Etihad Case Study

According to Johnson and Scholes (Exploring Corporate Strategy) the definition of business strategy is; “Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations”. A Business strategy will help an organization to answer the following question in order to achieve its objectives in long terms; Direction; what are the objectives in the long term?

Scope; which market and activities involved should we enter, should we compete ? Advantage; What makes us unique? How can we be better than the competitors in this field? Resources; What kind of resources (skills, assets, facilities, etc…) we have or we need to have to compete? Environment; what internal and external factors can influence our performance in a competition? Stakeholders; what are the expectation and holes of those who are around the organization?

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Business Strategy AnalysisAbove I describe a number of analysis can be used in order to identify the business strength and understanding the position in the market; PEST Analysis – It is used to understand the environment that can influence or impact the business. | | Five Forces Analysis – it is a technique that identify the forces which will impact the level of competition in an industry. | Market Segmentation – a technique which seeks to identify similarities and differences between groups of customers or users| Directional Policy Matrix – It will identify the competitive strength of a businesses in a determined market. Competitor Analysis – a wide range of techniques and analysis that seeks to understand a businesses’ overall competitive position. | SWOT Analysis – a useful technique for identifying the key issues arising from an assessment of a business’s “internal” position and “external” environmental influences. |  Strategic ChoiceDepending on the stakeholder expectation, this process will evaluate and select strategic options. Strategy ImplementationAfter the strategy has been analysed and selected, it is time to put into action, execution is very important and every organization has a different way to do it in order to fit its goal. | | |

Stakeholder Analysis Business Strategy 2009 – Etihad Airways The history Proud to be the National Airline of the United Arab Emirates, Etihad was founded in July 2003, and since then has carried a remarkable 17 million people to more than 50 destinations. With 52 environmental friendly aircrafts the company expectation to the end of 2009 is to have carried up to seven million guests and also expanding the routes to Melbourne, Istanbul, Athens, Lanarca, Chicago, Cape Town and Hyderabad. Major achievements • The largest ever commercial aviation start-up aircraft order, announced in 2004, for 29 Airbus and Boeing aircraft. More than 17 million Guests carried. • One of the youngest and most environmentally-friendly aircraft fleets, with an average age of three years. • A record-breaking order in July 2008 for up to 205 aircraft at the Farnborough International Airshow, including firm orders for 100 aircraft. • A record-breaking order in May 2009 for up to 469 engines at the Paris Air Show, including firm orders for 239 engines. • Sponsorship of the Ferrari Formula 1 team, Manchester City and Chelsea Football Clubs, Harlequins Rugby Football Club, the Etihad Stadium in Melbourne and the Formula One Etihad Airways Abu Dhabi Grand Prix. More than 40 global awards for service and innovation including Best Business Class at the 2009 Skytrax awards. As we have grown during the last five years so has the number of employees, with more than 8,500 staff representing 120 different nationalities A – Vision and Mission Etihad aims to bring the Arabian hospitality to the world as well as to be cultured, considerate, warm and generous as well as to enhance the prestige of Abu Dhabi as the center of hospitality between East and West. Uniqueness – is our goal is to be a truly 21st century, global airline, challenging and changing the established conventions of airline hospitality.

Hospitality Leader- We welcome everyone who flies with us as a distinguished Guest, as reflected in the unique hospitality we offer in our Guest Travel Classes. With our fresh new approach to service in the air and on the ground, we seek to return a sense of freedom to flight. Innovation – And we are always in touch with your needs. That’s why we are constantly innovating, taking the smallest detail into account in our pursuit of excellence and perfection. B- Goal “Etihad focuses on being the 21st Century, as well as being global, challenging as well as it is set to change the accepted way of behavior of airline hospitality. C- The Objectives The objectives of Etihad is to be the Market leader in the Aviation industry, by offering a renowned onboard service, reflecting the Arabian hospitality, well known for being warm and generous, innovating its products; e. g. State of the art Premium cabins of First and Business class, expanding routes; set to have 57 destinations added to its network by end 2009, and fleet expansion; a record breaking order at Paris Air show in 2008 with Etihad placing an order of 469 fleet addition that was projected at a price list of $ 14 billion.

Stakeholder analysis The government of Abu Dhabi – Being owned by the government, the growth of the company will not only contribute to enhance employment once the company support Emiratisation programme focusing on the UAE National staff but also contributing with development of Abu Dhabi helping the economy growth. Community – With the expansion and growth, the community will benefits in so many aspects, such as employment prospects, better infra tructure of the city to receive tourists, competitive flight rates, etc… Because being global is one of the objectives, this will put Abu Dabhi on the map, helping to promote the local culture worldwide, what signifies progress and National pride. Employees – One of the promises of Etihad is to be a leader in hospitality and to offer an outstanding services for customers, which translate in better trained staffs, opportunity of promotion, job security, better benefits and better working conditions but on the other hand a fast growing company can have a negative impact if it is not addressed properly, offering structure and training.

Etihad has also to invest on the satisfaction of employees in order to expect a great job and a greater customer satisfaction. High payCostumers – In order to keep ahead in the market, Etihad will focus on retaining customers satisfaction and loyalty, once they are the most important stakeholders and have high expectation on competitive flight rates, value for money, Innovation and excellence in service. Suppliers – The growth of Etihad swill also benefits small business and suppliers working . In order to meet the demand suppliers will have long term relationship with the company and opportunities for business.

But also will have to keep it up with a higher service standard, in order to keep contracts. Creditors – Banks will be the source of loan for the big purchase of aircrafts Etihad is planning. | D- Internal Audit SWOT ANALYSIS Strengths | Weakness | * Location; Abu Dabhi – an Ideal and strategic location at the Middle East, an International hub linking the East and west. * Government owned airline – which translate in support and incentive for the company’s growth. * Young and innovative driven team – customer satisfaction oriented – focusing on retaining customer loyalty, building a relationship with customers. High training program – with the promise of being a master in hospitality. Better trained employees+ greater job satisfaction = happy customer. | * Very young airline company – * Not internationally well known. * The world economic crisis– freezing ambitious development. * The price of the oil. | Opportunities| Threats| * Sponsorships; supporting some of the most important sports events around the world. E. g. formula 1 – Ferrari team, Etihad stadium Melbourne and Manchester football club. * Increasing number of destinations, purchasing new aircrafts. Focussing on product innovation and seeking unique hospitality. * Empowerment of employees, offering career growth, which translate in job satisfaction and equally excellence in customer service. | * Strong market competitors; Emirates Airlines and Qatar Airways. * The global economic downturn being an opportunity for the low cost carriers e. g. Fly Dubai and Air Arabia. * The challenge of keeping up with the good customer service, when the company is growing so fast. | E- External Audit F- Core Competencies People –

Etihad key business strategy is to invest on employees, capacitating them through training programs, where they can develop abilities to perform better in their function and offer an excellent customer service. Recently Etihad has signed an agreement with the Higher Colleges of Technology (UAE) to provide its students training in careers aviation. Fleet It is one of the most modern fleet in the word, with the world’s most sophisticated flight deck and it is the ultimate in twin-jet performance, operational efficiency, extended cabin space and increased flying range.

The cabins offer comfort and sophistication with seats upholstered with Ferrari lead, the seat belts have built-in airbags and the wood panelling has a cross-hatch design that echoes the Arab style. The new aircraft are described as an unparalleled level of style and luxury in all three travel classes.

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