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Strategic Management 2:
Submitted to: DR. NEIL BERMUDEZ
B6/MBA-GR5_GROUP 4
Presented by:
Jenielyn R. Pacheco
Virginia F. Josue
Teresa R. Sacramento
Brennan P. Rivera
Michelle Martin
Christine Mae Aterado
The Emirates Group 2014
OUTLINE
• 1. Case Background
• 2. Environment Analysis
• 3. Problem Statement supported by evidence
• 4. Alternative Courses of Action
• a. TOWS Matrix
• b. Internal-External Matrix
• c. Grand Strategy Matrix
• d. Summary of Strategies
• 5. Recommended Alternative and Action Plan
• a. Quantitative Strategic Planning Matrix
• b. Action Plan
• c. Financial Projections
– 1. Sales Forecast
– 2. Income Statement Forecast
– 3. Balance Sheet Forecast
– 4. Cash Flow Forecast
1. Case Background
Emirates group, based in Dubai, United Arab Emirates (UAE), a company specializing in aviation ground-
handling services comprises of Emirates Airline & Dnata. Emirates is owned by the government of Dubai operating
under the Investment Corporation of Dubai. (p. 473, par. 1)
Timeline
Late 1950s Sheikh Saeed bin Maktoum decreed open-seas, open-skies, and open-trade policies to develop the
country of Dubai (p. 472, par. 6)
1959 Started as Dubai National Air Transport Association (Dnata) with segments that includes Dnata airport
operations, Dnata Cargo and Dnata Agencies (p. 472, par. 6; p. 473, par. 1)
1985 They began to be called as Emirates group when the Royal Family began providing the funding
($10Million) to Dnata enabling them to acquire more planes. This is to fill up the need of the country of Dubai for air
transfer due to the effect of the cutting back of flight of Gulf Air, the state-owned airline and the flag carrier of Bahrain.
(p. 473, par. 1)
Pakistan International Airlines also played a large role in establishing the Emirates airline by providing
technical and administrative assistance as well as the gifting of 2 new airplanes (Boeing 737-300 and an Airbus A300B4-
200). This is apart from the two used Boeing 727-200 Adv that the Royal Family's Dubai Royal Air Wing
provided. The airline's first flight, flight EK600, was from Dubai, UAE to Karachi, Pakistan on 25 October
1985. (p. 473, par. 2)
Late 1980s In just four years from that time, the Emeritus was serving 12 destinations and up to the year 1994
expansion of up to 32 destinations and was the sixth largest airline in the Middle East. (p. 473)
Late 1990s up to 2000s the company has seen rapid expansion in its acquisition of additional aircrafts, opening of
their own training centers for their pilot and crews and new flights added almost every month, (p.473, par.
CURRENT SITUATION
- It operates to more than 130 cities in 70 countries across 6 continents through its fleet of nearly
300 aircraft (p. 472, par. 1)
- Emirates was known to be the “world fastest growing and most profitable airline in the industry.
(p. 473, par. 2)
- 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. (p. 472, par. 4)
EMIRATES MISSION STATEMENT
“To become one of the top lifestyle brands in the world.”
(p.473, par. 4)
2. Environment Analysis
Opportunities
✔The living standard is great, the climate is great, the
infrastructure is impressive, business is growing leaps and
bounds, and the schools in Dubai are international and provide
a great learning environment for kids of all nationalities. (p.473,
par. 3). This makes Dubai as one of the most attractive cities for
migration.
✔Thousands of people migrate to Dubai monthly. (p.473, par. 3)
It attracts multicultural employees.
✔Increase in interest in air travel among the population especially
the young generations
Socio-Cultural Demographic Forces Technological Forces
❖ Availability of Google Search app in its services. This new
product enables Emirates’ customers to see and monitor their
upcoming flight providing flight times and departure terminal.
Google now gives passengers relevant information on their
destination (for example weather conditions locally currency,
local landmarks, accommodations, and attractions) (p.473
par.4)
❖ Technology to provide an upgraded in flight entertainment to
its customers (personal TV monitors with more than 1,400
channels options), as well as provide in flight communication
while on air (e-mail, SMS services, telephone) (p.473 par.2)
❖ Amenities such as seats turning into a 79-inch flat bed at the
push of a button, power supply for laptops, extra large tables,
large screen TV’s) (p. 474 par. 2)
❖ Use of technology that maintains segment inventory to
optimize product and service offers for individual preferences
of each market.
❖ Technological advancement in the industry of aircraft
production and maintenance that improve the facilities and fuel
consumption as well as the impact of it to the environment.
Environment Forces
❖ Launch project to preserve and conserve natural resources.
❖ Help control pollution in the region and is active in the
development of effective and working sustainable programs for
the environment.
2. Environment Analysis
Opportunities
✔ No tax on personal wage (p.473 p.3)
✔ Dubai was aiming to eliminate its dependence on its finite oil
reserves within 50 years and thus has operated under a free
market society for decades (p.473 p.6)
✔ The Dirham is pegged in dollar so currency inflation is not
significant (p.473 par.3)
✔ Level of disposable income at an increase level per capita
income, thus people afford to use air transportation
✔ Potential investment interest in Dubai tourism will increase
the number of people willing to travel to it.
✔ Operating on multiple markets with different currencies and
economic characteristics
Economic Forces Politico-Legal Forces
❖ Government support for infrastructure development. (p.473
par. 3)
❖ Dubai and Abu Dhabi, the national capital, are the only two
emirates to have veto power over critical matters of national
importance in the UAE legislature. (p.472 par. 5)
❖ The government of Dubai owned the Emirates and operating
under the Investment Corporation of Dubai name. But treats
Emirates as a wholly independent business entity on its own
and attributes this to the firm’s success. (p.472 par. 3)
❖ Law taxation policy for companies and business entering Dubai
trade and ecommerce.
❖ World-trade opportunities between countries involved in
Agreements to enhance aviation sector
2. Environment Analysis
Threats
✔Emirates has no women as part of the top management officer
(p.473,par. 5)
✔Thousands of people migrate to Dubai monthly. (p.473, par.
3)In Dubai they pay lower than developed countries
✔Due to diverse backgrounds of its employees, Emirates spend
more resources in training rather than compensation
Socio-Cultural Demographic Forces
Environment Forces
❖ Environmental threats like earthquakes, volcanic eruptions and
other natural disaster affects the airline industry
❖ The industry is a significant contributor to greenhouse gas
emissions
❖ Adverse extreme weather conditions can affect flights
operations
✔ World economics condition affects the company, especially
on countries the airlines serves
✔ Volatility of fuel prices (p.478 par.3)
Economic Forces
Politico-Legal Forces
❖ Dubai and Abu Dhabi, the national capital, are the only two
emirates to have veto power over critical matters of national
importance in the UAE legislature. (p.472 par. 5)
❖ Political instability in the Middle East region (War And terrorism
threats)
❖ Open skies policies which provides equal opportunities for all
air carriers. (p.472 par. 3)
❖ Due to its international nature of operations which exposes it
to multiple political risks stemming from multiple countries for
example health risk from one country it services.
