1. Which of Porter’s three generic strategies does Emirates appear to be using based upon this case? Provide a rationale for your response
2. How does Emirates’ information systems strategy support its business strategy?
3. How does Emirates’ organizational strategy support its business strategy?
4. Use the “substitute” force to describe how information technology might be used to provide a winning position for Emirates?
Less than two decades after its foundation, Emirates placed the biggest order in civil aviation history, for $19 billion worth of aircraft. This is at the time when the industry was facing a global slump. Which Emirates defied with a massive 74 percent increase in net profits to $429 million in the financial year ending April 2004. Emirates has enjoyed a 25 percent annual growth rate since its founding in 1985 and has not posted a loss in the past eighteen years. In 2004, the airline was among the twenty largest global carriers in terms of passenger miles flown. In 2013, Emirates became the world’s top airline (ranked number 8 in 2012) beating Qatar (ranked number 1 in 2012) and Singapore Airlines (ranked number 3 in 2012) as announced by Skytrax at the 2013 World Airline
(https://www.worldairlineawards.com/awards_2013/airline2013_top20.htm)
Awards Most impressively, Emirates has achieved this enviable track record without direct government-funding, although the airline has benefited from the farsighted and ambitious leadership of the Al Maktoum ruling family which has led Dubai’s transformation from a small principality to one of the most vibrant city- states in the world
PREPARING FOR TAKEOFF:
Few would have predicted Emirates’ success in 1985, when the airline began with a fleet of two borrowed aircraft. Emirates was born out of crisis, when Gulf Air refused to increase flights to and from Dubai unless the government protected the carrier for its long-haul services. Rather than persuade Gulf Air to change its mind, and knowing how dependent Dubai was on air travel for its burgeoning economy, Sheikh Mohammed bin Rashid AlMaktoum, chairman of the Emirates Group, established the Emirates airline with an investment of $10 million, a trifling sum by the standards of international airlines. Right from the start, Emirates did things differently.
Sheikh Mohammed instructed his new managing director Maurice Flanagan: “Forget about protection against competition. That’s not the way Dubai works
DEFYING CONVENTIONAL WISDOM
Emirates’ formula for success cannot be found in any management book. Its creativity in seizing opportunities and solving problems as they arise is the company’s strength. “We don’t have to do what other airlines do,” Flanagan observes, “We do what seems right for us.” Gary Chapman, president of affiliated company Dnata, adds, “We are a multicultural environment, with different nationalities, cultures, tribes, kingdoms, so you are always looking at what will keep that team motivated and working well. We sometimes leave things that functionally don’t quite fit, but they work – so why disturb it”
Flexible family organization. Emirates’ success has emerged from taking a non-traditional management approach, rather than relying on the industry’s conventional wisdom. Emirates is run like a family with, for example, an informal and entrepreneurial spirit. At the head of the family sits Sheikh Ahmed Bin Saeed Al-Maktoum.
The family culture allows the airline great structural flexibility. “We are organized around the strengths of individuals,” said Gary Chapman.
MEMORABLE EXPERIENCE:
Emirates have been ahead of their rivals in the industry with their successful innovations and management. Diversification is essential to Emirates, therefore fights to all parts of the world with first class services ensures that’s their diversified client-base remains satisfied. They are dedicated to transform each journey to a memorable experience and do this with providing varied services from chauffeured pick-ups to hotel accommodations. Also, their 24- hour customer helpline allows their clients to communicate with Emirates, where ever in the world they are and at whatever time of the day. Emirates sustains a lean workforce which reduces overhead cost for them allowing them to provide services on secondary destinations and linking up with various destinations from the central location in Dubai.
Services provided online vary from purchasing tickets to booking hotel accommodations. Customers can even apply for their UAE visa through Emirates and collect it on arrival. Online check-in and booking your seat before travel speeds up the checking in process because all is left to do at the airport is drop off your luggage. All the services are available on their user-friendly Emirates.com website. And the airports have self check-in kiosks, which enable passengers to print their boarding cards. The most important strategy is the Customer-Relationship Management, which Emirates thrives on through their Skywards Miles program. This enables them to recognize customers through their profiles, track how often they travel, when and which routes, timings and through which class (economy, business or first class).
Customers earn miles after every journey with Emirates, and after earning specific miles are categorized based on Blue members, Silver and Gold. Customers can avail various benefits with the type of member they are, for example extra baggage allowance, preference of seating, business or first class lounges, free flights or upgrades using miles instead of money. This system helps Emirates identify their most profitable customers and focus on retaining them.
Today, the Emirates experience is a bridge between cultures – inviting people to experience all that the world has to offer. In short, a catalyst for their aspirations, hopes, and dreams. To support this, they are moving from a global travel brand to an aspirational, people-driven ‘lifestyle’ brand. The mission, in fact, is to become one of the top lifestyle brands in the world.