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Forest R. David
A. Case Abstract
Headquartered in Dubai in the United Arab Emirates, the Emirates Group is the parent of Emirates, the
largest airline in the Middle East, operating over 2,500 flights per week from its hub at Dubai
International Airport. Emirates flies to 120 cities in 70 countries and operates 4 of the worlds 10
longest non-stop commercial flights. With 50,000 employees and 50 subsidiaries, the Emirates Group
is wholly owned by the government of Dubai and controlled by the Investment Corp. of Dubai.
Emirates is very profitable and growing over 20% annually.
After beginning flights from Dubai to Warsaw, Algiers, Tokyo Haneda, and Stockholm in mid-2013,
the Emirates is preparing to launch flights to Conakry in Guinea, Sialkot in Pakistan, Kabul, Kiev,
Taipei, and Boston in the coming months. In October 2013, Emirates began flights from Dubai to
Clark in the Philippines, a nonstop flight between Milan and New York, and a brand new A380 service
to Brisbane. A clear strategic plan is needed for the firm to know when and where globally to roll out
its popular services.
The Emirates Group aspires to be the recognized leading airline (2) globally (3) in providing the
highest quality, service, technology, (4) and convenience (7) to our customers (1) in the air and on the
ground. Exemplary business ethics (6) in caring for our employees (9), customers, the environment,
and the communities (8) we serve is of paramount importance, as we strive to grow profitably for our
shareholders (5).
1. Customers
2. Products or services
3. Markets
4. Technology
5. Concern for survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
D. External Audit
Opportunities
1. The Dirham is pegged to the US Dollar so currency fluctuations are not significant.
2. The Government of Dubai treats Emirates as a wholly independent business entity on its own, and
attributes this to the firms success.
3. Dubai International Airport is expected to be the worlds busiest by 2016.
4. For fiscal 2012, Singapore Air profits were down $756 million to $336 million or 69%.
5. In 2013, profits in the airline industry are expected to continue to rise to $8.4 billion. North
American carriers are expected to end 2012 with a collective net profit of $2.4 billion, despite
GDP growth of only 2.0% and oil at a high price of $109.5/barrel.
6. Backed financially by the Dubai government.
7. British Airways, Delta, US airways and other carriers serving Europe and the USA do not offer
near the level of service as Emirates.
8. Growing middle class around the world.
9. Air traffic is forecasted to grow 5.3% annually between 2012 and 2016.
10. Through 2016, the USA will remain the single largest market for domestic passengers at 710
million annually.
Threats
1. Singapore Air is considered the closest competitor based on an overall business model of top
service at a premium price and markets served.
2. Women are traditionally not allowed the same access to upper level jobs in the Middle East as
men.
3. Rising fuel prices hurt overall profits, as fuel accounts for over 40% of all costs for Emirates.
4. The Arab Spring and instability in Africa also hurt profits, but the companys net profit for fiscal
2012 was $629 million, down 61% from prior year.
5. Over 100 different airlines provide service to Dubai International Airport.
6. Singapore Air markets they are the only airline to offer a standalone bed, not a converted seat.
7. Delta, British Airways, and other airlines are well entrenched in serving the USA.
8. Three of the largest alliances in the world are SkyTeam, Star Alliance and Oneworld. SkyTeam is
based out of Amsterdam and was created in 2000 by founding members: Delta, Air France,
Aeromexico, and Korean Air.
9. Volatile price of oil.
10. Ironically for Emirates, the flydubai discount airline may pose the largest threat to the firm, as
demand for low price flights is growing rapidly globally.
Competitive Profile Matrix
Emirates is doing exceptionally well when compared to peers Delta and Singapore Air. A rapidly
growing firm, Emirates has one area that needs addressing, expansion in the USA.
EFE Matrix
Emirates is doing an excellent job of addressing external issues as indicated by the score of 3.06.
Not being a member of a major alliance is problematic for Emirates, but the new alliance with
Quantas is a step in the right direction.
E. Internal Audit
Strengths
1. The largest airline in the Middle East, Emirates flies to over 120 destinations in 70 countries on 6
continents.
2. Operates a fleet of over 170 aircraft and has another 230 aircraft on order worth about $84 billion.
3. Most of the companys planes include spacious private suites, and some planes provide a spa with
showers.
4. Provide excellent service in Business Class, and Economy Class.
5. Emirates reported a profit for the 24th consecutive year in fiscal 2012 with revenues up 18% from the
previous year, and the best year ever for Dnata, which had revenues of $1.9 billion.
6. History of acquiring firms such as Travel Republic Ltd. and Alpha Flight Group for fair prices.
7. Cargo revenues account for 15% of all revenue from the Emirates segment.
8. Emirates has aligned itself with high-level soccer teams and the US Open Tennis Tournament,
providing excellent marketing on a global scale.
