Business Development Management
Task 1: Consultant’s Report
Background of the Company
Emirates Airline is a company that specializes on air flights in the UAE. It provides air transportation commercially, both internationally and in the United Arab Emirates. However, it is just a part of the Emirates Group. It is able to offer services in the transportation of people, cargo, as well as postal services. It also provides in-flight catering, hotel operations, wholesale and retail provision of consumer goods. The headquarters of the Emirates Airline are in Dubai, UAE. With more that 130 Boeing and Airbus jets and almost 10 cargo fighters, it is considered one of the largest airlines in the world. Therefore, the analysis of this airline can be as detailed as it can get. This is because it is a huge company whose actions affect a lot of changes in the market place. When the leaders make any change or advancement in the strategic organization, the effect of the same is seen in a magnified way. Therefore, this is enough proof that the issue of Emirates Airline is worth the research (Wilson 2007).
Recommendation for One New Area of Organizational Transformation
Emirates Airline is the strongest brand in the airline industry. This is because of its massive advertisements, quality services, development plans, innovativeness, adaption of latest technology, as well as many other factors that this company has been excellent in. For these reasons, the company has seen massive successes over the years. It has been in a position to be increasing the fleet over the years. This is a sign that the company has been growing. In a bid to maintain its originality, as well as distinctiveness, in terms of the brand, this company is not in interested in forming alliances like other companies. For this reason, it has always maintained its brand strength (Stonehouse & Pemberton 1999). Therefore, this is a company, whose faults are extremely difficult to identify. However, extensive research was carried out on the company. According to Sarin (2010), brand management is one of the factors that ensure the continuity in the success of any business. However, this author has mentioned that it can lead to the destruction of a company. In a bid to maintain its brand, an enterprise might forget about the importance of forming alliances with other companies. This can lead to the loss of touch with the world around the business. Therefore, this forms the basis of the first argument, as well as the areas that the company needs to place its focus on (Transportation Research Board 1990).
Emirates Airline is in a capital-intensive industry. This is an industry that requires some of the largest amounts of funds for use as the initial capital. This is because it has to be up to date with all the technologies that are emerging. The other fact about this company is that it is in an extremely competitive world. There are other companies that may want to take the place of those companies that are at the top. For this reason, every company has to keep on its toes in balancing their need to survive in the market, as well as their need to make profits. This is a balance that should be maintained, as long as the company wishes to maintain its profitability. For this reason, most companies in this business tend to spend a lot of money. This means that the initial capital required is extremely large (United Arab Emirates 1999).
Luckily, for Emirates Airline, it is owned by the government. This means that it is open to as many resources as possible. The country is extremely rich in terms of minerals, as well as other resources that may be necessary for the running of a country. However, it is correct to say that any business should be a separate entity from its owners. This means that every company should account for its expenditure independently. Therefore, even if the government is involved in funding this company, it has to exhibit success on itself. This means that it has to make profits that ensure the return on investment. It also has to be in a position to cope with future changes in the market. Competition, unexpected losses, changes in international laws, improvement of global airline services and other factors may help it to keep on its toes. This is a proof that, similarly to other companies, this one needs strategies to ensure the stability of its success in the relevant analyses (Kuczmarski 1996).
The cutting out the middleman model is widely used by Emirates Airline. This is the model whereby they eliminate most of the people in their supply chain. After this has been done, they are in a better position to obtain high profit margins. This has always proven to be an effective method for them to achieve the stated objective. However, this is a company that has many ambitions. This is because it is filled with young and innovative minds that may want to see it transformed (United States Catholic Conference 1988). For this reason, they are always on their toes. In the recent past, the greatest challenge for this company has been the expansion of their market. This is because it is one of the most independent companies. It does not make alliances with other companies. The expansion of market is an issue that may require more than independent strategy. This is where there is need for the adoption of the collective business model. This is a model in which two or more companies in the same industry come together to perform a collective duty (Levy & Merry 1986).
Supply chain collaboration is one of the most effective ways to raise capital. This is for the simple reason that more than one company is pulling their resources together to perform a specific task. As mentioned above, the airline business is one that is extremely capital-intensive. This means that it requires heavy capital input, especially at the start. This suggests that the plan for Emirates Airlines to expand its market may also require heavy capital input. There are several major ways in which these alliances and partnerships will help this company to achieve its objective (Truss & Mankin 2012). First, they will be in a position to raise higher capital for the procurement of the necessary and relevant items for expansion. Therefore, the profits and losses will be shared equally. The fact that they will share their profits and losses equally also suggests that they should share all their resources equally. However, it may be in terms that may be agreed by both parties. After the consensus between these parties has been reached, they shall be expected to work together. Emirates Airline is a government-owned company. However, it is clear that its operations are commercial. This means that it is not just an ordinary organization that offers help to its citizens. Instead, it is a company that is started as well as run with the sole aim of profit making (Cordon & Hald 2012). For this reason, the fact that they may find new ways in which to raise capital is extremely helpful for this company. This is because they can use their funds in other areas of development that are vital for the nation. At the same time, they would not loose out on this business end since the profits will be expected to be on a large scale (Stonehouse & Pemberton 1999).