Group of firms producing similar product or service
2.B – Operating Environment
Finance
Shareholders,
Creditors
Boeing &
Airbus
Low-Price
discovery
Community
Perceptions
Cheaper
services
FlyDubai
Alliance with Quantas
Rivalry Among Existing Firms
NO. OF COMPETITORS
FIXED COSTS
PRODUCT
CAPACITY
1. Singapore Airlines Group – 101 planes
(operates 6.7years)
2. Flydubai – 28planes (<2years)
3. Middle East Airlines – 10 planes
(<4years)
4. British Airway – 250 aircraft
5. Delta
Operating cost/First class ticket
Airline/passenger services
1. Singapore Airlines Group – operates Airbus
380/Boeing 777 (served 77)
2. Flydubai – Boeing 50 (served 52markets)
3. Middle East Airlines – Airbus 320 (served
31markets)
4. British Airway 250 aircraft (50 served)
5. Delta – 5k flights a day (6 continents)
HIGH
Potential Entrants
ECONOMIES OF SCALE
SWITCHING COSTS
PRODUCT DIFFERENTIATION
CAPITAL REQUIREMENTS
Labor cost / profitable
fuel, maintenance, airport
fees
Customer loyalty / Luxury
airline
Huge finance
Barriers to Entry-low
ACCESS TO DISTRIBUTION High risk/restricted
Entry Barriers in Some Industries
INDUSTRY BARRIER
Global Market Share Company’s major competitors are Singapore Airlines, British,
Delta Middle East Airlines
Fuel prices Volatility of fuel prices
Strategic Alliance Marketing & advertising exposure
Discount Airlines Spirit airlines, Flydubai, Ryanair
Emirates Group are luxury airplanes using Suites. Offer stand-alone
bed & all stuffs designed by Givenchy.
All amenities could enjoy by customers giving them the utmost
satisfaction.
Substitute Products MEDIUM
• Suppliers have concentrated into a specific region.
• High product differentiation
• Substitutes not available
Bargaining Power of Suppliers HIGH
• Low switching cost
• Plenty of alternative buyers
• Consumer price sensitivity
Bargaining Power of Buyers MEDIUM
• Industry growth
• Shareholders’ actions
• Creditors’ actions
• Community perception
Other Operating Environment Forces
“Operating Forces” ANALYSIS
FORCES OPPORTUNITY THREAT
Rivalry among competing firms Better coordinate price,
sales & schedule
Risky & intense
Potential entrants Customer loyalty Customers- switch
Substitute products better experience Threat
Bargaining power of suppliers With control Without control
Bargaining power of buyers With control Without control
Industry growth Increasing Declining
Shareholders’ actions Positive Negative
Creditors’ actions Positive Negative
Community perception Positive Negative
KEY EXTERNAL FACTORS WEIGHT RATING
WEIGHTED
SCORE RATING VALUES
OPPORTUNITIES (4) – superior response
1.·The living standard is great, the climate is great, the infrastructure is impressive,
business is growing leaps and bounds (Integration/Diversification)
0.19 4 0.76
(2) – ave. response
2. Thousand of people migrate to Dubai monthly (Catering middle class
passengers)
0.11 2 0.22
(1) – poor response
3 No tax on personal wage (Entering low-cost market) 0.11 2 0.22
4. Open skies policies which provides equal opportunities for all air carriers.
(Market Expansion)
0.22 4 0.88
THREATS Overall Rating:
1. Volatility of fuel prices (Changes in oil Price0 0.08 2 0.16 >2.5 – high response
2 Dubai was aiming to eliminate its dependence on its finite oil reserves
within 50 years and thus has operated under a free market society for
decades (Political influence/changes)
0.09 2 0.18
2.5 – medium response
3. Open skies policies which provides equal opportunities for all air carriers.
(Increased competitions)
0.14 3 0.42
<2.5 – low response
4. Fast paced changes in Technological advancement in aviation 0.06 3 0.18
TOTAL WEIGHTED SCORE
1 3.32
Conclusion:
Firm’s strategies
(responding)
External Factor Evaluation (EFE) Matrix
KEY INTERNAL FACTORS WEIGHT RATING
WEIGHTED
SCORE RATING VALUES
STRENGTHS (4) – superior response
1 Emirates is the most valuable brand in Airline Industry
(Strong Brand Name).
0.30 4 0.60
(2) – ave. response
2.Emirates mission is “to become one of the top lifestyle
brands in the world.”. (Strong Brand Image)
0.15 3 0.45
(1) – poor response
3.Emirates is the Best Service Provider Operating longer
flights / Safety record (Technological Advances)
0.16 3 0.48
Overall Rating:
4. Increasing total passenger volume by 15.9% in fiscal year
2013 and maintained a passenger seat factor of 80%. (High
Frequency of Flights)
0.10 2 0.20
>2.5 – high response
WEAKNESSES 2.5 – medium response
1. Only one-base Dubai. Lack of the diversification strategy 0.10 2 0.12 <2.5 – low response
2. Does not seem to cater to the middle class and budget
passengers
0.19 3 0.57
Conclusion:
3. Focusing more on international market with Emirates
having difficulty to occupy US Market
0.04 2 0.08
Firm’s internal position
STRONG
TOTAL WEIGHTED SCORE 1 2.80
Internal Factor Evaluation (IFE) Matrix
WEIGHT
EMIRATES
SINGAPORE
AIRLINES FLY DUBAI
Rating
Weighted
Score Rating
Weighted
Score Rating
Weighted
Score
1. STRONG MANAGEMENT 0.15 3 0.45 3 0.45 3 0.45
2. ORGANIZATION OF ROUTES 0.2 3 0.6 3 0.6 3 0.6
3. AVAILABILITY OF NON-
STOP FLIGHTS 0.05 3 0.15 3 0.15 2 0.1
4. QUALIFIED WORKFORCE 0.1 3 0.3 2 0.2 3 0.3
5. IN FLIGHT SERVICES AND
PROMOTIONS 0.05 4 0.2 4 0.2 3 0.15
6. PRICE COMPETITIVENESS 0.15 3 0.45 3 0.45 3 0.45
7. EFFECTIVE FINANCIAL
MANAGEMENT 0.15 4 0.6 4 0.6 2 0.3
8. COST MANAGEMENT 0.15 3 0.45 3 0.45 3 0.45
OVERALL SCORE 1 - 3.2 - 3.1 - 2.8
COMPETITIVE MATRIX Conclusion: Emirates is Strongest
2. G Assumptions
G.1 General Environment Stability
The socio cultural, economic and political environment are stable
since Dubai economy is growing and there are favorable regulations.
G.2 Industry Growth Prospects:
The market presents a promising opportunity due to the excellent
geographic location and outstanding management.
G.3 Company’s Competitive Position:
The competitive strengths of the company are excellent inflight
services, promotions, high quality aircraft, accessible and effective
financial management.
