STRATEGIC SERVICE VISON

 Target Market Segment

- Cost-conscious regional travelers

 Service Concept
- Safe, no-frills low-cost air travel
- Convenient schedules
- Make flying fun

 Operating Strategy
- Keeping operating costs down
- Making employees the first priority

 Service Delivery System

- Single type of aircraft—Boeing 737
- Efficient system for booking tickets, boarding passengers, maintaining airplanes
 COMPETITIVE SERVICE STRATEGY

1. Threat of New Entrants

The new company entrant into the Airline industry causes a severe threat to the existing companies in any
sector. This is because they may provide better quality services, cost-efficient, and better products. In the
airline sector, such a threat is low because the level of entry barriers is high. In the same case, many
challenges are supposed to be considered by the new entrants in the business as follows:

 Capital Requirements: An enormous amount of budget is needed for starting a new airline company to
offer the services to the customers and also, to buy aircraft. For example, Boeing costs approximately
$2 Billion (Ashraf, Emirates Airline)
 Brand Name and Customer Loyalty: Most of the existing airline companies have already established
and built a strong and excellent position in the current market, a strategy that assists them to compete
against the threats of new entrants. Therefore, depending on their long-time experience in the market,
their existing companies’ experience curve is high. For instance, American Airlines. Typically, the
alliances that lie between the essential airline companies make the entry on the sector hard for any new
company that offers the same service.

2. Bargaining Power of Suppliers

Suppliers have a significant effect on any industry through their capabilities to increase the prices and of
course, to reduce the entire quality of the purchased services and goods. The airline industry comprises of
few suppliers all over the world. They include the Airbus and Boeing. Therefore, the bargaining power of
the suppliers is very high, since those who are limited suppliers have the control over the market due to
the tremendous demand for their products.

3. Bargaining Power of the Buyers

The buyers of manufactured products typically affect the sector through their abilities to reduce the costs,
bargain in order to get high-quality or more services. Therefore, the power of the purchasers in this
industry is powerful. This is because there are many passengers, over 1.8 Billion Annually. The attempts
to have many buyers on the airline services makes the switching costs to be low, and passengers or
customers have many options in the market (ITAT). Furthermore, the advanced technology of e-ticketing
provided customers with the chances and flexibility to search for a lot of airline services companies,
which offer better as well as cheaper costs and services. Moreover, this concept eases the entire operation
of switching between various airline businesses. Therefore, most companies providing the airline services
give the air miles systems to have the attention of customers and also, to retain them.
4. Threat of a Substitute Service or Product
The risks that are posed by the substitutes differ, mainly from one region to the other and the international
airlines. In cases of the regional airline services, this threat may be higher as many people can drive their
personal vehicles or just use railroads as a way to travel within the same region. However, on the
international level, most people typically use airplanes to move more comfortable and faster. For instance,
in Europe, they are using trains to travel from one country to the other. In fact, it is easy to move using
passengers from the United Kingdom to France, due to the Eurostar Train, which spends about 1 hour 40
minutes (London to France). However, in many nations, railroads, and trains are not available, such as in
the United Arabs Emirates. Accordingly, such carriers do not have a potent threat to the airline sector,
because they aren’t used for long distances journey by many nations.

5. Rivalry Among Existing Firms

In the Airline Sector, the competition is significantly high, especially between the companies, since there
exists a variety of airline companies, which offers the best aircraft as well as services to their esteemed
customers. For example, most businesses try as much as possible to expand their market shares through
providing perfect prices, customer services, and some exclusive promotions. Also, expansion of the
market by Airline Company can be done by being creative in their campaign of advertising.

All these Porter’s Five Forces of Competition favors the Airline Industry. Therefore, it is crystal clear to
conclude that this sector is profitable, having less competition and threats for any new entrant company or
substitutes.
EMIRATES AIRLINE SERVICE BLUEPRINTING
 GENERIC APPROACH TO SERVICE SYSTEM DESIGN
The Three Generic Strategies, which were identified by Michael Porter, include the differentiation, cost
leadership, and focus. These are all the options which are available for small businesses. Cost leadership
needs a tight set of interrelated tactics that involve the aggressive construction of efficient-scale facilities,
fixed costs and overhead control, vigorous pursuit of cost reductions from experience, avoidance of
marginal customer accounts, and the cost minimization in every activity in the firm’s value chain. On the
other hand, differentiation is the strategy of differentiation that comprises of developing a difference in
the products or services of the company by building something that that is unique all over the sector and
valued by the consumers. Focus depends on the preference or choice of narrow competitive scope within
the industry (Upham, 2015).

 Differentiation
Emirates Airline adopts the distinction as one of the three generic strategies to achieve the best out of the
competition and gains competitive advantages amongst its competitors by providing high-quality services
to their customers. This makes Emirates Airlines be the best Air Travel Company all over the market and
differentiates from its competitors. For instance, Emirates was the first airline across the globe to provide
TV screen for all the classes of Aircraft. Also, it was the first airline company in the Middle East to serve
the e-ticketing.

 Focus
In addition to the gained competitive advantage through differentiation, Emirates Airlines have achieved
the same strength by focusing on new market segments. For instance, it provided another Air Travel
Company like Qatar Airways, with outstanding training courses, specifically by utilization of modern
machines, called the Plane Simulator, to be the only company all over the Middle East that provides such
a service (Reuters. 2017). The primary aim of this adjustments is to be the core leaders in the entire airline
sector, mainly by increasing the brand name awareness in the region as well as internationally. This will,
in turn, increase the full demands and the profit margin of the company.

 Cost Leadership
Emirate Airline has been the cost leaders by decreasing the company’s operating costs. The lower price of
fuel and gas has assisted the Emirates to lower the operating costs. Emirates Airline has a significant Cost
per Seat Kilometer (CASK) advantage compared with other European legacy groups, and these include
the carriers that have been hardest hit by the Gulf carrier competition (Reuters. 2017).