CSEB3101 Strategic Management
Lecturer: Dr Tey Lian Seng
Presented by:
1. Tan Wei Teng CEB130056
2. Yeap Szu Hui CEB130067
3. Chee Hui Min CEB140016
4. Chuah Pui Ling CEB140028
5. Lim Meng Sheng CEB140063
6. Ng Kong Biau CEB140081
Case Presentation:
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The Emirates Story
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• Launch on 25th October 1985
 2 Aircraft
 3 Destinations:
i. Karachi
ii. Delhi
iii. Mumbai
• Headquartered in Dubai, United Arab Emirates
• Subsidiary of The Emirates Group, which is wholly owned by the
government of Dubai's Investment Corporation of Dubai
• Emirates Airline was headed by Ahmed bin Saeed Al Maktoum,
the airline's present chairman

The Emirates Story
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• Largest airline in middle east
• Fleet size>230
• Top 10 carriers worldwide in terms of revenue and passenger
kilometres
• World largest operator of Airbus380 and Boeing777
• Air Transport World gave Emirates Airlines the title of "Airline of
the Year" for 2011

The Emirates Story
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140 destinations over 80
countries, 6 continents

What are the firm’s most important
external opportunities and threats?
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Opportunities
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• Use the current technology to reduce the
fuel cost
 Purchasing aircraft like Boeing 787
• Technology in reducing the noise produce
1. Innovation in Technology
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2. More international destinations to leverage
• Offer continual expansion
opportunities for both leisure and
business destinations
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• In-Flight Internet Access
– Fulfil customer needs
– Increase revenue
3. Use of technology to improve the services
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Threats
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• Fluctuating fuel prices
 Affect profit margin
• The price of the fuel increase, the price of the flight
ticket will also increase.
1.Unstable Fuel Price in the market
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• EBOLA virus
• Severe Acute Respiratory Syndrome (SARS)
• Influenza A virus subtype H1N1
• When these diseases start to spread among publics, the local
government will issue warnings and advising their citizens not
to travel to the affected countries.
2. Diseases
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• Eruption of ash could create a
further hazard for the airline
industry.
• Flight Cancelled.
• Airport Closed.
• Passengers will be rebooked.
3. Volcanic Eruptions
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Apply Porter’s Five-Forces Model,
discuss the attractiveness of the industry
in which the company competes.
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Porter’s Five
Forces Model
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Competitive
Rivalry within
a company
HIGH
Threat of
New
Entrants
LOW
Bargaining
Power of
Buyer
MODERATE
Threat of
Substitute
HIGH
Bargaining
Power of
Supplier
MODERATE
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Threat of New Entrants (LOW)
• Barriers to entry
large capital requirements
• Customer loyalty to established brands
• Complex regulatory procedures
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Threat of Substitutes
(Moderate)
• highly price-sensitive
• There have many others substitutes that can reach the same
destination such as people use theirs cars or use trains and
buses within the same area or country.
• Depend the situation
 long distance flight
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Bargaining Power of Suppliers
(High)
• The airline industry has limited suppliers
I. Boeing
II. Airbus
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Bargaining Power of Buyers
(Moderate)
• Buyer switching cost relative to firm switching cost is easier to
switch between airlines.
• The new technology of e-ticketing/ e-booking gives people
the chance and flexibility to search for many airlines
companies offering better or cheaper costs and services.
• But Emirates’s customers are not very price sensitive.
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Rivalry Among Existing Firm
(High)
• Large number of airlines
• Competitor will always offer the Promotion
• The Emirates Group 2010-2011 Financial Report suggests that
The International Air Transport Association (IATA) that the top
10 international Airlines have only about 30% of market share
in a US$ 565 billion industry.
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Overall Analysis
Threat of New Entrants (LOW)
Threat of Substitutes (Moderate)
Rivalry Among Existing Firm ( High)
Bargaining Power of Buyers(Moderate)
