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The Emirates Airlines Company’s Analysis

Words: 1918
Paper Type: Essay
Subject: Company Analysis

Introduction

A detailed managerial analysis of Emirates Airlines will be presented in this paper. Emirates Airline is the largest airline in the United Arab Emirates (UAE) and the seventh largest in the world.

The company operates in the global airline industry, where it provides commercial air transportation services. Emirates Airline’s headquarters are located in the UAE (Emirates Airline, 2014). The analysis will focus on the company’s mission, organization, leadership, control processes, and innovative management practices.

Mission

Planning Methodologies

Emirates Airline owes its success to the utilization of the best planning methodologies. The company’s mission is to “deliver the world’s best in-flight experience” (Emirates Airline, 2014). To achieve this mission, the company focuses on effective fleet planning, schedule planning, and marketing planning. Schedule planning is done using econometric models that can accurately forecast the demand for flights (Emirates Airline, 2014).

The forecasts enable the company to allocate enough aircraft to each route to maximize its revenue. The company uses a bottom-up marketing planning methodology. Each subsidiary develops its market plan based on the guidelines provided by the headquarters.

Fleet planning is based on the company’s growth objectives and expected changes in demand. These variables help the planning team to determine the type and number of aircraft that the company needs.

Strategy

Emirates Airline pursues a global strategy that involves joining foreign markets through fixed direct investment (FDI), as well as mergers and acquisitions (Emirates Airline, 2014). In FDI, the company establishes its subsidiaries in overseas markets. Mergers and acquisitions involve merging with or acquiring competitors in various markets.

The company’s competitive strategy is cost leadership. It focuses on maintaining very low operating costs to provide affordable high-quality services. The strategies that the airline uses to reduce costs include using a young fleet of large aircraft to reduce fuel costs (Emirates Airline, 2014).

The company has a lean workforce that enables it to reduce labor costs. The airline also pursues a diversification strategy where it invests in related businesses such as warehousing to improve its revenues.

Industry Analysis

Customers and Competitors

Emirates Airline’s main customers include tourists and business people. Other customers include individuals and organizations that are interested in chartered flights. In the Middle East, the company’s main competitors are Qatar Airways and Etihad Airways. At the global level, the company competes with large airlines such as Lufthansa, Qantas, Air France, and KLM.

Competition

The global airline industry is characterized by high competition. The competition is attributed to high fuel prices and labor costs. Poor economic growth in major markets such as Europe also limits sales potential (Johnson, 2012). This challenge is exacerbated by customers’ sensitivity to price. As a result, consolidation has become the norm as companies seek to improve their market power. Airlines are also forming alliances to expand their route network.

Organizational Structure

Formal Structure

Emirates Airline uses a hierarchical organizational structure with several levels of management. The senior management is supervised by the board of directors, which consists of the chairman and several independent directors (Emirates Airline, 2014).

The positions that report to the CEO include the vice presidents for operations, sales, services, communication, and purchasing. The vice presidents oversee the functions of various departments. There are also informal structures and groups within the company. The informal groups promote teamwork and corporation among employees.

Decision-making Process

Emirates Airline uses a bottom-up decision-making process. The senior management consults line managers and employees on various issues before making decisions. Line managers and employees often articulate the company’s problems and make recommendations to the management. The management studies the recommendations and makes the final decision. The company’s decision-making model is assess-action-manage.

The first step in the model is to assess the situation to determine the causes of a problem and the solutions that can be adopted to solve it (Emirates Airline, 2014). The next step is the implementation of the identified solution. The last step involves managing the decision by documenting and sensitizing the employees on the lessons learned.

Change Management

Change management at the company is often led by the CEO, who creates a sense of urgency for change and builds a guiding coalition to implement it. After gaining the support of influential managers, the CEO creates a vision for change and communicates it to the employees.

The CEO then collaborates with line managers to remove the obstacles that are likely to derail the implementation of the desired change. During the implementation, the managers focus on achieving short-term targets to motivate employees to continue supporting the change process. After achieving the desired change, the managers focus on integrating it into the company’s organizational culture to ensure continuity (Kreitner & Cassidy, 2012).

Literature Review

Founders’ Biographies and their Leadership Styles

The company’s managers use charismatic and transformational leadership. Emirates Airline was founded by Sheikh Mohammed bin Rashid Al Maktoum in 1985. He became the Vice President and Prime Minister of the UAE in 2006. Sheikh Al Maktoum is a graduate of the Bell School of Languages. He is a charismatic leader with over 30 years of experience in civil service.

The company’s CEO is a charismatic leader who uses his positive attitude and excellent communication skills to inspire his followers. He is a graduate of the University of Denver and co-founder of the airline. The CEO has over 25 years of experience in the aviation industry and civil service (Emirates Airline, 2014). Thus, he has expert power that motivates his followers to follow him.

The president of the airline is a transformational leader who provides a clear vision for change and excellence. He has worked for the company since its inception. The president is a graduate of London University and has over 30 years of experience in the aviation industry.

The company’s heroes are its cabin crewmembers who are always committed to providing excellent services to customers. In the last two decades, the company focused on building a team of professional cabin crewmembers who prioritize the interests of the customers in everything that they do. As a result, the company has been able to defend its market share by building strong relationships with its customers.