Problem Statement supported by evidence
• Formulating effective business strategy in becoming
one of the top lifestyle brands in the world as
evidenced by the following :
1. Emirates collects about 90 percent of its revenue outside Middle East (p.477, par. 5)
2. Difficulty of adapting internal branding of growing number of pilots and crew,
having more than 67,000 employees (p. 472, par. 3)
3. High maintenance of training center with simulators for training pilots and crew
which costs $65-million (p. 473, par. 2)
4. Rising fuel prices hurt overall profits because fuel accounts for more than 40
percent of all costs. (p. 474, par.3)
5. Trying to adapt the growing of air traffic and emerging necessities. (p. 472, par. 1)
6. Pricing policies on different segments- first class, business class and economy class.
(p. 474, par. 1)
TOW
MATRIX
STRENGTH
1. Strong backing of Dubai Government
2. Strong brand name and image
3. High frequency of flights
4. Large asset & technological advance
5. Solid Alliances and Strong network
6. High customer loyalty due to Quality services and competitive fare
and promotion
7. Large distribution of networks
OPPORTUNITIES
1. No Tax of personal wage (Entering low-
cost markets)
2. Dubai’s ideal living condition (Catering to
Middle-class passengers)
3. Open Skies (Market expansion)
4. Thousand of people migrate to Dubai
(Diversification)
5. Open skies (Innovation/Integration)
SO STRATEGIES
1. Strong financial support of Dubai Government would provide an
opportunity to expand the untapped market (Market Penetration)
2. With lower prices and higher quality, there are more opportunities to
grow your customer base. (Market Expansion)
3. There are more opportunities to enhance service quality thanks to the
extensive supplier network. (Market Penetration)
THREATS
1. Increased competitions
2. Political changes/influence
3. Changes in oil prices
4. Fast paced changes in Technology
advancement
ST STRATEGIES
1. Technology is constantly revolving and changing
2. Increased rivalry in the aviation industry(S5,T1)
3. Varying government Policy and Regulation (S5,T3)
TOW
MATRIX
WEAKNESSES
1. Only one-base Dubai. Lack of the diversification strategy
2. Focusing more on international market with Emirates having
difficulty to occupy US Market
3. Does not seem to cater to the middle class and budget passengers
4. Profit margin is quite less due to having a limited target market.
5. Low current ratio creating problems in its operation
OPPORTUNITIES
1. No Tax of personal wage (Entering low-cost
markets)
2. Dubai’s ideal living condition (Catering to
Middle-class passengers)
3. Open Skies (Market expansion)
4. Thousand of people migrate to Dubai
(Diversification)
5. Open skies (Innovation/Integration)
WO STRATEGIES
1. Heavily focused on the international market. (Market Penetration)
2. Intense competition in the Arab areas which gives more opportunity
to move towards the untapped market which is not covered by any
airline company.(Market Penetration)
3. Provide quality services for the expanding market of middle and
low-cost market (Product Development)
THREATS
1. Increased competitions
2. Political changes/influence
3. Changes in oil prices
4. Fast paced changes in Technology
advancement
5. Exchange rates
6. New Entrants-numerous players in the industry
WT STRATEGIES
1. High investing in innovation, quality services result in low-profit
margins.(Diversification)
2. Increasing cost of fuel would increase the company
overall expenses.(Backward Integration)
1. Less marketing efforts give less awareness in the
global market (Marketing Penetration)
B. INTERNAL-EXTERNAL MATRIX
EFE= 3.32
IFE = 2.80
IFE WEIGHTED SCORE
STRONG
(3.0-4.0)
AVERAGE
(2.0-2.99)
WEAK
(1.0-1.99)
EFE TOTAL
WEIGHTED
SCORE
High
(3.0-4.0)
I II III
Medium
(2.0-2.99)
IV V VI
Low
(1.9-1.99)
VII VIII IX
GROW AND BUILD – INTENSIVE,
INTEGRATIVE
B. INTERNAL-EXTERNAL MATRIX
Quadrant 2
1. Market Development
2. Market Penetration
3. Product Development
4. Horizontal Integration
5. Divestiture
6. Liquidation
Quadrant 1
1. Market Development
2. Market Penetration
3. Product Development
4. Forward Integration
5. Background Integration
6. Horizontal Integration
7. Concentric Diversification
Quadrant 3
1. Retrenchment
2. Concentric Diversification
3. Horizontal Diversification
4. Conglomerate
Diversification
5. Divestiture
6. Liquidation
Quadrant 4
1. Concentric Diversification
2. Horizontal Diversification
3. Conglomerate Diversification
4. Joint Venture
RAPID MARKET GROWTH
SLOW MARKET GROWTH
WEAK
COMPETITIVE
POSITION
STRATEGY OPTIONS TOWS IEM GSM TOTAL
A. INTEGRATION STRATEGIES
1. Forward Integration 1 1 2
2. Backward integration 1 1 2
3. Horizontal Integration 1 1 2
B. INTENSIVE STRATEGIES
1. Market Penetration 1 1 1 3
2. Market Development 1 1 1 3
3. Product Development 1 1 1 3
C. DIVERSIFICATION STRATEGIES
1. Concentric Diversification 1 1
2. Conglomerate Diversification
3. Horizontal Diversification
D. DEFENSIVE STRATEGIES
1. Joint Venture
2. Retrenchment
3. Divestiture
4. Liquidation
SUMMARY
OF
STRATEGIES
ALTERNATIVE COURSES OF ACTION
The proposed courses of action (ACA) were identified based from the Strategic Factor Analysis,
Competitive Profile Matrix, TOWS Matrix, Internal-External Matrix and further validated through the
evaluative dimensions of the Grand Strategy Matrix. The Strategic Factor Analysis revealed that
Emirates Group is responsive with their internal and external factors. TOWS Matrix pointed out that
there is three strategies according the matching of Internal and external factors. The Internal-External
Matrix revealed that the current position of Emirates Group hold and maintain Market Penetration,
Market Development and Product Development . Moreover, the analysis of the market growth and
competitive position of the company from the Grand Strategy Matrix indicated that the appropriate
strategies that must be pursued by the company fell under Quadrant I. These findings could be
attributed to the strengths include the success of their products evidenced by the revenues generated
by it, specifically for their high brand image, for the excellent service for high-end passengers in first
class that they provide and having strong support from the government for its operations. In totality,
the Summary of Strategies Matrix confirmed that the most feasible alternatives are A, B, and C.
Therefore strategies A, B & C would be best addressed the major problem of the firm under study.
With this it can be said that Emirates can afford to improve their public concern, product
value and price competitors in order to increase their performance in the market.