Bargaining Power of Suppliers (High)
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Who are the firm’s competitors
and what are their strategies?
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1. Dual Strategy
i. differentiation through service excellence and innovation,
together with simultaneous cost leadership in its peer
group.
2. Carry out rigorous service design and development
i. hones and thoroughly tests any change before it is
introduced.
ii. customers’ high expectations as a fundamental resource
for innovation ideas.
3. Use of information technology
i. enhancing customer service as well as increasing
efficiency.
4. Developing staff holistically
1. functional skills, soft skills of personal interaction, personal
poise, grooming and deportment, and emotional skills.
1.Singapore Airlines Group
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1. Launched its new global brand campaign “Going Places Together”.
i. to reflect its core values as a contemporary and innovative company
that is really going places and wants nothing more than to inspire its
passengers to do the same.
2. Cost leadership strategy
i. be the cost leader by reducing its operational costs.
3. Differentiation strategy
i. offers affordable tickets.
ii. lowers tickets to those who travel light.
4. Niche strategy
i. focusing all the firms’ resources and capabilities to a special segment in
that market that has its needs unmet.
2. Qatar Airways
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1. Long Term brand loyalty
i. Pay attention to consumers need and want to perfect its services and
products.
ii. Pays back to consumers by accumulating their travelling mile points.
2. Physical evidence strategy
i. Inflight entertainment system.
ii. Wide range of menu to its customers.
3. Support energy sustainability
i. Emphasize 3 “Rs” that is reducing, reusing and recycling as their
compliance principles.
4. Promotion strategy
i. Brands its name by promoting sport festivals
ii. Sales promotion
3. Etihad Airways
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What are the firm’s major
strengths and weaknesses?
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Strengths
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 World’s most valuable airline brand- ranked 171st 2016 Brand
Finance Global 500 Report
 Brand value grew 17% to reach US$7.7billion
 Brand equity scores –customer factor ( Familiarity,
consideration, preference, satisfaction& recommendation are
up
 Offer superior luxury service
1. Strong Brand Name
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 Comprised of more than 50 specialist businesses
 Utilize the expertise derived from core aviation business
 including airport service, engineering, hospitality,
catering, tour operator, destination& leisure management
Dnata- world’s 4th largest combined air services provider -
ground handling, cargo, travel & catering services
2. Focus on diversified market
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 World’s largest operator of Airbus A380&Boeing 777
 trademark Onboard Lounge, Shower Spa, Industry-leading
First Class private suite.
 Most advancement in reducing fuel consumption&
emission
 Larger aircraft-fewer takeoffs and landing
 Onboard Wi-Fi service , Satellite phone
3. Advanced technology & innovative
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 Apps-Apple and Android
 Search &book flight
 check in online& download boarding pass
 Manage passenger travel plan
 Become the most followed travel brand in the world &Middle East
 Milestones: 1st airline
-1million followers (Instagram)
-500,000 followers (Linkedln)
4. Enhancement in mobile Apps
5. Largest transportation on social media platform
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Weaknesses
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• Seek to grow based on own business plan without
seeking permission from alliance partner
• Unable to enjoy jointly benefits
 Code sharing- market access to overcome
restrictions over route access & airline
ownership imposed by national government
 Cost-reduction- sharing of office , operational
staff &maintenance facilities
1. No global international airline alliances
-Star Alliance, Skyteam, Oneworld
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• Focus too much on First class clients
• High fares as comparatively other airlines companies
• Economic condition-Recession
• Price conscious passengers
2. Do not cater to middle class
and budget travelers
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How would you describe
the firm’s financial condition?
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Liquidity Ratio
1.06679 0.97768 1.09988 0.84353
0.80436
1.31236
1.09977 1.18679 1.26696
0.96957
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Current Ratio
Emirates Singapore Airline