Motivational Environment

Emirates Airline uses extrinsic and intrinsic rewards to motivate its employees. The extrinsic rewards include incentive plans such as profit-sharing scheme, exchange rate protection scheme, and a professional allowance.

The company also provides non-cash incentives such as annual leave, leave tickets, and education support allowance. The intrinsic rewards include promotions and recognition of employees’ efforts. The rewards motivate the airline’s employees to improve their productivity (Ansoff, 2007).

Effectiveness of Communication

The company has an effective and efficient communication system. All marketing communication activities are “managed by the corporate communication department” (Emirates Airline, 2014). This centralized communication system enables the company to convey consistent marketing messages in all markets to build a strong global brand.

The internal communications unit (ICU) focuses on providing employees with information concerning the company’s policies. The unit uses several communication channels, which include newsletters, emails, leaflets, websites, and fliers to reach as many employees as possible.

Control Processes

Emirates Airline has three types of control systems, namely, feed-forward controls, concurrent controls, and feedback controls. Feed-forward control systems help the company to identify and prevent risks or problems before they occur (Emirates Airline, 2014).

Concurrent controls are used to monitor employees’ performance to facilitate the achievement of work targets. The feedback control systems enable the airline to review information concerning performance variables such as sales to determine the effectiveness of its growth plan.

Financial and Operational Controls

Emirates Airline uses financial audits and budget controls to ensure effective management of its funds. Financial audits are “formal investigations that are conducted regularly to ensure that financial management practices follow accepted procedures and policies” (Ansoff, 2007, p. 96).

The audits are conducted by internal and external auditors to provide a balanced view of the airline’s financial performance. The airline’s budget control policy ensures that revenue targets are met and expenditures are maintained within the set limits.

The company has established operational control systems that facilitate the provision of safe and efficient flight services. The flight’s operations department ensures safety by training the flight crew.

The objective of the training is to ensure that the flight crewmembers possess the right skill set and meet all regulatory requirements to provide safe flights. The operations control center coordinates activities such as flight arrivals and departures, as well as tracking flights to identify and solve problems that might hinder service delivery.

Role of Information Systems

Emirates Airline uses advanced information systems in three areas, namely, customer relationship management, scheduling flights, and marketing. The airline uses online business-to-customer e-commerce platforms such as its website to respond to customers’ inquiries. The flight’s operations department uses advanced web-based software to schedule flights (Emirates Airline, 2014).

The software helps in forecasting demand and coordinating flight arrivals and departures. In marketing, the airline’s management uses an online sales system to track customers’ purchasing behavior. The management uses big data analytics to model consumer behavior to understand customers’ tastes and preferences.

Innovative Managerial Practices

Entrepreneurship

The company encourages entrepreneurship through its culture of innovation. The airline has invested heavily in research and development to achieve both product and process innovation. As a result, its talented workforce can develop new revenue streams that increase profits.

Promotional Materials

The main promotional materials that the airline uses include its sales website, brochures, and fliers (Emirates Airline, 2014). These materials are used to create awareness about the company’s services and brand promise. The sales website is effective due to its interactive interface and attractive layout. The brochures and fliers have clear marketing information that enables the company to convince customers to purchase its services.

Ethical Dilemma

The company’s main ethical dilemma is how to minimize its ecological footprint (Emirates Airline, 2014). In the last decade, the company focused on expanding its feet size aggressively by purchasing several large aircraft. Although the expansion plan will enable the company to serve more customers, it leads to increased pollution of the environment through the emission of greenhouse gasses.

Employee Empowerment and Role of Technology

The airline empowers its employees through training and professional development. The cabin crewmembers usually retire before they reach the age of forty years (Emirates Airline, 2014). This means that they have to look for jobs after leaving the company. As a result, the airline collaborates with ICDL to offer training programs that equip its employees with the skills that they require to get jobs or start their businesses after leaving the company.

Advanced information and communication technologies enable the airline to provide high-quality flight services. For instance, the company’s aircraft was the first to have audio an video on demand (AVOD) entertainment system. Moreover, the company has integrated modern technologies such as social media into its communication mix. This enables the company to communicate effectively with its customers at a low cost (Czinkota & Ronkainen, 2012).

I am interested in working for the airline because of its commitment to addressing the needs of its stakeholders. The company provides acceptable terms of service and continues to create value for its customers and shareholders. Moreover, it has implemented measures to reduce its impact on the environment.

Conclusion

The main factors that contribute to the success of Emirates Airlines include the use of innovative management practices and advanced technology. The management continues to provide effective leadership by inspiring employees to focus on change and improved performance. Also, the company has established effective control systems to ensure that its growth and operations strategies are implemented as planned.

References

Ansoff, I. (2007). Strategic management. New York, NY: McGraw-Hill.

Czinkota, M., & Ronkainen, I. (2012). International marketing. New York, NY: McGraw-Hill.

Emirates Airline. (2014). About us. Web.

Johnsons, M. (2012). Attracting and retaining customers in a competitive market. Strategic Direction, 28(1), 17-20.

Kreitner, R. & Cassidy, C. (2012). Management. London, UK: Palgrave.