks after aero-political rights of Dubai.
• Dubai is one of the fastest-growing countries in the world because
thousands of people migrate to Dubai monthly, often because there is no
tax on the personal wages in Dubai.
• The government of Dubai treats Emirates as a wholly independent
business entity on its own and attributes this to the firm’s success.
PESTEL Analysis-Legal

39. Porter’s Five Forces

40. • In airline industry threats are low as comparatively barriers are high.
Some challenges under below due to new entrants..
 the existence of barriers to entry (patents, rights, etc.):- national carrier(hence
enjoying many benefits)
 brand equity:- renowned player, markets heavily, old in industry, very high
brand value
 Capital requirements: - part of emirates group, so capital is not an issue.
 Access to distribution: - very accessible, has its own terminal & direct metro &
busses.
 Customer loyalty to established brands: has a program like skywards &
frequent flyer miles.
Porter’s Five Forces:
Threats of New Entrants

41.  Supplier switching costs relative to firm switching costs: - very high (only 2
suppliers)
 Presence of substitute inputs: - a lot of substitutes are present for suppliers as
there are over a hundred airlines currently operating & most of them are
planning for expansions.
Porter’s Five Forces:
Bargaining Power of Suppliers

42.  Buyer switching costs relative to firm switching costs: easier to switch between airlines as
people might find competitive schemes & offers or cheaper tickets or better services with
other service providers.
 Number of flights to a particular destination, e.g. only emirates operates direct flights to San
Francisco from Dubai, hence has competitive edge. As no other carrier has a direct flight on
this route.
 Buyer price sensitivity: - difficult to compete with competitive prices of budget carriers, but
emirates compensates it by offering world class food, services, comfort & in-flight
entertainment.
 Differential advantage of industry products: - A380 aircrafts, world class service, choices of
menu for elite class, its own private terminal, non-stop direct flights to various routes some of
them world’s longest non-stop direct flights.
Porter’s Five Forces:
Bargaining Power of Buyers

43. Porter’s Five Forces:
Bargaining Power of Buyers

44.  Buyer propensity to substitute: - very high as there are two types of players in
market, budget & luxury. This leads to a huge price difference. So a lot of
people prefer going for cheaper tickets for short distance flights. Hence
emirates looses business.
 Relative price performance of substitutes:- Huge price differences due to
services offered, but in luxury segments Emirates leads the market.
 perceived level of product differentiation:- in case of emirates the perceived
value is fairly good due to new aircrafts, courteous crew which provides
personalized services, gourmet food with at least 4 meal choices for business
class & above, its own world class new private terminal to fly from, fleet of
new latest technology aircrafts.
Porter’s Five Forces:
Threat of a Substitute Products or Services

45.  Number of competitors:- 37 airlines fly from & to Dubai
 Rate of industry growth: - Middle East showed the strongest growth at 11
percent in the last decade.
 diversity of competitors: domestic flyers & global flyers
 Sustainable competitive advantage through continuous improvisation:- new
services like onboard Spas, fully reclining seats, live TV.
Porter’s Five Forces:
Rivalry amongst existing firms

46. Porter’s Five Forces:
Forces Impact
Threats of New Entrants low
Bargaining Power of Suppliers High
Bargaining Power of Buyers Maderate
Threat of a Substitute Products or Services Maderate
Rivalry amongst existing firms Maderate

47. Inside
Organizational
Analysis
7s Mckinsey
BCG Matrix
Porter’s Value Chain

48. 7s Mckinsey

49. 7s Mckinsey
Strategy:
 Emirates Airlines has been considered to be at the forefront of industrial
aviation throughout the years. Having flights to more than different cities all
over the world, Emirates Airlines corporate strategy gives importance with the
diversity of their stakeholders, specifically with their clients. As the company is
committed with the diversity of their clients, the diversification management
approach of the company enables them to ensure that clients and
communities receive excellent service provided by passionate and dedicated
staffs and employees. The success of Emirates Airline is also attributing to the
generic strategies which include focus-leadership strategy. It can be said that
the strategy of Emirates Airlines is a good strategy and it enables the
company to provide total commitment and support organizational operations.

