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Transcript of Emirates Air
Vision & Mission
Core Values Agenda Organizational Overview
Organizational Performance (Fiscal Year 2011-2012)
Key points from Porter’s Five Forces
Key Issues (Weaknesses & Threats)
Competitive Advantage (Strengths & Opportunities)
Blue Ocean Strategy
The Future Prospects of the Emirates Group History of Emirates Airlines Emirates Airlines is part of the Emirates Group
Emirates Airline was launched in 1985 with two leased aircraft from a rudimentary airport.
170-plus aircraft in its rapidly expanding fleet
Its fleet is one of the youngest in the skies, with an average age of under 80 months
200-plus aircraft it has on order - $84 Billion at list price
A380 operator, with 20-plus in the air and over 60 still to be delivered.
Emirates flies to more than 120 destinations in over 70 countries
1,200 flights per week across six continents Vision & Mission “Today, the Emirates experience is a bridge between cultures – inviting people to experience all that the world has to offer. In short, a catalyst for their aspirations, hopes, and dreams. To support this, we are moving from a global travel brand to an aspirational, people-driven ‘lifestyle’ brand. Our mission in fact is to become one of the top lifestyle brands in the world.” “Forging a New Path in Customer’s Experience
in Airline Flight Service” Emirates Air
On the Crossroads of Glory and Success Professor: Dr. Prior
Date: April 26th - 2013
By: Christian, Chiyi, Georg, Kiran, Nataphol and Sarah - Chairman & Founder, Sheikh Ahmed Bin Saeed Al Maktoum Core Values Strong and stable leadership team
Ambitious yet calculated decision-making
Business ethics are foundation for success
Caring for employees and stakeholders, environment, and the communities we serve Industry Overview 2007- 2010 unstable oil price scenario and sluggish world trade
Global airline industry is expected to perk up through 2013 on improved passenger traffic and freight volumes
(IATA) projections for this year that shows the industry generating $10.6 billion in profits this year, up from their earlier forecast of $8.4 billion
Net profit margin is expected to be 1.6%, up slightly from the previously estimated 1.3%
profits from the Middle East carriers are expected to grow to $1.4 billion compared with $900 million in 2012 Location of Emirates Airlines on the Life Cycle Curve Internal Capabilities SWOT Analysis of the Emirates Group
Organizational Culture & Adaptability to External Changes
Responding to Demand
The Right Infrastructure for Growth SWOT Organizational Culture & Adaptability to External Changes Internal Capabilities Global route map has grown by nearly 40 percent in the last five years
Emirates network of more than 120 destinations worldwide
New gateways are immediately viable, increasing traffic, trade, and commerce Internal Capabilities Responding to Demand "At the Emirates Group, we place great value on corporate citizenship and social responsibility and believe our business ethics are integral to our continued success" Staff’s commitment towards ongoing improvement combines to maintain the competitive edge of operations in global markets.
Belief on employees as assets
Growing business while using fewer resources and creating less waste and pollution.
Operate one of the youngest and most eco-efficient fleets in the world.
Commitment to the environment Internal Capabilities The Right Infrastructure for Growth Strategic Advantage of geographical location of Dubai as a central hub of operations holds the key to global operations across continents Organizational Performance (Fiscal Year 2011-2012) Metrics Dashboards 24th Consecutive Year in Profit Internal Operation Analysis Significant increases in their operating and employee costs
The Emirates’ employee costs are about 45.7% of the total operating cost External Environment Opportunities, Threats & Trends of Emirates
TOWS Matrix Analysis
Opportunities, Threats & Trends of Emirates Confidence in the outlook for both the global economy and the airline industry has improved during the first quarter of 2013
Airline share prices are up 7% so far this year
Projection for 2013 ---$10.6 Billion TOWS Matrix Analysis Porters 5 Forces Competitive Rivalry • 37 airlines fly from & to Dubai
•Middle East has strongest growth with 11 percent last decade
•Fuel & capital costs Threat of New Entry Old in industry, very high brand value
Very accessible, has its own terminal & direct metro & busses.
In terms of fuel & flight caterings. Power of Suppliers Threat of Substitution Power of Buyer •Bargaining leverage
•Availability of existing substitutes products
•Differential advantage (uniqueness) of industry products •Bargaining leverage
•Buyer price sensitivity •Buyer propensity to substitute
•Relative price performance of substitutes Key Issues (Weaknesses & Threats) To keep sustainable growth
Competition from Low Cost Airlines
High Level of Firm Debts
High Jet Fuel Prices Competitive Advantage
(Strengths & Opportunities) Brand Image & Reputation
Strong Financial Position
First Class I.T. System - Mercator
Forging New Partnerships & Acquisitions
Innovation Strategies & Recommendations Porters 5 Forces Porters 5 Forces Lifestyle Brand
Strategies Lack of Diversification (Global Partnership Strategy)
Competition from Low Cost Carriers (Encirclement & Flanking Strategy):
High Jet Fuel Prices (Leap Frog Strategy):
Geopolitical Instability (Corporate Strategy):
High Firm Debts (Corporate Strategy): Emirates B.O.S Reduce: Operating costs, cost of doing business, debt levels, and exposure to geopolitical disruptions in foreign markets, reduce capital investments in new planes; Eliminate: All old planes that do not meet environmental CO2 standards; and eventually get rid of turbine engines that can only use oil based fuels. Create:
•A new fleet of planes focused on middle class customers.
•Work with redesign new planes with unique features such as: glass sky view for passengers.
•Partner with the UAE government to create a new in house engineering firm focused on testing& developing new turbine engines.
•Develop a new subsidiary company focused on providing cruise ship tourism to new & existing customers in North & South America & partner with Hotel Operators in the Americas.
•Establish tourism centers in Los Angeles & Rio de Janeiro or Sao Paolo. Raise:
•Increase equity capital investments in alternative fuels and new engine design R&D.
•Increase hiring of new aeronautical engineers and research scientists focused on developing new turbine engines that can use alternative fuel sources. BOS BOS Value Canvas Executing BOS Strategy Three Tier Matrix Gap Analysis 1 Gap Analysis II Gap Analysis Questions Thank You Chi-Yi Li, Christian Coleman, Georg Hartmann,
Kiran Khandare, Nataphol Tovichakchaikul, & Sarah Agnetti