According to Brock-Al-Ansari (1994), the other factor that formation of these alliances will help in is acquiring of customers. As a matter of fact, there are numerous customers that are loyal to Emirates Airlines. This is because the company has been offering them quality services for a long time. Therefore, they would not like to leave this company and join another. As a result of brand management, this company has shown its ability to maintain its loyal customers through the sands of time. However, there are other companies in the industry that have the same issue. This means that they have their own loyal customers who would not like to leave them. The deduction that can be made from this is that the alliances they formed with these companies would mean the acquisition of these new customers. As a result of this, the customers may develop loyalty to these new groups that will be formed. When this happens, the demand for services from this alliance would be as high as the company would wish. It would ensure that there is a dire need to increase the scale of operation. This would fulfill the desire for this company to expand its scale of operation. Although the profits would be shared according to contribution, this company would reap a lot of benefits from the acquisition of these new, loyal customers (Brock-Al-Ansari 1994).
Randall (2005) suggests that the other factor that has to be considered in this part is that of expanding the market. The companies that form alliances are not guided by location, especially if the geographical position of a company is not as influential as would be hoped. Instead, it is guided by the presence of mutual interests. When forming collaborations, there is a need to ensure it is with the right people. This company should look for alliances with countries that are outside their own market. This is because they will reveal new locations for which it can expand its operations. The expansion of a market alone is a hard task to fulfill. This is because there are always competitions in new markets. Therefore, the penetration of a company in a new market can prove to be difficult. This is especially in such a company that is in a capital-intensive industry. However, the experience of companies that are already there could prove to be useful. These companies do not have to absorb each other completely. Instead, they can form a system whereby each of them takes care of the interests of the other in the region in which it operates. This can help in the development of a mutual relationship that can be used as a necessary tool for expansion of the operational areas. Therefore, it is clear that collaborations, partnerships and alliances may be vital if this company is to achieve its objective of having a wider market share (Randall 2005).
Evaluation of the Leadership, Innovation and Change Issues
For any change to be effective, it has to be embraced by every person in the company. This means that there should be a force and reason for all members of an organization to accept any change. This force has to come from a direction of influence as well as power. One of the areas that would be completely affected by this proposed change is leadership. This is because it is responsible for enforcing the changes that would be undertaken by Emirates Airlines. There are some changes that are easily manageable. This is because they would just require simple adjustments to be made on a preexisting schedule. However, the change that has been proposed suggests that the company merges with other companies. Therefore, this company has to merge its structure with those of other companies. Moreover, it may involve the partial merging of structures, plans, objectives and designs. It would mean that the company has to plan on how it can cope with bigger markets. This is why it is vital to evaluate the implications that the same would have on leadership (Antonakis 2004).
First, the leadership of this company has been extremely conservative. This is because they have been used to the fact that they are completely independent. Therefore, they have created a global attitude towards the airlines as well as its behavior towards alliances. However, there would be a need to change attitudes if this change is to be implemented. This is the work of the leadership of the company. The attitudes that need adjustments are those of workers in the company, customers, other companies as well as the global market with regards to this industry. In its advertisements, the leadership of this company should ensure that there is a show of diversification. They should come up with models that exhibit a lot of diverse boundaries with regards to their thinking and operations. This will have an effect on the customers. It will take the attention of all customers in the world, as well as attract other companies that may be willing to make alliances. With this, it will be possible to come up with a way in which their companies can merge (Grady & Malloch 2010).
The other party whose attitudes can be adjusted is the employees of this company. This is the most important part of the company. This is because the labor force ensures that all the activities that have been planned for are accomplished. The leaders may decide on any plan. However, they cannot be in a position to implement the same. They require the workforce to take care of the relevant changes that are involved. This way, they can be in a position to cover the smallest bits of changes in the firm. The communications that are made to the employees should depict a company that is open for the association with others. This is a company that would be willing to join any others in their quest to achieve a similar objective. This can prepare the employees psychologically. If any changes are to occur in the future, they should be in a position to ensure that they execute them in the right way. The other option would be bombarding the employees with ideas and changes that would only cause rebellion and resistance that would prove the division of the company to the outside world (Green & Butkus 1999).
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Creation of an enabling environment is another issue that the leadership should be involved ion. This is because the company would undergo complete restructuring. The fact that Emirates Airlines invests most of its resources in research should be adjusted. This company should start on a new quest to ensure that resources are allocated to make adjustments in the structuring of the company’s plans. However, this cannot be done aimlessly. They should first make a list of the companies that they expect to merge with (Sadler 2003). After this, they should approach them, considering all the factors that have been listed and explained in the previous part of this paper. This way, they can be sure of the funds that are required for this merging. Thus, the leaders can be in a position to go back to the drawing board and come up with a new structure for their newly formed company. They can even consider factors such as changing their name or some other factors. However, it is vital to ensure that they maintain some bit of originality. This is because the time that a partnership is going to last can never be estimated. Therefore, the company should not lose all its original characteristics. It should strive to be diverse, while still being conservative. This calls for a balancing act (Snowdon & Stonehouse 2006).