9. In fiscal 2012 alone, Emirates started long haul flights to Seattle, Dallas/Fort Worth, Rio de Janeiro,
Buenos Aires, Washington DC, Geneva, Baghdad, and St. Petersburg, Russia, among others.
10. In January 2013, Emirates and Quantas, two rival firms, partnered to allow Quantas passengers to use
the nicest terminal in Dubai in exchange for Quantas moving its hub for European flights from
Singapore to Dubai.
Weaknesses
IFE Matrix
1. Order 70 additional aircraft for $25 billion (S2, S3, O1, O2).
2. Have 20 of the 70 extra plans configured to be entirely business class (S2, S3, S4, O5).
3. Partner with several to be determined NFL teams (S8, O1, O5, O10).
WO Strategies
1. Aggressively hire women to manage US operations based in New York City (W1, O5, O10).
2. Acquire a catering service in the USA under the Dnata segment (W6, W9, O5, O10).
3. Have 5 of the 70 planes ordered above 100% suite design in nature with full size beds (W7, O4).
ST Strategies
1. Aggressively hire women to manage US operations based in New York City (W1, T2).
2. Extend the long-term contract with Quantas to have their European based flights connect through
Dubai (S10, T1, T8).
3. Increase flights to the USA by 200% by 2015 (S2, S5, S9, T7).
WT Strategies
1. Increase flights to the USA by 200% by 2015 (W2, W5, W9, T7).
2. Extend the long-term contract with Quantas to have their European based flights connect through
Dubai (W3, T1, T8).
https://prezi.com/ht9dc8ty_2xr/emirates-airlines/
G. SPACE Matrix
FP
Conservative Aggressive
7
3 X = 1.8
Y = 1.4
2
CP IP
-7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7
-1
-2
-3
-4
-5
-6
-7
Defensive Competitive
SP
Placed in the Aggressive Quadrant, Emirates should add more routes, most notably in the USA. Also, increasing the
size of the fleet of aircraft to better serve existing markets would be a viable strategy.
H. Grand Strategy Matrix
Quadrant II Quadrant I
Weak Strong
Competitive Competitive
Position Position
Growth in the middle class around the world is spurring revenue growth among airlines. Emirates holds a
strong competitive advantage, especially with respect to providing service for higher end passengers.
I. The Internal-External (IE) Matrix
Europe
High
Other
3.0 IV V VI
The
EFE
Total Medium
Weighted
Scores Americas
Low
1.0
J. QSPM
Increase
Order 70 Flights to the
Additional USA by
Aircraft 200% by
2015
Opportunities Weight AS TAS AS TAS
1. The Dirham is pegged to the US Dollar so currency fluctuations 0.03 2 0.06 4 0.12
2. The Government of Dubai treats Emirates as a wholly
independent business entity on its own, and attributes this to 0.08 0 0.00 0 0.00
the firms success.
3. Dubai International Airport is expected to be the worlds busiest
0.08 4 0.32 2 0.16
by 2016.
4. For fiscal 2012, Singapore Air profits were down $756 million to
0.05 0 0.00 0 0.00
$336 million or 69%.
5. In 2013, profits in the airline industry are expected to continue to
rise to $8.4 billion. North American carriers are expected to end
0.08 3 0.24 4 0.32
2012 with a collective net profit of $2.4 billion, despite GDP
growth of only 2.0% and oil at a high price of $109.5/barrel.
6. Backed financially by the Dubai government. 0.05 0 0.00 0 0.00
7. British Airways, Delta, US airways and other carriers serving
Europe and the USA do not offer near the level of service as 0.06 2 0.12 4 0.24
Emirates.
8. Growing middle class around the world. 0.06 3 0.18 2 0.12
9. Air traffic is forecasted to grow 5.3% annually between 2012 and
0.04 3 0.12 2 0.08
2016.
10. Through 2016, the USA will remain the single largest market for
0.06 3 0.18 4 0.24
domestic passengers at 710 million annually.
Threats Weight AS TAS AS TAS
1. Singapore Air is considered the closest competitor based on
overall business model of top service at a premium price and 0.08 0 0.00 0 0.00
markets served.
2. Women are traditionally not allowed the same access to upper
0.05 0 0.00 0 0.00
level jobs in the Middle East as men.
3. Rising fuel prices hurt overall profits as fuel accounts for over
0.04 0 0.00 0 0.00
40% of all costs for Emirates.
4. The Arab Spring and instability in Africa also hurt profits, but
the companys net profit for fiscal 2012 was $629 million, down 0.04 2 0.08 3 0.12
61% from prior year.
5. Over 100 different airlines provide service to Dubai International
0.03 0 0.00 0 0.00
Airport.
6. Singapore Air markets they are the only airline to offer a
0.02 3 0.06 1 0.02
standalone bed, not a converted seat.
7. Delta, British Airways, and other airlines are well entrenched in
0.04 2 0.08 4 0.16
serving the USA.
