Emirates Airlines: Macro-Environmental Analysis (Term Paper Sample)
Emirates Airlines: Macro-Environmental Analysissource..
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This report seeks to examine the strategic issues surrounding Emirates Airlines. The report begins by carrying out the external and internal analysis of the company to unearth the issues present in its business environment. This report also evaluates Emirates' corporate and business strategy, issues and challenges, and strategic options. Emirates is a Dubai-based airline company that provides in-flight and flight entertainment systems that include business, economy, and first classes. It is one of the fastest growing firms in the world, and as noted in the case by Alcacer & Clayton (2014), it took the company just twenty-five years to grow and become the third-largest airline worldwide in terms of capacity. In addition, in regards to the number of international passengers, the company is the largest in the world. As pointed out by Alcacer & Clayton (2014), the geographical markets covered by Emirates are Europe, Africa, Asia, the Gulf and the Americas. The main stakeholders of Emirates are the government, customers, the management, and its employees. Differentiation is the generic strategy followed by the firm. Emirates achieves this through the provision of advanced services and experience for its passengers such as e-ticketing, wide seats, and technology. The main stakeholders of Emirates are the government, customers, the management, and its employees. Each of these main stakeholders has interests in Emirates' operations.
1 Part I- External Analysis
1 Macro-Environmental Analysis (PESTEL Analysis)
1 Political Factors
Emirates airline works effectively by signing agreements with countries within the Asian Pacific region. Any political instability, war or terrorist activities in any of these countries largely affect the operations of the airline because they result in suspension of flights over routes through those affected countries. For example, the recent political friction between Asian Pacific countries due to a diplomatic rift has affected the airline, which has forced them to suspend their flights in and out of some countries (McMah, 2017).
2 Economic Factors
The airline industry is largely affected by fluctuations in fuel prices, and when the fuel prices change, the bottom line of the airline is affected too (Cento, 2008). The company suffered a decline in its profits early last year due to low oil prices experienced by Persian Gulf economies (Kamel, 2017). In addition, the level of investment in the country and in countries in which the airline routes pass through determines the number of tourists visiting the country. The more the investments, the more the number of tourists, resulting in an increase in profits generated by the airline.
3 Social Factors
The airline industry depends largely on the number of travelers. As the population of people globally increases, the number of travelers increases as well. This, in turn, promotes the growth and financial performance of the airline. In addition, a lot of people are lately traveling to Dubai and other countries in the UAE, which has resulted in an increase in profits reaped by the company. A decrease in population, on the other hand, affects the airline negatively. The airline also incorporates people from different background in their workforce (Alcacer & John, 2014). This has promoted social diversity among the employees.
4 Technological Factors
Technological factor also form part of the PESTEL Model (Hill & Gareth, 2009). Technology has affected the airline in various ways. For example, on one hand, it has facilitated reservations through the electronic ...
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