ANALYSING TOURSIM AND

HOSPITALITY BUSINESSES

Table of Contents
INTRODUCTION......................................................................................................................1
1.

Evaluate Emirates objectives and comment on the range of methods used to achieve

them. Critically assess if these goals were successfully achieved.............................................1

2.

Suggest how strategies can be formulated to brand/position Emirates in the context of its

operating environment, using Porters 5 Forces model. Analyse the impact of the PESTLE
macro environment on the business and its trading market place..............................................4
3.

Critically evaluate and explain the roles of various stakeholders within the organisation,

as well as any external stakeholders who interact with Emirates..............................................8

4.

Explain the process and importance of a marketing audit. Analyse customer profitability

using relevant auditing tools and models...................................................................................9

5.

Review and comment on the organisations resources in terms of product or service USP,

the quality and flexibility of team members, culture within the organisation and quality of
operational systems and processes...........................................................................................11
CONCLUSION........................................................................................................................13
REFERENCES.........................................................................................................................15

Table of Figures
Figure 1 Porter's Five Forces Model of Emirates.......................................................................5

INTRODUCTION
By the development of worldwide economy, hospitality and tourism industry has
emerged as the highest growing sector in the globe. One of the largest industries in the world
is tourism. As per the WTO definition, tourism encompasses the individuals activities
traveling to and staying in outside places from their usual environment for less than one
consecutive year for business, leisure or several other purposes. Like a tourism sectors, the
industry of hospitality has much wider scope. Basically, it refers to the company giving a
service package, which involves accommodation, arrival, transportation, departure and food
service for the person away from home. Hospitality sector not only comprises hotels but also
refers to several other types of services or products. The present report is inculcating about
business undertakings of Emirates Airline. The content of paper is briefing about companys
structure, operational context and the way it is affected by external environment. The
strategies are also defined in the report that is adopted by Emirates airlines for gaining
leading position in the marketplace.

1. Evaluate Emirates objectives and comment on the range of methods used

to achieve them. Critically assess if these goals were successfully achieved
Emirates is an UAE (United Arab Emirates) based airline. It is a subsidiary of The
Emirates Group that is completely owned by the Dubais government. The company is
biggest airline in the Middle East, operating per week almost 3200 flights, from the
international airport of Dubai to more than 150 cities in 74 nations throughout the six
continents. The strong brand name as an aviation industry leader has been developed by
Emirates, specifically in terms of excellence in service as well as its very fastest growth,
coupled with constant profitability. The company has won various awards and was ranked 8 th
for Airline of the year by Air Transport World in 2012. The particular award was given
according to the recognition of its commitment to operational excellence, safety, financial
state including annual profit of 25 years and consumer service trendsetters. Moreover, by the
Skytrax group of aviation consultancy, the company is also rated as four-star airline. Further,
it is the voted airline of current year 2013 (The Emirates Group, 2013).
Emirates airline follow a centralized corporate structure with top level management
holds lions share in making decisions. The company is divided into several departments that
are again divided into subgroups. The chairman and CEO are stand at the top position in the
business with single person absorbing the posts. The vice chairman pursues in ranks and from
there the organization is alienated into three departments, such as operations plus
1

engineering, sales, cargo and logistics as well as facilities purchase. These departments are
further separated into other subdivision as per the specialization. Mission of Emirates airline
is to offer highest service quality standards to grow business in the industry of air transport
and to attain complete satisfaction of customers through refinement of service levels and
innovation. The vision of firm is to have strong and stable team of leadership with ground
breaking ideas and valuable decision making capabilities that contribute to the development
of best company.
The Emirates airline makes attempt to be the best in its entire venture for meeting
expectations of their customers and profitably add to the development of Dubai incorporated
(Sherrett, 2013). The company is also focusing towards making UAE a worldwide aviation
center for the 21st century. The Emirates aim is based on quality, rather than quantity and thus
its management put more efforts towards enhancing aviation sector. At present, the
organization has great influence into the tourism and travel industry at the global level, as
Emirates is well committed to provide high service in all business aspects. Due to this,
company has developed objectives that are perfectly in lined with its mission, such as to
provide best quality services to its customers and to position Emirates as worldwide airline
along with the carrier of choice to Middle East and Gulf nations. These corporate aim and
objectives is practiced in each level of its business operations from keeping its customer
services and fleets. Due to this, the organization has raised its market share (Baum, 2006).
It can be stated that the business strategies are main behind the success of Emirates over
the years. It is critically reviewed that organization has invested huge money in wide training
of its manpower so that they can offer quality services to clients. The company is able to
attract large pool of talented labor by adopting this strategy and has become the most
accepted airlines. This is also believed that Emirates got triumphant success because it
operates as independent airline, against other airlines, which operate under the star alliance.
The particular policy facilitates it to be flexible during operations and decision making. The
company manages social responsibility and corporate citizenship initiatives that enhance its
brand in the market and at the same time ensures about loyalty of customers. It also has
diversified products portfolio by projecting in another connected businesses including
logistics and hospitality sectors (Betz, 2010).
It is observed that company has able to keep its corporate citizenship and social
responsibility by following proper business ethics and positive culture. In the organization,
employees are well committed for the continuous improvements that combine to develop and
sustain the competitive edge of business operations in international market. The management
2