RECOMMENDED ACTION PLAN
1. Quantitative Strategic Planning Matrix
2. Action Plan
3. Financial Projections
1. QUANTITATIVE STRATEGIC PLANNING MATRIX
KEY STRATEGIC FACTORS WEIGHT
MARKET PENETRATION MARKET DEVELOPMENT PRODUCT DEVELOPMENT
Rating
Weighted
Score
Rating
Weighted
Score
Rating
Weighted
Score
OPPORTUNITIES:
1. Entering low-cost markets
2. Middle-class passengers
3. Market expansion
4. Integration/diversification
0.11
0.11
0.22
0.19
4
4
4
4
0.44
0.44
0.88
0.76
2
3
2
2
0.22
0.33
0.44
0.38
1
3
1
1
0.11
0.33
0.22
0.19
THREATS:
1. Increased competitions
2. Political changes/influence
3. Changes in oil prices
4. Fast paced changes in
Technology advancement
0.14
0.09
0.08
0.06
3
1
2
3
0.42
0.09
0.16
0.18
3
3
3
2
0.42
0.27
0.24
0.12
3
3
3
2
0.42
0.27
0.24
0.36
SUB-TOTAL 1.00 3.37 2.42 2.14
QUANTITATIVE STRATEGIC PLANNING MATRIX
KEY STRATEGIC FACTORS WEIGHT
MARKET PENETRATION MARKET DEVELOPMENT
PRODUCT
DEVELOPMENT
Rating
Weighted
Score
Rating
Weighted
Score
Rating
Weighted
Score
STRENGTHS:
1. Strong backing of Dubai
Government
2. Strong brand name and image
3. High frequency of flights
4. Technological advance
5. Solid Alliances and Strong
network
6. High customer loyalty
0.15
0.17
0.03
0.09
0.02
0.14
3
4
4
4
3
4
0.45
0.68
0.12
0.36
0.06
0.56
2
3
3
3
2
2
0.30
0.51
0.09
0.27
0.04
0.28
1
2
2
3
2
2
0.15
0.34
0.06
0.27
0.04
0.28
WEAKNESSES:
1. Only one-base Dubai.
2. Lack of the diversification
strategy
3. Focusing more on international
market
4. Does not seem to cater to the
middle class and budget
passengers
5. Profit margin is quite less due to
having a limited target market.
0.05
0.08
0.12
0.11
0.06
2
3
3
3
3
0.10
0.24
0.36
0.33
0.18
3
3
1
2
2
0.15
0.24
0.12
0.22
0.12
3
3
1
2
2
0.15
0.24
0.12
0.22
0.12
SUB-TOTAL 1.00
OVERALL SCORE - - 3.44 - 2.34 - 1.99
ALTERNATIVE COURSES OF ACTION
The Quantitative Strategic Planning Matrix results indicated that ACA Market Penetration
obtained the highest overall score which means that this is the best alternative course of
action that could significantly address the identified major problem. Evaluation indicated that
the least risky, in relative terms is market penetration. When employing a market penetration
strategy, management seeks to sell more of its existing products into markets that they’re
familiar with and where they have existing relationships.
Market penetration strategies are used to ultimately increase the number of customers and sales
dollars of Emirates. Market penetration is the act of gaining a deeper presence in a market; by
employing strategies to increase how deep Emirates Airlines is engrained in the market, that
company often has greater short-term and long-term financial health, is better in tune with what
its customers want, and is often better positioned compared to its competition.
In other words, market penetration can be used to assess Emirates as a whole to determine the
potential for companies within the industry to gain market share or grow their revenue through
sales.
Market penetration can help Emirates to determine the size of the potential market it may want to
enter.. If the total market is large, new entrants to the industry might be encouraged that they can
gain market share or a percentage of the total number of potential customers in the industry.
2. ACTION PLANS-
We recommend ACA 1 (Market Penetration)
STRENGTHS
The biggest strength of the Emirates Group is that they have strong brand and image. In the industry of
aviation, Emirates is a strong market leader, with large investments and million of loyal members. The airline
flies to 150 cities worldwide with numerous routes daily. The airline is also active in advertising luxury,
sophistication and simple family life so when customers choose an airline, they will remember Emirate’s
advertisements.
Emirates can also form strategic alliances with its competitors, for example allowing them to depart from
Emirates hub in Dubai, and vice versa. This will allow Emirates to increase market share in markets the airline
currently serves at a lesser cost than establishing a new hub.
ACTION PLANS-
We recommend ACA 1 (Market Penetration)
WEAKNESSES
The biggest strength of the Emirates Group is that they lack diversification in their segments. They
only have Dubai as their base. By having alliance with other airlines, they can expand and cater
more countries bases.
Emirates can also venture into servicing the growing number of middle and lower class of society.
Though when presenting this package, marketing should see to it what this low cost packages will
put on the brand image of “LUXURY” the company projects. Instead it has to offer new low cost
brand as a subsidiary of Emirates group serving economic travelers who are now customers of new
low cost airlines, thus expanding the market share.
Emirates can also increase its profit margin by reducing the cost of its operational improvements,
namely improving maintenance processes, maintaining high aircraft utilization and making
effective flight scheduling. It could also invest in the technology of distribution channels to reduce
labor costs for example, installing more self service kiosks in airports of the destinations.
ACTION PLANS-
We recommend ACA 1 (Market Penetration)
OPPORTUNITIES
Dubai being a an ideal place for migration due to its
ACTION PLANS-
We recommend ACA 1 (Market Penetration)
THREATS
The biggest strength of the Emirates Group is that they are in
ACTION PLAN – MARKET DEVELOPMENT
FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME
FRAME
BUDGET
Marketing To penetrate new markets,
build and strengthen
relationships with its existing
customer base, and increase its
overall passenger traffic.
To enhance brand awareness.
Rigorous market research, competitive
analysis, and customer segmentation
enable Emirates Airlines to tap into new
markets and develop customer-centric
strategies to drive business growth.
Promoting consistent exposure in the
marketplace. It focuses on creating a
strong brand identity advertising
campaigns, public relations activities,
social media marketing, and direct mail
campaigns. Participating in trade
shows, conferences and sponsorship to
reach out to potential customers and
showcase its products and services
ACTION PLAN – MARKET DEVELOPMENT
FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME
FRAME
BUDGET
Marketing To emphasize cost-effective
marketing tactics that increase
revenue generation
opportunities.
To maintain exceptional
customer satisfaction
Pricing strategies, promotional
campaigns, and product diversification
are implemented to ensure maximum
returns on investment.
Enhance customer experience, by
ensuring a seamless and hassle-free
journey. This involves initiatives such
as personalized customer service, in-
flight amenities, and entertainment
options, frequent flyer programs, and
other value-add services that cater to
the needs of its customers.
ACTION PLAN – MARKET DEVELOPMENT
FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME
FRAME
BUDGET
Production/Operations To improve the operational
efficiency of air traffic
management and provide more
flexibility on flight routes
which increased fuel efficiency
and customer attraction.
The Flight operations specialist
collaborates with air traffic control
organizations internationally to
deliver more efficient routes and
operational procedures, applying the
latest technology to support
marketing objectives and
promotions.
Finance To fund the overall budgetary
requirements of all functional
areas of the Market Penetration
Project.
ACTION PLAN – MARKET DEVELOPMENT
FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME
FRAME
BUDGET
Human Resources To provide its employees
with the necessary skills and
knowledge to excel in their
roles, aligning with marketing
goals.
Organizes training programs that are
designed to enhance employee skills
and performance, and ultimately, to
build stakeholder brand awareness,
customer loyalty, and goodwill.
Research & Dev’t To understands the need and
wants of its customers.
To constantly evaluate and
improve its products and
services.
Developing new products and services
that meet the changing needs of its
customers
Monitors customer feedback and uses
this information to make changes and
improvements to its products and
services.