8. Three of the largest alliances in the world are SkyTeam, Star
Alliance and Oneworld. SkyTeam is based out of Amsterdam
0.04 0 0.00 0 0.00
and was created in 2000 by founding members: Delta, Air France,
Aeromexico, and Korean Air.
9. Volatile price of oil. 0.03 0 0.00 0 0.00
10. Ironically for Emirates, the flydubai discount airline may pose the
largest threat to the firm, as demand for low price flights is 0.04 0 0.00 0 0.00
growing rapidly globally.
Increase
Order 70 Flights to the
Additional USA by
Aircraft 200% by
2015
Strengths Weight AS TAS AS TAS
1. The largest airline in the Middle East, Emirates flies to over 120
0.08 4 0.32 2 0.16
destinations in 70 countries on 6 continents
2. Emirates operates a fleet of over 170 aircraft and has another 230
0.08 4 0.32 2 0.16
aircraft on order worth about $84 billion.
3. Most of the companys planes include spacious private suites,
0.05 3 0.15 2 0.10
and some planes provide a spa with showers.
4. Provide excellent service in Business Class, and Economy Class. 0.05 3 0.15 2 0.10
5. Emirates reported a profit for the 24th consecutive year in fiscal
2012 with revenues up 18% from the previous year, and the best 0.10 0 0.00 0 0.00
year ever for Dnata, which had revenues of $1.9 billion.
6. History of acquiring firms such as Travel Republic Ltd. and
0.05 0 0.00 0 0.00
Alpha Flight Group for fair prices.
7. Cargo revenues account for 15% of all revenue from the Emirates
0.04 0 0.00 0 0.00
segment.
8. Emirates have aligned themselves with high-level soccer teams
and the US Open Tennis Tournament, providing excellent 0.04 0 0.00 0 0.00
marketing on a global scale.
9. In fiscal 2012 alone, Emirates started long haul flights to Seattle,
Dallas/Fort Worth, Rio de Janerio, Buenos Aires, Washington
0.06 2 0.12 4 0.24
DC, Geneva, Baghdad, St. Petersburg, Russia, among others.
10. In January 2013, Emirates and Quantas, two rival firms, partnered
to allow Quantas passengers to use the nicest terminal in Dubai
0.06 0 0.00 0 0.00
in exchange for Quantas moving its hub for European flights
from Singapore to Dubai.
K. Recommendations
1. Partner with several to be determined NFL teams.
2. Order 70 additional aircraft for 25 billion.
3. Aggressively hire women to manage US operations based in New York City.
4. Acquire a catering service in the USA under the Dnata segment.
5. Have 20 of the 70 extra plans configured to be entirely business class.
6. Extend the long term contract with Quantas to have their European based flights connect through
Dubai.
7. Increase flights to the USA by 200% by 2015.
L. Epilogue
On June 18, 2013 in Paris, France, Emirates was awarded the highly coveted Worlds Best Airline award,
presented by Skytrax at the 2013 World Airline Awards. The company also received two other awards
including: Best Middle East Airline and for a record ninth year in a row, Worlds Best Inflight
Entertainment. The Skytrax World Airline Awards polled over 18 million business and leisure air
travelers from more than 160 countries.
On June 5, 2013 in Munich, Germany, Emirates SkyCargo, the freight division of Emirates, was awarded
the Cargo Airline of the Year 2013 award at the Air Cargo Week World Air Cargo Awards. Emirates
SkyCargo earlier in 2013, significantly boosted its cargo capacity with the addition of three new Boeing
777F aircraft, taking its freighter fleet to 10 aircraft and its dedicated freighter network to 13 destinations:
Taipei, Chittagong, Eldoret, Lilongwe, Chicago, Almaty, Gothenburg, Zaragoza, Viracopos, Tripoli,
Djibouti, Hanoi and Liege. Emirates SkyCargo currently serves a route network of more than 130
destinations in 77 countries, spanning six continents across the globe.
On May 14, 2013, JetBlue Airways and Emirates announced expansion of their current partnership to
include bilateral code sharing, pending FAA and DOT regulatory approval, whereby JetBlue will place its
B6 airline code on all flights currently operated by Emirates between the USA and Dubai International
Airport, as well as between New Yorks John F. Kennedy International Airport (JFK) and Milan, Italy. The
agreement deepens a three-year partnership between JetBlue and Emirates. Emirates started placing its
code on select JetBlue-operated flights in April 2012, expanding an interline agreement that dates back to
2010. Current codeshare routes offered by Emirates on JetBlue-operated flights cover 28 destinations.
Chapter 20: Emirates Group
10 Basic Questions
1: B
2: C
3 A
4: B
5: A
6: A
7: D
8: A
9: B
10: C
15 Applied Questions
Strategy Types
1: D
2: D
3: D
4: D
5: B
1: C
2: C
3: D
4: A
5: B
Balanced Scorecard
1: C
2: D
3: C
4: C
5: D