University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Competitive advantage in the airline industry
The airline industry has grown tremendously over the last few years. In the past, there were very few airlines operating across the world. However, today there is a great development in the industry. The growth of the airline market has led to a lot of competition amongst the stakeholders. The development of an effective strategy is believed to be the only solution to overcome this competition. The success of any airline currently is dependent on the suitability of the adopted strategy. A good example is the Emirates Airline which has recorded the highest growth rate over the other airlines in the world. The growth of Emirates Airline has caught the concern of the other competitors in the airline industry. The secret behind the success is linked with the form of strategies it has employed over past few years. For example, Emirates Airline has the best marketing strategy that has led to strong brand awareness worldwide. The organization has continued to market itself by offering cheap air ticket to its customers. The use of corporate social responsibility has also been attributed to its success. The airline has been concerned with sponsorship of many sports activities and other activities which concern the society as a means of marketing itself to the potential customers. The leadership mechanism and its services to its client are very important for its success.
Emirate Airline would not succeed without the right leadership. Strong managerial skill is very important for the success of any organization. This is because for an organization to make fulfill its objectives, it has to rely on its employees. If an organization can retain employees, that organization can attain competitive advantage over its rivals in the industry. The staffs at Emirate airline are very influential, therefore attracting more customers. The management is responsible for formulating policies that are going to guide the organization to achieve its mission and vision. The management is responsible for managing the human resources together with other resources of the organization to ensure optimal utilization of scarce resources. The human capital is very important for the success of any organization. Therefore, they must be treated very well and with the dignity they deserve. Resource should be utilized efficiently to avoid wastage. The leadership factor can be seen as the contributing to the success of Emirate Airline. The reason to the Emirates success has been the continuity of its management team. The top management of the company is a group of the most talented executive with a proven track record in their respective fields of expertise. Under the leadership of the current chief executive; Emirates Airline has grown from a regional to an international market, which started with leasing aircraft that operated in only three destinations. Today, Emirates is an international airline with a fleet of more than 100 aircrafts with destinations all over the world. In addition, it has the fastest, growing intercontinental carrier (Ahmed, 2012).
The marketing strategy is another contributing factor to the success of this airline. For example on their website there is a picture of famous footballer Cristiano waiting to board, implying that means the airline is the best choice for celebrities. This is another way which enables the airline to gain competitive advantage. Different people are swayed differently by such advert. It is worth noting that such adverts sway people’s believes, making it possible for the airline to acquire more customers. Its competitors have been worried by the latest growth being witnessed. The marketing plan of the organization is very important for the future business of the entity. This plan is responsible for selling out the company products and services. If the strategy is effective, it will lead to an influx of more customers day by day. The marketing plan used by Emirates Airline is very comprehensive to ensure that the market is captured well. The first strategy is to analyze the working environment. The analyses would help the organization to understand the external and internal factors that influence the activities of the entity. The external factors are the factors outside the organization. Therefore, the organization does not have control over them. Internal factors, on the other hand are those factors within the organization that it can control.
The location of the airline provides it with some unique feature. Emirates Airline has its operations in Dubai city. The culture of the people at that city influences the functioning of the airline. The city has a large population providing the airline with a lot of passengers and cargo services. The culture of Dubai city is open which makes it easy to connect to different parts of the world. As a marketing strategy it is important to understand the culture where the business is operating.
Before the commencement of any air travel, negotiation agreement has to be signed between different countries. There are rules and regulation which govern the aviation facility and the operation of the airline. Emirate Airline enjoys unprotected market. The implementation of open sky policy has helped the airline to increase business and change into a carrier. This is one of the factors which have helped it to be much competitive over the other airlines in the airline industry. When the rules and regulation in the industry are favorable, it promotes growth and sustainability. Emirates Airline has been able to take full advantage of functioning in the international market, therefore, connection to more destinations.