also employs profit sharing scheme where overall profits are shared with staff members. This
is the best policy adopted by company, as it believed that individuals are more motivated
when they know that higher income will lead to increase in their profit sharing ratio. The
organization is concentrated on improving profit margins by making use of less resources and
producing less wastage or pollution. It is supposed of its eco-friendly fleets operations
throughout the globe that are replaced in short periods for controlling pollution (Buglear,
2010).
The organizational design of Emirates Airlines is mainly divided into two wide
categories, such as contextual and structural dimensions. The structural dimension puts
concentration on companys internal characteristics. This dimension is centralized one which
has hierarchical level that makes decisions regarding policy formation, regulations, job
descriptions, etc. It also includes specialization, i.e. the extent to which business tasks are
subdivided into separate jobs. Moreover, the hierarchy of authority that means the
management level numbers and professionalism, such as employees level plus their
deployment to several functions or departments. On the contrary, the contextual dimensions
make deal with problems that shape the firms structure. These issues are related to culture,
i.e. fundamental set of key values, beliefs, norms and understanding shared within the firm;
its strategies and goals; social system; size; technology and environment. Hence, the
management put great efforts to manage these areas while developing the design of
organization (Clarke and Chen, 2012).
This can be seen that employees contribute best for the attainment of Emirates
objectives, as they are provided with the benefits of broad chances for the professional
development and growth. Furthermore, they are attracted to work in the company, as it have
wide destination network together with chances to learn about the culture of world. Emirates
also recognized as best in the aviation innovation and due to the novel thoughts or ideas of
doing business, the organization has got success in reaching its core objectives. There are
many awards won by the business for its innovation in hub operations and in-flight
environment. In addition to this, planes of Emirates are artistically decorated and included all
technological facilities along with Wi-Fi connectivity that enhances the customers utility.
Hence, from this particular facility, the organization is able to provide quality service above
all in airlines industry and can attract desired target clients. Despite the in-flight innovations,
the Emirates have designed unique strategies and product offerings that contribute to the
accomplishment of its organizational goals (Cooper and Burke, 2011).

Therefore, it can be perfectly stated that due to the open culture in organization, both
employees and managers of Emirates are greatly involved in a continuous mutual efforts to
improve the products or services quality at each stages of business. This then comprises an
impact similar to that of chain reaction in which the companys united goal to develop its
service will eventually increase satisfaction level of customers and lessen the overall costs of
firm. Moreover, corporate culture also enhances the employees self-worth and sense of pride.
It positively affects their behavior and they work well for increasing the efficiency of
organization (Govers and Go, 2009).

2. Suggest how strategies can be formulated to brand/position Emirates in

the context of its operating environment, using Porters 5 Forces model.
Analyse the impact of the PESTLE macro environment on the business
and its trading market place
In order to device appropriate strategies for making organizations brand and position at
top level in the marketplace, Porters Five Forces model can be adopted. It is a simple but
influential tool for comprehending where actual power lies in the situations of business. This
is a useful model, as supports in understanding both the present competitive position strength
and the strength of place where company is in view to move into. It will also help in making
best decisions about business and can avoid wrong step that can bring negative outcome for
the firm. In the sector of tourism, the most essential part is to offer excellent customer
service. Hence, if management of Emirates will able to identify several weaknesses of their
business and recognize where the actual power lies, then can solve the problems very easily
(Gu, 2004).
In the business of hospitality, the tools and techniques are utilized to find out whether
new services or products have the possibilities to profitable or best positioned in the market
or not. Thus, the porters five force models is explained below that will brief about Emirates
position in the market and on the basis of which policy maker will be able to device best
strategies for gaining positive image of its brand over others (Taylor, 2008).