ACTION PLAN – MARKET DEVELOPMENT
FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME
FRAME
BUDGET
Information Systems To upgrade the existing
IT Infrastructure,
introduce innovative
technologies, and
provide a personalized,
integrated experience
to its passengers.
Enhance the customer
experience, such as online
booking and boarding
systems, mobile applications,
and flight entertainment.
3. FINANCIAL PROJECTIONS
THANK YOU

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Strategic Management 2___Submitted to_ DR. NEIL BERMUDEZ_B6_MBA-GR5_GROUP 4.pptx

  • 1. Strategic Management 2: Submitted to: DR. NEIL BERMUDEZ B6/MBA-GR5_GROUP 4 Presented by: Jenielyn R. Pacheco Virginia F. Josue Teresa R. Sacramento Brennan P. Rivera Michelle Martin Christine Mae Aterado
  • 3. OUTLINE • 1. Case Background • 2. Environment Analysis • 3. Problem Statement supported by evidence • 4. Alternative Courses of Action • a. TOWS Matrix • b. Internal-External Matrix • c. Grand Strategy Matrix • d. Summary of Strategies • 5. Recommended Alternative and Action Plan • a. Quantitative Strategic Planning Matrix • b. Action Plan • c. Financial Projections – 1. Sales Forecast – 2. Income Statement Forecast – 3. Balance Sheet Forecast – 4. Cash Flow Forecast
  • 4. 1. Case Background Emirates group, based in Dubai, United Arab Emirates (UAE), a company specializing in aviation ground- handling services comprises of Emirates Airline & Dnata. Emirates is owned by the government of Dubai operating under the Investment Corporation of Dubai. (p. 473, par. 1) Timeline Late 1950s Sheikh Saeed bin Maktoum decreed open-seas, open-skies, and open-trade policies to develop the country of Dubai (p. 472, par. 6) 1959 Started as Dubai National Air Transport Association (Dnata) with segments that includes Dnata airport operations, Dnata Cargo and Dnata Agencies (p. 472, par. 6; p. 473, par. 1) 1985 They began to be called as Emirates group when the Royal Family began providing the funding ($10Million) to Dnata enabling them to acquire more planes. This is to fill up the need of the country of Dubai for air transfer due to the effect of the cutting back of flight of Gulf Air, the state-owned airline and the flag carrier of Bahrain. (p. 473, par. 1) Pakistan International Airlines also played a large role in establishing the Emirates airline by providing technical and administrative assistance as well as the gifting of 2 new airplanes (Boeing 737-300 and an Airbus A300B4- 200). This is apart from the two used Boeing 727-200 Adv that the Royal Family's Dubai Royal Air Wing provided. The airline's first flight, flight EK600, was from Dubai, UAE to Karachi, Pakistan on 25 October 1985. (p. 473, par. 2) Late 1980s In just four years from that time, the Emeritus was serving 12 destinations and up to the year 1994 expansion of up to 32 destinations and was the sixth largest airline in the Middle East. (p. 473) Late 1990s up to 2000s the company has seen rapid expansion in its acquisition of additional aircrafts, opening of their own training centers for their pilot and crews and new flights added almost every month, (p.473, par.
  • 5. CURRENT SITUATION - It operates to more than 130 cities in 70 countries across 6 continents through its fleet of nearly 300 aircraft (p. 472, par. 1) - Emirates was known to be the “world fastest growing and most profitable airline in the industry. (p. 473, par. 2) - 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. (p. 472, par. 4) EMIRATES MISSION STATEMENT “To become one of the top lifestyle brands in the world.” (p.473, par. 4)
  • 6. 2. Environment Analysis Opportunities ✔The living standard is great, the climate is great, the infrastructure is impressive, business is growing leaps and bounds, and the schools in Dubai are international and provide a great learning environment for kids of all nationalities. (p.473, par. 3). This makes Dubai as one of the most attractive cities for migration. ✔Thousands of people migrate to Dubai monthly. (p.473, par. 3) It attracts multicultural employees. ✔Increase in interest in air travel among the population especially the young generations Socio-Cultural Demographic Forces Technological Forces ❖ Availability of Google Search app in its services. This new product enables Emirates’ customers to see and monitor their upcoming flight providing flight times and departure terminal. Google now gives passengers relevant information on their destination (for example weather conditions locally currency, local landmarks, accommodations, and attractions) (p.473 par.4) ❖ Technology to provide an upgraded in flight entertainment to its customers (personal TV monitors with more than 1,400 channels options), as well as provide in flight communication while on air (e-mail, SMS services, telephone) (p.473 par.2) ❖ Amenities such as seats turning into a 79-inch flat bed at the push of a button, power supply for laptops, extra large tables, large screen TV’s) (p. 474 par. 2) ❖ Use of technology that maintains segment inventory to optimize product and service offers for individual preferences of each market. ❖ Technological advancement in the industry of aircraft production and maintenance that improve the facilities and fuel consumption as well as the impact of it to the environment. Environment Forces ❖ Launch project to preserve and conserve natural resources. ❖ Help control pollution in the region and is active in the development of effective and working sustainable programs for the environment.
  • 7. 2. Environment Analysis Opportunities ✔ No tax on personal wage (p.473 p.3) ✔ Dubai was aiming to eliminate its dependence on its finite oil reserves within 50 years and thus has operated under a free market society for decades (p.473 p.6) ✔ The Dirham is pegged in dollar so currency inflation is not significant (p.473 par.3) ✔ Level of disposable income at an increase level per capita income, thus people afford to use air transportation ✔ Potential investment interest in Dubai tourism will increase the number of people willing to travel to it. ✔ Operating on multiple markets with different currencies and economic characteristics Economic Forces Politico-Legal Forces ❖ Government support for infrastructure development. (p.473 par. 3) ❖ Dubai and Abu Dhabi, the national capital, are the only two emirates to have veto power over critical matters of national importance in the UAE legislature. (p.472 par. 5) ❖ The government of Dubai owned the Emirates and operating under the Investment Corporation of Dubai name. But treats Emirates as a wholly independent business entity on its own and attributes this to the firm’s success. (p.472 par. 3) ❖ Law taxation policy for companies and business entering Dubai trade and ecommerce. ❖ World-trade opportunities between countries involved in Agreements to enhance aviation sector
  • 8. 2. Environment Analysis Threats ✔Emirates has no women as part of the top management officer (p.473,par. 5) ✔Thousands of people migrate to Dubai monthly. (p.473, par. 3)In Dubai they pay lower than developed countries ✔Due to diverse backgrounds of its employees, Emirates spend more resources in training rather than compensation Socio-Cultural Demographic Forces Environment Forces ❖ Environmental threats like earthquakes, volcanic eruptions and other natural disaster affects the airline industry ❖ The industry is a significant contributor to greenhouse gas emissions ❖ Adverse extreme weather conditions can affect flights operations ✔ World economics condition affects the company, especially on countries the airlines serves ✔ Volatility of fuel prices (p.478 par.3) Economic Forces Politico-Legal Forces ❖ Dubai and Abu Dhabi, the national capital, are the only two emirates to have veto power over critical matters of national importance in the UAE legislature. (p.472 par. 5) ❖ Political instability in the Middle East region (War And terrorism threats) ❖ Open skies policies which provides equal opportunities for all air carriers. (p.472 par. 3) ❖ Due to its international nature of operations which exposes it to multiple political risks stemming from multiple countries for example health risk from one country it services.