50. 7s Mckinsey
Style:
 The competitive advantage and position of Emirates can be attributed by their
leaders. The leadership style of "family style". It can be said that they are able
to integrate patience as well as their will to attain consensus with the
capability to act quickly and decisively. Emirates leader can be considered as
an influential and democratic kind of leader. It is known the leadership
composes the aptitude and skills to inspire as well as influence the behaviour
and the thinking of the people or the subordinates.Emirates leader looked for
final decisions made by the other members of the corporation especially the
shareholders.

51. 7s Mckinsey
Structure:

52. 7s Mckinsey
Shared Value
 They believe their business ethics are the foundation on which their success
has been built. Caring for employees and stakeholders, as well as the
environment and the communities , have played a huge part in their past and
will continue to shape their future.
Staff:
 remuneration packages are offered based on the labor law of each country
and are benchmarked with other reputed airlines. Emirates provides a Profit
Share to all eligible staff based on company performance which has ranged
from between 2 and 14 weeks of basic salary. All eligible staff can avail
concessional airline rebated tickets for self and family.

53. 7s Mckinsey
System:
 The most important issue in Emirates system is their IT solution. Being an
international company resulted in needing a high qualified IT system to
manage and control all the branches’ performance.
Skills:
 Emirates has a training center named “Emirates Aviation University” which
has helped the company to acquire new skilled employees. They also have a
in-house training center for training and development of the employees.

54. BCG Matrix
Emirates Business Class
Emirates First Class
Emirates Economy Class
Emirates SkyCargo
Emirates Holidays

55. Porter’s Value Chain

56. Porter’s Value Chain
Support Activities
Firm’s Infrastructure  Vertical hierarchy
 Government financial support
 Department of International Government Affairs legal support
 Free tax by Dubai international airport
 Standardized aircrafts
HR Management  Emirates Aviation College
 Rewards based on performance program
 Accommodation and transport allowance
Technology Development  Inflight Entertainments (ICE)
 In-house research center
 Engineering center
 New Technologies in SkyCargo
 Online reservation system
Procurement  Emirates catering system
 Fuel Handling

57. Porter’s Value Chain
Primary Activities
Inbound Logistics  Exclusive Emirates terminal for fuel storage
 Organized catering system
Operation  Check in
 Service Desk
 Boarding and lounge services
 Baggage and handling
Outbound Logistics  SkyCargo
Marketing & Sales  Official Sponsorship
 Slogans like “Fly Emirates”, “Hello tomorrow”, “keep
Discovering
 Awards achieving
 Pricing strategy
Services  Skyward
 Emirates Lounges
 Emirates hotels & resorts
 ICE

58. SWOT Analysis

59. SWOT Analysis- Strengths
 Having strategic position in the global market.
 Huge profits from several consecutive years
 The ability to continuously renew and improve their service in the airline and
aviation with strong support of Dubai government.
 Customer loyalty program
 Skilled workforce

60. SWOT Analysis- Weaknesses
• Analysts have accused the company of focusing too much on their high-end
acquisitions and diversification in spite of the risky effects of such decisions.
• No global international alliance
• Fares are higher than other international airlines

61. SWOT Analysis- Opportunities
 Emirates have ability to develop continuously new generations of more advanced
airline and aviation services for long-term competitiveness.
 The important contributing factor to Emirates’ success, and a huge opportunity
for future growth, is Dubai’s very suitable location.
 The UAE’s government has been a successful in negotiating free-trade
agreements with all major economies from the USA to the emerging markets of
Asia (though not with a reluctant EU), which are very likely to further increase
demand for air travel to and from the UAE.

62. SWOT Analysis- Threats
 The competitors have the very aggressive growth plans of some other Gulf-
based carriers, most notably of Qatar Airways and Etihad Airways, that might
pose the most serious future threat to Emirates.
 Qatar Airways’ catch-up strategy with Emirates seems to rely largely on undercutting its
competitor while offering similar product quality.
 Etihad’s expansion might prevent Emirates from obtaining much needed traffic rights to
countries that do not pursue an open-skies policy.
 Fluctuations in the fuel prices creates hurdles for the company to generate more
profits
 Wars and Terrorism in Middle East.