Figure 1 Porter's Five Forces Model of Emirates

(Source: Porters Five Forces, 2012) (Yes this is proper year)
o Threat of the new competitors entry In all types of business there is a competition
among the organizations. The new entrants bring additional capacity into a sector. It is a
threat as the prevailing business can lose their share in the market. The Emirates airline
has less threat from new entrants, as it is a national carrier and therefore enjoys lots of
benefits. The company has its brand equity in the marketplace and it is old in the
aviation sector, so marked as renowned player with high brand value. The requirement
of capital for business is not a big issue for its management, as it is the part of emirates
group. Moreover, the airline is very accessible to customers because having its direct
busses, metro and own terminal. The company has good customer loyalty through its
program like frequent flyer miles and skywards. Further, the business has absolute cost
benefits in terms of flight caterings and fuel. All these capabilities allow it to enjoy less
threat from fresh entrants (Hara, 2008).
o The intensity of competitive rivalry Competitive forces have broad influence on the
market, as it defines the competition value. Emirates accommodate both small and long
yank flights, having slight divergence of terms and policies with their rivalries. There
are around 37 airlines that fly from and to Dubai; hence the organization faces high
competition.
5

o Customers bargaining power The power of buyer is determined by the customers

concentration and also their spurs or ample to utilize that power, which generally drives
the risk. The internet has increased the allure and consciousness of buyers. The
company also faces bargaining leverage between luxury flights and tickets of budget
for same destination (Katsioloudes and Hadjidakis, 2012).
o Suppliers bargaining power The organization faces great bargaining power of its
suppliers. This is mainly due to large number of substitutes are presented for suppliers,
as there are many airlines operating in UAE and which is also planning for expanding
their business operations.
o Threat of substitute products There are various direct substitutes for Emirates airline
that are considerably lessen its market value. The company has internally threat from
local flights together with several another transport means, such as rail, cars, buses and
ships. But externally the organization has just threat from international airlines, which
compete with their sound strategies and policies (Paul, 2008).
In order to beat competition and substitute products as well as to enhance brand in the
market, Emirates should start direct flights to every destinations within its network for
gaining customers loyalty by providing convenience and satisfaction. The airline can upgrade
its hardware and software systems of ticket booking in an attempt to counter the regular
delays experienced by the customers at the time of using online tool. The organization can
add new hardware and software or replace existing system with new one. It will improve
service delivery and will save precious time of customers, which again enhance brand image
in the market. Furthermore, Emirates can also ensure a balance between available products in
the business and economy class, so customers do not feel undervalued and become more
attached towards the company (Saee, 2013).
In order to analyze the macro environment impact on the Emirates business, PESTLE
analysis can be done, which includes factors that influences the company both positively and
negatively:

Political Emirates airline is one of the privileged organizations in present scenario.

The political scene are favorable for company, as many nations in the region have
making agreements, which help better trade among these countries, specifically in
relation to aviation industry. However, Emirates should be ready to tackle rising fuel

cost of the nation.

Economical The Middle East Region has been growing their economy at fast space.
This increasing economy affecting overall salary structure of nation and hence
6

improving per person income. Therefore, more people are able to afford the air
transport. Due to this, over the past few years, Emirates has been growing dramatically.
Secondly, the airline success is directly connected to the Dubais success. The plenty of
business projects are begun in the city that is attracting more tourists to visit UAE

(Sigala, Christou and Gretzel, 2012).

Social Emirates operations involved services from huge manpower. When comparing
UAE with other nations, for instance USA, there is great difference in costs of work.
USA uses only 38% whereas UAE utilizes 8% of its operating cost. Hence, many

employees are becoming aware of these problems and demanding more.