  • 9. Group of firms producing similar product or service 2.B – Operating Environment Finance Shareholders, Creditors Boeing & Airbus Low-Price discovery Community Perceptions Cheaper services FlyDubai Alliance with Quantas
  • 10. Rivalry Among Existing Firms NO. OF COMPETITORS FIXED COSTS PRODUCT CAPACITY 1. Singapore Airlines Group – 101 planes (operates 6.7years) 2. Flydubai – 28planes (<2years) 3. Middle East Airlines – 10 planes (<4years) 4. British Airway – 250 aircraft 5. Delta Operating cost/First class ticket Airline/passenger services 1. Singapore Airlines Group – operates Airbus 380/Boeing 777 (served 77) 2. Flydubai – Boeing 50 (served 52markets) 3. Middle East Airlines – Airbus 320 (served 31markets) 4. British Airway 250 aircraft (50 served) 5. Delta – 5k flights a day (6 continents) HIGH
  • 11. Potential Entrants ECONOMIES OF SCALE SWITCHING COSTS PRODUCT DIFFERENTIATION CAPITAL REQUIREMENTS Labor cost / profitable fuel, maintenance, airport fees Customer loyalty / Luxury airline Huge finance Barriers to Entry-low ACCESS TO DISTRIBUTION High risk/restricted
  • 12. Entry Barriers in Some Industries INDUSTRY BARRIER Global Market Share Company’s major competitors are Singapore Airlines, British, Delta Middle East Airlines Fuel prices Volatility of fuel prices Strategic Alliance Marketing & advertising exposure Discount Airlines Spirit airlines, Flydubai, Ryanair
  • 13. Emirates Group are luxury airplanes using Suites. Offer stand-alone bed & all stuffs designed by Givenchy. All amenities could enjoy by customers giving them the utmost satisfaction. Substitute Products MEDIUM • Suppliers have concentrated into a specific region. • High product differentiation • Substitutes not available Bargaining Power of Suppliers HIGH
  • 14. • Low switching cost • Plenty of alternative buyers • Consumer price sensitivity Bargaining Power of Buyers MEDIUM • Industry growth • Shareholders’ actions • Creditors’ actions • Community perception Other Operating Environment Forces
  • 15. “Operating Forces” ANALYSIS FORCES OPPORTUNITY THREAT Rivalry among competing firms Better coordinate price, sales & schedule Risky & intense Potential entrants Customer loyalty Customers- switch Substitute products better experience Threat Bargaining power of suppliers With control Without control Bargaining power of buyers With control Without control Industry growth Increasing Declining Shareholders’ actions Positive Negative Creditors’ actions Positive Negative Community perception Positive Negative
  • 16. KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE RATING VALUES OPPORTUNITIES (4) – superior response 1.·The living standard is great, the climate is great, the infrastructure is impressive, business is growing leaps and bounds (Integration/Diversification) 0.19 4 0.76 (2) – ave. response 2. Thousand of people migrate to Dubai monthly (Catering middle class passengers) 0.11 2 0.22 (1) – poor response 3 No tax on personal wage (Entering low-cost market) 0.11 2 0.22 4. Open skies policies which provides equal opportunities for all air carriers. (Market Expansion) 0.22 4 0.88 THREATS Overall Rating: 1. Volatility of fuel prices (Changes in oil Price0 0.08 2 0.16 >2.5 – high response 2 Dubai was aiming to eliminate its dependence on its finite oil reserves within 50 years and thus has operated under a free market society for decades (Political influence/changes) 0.09 2 0.18 2.5 – medium response 3. Open skies policies which provides equal opportunities for all air carriers. (Increased competitions) 0.14 3 0.42 <2.5 – low response 4. Fast paced changes in Technological advancement in aviation 0.06 3 0.18 TOTAL WEIGHTED SCORE 1 3.32 Conclusion: Firm’s strategies (responding) External Factor Evaluation (EFE) Matrix
  • 17. KEY INTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE RATING VALUES STRENGTHS (4) – superior response 1 Emirates is the most valuable brand in Airline Industry (Strong Brand Name). 0.30 4 0.60 (2) – ave. response 2.Emirates mission is “to become one of the top lifestyle brands in the world.”. (Strong Brand Image) 0.15 3 0.45 (1) – poor response 3.Emirates is the Best Service Provider Operating longer flights / Safety record (Technological Advances) 0.16 3 0.48 Overall Rating: 4. Increasing total passenger volume by 15.9% in fiscal year 2013 and maintained a passenger seat factor of 80%. (High Frequency of Flights) 0.10 2 0.20 >2.5 – high response WEAKNESSES 2.5 – medium response 1. Only one-base Dubai. Lack of the diversification strategy 0.10 2 0.12 <2.5 – low response 2. Does not seem to cater to the middle class and budget passengers 0.19 3 0.57 Conclusion: 3. Focusing more on international market with Emirates having difficulty to occupy US Market 0.04 2 0.08 Firm’s internal position STRONG TOTAL WEIGHTED SCORE 1 2.80 Internal Factor Evaluation (IFE) Matrix
  • 18. WEIGHT EMIRATES SINGAPORE AIRLINES FLY DUBAI Rating Weighted Score Rating Weighted Score Rating Weighted Score 1. STRONG MANAGEMENT 0.15 3 0.45 3 0.45 3 0.45 2. ORGANIZATION OF ROUTES 0.2 3 0.6 3 0.6 3 0.6 3. AVAILABILITY OF NON- STOP FLIGHTS 0.05 3 0.15 3 0.15 2 0.1 4. QUALIFIED WORKFORCE 0.1 3 0.3 2 0.2 3 0.3 5. IN FLIGHT SERVICES AND PROMOTIONS 0.05 4 0.2 4 0.2 3 0.15 6. PRICE COMPETITIVENESS 0.15 3 0.45 3 0.45 3 0.45 7. EFFECTIVE FINANCIAL MANAGEMENT 0.15 4 0.6 4 0.6 2 0.3 8. COST MANAGEMENT 0.15 3 0.45 3 0.45 3 0.45 OVERALL SCORE 1 - 3.2 - 3.1 - 2.8 COMPETITIVE MATRIX Conclusion: Emirates is Strongest
  • 19. 2. G Assumptions G.1 General Environment Stability The socio cultural, economic and political environment are stable since Dubai economy is growing and there are favorable regulations. G.2 Industry Growth Prospects: The market presents a promising opportunity due to the excellent geographic location and outstanding management. G.3 Company’s Competitive Position: The competitive strengths of the company are excellent inflight services, promotions, high quality aircraft, accessible and effective financial management.