Debt Ratio
0.67888 0.72153 0.75705
0.74931 0.74500
0.18035
0.18735 0.20513 0.21141
0.22057
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Debt Ratio
Emirates Singapore Airline

Debt Ratio
2.11406 2.59107
3.11614 2.98901 2.93700
0.22003 0.23054 0.25807 0.26809 0.28299
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Debt To Equity
Emirates Singapore Airline

Profitability Ratio
10.249%
2.946%
3.990%
5.278%
6.795%
7.252%
1.496% 1.518% 1.701%
2.630%
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Operating Profit Margin
Emirates Singapore Airline

Profitability Ratio
10.121%
2.442%
3.208%
4.031%
5.252%
7.909%
2.671%
2.925% 2.784%
2.613%
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Net Profit Margin
Emirates Singapore Airline

Activity Ratio
0.81576 0.79791
0.75060
0.79443 0.77879
0.68071 0.76351
1.00465 0.99249
1.04774
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Total Asset Turnover
Emirates Singapore Airline

48943
60474
70274
78376 82926
10888
11890 12200 12224 12078
2010-2011 2011-2012 2012-2103 2013-2014 2014-2015
Operating Cost (million AED/$)
Emirates Singapore Airline

What are the firm’s existing
strategies and objectives?
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Existing Strategies
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1. Network Expanding
• Flying to more
destinations on more
aircraft everyday
• currently fly to over 140
destinations in more than
80 countries
Year Announcement
2005 Announced the largest-ever
order with 42 Boeing777
aircraft
2007 Signed contract for 120 Airbus
A350s, 11 A380s, and 12
Boeing 777-300ERs
2010 Increase additional 32 Airbus
A380s and 30 more Boeing
777-300ERs.
2011 Requested an additional 50
777-300ERs
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2. First to introduce new products
• First airline in the world to introduce a personal
entertainment system on a private first-class suites
• First to introduce the use of mobile phones and free Wi-Fi
on board
• First airline to place huge aircraft orders
• Won the award for best in-flight entertainment
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3. Sponsorship
• F1 events included in their Emirates
holiday packages.
• Showcase of Emirates first class seats
in US Open sponsorship
• World’s richest horse racing event -
the Dubai World Cup.
“We believe sponsorship is one of the best ways to
integrate with our passengers. It allows us to share and
support their interests and to build a closer relationship
with them.”
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4. Loyalty Program
A) Skywards Miles
• Route, fare type, class
and tier
• Redeem rewards,
promotions and partner
offers
B) Business Miles
• USD 1= 1 Business Rewards
Mile
• Business/organization
• Flights booking
• Upgrades membership
Earning Miles
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Existing Objectives
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Existing Objectives
“To become one of the top
lifestyles brands in the world”
MISSION
To be a powerful international brand delivering a world
class product as customer experience is the differentiator
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What objectives and strategies do
you recommend for this firm?
Explain your reasoning. How does
what you recommend compare to
what the firm plans?
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How could the firm best implement what you
recommend? What implementation problems
do you envision? How could the firm avoid or
solve those problems?
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To increase the passenger seat factor to 90% in order
to maximise the efficiency of generate fare revenue.
Objectives
To increase customer satisfaction level to the range of
90% and above all the time.
To achieve a target of 70 millions passengers per
year on over 300 aircrafts by year 2020.
1
3
2
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STRATEGIES - Increase the flight service to unserved and
poorly served routes on which high demand
currently existing or can be developed
- Meeting peak demands on certain key
seasonal and other variable routes where
very high load factors can be predicted
- Reduce flight to those low demand
destination
PROBLEM - Our existing customers may switch to other
airline company
- Facing unprofitable income at the beginning
SOLUTION Increase the flight for two destination and at the
same time reduce flight for one destination
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STRATEGIES Cooperate with the minister of tourism from
other countries to increase their inbound tourists
by promoting their local destination in Dubai
airport and travel package
PROBLEM Conflict in benefit will occur to reach the
agreement between two parties
SOLUTION Best negotiation to make sure that both parties
satisfied the agreement benefits
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STRATEGIES Purchase 4 types of aircraft model instead of 8
to reduce the training time for the pilot
PROBLEM Facing difficulties in choosing which 4 types of
aircraft model because certain aircrafts are
specialized with fuel efficiency while the others
are seat capacity
SOLUTION Carry out statistical analysis and calculate the
opportunity cost of the options.
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STRATEGIES Register the license from related govern agencies
to operate a casino in the flight of emirates.
PROBLEM It is very hard to obtain the registered license
and which country we need to register to
because some countries are forbidden gamble
act.
SOLUTION Operate in certain aircraft and also direct flight
to one destination only where the country
approve our casino license
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THANK YOU

References
1. A World Force in Travel and Tourism; The Emirates Group(2016) Retrieved from
http://www.theemiratesgroup.com/english/our-company/our-company.aspx
2. Our Company, Our Emirates, About Malaysia Retrieved from
http://www.emirates.com/english/about/
3. Economic Crisis Project On Emirates Airlines Tourism Essay Retrieved from
http://www.ukessays.com/essays/tourism/economic-crisis-project-on-emirates-
airlines-tourism-essay.php#ixzz42t0czKIS
4. Analysis of Luxury Airlines Emirates Airways and Competitors Retrieved from
http://www.academia.edu/1354030/Analysis_of_Luxury_Airlines_Emirates_Airwa
ys_and_Competitors
5. Singapore Airline Annual Report 2010-2015 Retrieved from
https://www.singaporeair.com/jsp/cms/en_UK/global_header/annualreport.jsp
6. The Emirates Group Annual Report 2010-2015 Retrieved from
http://www.theemiratesgroup.com/english/facts-figures/annual-report.aspx
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