Technological Due to the technological advancement, the airline is required to train
employees who can provide online information about companys strengths. Moreover,
with internet customers can easily compare services of Emirates with its competitors

(Taneja, 2003).
Legal In order to sustain its brand value in the market place, airline is required to
follow legal regulations related to customers and employees rights. Further, customers
are becoming more aware about the environmental impact of various activities. Hence,
failure to adopt with an incorporated environmental tactic can create negative impact on
the income and reputation of Emirates. In addition to this, flights cancellations and
baggage loss by clients would raise ethical issues, which can have an adverse effect on

the brand image of company if remain unsolved.

Environmental Strong environmental regulation can increase each year costs of
operations. To provide adequate response to environmental issues, Emirates has
employed low-carbon fuels and new technologies to reduce worldwide greenhouse gas
emission (Wber, 2002).

3. Critically evaluate and explain the roles of various stakeholders within

the organization, as well as any external stakeholders who interact with
Emirates
There are both internal and external stakeholders of Emirates airline and they have following
interest in the business operations and performance of company:
Internal Stakeholders
Employees Airline employees are interested in operations and management of
Emirates, as it given them with opportunities of training, job security, good work
conditions and competitive salary. It can be stated that manpower is the main players in
the company and also they are the image of business as well as create great influence
on clients (Ahmed and et.al., 2010).
Shareholders They want Emirates to do well, as are the owners of business and desire
their investments to improve in value, they are also considered as one of the major
players in company. The shareholders are interested in organizations performance to
get high dividends and profits along with encouraging corporate image and a state in
overall business. It is observed that shareholders of company should be well informed
about the benefits and risks associated with the novel strategies. Moreover, they should
know when to expect income and in what amount they will their investments returns
(Alserhan, 2009).
External stakeholders
Customers The airline customers will be interested in business undertakings, as they
get excellent customer service and quality flights as well as service choices. Business
clients fly with the airline flights regularly; hence they want Emirates to do well, so
they can use their services continuously. It can be said that consumers have less interest
in the management of organization but have strong impact on the total sales. Therefore,
the goal of company is to attract more consumers towards their services (Baker and
Holt, 2004).
Government The government wants that company should be adequately comply with
regulations and laws, pay its taxes on regular basis, follow healthy employment policy,
make optimum use of resources and actively contribute to the national economy. The
government of United Arab Emirates has enables the airline to develop a liberal market
in which it operates, for the reason to promote as well as sustain competition. As a key
8

stakeholder, the operations of airline has successfully monitored by government to

make sure that it constantly complies with the standards of market, hence ensuring that
the company competitively stay in the place of market (Bottorff, 2013).
Creditors Emirates creditors have interest in its business, as they want their credit to
be repaid promptly and want to issue additional credit, in order to make extra profit.
They are interested in financial undertakings of firm, for instance profit and loss
accounts, balance sheet and cash flow (Chan, 2000).
Suppliers Airbus and Boeing are the two main suppliers of Emirates with which
business is required to maintain strong relations through long term agreements. With
this organization remain safe from the potential changes in the strategy of pricing.
Suppliers have interest in the pricing policy adopted by company.
Local community Local community also influence the companys operational
procedures, as Emirates is required to adopt travelling facilities and fares, which can be
afford by local people of country.
Thus, it can be said that stakeholders are main part of business and their requirements
should be properly addressed by company to gain their effective contribution in the growth
and development of business.

4. Explain the process and importance of a marketing audit. Analyse

customer profitability using relevant auditing tools and models
A marketing audit is systematic, comprehensive, periodic and independent examination
of an organizations objectives, marketing environment, activities and strategies with a view
to determine opportunities and problem areas. This particular audit helps in recommending a
best action plan to be adopted by the company for improving its performance of marketing.
The audit and assessment process of marketing generally include following three steps:

Pre-audit activities It include identifying who will undertake the whole audit process
and at what time it will be executed. It also comprises establishing objectives, scope

and methodology (MARKETING AUDIT, 2013).