The economic strategy is another aspect that helps the organization to be more competitive in the market. The economic condition has a great impact in the airline industry. For instance, the growth of the Emirate Airline has taken place in Dubai, a town widely known for its economic viability. The airline has chosen a strong and powerful economy, therefore being able to compete fairly with other airlines in the industry (Saxena & Gupta, 2012). At times, it faces economic challenges which lead to a reduced number of passengers. During these times Emirates Airline has to alter its economic strategy to cope with economic crisis. Proper policy will help cut down cost to avoid wastage. A low cost strategy will help the airline to compete with other rival airline. There has been great advancement in technology, which has resulted to success in the airline industry. There is a great need to embrace technology to cut down cost and reduce time wastage. The Emirates Airline has full knowledge about technology and has invested heavily on it. This strategy has helped them improve on their service to customers. The airline understood that a proper utilization of technology would help them gain a competitive advantage over the other airline through provision of best services to the passengers (Desai et.al., 2012)
The reputation of an organization plays a great role in determining its market share. For an organization to gain a competitive advantage its brand image is very important. The differentiation strategy of an organization aim at the ability of the airline to provide the best services and valuable product that is relatively rare to find in the other rival airlines. The best customer services, proper utilization of technology, creation of unique products and exceptional features are the main sources of competitive advantage for an airline. Emirates Airline has worked hard to ensure that its reputation in the market is always above the other airlines. The organization values their customers very much. It has received numerous awards for being the best in customer service. The staffs and the customers maintain a very healthy relationship, which lead to the satisfaction of their clients (Cole, 2013).
The identification of a market niche is another strategy of maintaining a competitive advantage. This strategy allows an organization to concentrate on a particular part of the market. When an entity concentrates on a particular market segment, it expects maximum return from that segment, and does it best to satisfy the demands of the participants in the market. The method applied here is the low cost strategy, which means that the organization incurs the list cost while generating more revenue. If the airline concentrates on a specific market gap it will be able to minimize on the cost incurred when operations are diversified (Roy, 2012). For example, Emirates Airline has concentrated its operation airlifting of customers and cargo services. The activity has helped the Airline to concentrate on service delivery to the customers. In addition, the airline has been able to reduce fare charges, making them cheaper than those of other airlines in the industry. The lowest fare for air transport has enabled the airline to win the loyalty of customers, thus strengthening its brand image. Despite high competition in the airline industry Emirates Airline has continued to maintain the lowest price for a number of years (Barbajee, 2013).
For an organization to be competitive in the industry it has to formulate the competitive strategies. The development in technology, economic growth and globalization are some of the reasons why many airlines have been coming up in the recent past. When competition is increasing day by day, it becomes important for the airline to use a mix of strategies so that it can face competition. The Emirates Airline is now a known brand. For a company to remain competitive it keeps on changing its strategies in order to keep up to the competition in the airline industry (Startton, 2012).
If a company has shown consistency is service delivery following factors which are known with certainty, the company can be said to have a competitive advantage. The positioning of any organization in the market is determined by its customers. The customers to the Emirates Airline are the passengers who use the airline for travelling. The customers have test for different services which are offered by the organization. The information received from the customers is very important for the company future. Proper use of the information obtained from customers can lead to improved services (Squalli, 2014). An organization which values customer information is likely to succeed in its operation. The service delivery to the clients plays a crucial role in building the reputation of the company in the industry. Emirates Airline has been awarded for being the best in customer services over the years (O’Connell, 2011).
It is true that for any organization to succeed in its operation; sustainable strategies are very important. The strategy adopted should give the organization more benefits than any other organization in the same industry. The airline industry has a lot of competition all over the world. Investment in infrastructure development can help to reduce competition in a number of ways. Providing the staff with all the required facilities will increase motivation hence they will work hard towards the achievement of the organization’s goals. When the staff is motivated enough, they will be able to serve passengers well. Excellence in delivery of services has a great influence on the priorities of consumers or the passengers (Heracleous & Wirtz, 2012).
Emirate Airline has gained a lot of publicity across the world. The company has been able to gain a large portion of the market because of the strategies it has formulated in the past few years. The significant size of the company has also contributed to the competitive advantage of the airline. The company has succeeded in attracting royal customers. Therefore, it has been able to earn profit for many consecutive years. The company is dominated by wealthy shareholders; hence it has gained a competitive edge over its competitors thus emerged as a model firm CITATION Joc12 l 1033 (Wirtz, 2012).
From the discussion, it can be noted that for an organization to succeed in a particular industry, it is important position itself in the industry. Proper utilization of distinct qualities can make a company gain a competitive advantage over other organizations. Apart from the strategies formulated by the organization, other management strategies adopted by the organization play a great part in the development of the organization. The strategies which have been formulated and implemented by Emirates Airline have assisted the company to succeed in a competitive market and maintain the top position in the airline industry. The leadership style and the strategies which the company has adopted for many years have enabled the organization to maintain its position despite economic challenges. The adoption of corporate strategy by Emirate Airline has proved to be a solution for the company in the times of economic recession. Every market has its own challenges that affect market players. Therefore, organizations should prepare in advance for the unforeseen challenges. This strategy is aimed to help the company to stand in every situation. The strategy Emirates Airline has adopted in the past has proved to be the biggest milestone for the organization.
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