  • 20. Problem Statement supported by evidence • Formulating effective business strategy in becoming one of the top lifestyle brands in the world as evidenced by the following : 1. Emirates collects about 90 percent of its revenue outside Middle East (p.477, par. 5) 2. Difficulty of adapting internal branding of growing number of pilots and crew, having more than 67,000 employees (p. 472, par. 3) 3. High maintenance of training center with simulators for training pilots and crew which costs $65-million (p. 473, par. 2) 4. Rising fuel prices hurt overall profits because fuel accounts for more than 40 percent of all costs. (p. 474, par.3) 5. Trying to adapt the growing of air traffic and emerging necessities. (p. 472, par. 1) 6. Pricing policies on different segments- first class, business class and economy class. (p. 474, par. 1)
  • 21. TOW MATRIX STRENGTH 1. Strong backing of Dubai Government 2. Strong brand name and image 3. High frequency of flights 4. Large asset & technological advance 5. Solid Alliances and Strong network 6. High customer loyalty due to Quality services and competitive fare and promotion 7. Large distribution of networks OPPORTUNITIES 1. No Tax of personal wage (Entering low- cost markets) 2. Dubai’s ideal living condition (Catering to Middle-class passengers) 3. Open Skies (Market expansion) 4. Thousand of people migrate to Dubai (Diversification) 5. Open skies (Innovation/Integration) SO STRATEGIES 1. Strong financial support of Dubai Government would provide an opportunity to expand the untapped market (Market Penetration) 2. With lower prices and higher quality, there are more opportunities to grow your customer base. (Market Expansion) 3. There are more opportunities to enhance service quality thanks to the extensive supplier network. (Market Penetration) THREATS 1. Increased competitions 2. Political changes/influence 3. Changes in oil prices 4. Fast paced changes in Technology advancement ST STRATEGIES 1. Technology is constantly revolving and changing 2. Increased rivalry in the aviation industry(S5,T1) 3. Varying government Policy and Regulation (S5,T3)
  • 22. TOW MATRIX WEAKNESSES 1. Only one-base Dubai. Lack of the diversification strategy 2. Focusing more on international market with Emirates having difficulty to occupy US Market 3. Does not seem to cater to the middle class and budget passengers 4. Profit margin is quite less due to having a limited target market. 5. Low current ratio creating problems in its operation OPPORTUNITIES 1. No Tax of personal wage (Entering low-cost markets) 2. Dubai’s ideal living condition (Catering to Middle-class passengers) 3. Open Skies (Market expansion) 4. Thousand of people migrate to Dubai (Diversification) 5. Open skies (Innovation/Integration) WO STRATEGIES 1. Heavily focused on the international market. (Market Penetration) 2. Intense competition in the Arab areas which gives more opportunity to move towards the untapped market which is not covered by any airline company.(Market Penetration) 3. Provide quality services for the expanding market of middle and low-cost market (Product Development) THREATS 1. Increased competitions 2. Political changes/influence 3. Changes in oil prices 4. Fast paced changes in Technology advancement 5. Exchange rates 6. New Entrants-numerous players in the industry WT STRATEGIES 1. High investing in innovation, quality services result in low-profit margins.(Diversification) 2. Increasing cost of fuel would increase the company overall expenses.(Backward Integration) 1. Less marketing efforts give less awareness in the global market (Marketing Penetration)
  • 23. B. INTERNAL-EXTERNAL MATRIX EFE= 3.32 IFE = 2.80 IFE WEIGHTED SCORE STRONG (3.0-4.0) AVERAGE (2.0-2.99) WEAK (1.0-1.99) EFE TOTAL WEIGHTED SCORE High (3.0-4.0) I II III Medium (2.0-2.99) IV V VI Low (1.9-1.99) VII VIII IX GROW AND BUILD – INTENSIVE, INTEGRATIVE
  • 24. B. INTERNAL-EXTERNAL MATRIX Quadrant 2 1. Market Development 2. Market Penetration 3. Product Development 4. Horizontal Integration 5. Divestiture 6. Liquidation Quadrant 1 1. Market Development 2. Market Penetration 3. Product Development 4. Forward Integration 5. Background Integration 6. Horizontal Integration 7. Concentric Diversification Quadrant 3 1. Retrenchment 2. Concentric Diversification 3. Horizontal Diversification 4. Conglomerate Diversification 5. Divestiture 6. Liquidation Quadrant 4 1. Concentric Diversification 2. Horizontal Diversification 3. Conglomerate Diversification 4. Joint Venture RAPID MARKET GROWTH SLOW MARKET GROWTH WEAK COMPETITIVE POSITION
  • 25.
  • 26. STRATEGY OPTIONS TOWS IEM GSM TOTAL A. INTEGRATION STRATEGIES 1. Forward Integration 1 1 2 2. Backward integration 1 1 2 3. Horizontal Integration 1 1 2 B. INTENSIVE STRATEGIES 1. Market Penetration 1 1 1 3 2. Market Development 1 1 1 3 3. Product Development 1 1 1 3 C. DIVERSIFICATION STRATEGIES 1. Concentric Diversification 1 1 2. Conglomerate Diversification 3. Horizontal Diversification D. DEFENSIVE STRATEGIES 1. Joint Venture 2. Retrenchment 3. Divestiture 4. Liquidation SUMMARY OF STRATEGIES
  • 27. ALTERNATIVE COURSES OF ACTION The proposed courses of action (ACA) were identified based from the Strategic Factor Analysis, Competitive Profile Matrix, TOWS Matrix, Internal-External Matrix and further validated through the evaluative dimensions of the Grand Strategy Matrix. The Strategic Factor Analysis revealed that Emirates Group is responsive with their internal and external factors. TOWS Matrix pointed out that there is three strategies according the matching of Internal and external factors. The Internal-External Matrix revealed that the current position of Emirates Group hold and maintain Market Penetration, Market Development and Product Development . Moreover, the analysis of the market growth and competitive position of the company from the Grand Strategy Matrix indicated that the appropriate strategies that must be pursued by the company fell under Quadrant I. These findings could be attributed to the strengths include the success of their products evidenced by the revenues generated by it, specifically for their high brand image, for the excellent service for high-end passengers in first class that they provide and having strong support from the government for its operations. In totality, the Summary of Strategies Matrix confirmed that the most feasible alternatives are A, B, and C. Therefore strategies A, B & C would be best addressed the major problem of the firm under study. With this it can be said that Emirates can afford to improve their public concern, product value and price competitors in order to increase their performance in the market.