The audit process The procedure of audit itself involves range of sub steps:
Collection of data Collection of information about the industry, macro
environment, customers, competitors, the company and marketing mix, which is

considered as the most time consuming and expensive facets of marketing audit.
Analysis of information It includes evaluation of collected data in an effort to
give whole inclusive picture of marketing program of organization, such as how
effectively it fulfills the marketing concept requirement in providing for corporate
9

profitability and customer needs, facing the rivalry, adapting itself to the macro
environment changes and how well it is in undertaking this (Dalci, Tanis and

Kosan, 2010).
Preparing recommendations A report of audit is prepared on the basis of
identified weaknesses and strengths. The report must give directions for the
further developments and manners of satisfying consumers needs (Lawton,

Rajwani and O'Kane, 2011).

Post-audit activities After the preparation of audit report it should be presented to
management. The recommendations and findings should be debated and plans to
execute recommendations along with proper time table must be drawn up. Then finally
implementation should be done.
The undertaking of marketing audit is important for the organization as it provides

guidelines for managing appropriate change in the marketing process. The airline can
improve its effectiveness and productivity as well as re-evaluate knowledge process
informations. The management can understand through audit what activities have done in the
past and what not. Moreover, they can increase their cross-functional understanding. The
marketing management can also review the marketing communications efforts efficiencies
through audit together with assessment of sales forecast accuracy (Michail, 2011).
In addition to above, companies also make customer profitability analysis to understand
better and satisfy present or further demands of clients. The CPA tries to bring together
accounting and marketing professionals to manage, analyze and improve the profitability of
customers. The one best modern method used for conducting CPA is ABC (Activity based
costing) tool that assumes that activities leads to costs and products, customers plus services
are the mains reason for activities. ABC concentrates on determining reasons for what costs
occur, rather than on simply allocating what has been used up. The particular tool traces
activities costs in the process of production by utilizing activity and resource drivers on the
basis of cause and effect (Customer Profitability Analysis, 2013). Primarily there are five
steps in the costing process of ABC:

Identification of activities;
Determination of input from the consumption of resources by activities;
Identification of output through which the process cost directly vary;
Calculation of driver rate;
Tracing of activity costs to cost objects, such as processes, products and consumers
based on the activities usage.

10

With the help of consumer based ABC model, a company can able to analyze how to
fulfill the needs of customers, which want minimal services and less cost products and also in
what way to offer services of high cost, high margin to service customers. Therefore,
profitable clients can be obtained as well as retained in several different ways (Epstein,
2000). Furthermore, the following problems should be considered at the time of analyzing
profitability of customers by airline:
How to identify further downstream customers costs;
How to build reliable customer cost and revenue information;
How to integrate in an analysis, a multi period horizon;
How to discover distinct drivers of customer costs (Mills, Meyers and Byun, 2010).

5. Review and comment on the organizations resources in terms of product

or service USP, the quality and flexibility of team members, culture
within the organization and quality of operational systems and processes
It has been observed that Emirates came into the market simply as several brands and
name of western airlines were bleeding financially, losing their luster and cutting back on
their services, such as bad food, smaller seats, and poor infrastructure of airport and cheap
snacks, etc. Emirates came into market to provide customers will complete experience of
great accessibility to airports along with finest hotels, excellent duty free, adequate
destinations and good shopping facility. When looking step back on the remarkable expansion
and growth of airline, there are several lessons for mainly Islamic finance and specifically
Islamic banking. At present, the company is become the biggest aviation in the region of
Middle East, from its poor beginning in the year 1985 with starting capital of just $10 million
from the royal family unit and currently, it is operating numerous flights in a week (Unique
Selling Proposition, 2010).
It can be stated that the main reason behind revenue growth of the organization in
chaotic times are its stability of leadership, which also adds to the persona of airlines. The
Muslim world must review the present life cycle of Emirates on developing worldwide nonpetroleum based organizations. It is the essence of local diversification of economy and
contributor to knowledge based nation. It can be perfectly said that the airline is a model for
several other luxury airlines of Middle East, like Etihad Airlines, Qatar Airways and jointly
such airlines have placed their bar very high from the coach (Siddiqui, 2012).
Unique selling proposition is the manner which makes business different or unique
form another businesses of similar category. The USP allowed Emirates to dominate and take
over the aviation industry. The airline has developed in the customers minds after their
11

