Emirates Airlines - Economics Essay Example
Emirates Airlines is one of the leading airlines in the industry - Emirates Airlines introduction. It has maintained many sources of competitive advantage in terms of cost and uniqueness which had led to a cost advantage and differentiation advantage. Although cost advantage and differentiation advantage are mutually exclusive, Emirates Airlines was able to sustain both. As for the competitive scope, the company can have either a broad target or a narrow target.
Most probably Emirates Airlines is favouring the broad target because it is using both differentiation and cost instead of focusing on one of the factors. On the other hand, a business strategy is a long term plan of action used to reach a particular goal or objective. In the case of Emirates Airlines, its goal is both to have a cost advantage and a differentiation advantage which makes the company’s strategy sustainable. In terms of cost, Emirates Airlines is using various strategies to have a cost advantage.
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It is having a 30% decrease on labor cost; it is using more labor from the Indian subcontinent. It is also using economies of scale. A good example for the economies of scale is its purchase of the aircraft (75 A380). Above all that, the company doesn’t have to pay any taxes because it’s in a country with no taxes policy. These enable Emirates Airlines to have an advantage in terms of cost. As for differentiation, Emirates Airlines is having differentiation because of many points.
The company is offering, if we can say, glamour in its first class such as showers and beds. Moreover, it is offering free meals for the passengers. The company is also having associations with other international high profile organizations which made it have a competitive advantage based on differentiation. In addition, the company is having a geographical scope such as it has international destinations around the world. It has also a dedicated terminal and free transport. The question that remains is whether the strategy is sustainable or not.
By offering all this, Emirates Airlines can guarantee having loyal customers. Customers will be mainly focused on the developing countries. In addition, the company is having an absolute cost advantage which is 30% non- union. This is why it is difficult to imitate. The company is also seen sustainable because it offers training programs for pilots. Also, Emirates Airlines has its own Aviation College. As a result, this makes Emirates Airlines sustainable in terms of competitive advantage in the future.