  • 28. RECOMMENDED ACTION PLAN 1. Quantitative Strategic Planning Matrix 2. Action Plan 3. Financial Projections
  • 29. 1. QUANTITATIVE STRATEGIC PLANNING MATRIX KEY STRATEGIC FACTORS WEIGHT MARKET PENETRATION MARKET DEVELOPMENT PRODUCT DEVELOPMENT Rating Weighted Score Rating Weighted Score Rating Weighted Score OPPORTUNITIES: 1. Entering low-cost markets 2. Middle-class passengers 3. Market expansion 4. Integration/diversification 0.11 0.11 0.22 0.19 4 4 4 4 0.44 0.44 0.88 0.76 2 3 2 2 0.22 0.33 0.44 0.38 1 3 1 1 0.11 0.33 0.22 0.19 THREATS: 1. Increased competitions 2. Political changes/influence 3. Changes in oil prices 4. Fast paced changes in Technology advancement 0.14 0.09 0.08 0.06 3 1 2 3 0.42 0.09 0.16 0.18 3 3 3 2 0.42 0.27 0.24 0.12 3 3 3 2 0.42 0.27 0.24 0.36 SUB-TOTAL 1.00 3.37 2.42 2.14
  • 30. QUANTITATIVE STRATEGIC PLANNING MATRIX KEY STRATEGIC FACTORS WEIGHT MARKET PENETRATION MARKET DEVELOPMENT PRODUCT DEVELOPMENT Rating Weighted Score Rating Weighted Score Rating Weighted Score STRENGTHS: 1. Strong backing of Dubai Government 2. Strong brand name and image 3. High frequency of flights 4. Technological advance 5. Solid Alliances and Strong network 6. High customer loyalty 0.15 0.17 0.03 0.09 0.02 0.14 3 4 4 4 3 4 0.45 0.68 0.12 0.36 0.06 0.56 2 3 3 3 2 2 0.30 0.51 0.09 0.27 0.04 0.28 1 2 2 3 2 2 0.15 0.34 0.06 0.27 0.04 0.28 WEAKNESSES: 1. Only one-base Dubai. 2. Lack of the diversification strategy 3. Focusing more on international market 4. Does not seem to cater to the middle class and budget passengers 5. Profit margin is quite less due to having a limited target market. 0.05 0.08 0.12 0.11 0.06 2 3 3 3 3 0.10 0.24 0.36 0.33 0.18 3 3 1 2 2 0.15 0.24 0.12 0.22 0.12 3 3 1 2 2 0.15 0.24 0.12 0.22 0.12 SUB-TOTAL 1.00 OVERALL SCORE - - 3.44 - 2.34 - 1.99
  • 31. ALTERNATIVE COURSES OF ACTION The Quantitative Strategic Planning Matrix results indicated that ACA Market Penetration obtained the highest overall score which means that this is the best alternative course of action that could significantly address the identified major problem. Evaluation indicated that the least risky, in relative terms is market penetration. When employing a market penetration strategy, management seeks to sell more of its existing products into markets that they’re familiar with and where they have existing relationships. Market penetration strategies are used to ultimately increase the number of customers and sales dollars of Emirates. Market penetration is the act of gaining a deeper presence in a market; by employing strategies to increase how deep Emirates Airlines is engrained in the market, that company often has greater short-term and long-term financial health, is better in tune with what its customers want, and is often better positioned compared to its competition. In other words, market penetration can be used to assess Emirates as a whole to determine the potential for companies within the industry to gain market share or grow their revenue through sales. Market penetration can help Emirates to determine the size of the potential market it may want to enter.. If the total market is large, new entrants to the industry might be encouraged that they can gain market share or a percentage of the total number of potential customers in the industry.
  • 32. 2. ACTION PLANS- We recommend ACA 1 (Market Penetration) STRENGTHS The biggest strength of the Emirates Group is that they have strong brand and image. In the industry of aviation, Emirates is a strong market leader, with large investments and million of loyal members. The airline flies to 150 cities worldwide with numerous routes daily. The airline is also active in advertising luxury, sophistication and simple family life so when customers choose an airline, they will remember Emirate’s advertisements. Emirates can also form strategic alliances with its competitors, for example allowing them to depart from Emirates hub in Dubai, and vice versa. This will allow Emirates to increase market share in markets the airline currently serves at a lesser cost than establishing a new hub.
  • 33. ACTION PLANS- We recommend ACA 1 (Market Penetration) WEAKNESSES The biggest strength of the Emirates Group is that they lack diversification in their segments. They only have Dubai as their base. By having alliance with other airlines, they can expand and cater more countries bases. Emirates can also venture into servicing the growing number of middle and lower class of society. Though when presenting this package, marketing should see to it what this low cost packages will put on the brand image of “LUXURY” the company projects. Instead it has to offer new low cost brand as a subsidiary of Emirates group serving economic travelers who are now customers of new low cost airlines, thus expanding the market share. Emirates can also increase its profit margin by reducing the cost of its operational improvements, namely improving maintenance processes, maintaining high aircraft utilization and making effective flight scheduling. It could also invest in the technology of distribution channels to reduce labor costs for example, installing more self service kiosks in airports of the destinations.
  • 34. ACTION PLANS- We recommend ACA 1 (Market Penetration) OPPORTUNITIES Dubai being a an ideal place for migration due to its
  • 35. ACTION PLANS- We recommend ACA 1 (Market Penetration) THREATS The biggest strength of the Emirates Group is that they are in
  • 36. ACTION PLAN – MARKET DEVELOPMENT FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME FRAME BUDGET Marketing To penetrate new markets, build and strengthen relationships with its existing customer base, and increase its overall passenger traffic. To enhance brand awareness. Rigorous market research, competitive analysis, and customer segmentation enable Emirates Airlines to tap into new markets and develop customer-centric strategies to drive business growth. Promoting consistent exposure in the marketplace. It focuses on creating a strong brand identity advertising campaigns, public relations activities, social media marketing, and direct mail campaigns. Participating in trade shows, conferences and sponsorship to reach out to potential customers and showcase its products and services
  • 37. ACTION PLAN – MARKET DEVELOPMENT FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME FRAME BUDGET Marketing To emphasize cost-effective marketing tactics that increase revenue generation opportunities. To maintain exceptional customer satisfaction Pricing strategies, promotional campaigns, and product diversification are implemented to ensure maximum returns on investment. Enhance customer experience, by ensuring a seamless and hassle-free journey. This involves initiatives such as personalized customer service, in- flight amenities, and entertainment options, frequent flyer programs, and other value-add services that cater to the needs of its customers.
  • 38. ACTION PLAN – MARKET DEVELOPMENT FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME FRAME BUDGET Production/Operations To improve the operational efficiency of air traffic management and provide more flexibility on flight routes which increased fuel efficiency and customer attraction. The Flight operations specialist collaborates with air traffic control organizations internationally to deliver more efficient routes and operational procedures, applying the latest technology to support marketing objectives and promotions. Finance To fund the overall budgetary requirements of all functional areas of the Market Penetration Project.
  • 39. ACTION PLAN – MARKET DEVELOPMENT FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME FRAME BUDGET Human Resources To provide its employees with the necessary skills and knowledge to excel in their roles, aligning with marketing goals. Organizes training programs that are designed to enhance employee skills and performance, and ultimately, to build stakeholder brand awareness, customer loyalty, and goodwill. Research & Dev’t To understands the need and wants of its customers. To constantly evaluate and improve its products and services. Developing new products and services that meet the changing needs of its customers Monitors customer feedback and uses this information to make changes and improvements to its products and services.
  • 40. ACTION PLAN – MARKET DEVELOPMENT FUNCTIONAL AREA OBJECTIVE STRATEGIES TIME FRAME BUDGET Information Systems To upgrade the existing IT Infrastructure, introduce innovative technologies, and provide a personalized, integrated experience to its passengers. Enhance the customer experience, such as online booking and boarding systems, mobile applications, and flight entertainment.
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