campaign of Kids go free. Moreover, in order to create competent image in the

marketplace, the organization has sponsored lots of sports events. In addition to this, the
airline, which took deliverance of the huge aircraft in Hamburg, has planned to provide
themselves, the refreshment chance to its premium class customers. This type of luxury is
reserved for 14 individuals in the cabin of first class, who will have best access to two
showers throughout the trip (Nataraja and Al-Aali, 2011).
The clients will order their 25 minutes slots that will comprise five minutes itself in the
shower and little additional duration to dry them off along with dressing again. They would
be capable to maintain track the time left by them in shower by watching at a dial in the
cubicle itself. This shows that airline has designed all of its facilities to provide best comforts
to the passengers for gaining their more attraction towards their services (Raaij, 2005).
Furthermore, at the time passengers of business class get large seats, those in the first
class are provided with suites, with plenty of gold trim, wood and leather along with 23inch television screen. Thus, this can be viewed that such luxuries support the airline in
making apart from the competitors because they hope to attract premium customers ready to
pay big amount for some hours pampering. Singapore airlines that make delivery of the first
superjumbo, boasted massive amounts of vast seats and leather in its premium class cabins.
The company has decided that large cocktail bar and shower, which is recognized in business
circled as its unique point of selling for those clients unaffected by the soaring prices of
fuels and credit crisis (Millward, 2008).
In order to take deliverance of aviation behemoth, the airline has ordered 58 A380s.
Although there was much triumph when the plane was handed over, the delivery was almost
two years late. These delays have angered airlines whose calculations of passenger were on
the basis of using double-decker plane. Despite the problems of production, the European
group behind Airbus continued to hail its credentials as the upcoming time of aviation.
Capable of tackling 525 passengers, it was claimed by airbus that the plane of Emirates is
more fuel efficient than its competitors and its size shows that customers will use major hub
airport, like Heathrow (Taylor and Taylor, 2008).
While considering the quality and flexibility of team members in company, it can be
observed that Emirates follow the modern style of leading staff members by providing them
coaching, supporting systems and appropriate sessions of training. These are the main reason
behind empowerment of employee in airline. The top level management of organization has
also learned that way to trust workers by building a vision and letting them free to make their
judgments on their own responsibility. The management built a support system where
12

employees can get help from one another across the functions and outside the formal
structure. Subordinates are also shown about the importance of their contribution in the
overall operations of company. It reflects that in the organization, individuals are asked to
make decisions on their own, further are provided with a framework or vision in which they
can take appropriate actions to give response in non-standard events (Raaij, 2005).
If anyone looks at the culture and quality of operations at Emirates, they will found that
the companys structure, design and culture are driven by its values, mission and vision. The
informal and formal communication strategies also contribute to devise such structure.
Moreover, the culture at workplace is driven by diverse employees from multicultural
environment that put their efforts to follow common organizational culture. The particular
culture allows company to provide quality services or facilities and for that reason it is stand
in the global top 10 airlines. It is the excellence of business that it has been gradually
capturing the traffic from South Asia and North America and all the continents of globe. The
culture has also been to modify the company to the brand and thus from 2004, airline has
altered its slogan to Fly Emirates. In 2008, it has launched a slogan around their network of
100 destinations in 50 countries and more across six continents (Taylor and et.al., 2008).
It has been reviewed that culture of company has been to offer quality services to the
customers. Therefore, they provide different seats to different class passengers along with
additional facilities for their convenience. Hence, the culture allows it with novel ideas and
innovation, as employees is belonging from diverse places with their unique knowledges or
thoughts. Due to this reason, the airline is first who has launched for its all three classes, the
IFE system. Besides the operational system and service quality, the diversified culture of
Emirates allows it to invest in varied events like the company has sponsored Fifa World Cup.
Lastly, it can be stated that overall growth and development of airline is because of its
diversified culture that facilitates execution of different novel ideas for the productivity of
business operations (Gu, 2004).

CONCLUSION
From the above report, it can be concluded that Emirates Airline is the most important
airline in the Middle East that has effectively established on the marketplace in past 25 years.
Its sustainable model of business supports in attaining the overall competitive edge in the
worldwide international market. The companys competencies, strategic capabilities,
sustainable business model and strengths have reinforced the strategic management that
13

ultimately leads to the accomplishment of its business objectives. Furthermore, the working
environment and culture followed in company motivated the workforce to perform efficiently
and effectively that again lead to the attainment of strategic objectives.

14

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