Task 2: Group Presentation
Evaluation of Strategic Choices
The Porter’s generic strategies are one of the most influential in such a company. This is because they give ideas on how the company can be made better in terms of its supply side as well as the demand side. Product differentiation is one idea that can be used as a strategy for this company. This is where it can be involved in differentiating its products, in a way that they are unique. This can be done by changing tiny bits about the way in which they provide services to their customers. When this is achieved, they can be able to be distinguished from other companies. This only functions to increase the competitiveness of a company. It does not provide a larger market scope. This is because it is on the strength side of Porter’s arguments. Although it does not increase the market, it ensures the maximum usage of the existing one (Porter & van der Linde 1995). When a company focuses on differentiation, it tends to attract customers more. It also ensures that the customers develop a sort of loyalty for the goods or services from this particular company.
The other strategy that the company can be involved in is the issue of product cost. At any time, in any industry, there is the equilibrium price of a certain product. This is the average price at which most of the commodities in such companies are sold. For this reason, any prices above or below this one are not common. Emirates Airline should ensure that it lowers its price by a small bit (Nadler, Shaw & Walton 1995). The effect that this has on the demand never disappoints any company. This is because customers always want the services that are the most affordable. However, this does not mean that they should reach prices that are not profitable. Instead, they should just ensure that their prices are slightly below the equilibrium ones. One may think that this may cause a smaller profit margin. This is only true in theory. The long-term effect of this is extremely different. This is because a reduction in process ensures that there is a resulting increase in the sales that are made. This shows that the company is likely to increase the number of customers. The demand for their services might even grow greatly. This would call for more equipment, workers, as well as working space. Therefore, it is a strategy that can ensure the expansion of any business to levels that may not have been previously imagined (Dixon & Ahrendsen 1999).
The last strategy that this company would be involved in is the expansion of the scope of the business market. This is one of the most difficult strategies for the company to adapt. This is because it does not only depend on the internal factors and changes that are to be made. Instead, it also depends on external factors that are beyond the control of the company. Furthermore, it is one of the strategies that can lead to the downfall of a company (Lynton & Pareek, 2000). This is because it requires a lot of resources. After these resources have been used, the plan may fail. This would mean the loss of massive funds from the company. However, this is also one of the most rewarding strategies of a business if conducted in the right way. The supply side of the company can always be adjusted to meet the levels that can be required by the consumers. However, the demand side takes time to change. That is why market expansion is vital for this company. It is a strategy that can ensure an increase in the rate of success of this business (Sarin 2010).
Emirates Airlines is a huge company that has exposure to a lot of resources. Therefore, they can be in a position to make numerous changes in their structure as well as operational activities. This is because they have all the funds and influence that a company would wish. This comes from the fact that it is run by the government itself. However, there are a number of factors that should be checked in the making of a decision on the best strategy for the company. The cost is one regulating factor (Randall 2005). The enterprise should weigh the cost of each and every endeavor with reference to the amount of funds that it requires to be in a position to reach its objectives using this tool. The other factor that should be considered is the legal implications of any of the strategies. The effect on staff morale, customer preference as well as the global image of the company should be considered in this choice as well. Therefore, there is a need for the management of this company to have a sitting and decide on the best course of action. The failure to do this can ensure that the company does not prosper or achieve any of the dreams that it may have (Stake 2004).
The important factor to consider in the recommendations is the effect that would be witnessed by the stakeholders of the company. These include the customers, employees, funders, as well as other partnering companies in the industry. This is a company that has always shown success. As a matter of fact, it is one of the biggest airline companies in the world. This is owing to the market command that it has, as well as the profit margins that it has always experienced. This is a factor that makes it hard for anyone to make changes in the company itself. This is because it might cause alterations that may be disastrous to the survival of the same. However, there are changes that can be made on the demand side of the company. These are changes that can ensure an increase in the quantity as well as the quality of the customers. The quality means that there can be customers that are extremely loyal and willing to spend on the services that the company provides (Williams, Samset & Sunnevåg 2009).
Increase in the market scope of this company should be a key factor of consideration. The management of this company should come up with ways in which the market scope can be increased. The formation of alliances can be an instrumental tool in ensuring that the company touches more parts of the world. It can even increase the competitiveness of this company. This is because it will have representative companies in these desired parts of the world. The other factor is that the ideas of both companies can be merged to ensure that they both achieve their desired objectives. This strategy has minimum negative influence on the stakeholders. First, the labor force would be thrilled by the idea (Stonehouse, Pemberton & Barber 2001). This is because it would demand for more labor as well as technology. On the other hand, the customers would also like the idea. This is because merging may cause an increase in quality. It would also enable the company to reduce its cost to affordable levels. The only asset that would be lost is the originality of the company. If done in the right way, it can be instrumental in ensuring that the employees are comfortable with the working conditions, the customers enjoy the prices and the company enjoys more success. This is because it would be serving a larger market than before.