63. • The long-haul, low cost carrier strategy.
• Differentiation.
• Horizontal Diversification.
Emirates Airlines Strategies

64. • Emirates' unit operating cost is about 40% lower than the lowest cost
European major, KLM. It derives its cost advantage from:
I. Its business model is focused purely on long-haul aircraft
II. The zero tax rate in Dubai
III. It has not acquired legacy costs 4. It is a dollar-based carrie
Emirates' strategy is unique in that it plans to serve the connecting
market with just long-haul aircraft, whereas most hubs in Europe and the
US have an expensive short-haul network (generally competing against
LCCs) feeding into a hub.
Emirates Airlines Strategies –
The long-haul, low cost carrier strategy

65. • Emirates is differentiated as a legacy airline where advanced technology,
staff skills and ancillary services are the main drivers for success.
Therefore, Emirates is aware of the need for continuous innovations, not
only in fleet and staff expansion but also in premium services. Emirates
has been renowned for technology development and skilled staff of multi-
culture backgrounds
Emirates Airlines Strategies –
Differentiation

66. • Although less well known than the airline, DNATA is a diversified,
multinational force of its own. DNATA Airport Operations takes care of
baggage and cargo handling at 17 airports in seven countries - the
Emirates, Singapore, the Philippines, China, Switzerland, Pakistan and
Australia. DNATA Travel Services, meanwhile, handles ticketing and
travel bookings for individuals and corporations at dozens of locations in
the GCC, and recently opened an office in Kabul.
• Over the years, the airline has also diversified into hotels, a natural
synergy with its airline and holidays divisions. It controls the Le Meridien
Al Aqah in Fujairah, and the small but growing Premier Inn Hotels chain
in the UAE. New projects include other hotels and resorts in Dubai,
Australia and the Seychelles.
• They have also diversified their business into “Education” through
building Professional Aviation Universities.
Emirates Airlines Strategies –
Horizontal Diversification

67. • Generate Growth Through Innovation.
• Enhance Customer Experience.
• Create Operational Excellence.
Strategy Themes

68. BSC Map

69. • Critical Success Factor (CSF)
• Key Performance Indicators (KPI)
Control and Monitoring

70. • This is vital for a capital-intensive industry such as airlines It is critical
that good managers can run operation costs at minimum level to
increase highest profits. To balance total operation costs, the
management must solve the problem on cost cutting in process to keep
profitability
Critical Success Factors (CSF) –
Cost competitiveness:

71. • Emirates is well-established with strong network alliances over
international destinations. On the other hand, Emirates has continuously
invested in its fleet and enjoyed high profitability (refer to Appendix 4).
This means the company is able to increase capacity while still able to
maintain fixed costs compared with other players. Emirates can have
access to global markets with greater geographical coverage. Thus, this
creates a high barrier to other entrants due to high costs and scope of
business.
Critical Success Factors (CSF) –
Economies of Scale:

72. • Emirates has built up its brand and image significantly within the last two
decades. Morecustomers have become loyal and chosen Emirates when
travelling from the Middle Eastand Europe or NZ (Stanik et al, 2007)
because of high quality, product innovation and excellent service.
Critical Success Factors (CSF) –
Brand loyalty and product quality:

73. Key Performance Indicators (KPI) –
Revenue growth (Sale KPI):
42.5 42.5
52.9
61.5
71.2
87.8
96.5
0.0
20.0
40.0
60.0
80.0
100.0
120.0
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Revenue in billion AED

74. Key Performance Indicators (KPI) –
Market share (Marketing KPI):
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Number of Passengers in millions

75. Key Performance Indicators (KPI) –
Ground Operation KPIs:

76. References
 Strategic Management; Concepts and Cases; Fifteenth Edition; Fred R. David;
Forest R. David
 http://www.emirates.com
 http://www.skycargo.com
 www.dnata.com
 www.emiratesholidays.com

77. Thank You!