Name: Michael Beiser

Student-ID: w13034743
Degree: International Business Management (Hons)

Doing Business
Globally and Internationally
SM0380

Module Tutor: Dr. Alison Pearce

Word Count: 3300

1
W13034743

T ABLE OF CONTENTS
GLOSSARY .......................................................................................................................... 3
List of Figures ....................................................................................................................... 4
List of Tables ........................................................................................................................ 4
1. Partner Selection .............................................................................................................. 5
1.1 PESTEL- Analysis ....................................................................................................... 5
1.2 Porter- Analysis ........................................................................................................... 5
1.3 Synergies .................................................................................................................... 6
1.4 Benefits ....................................................................................................................... 7
2. Risks ................................................................................................................................. 7
2.1 Choice of Strategy ....................................................................................................... 7
2.2 Why is it not a merger? ................................................................................................ 8
2.3 Relational Risk............................................................................................................. 8
2.4 Performance Risk ........................................................................................................ 9
3. Culture ............................................................................................................................ 10
3.1 National Culture ......................................................................................................... 10
3.1.1 Potential impact .................................................................................................. 10
3.2 Corporate Culture ...................................................................................................... 10
3.2.1 Emirates Airline ................................................................................................... 10
3.2.2 Qantas Airways ................................................................................................... 11
3.2.3 Potential Impact .................................................................................................. 11
3.3 Extent of impacts ....................................................................................................... 12
4. Exchange Rate Movements ............................................................................................ 12
4.1 Operational Exposure ................................................................................................ 13
4.2 Transaction Exposure ................................................................................................ 13
4.3 Translation Exposure ................................................................................................. 14
4.4 Conclusion................................................................................................................. 14
5. Learning Outcome of the Module ................................................................................... 14
5.1 Knowledge about global business ............................................................................. 14
5.2 Expert Lectures ......................................................................................................... 15
5.3 International collaboration .......................................................................................... 15
6. Reference List ................................................................................................................. 16
7. Appendices ..................................................................................................................... 20
Appendix A ...................................................................................................................... 20
Appendix B ...................................................................................................................... 21

2
W13034743

GLOSSARY
UAE

United Arabian Emirates

NC

National Culture

CC

Corporate Culture

IDV

Individualism

UAI

Uncertainty Avoidance

PDI

Power Distance

XR

Exchange Rate

SA

Strategic Alliance

3
W13034743

LIST OF FIGURES
Figure 1.1: Ansoffs Model of Product Diversification
Figure 2.2: Classification of foreign market entries
Figure 3.1: National Culture of Australia compared with UAE
Figure 3.2: Trompenaars model of corporate culture
Figure 4.2: Currency Chart of USD AUD exchange rate movements

LIST OF TABLES
Table 1: PESTEL-analysis of Australia and the UAE
Table 2: Porter-analysis of the high-cost airlines Industry

4
W13034743

1. PARTNER SELECTION
1.1 PESTEL- ANALYSIS
With use of the PESTEL-framework (Appendix A) the reasons for Emirates are that
the government of the UAE prepares the Gulf region for an elementary economic
change towards an economic centre and a tourist region (Elbanna, 2010). In order to
advance the strategy, the government aspires to provide a worldwide reachability
(OConnel, 2011). Particularly, Dubais low labour costs, taxes (Sundaram & Al-Ali,
2011) and the proximity to oil production can lower operational costs (OConnel,
2011). Besides, the UAEs geographic location enables fast connections to six
continents (Sundaram & Al-Ali, 2011). Otherwise, Australia and New Zealand have
an isolated geopolitical position and the government supports opportunities to
ameliorate connections to key markets as Europe (Kleymann & Seristoe, 2004).
1.2 PORTER- ANALYSIS
With the usage of Porters five forces (Appendix B) the competitive environment
(Lynch, 2012) of premium and high-cost airlines will be analysed. This cost intensive
industry can be ranged in a level of stagnating demand with a defined number of
premium airlines (Kleymann & Seristoe, 2004). Reasons for the stagnation are the
impact of technological developments like video communication and financial crises
(Fleisher & Bensoussan, 2007). In this competitive market, premium airlines are
threatened of losing customers to low-cost carriers (Hunter, 2006) or competitors
with similar standards and due to easier internet research, the buyers developed
higher price sensitivity (Fleisher & Bensoussan, 2007). Thus, Qantas has lost market
shares in its unprofitable international business (Qantas, 2012). In contrast, Emirates
is supported by the government and throughout its strong hub dominance, the airline
seeks to expand its network in order to enforce their role as a global connector
(Kleymann & Seristoe, 2004; Nataranja & Al-Ali, 2011). Nowadays, most countries
have mutual agreements and open sky policies, but especially governmental
regulations of international air transportation in Australia complicate an independent
market entry and effective operations (Duval, 2008). Otherwise, the Australian
domestic market is predominated by Qantas, which makes an SA feasible (Sarina &
Lansbury, 2013). Furthermore, expenses for fuel supply are rising (Doganis, 2005),
because of the high demand for oil at booming emerging countries and political
unrest in oil producing countries (Tagesschau, 2008). Cost of labour force can be a
relevant disadvantage depending on the main operating location (Hanlon, 2007).
Modern and fuel-efficient aircraft technologies mostly provided by Airbus and Boeing
are important assets of premium airlines (Lufthansa, 2013). Currently, Emirates
receives high price deduction as priority client (OConnell, p.340) and possesses one
of the youngest and most modern fleets in the market (Nataranja & Al-Ali, 2011). In
addition, both air carriers can provide a developed infrastructure.

5
W13034743

1.3 SYNERGIES
Both companies agreed to adapt each others schedules and combine prices by
sharing their flight codes to consolidate the complementary networks to achieve
economies of scope in order to raise the companies value and to operate worldwide
(Qantas, 2012; Kang & Sakai, 2000). This is demonstrated by a higher amount of
destinations and flights in a certain interval without an input of additional labor force
and fuel, which can be summarized in economies of density (Kleymann & Seristoe,
2004). According to Ansoff framework (Figure 1, 1987) the potential effects of these
strategic decisions are a higher penetration in the current markets and the intention
to develop new markets in order to achieve economic growth.

Figure 1.1: Ansoffs modell of diversification (Ansoff

et al., 1987)

Though, the companies agreed to combine facilities and harmonize processes within
their networks (Qantas, 2012) as well as they might conduct common procurement
of basic material as fuel and catering to attain economies of scale by reducing labor
force and increasing cost efficiency (Oum, Park & Zhang, 2000). In addition, the
companies agreed to mutual crediting of frequent flyer points (Qantas, 2012). As a
result, they can market these features in joint promotion activities (Kleymann &
Seristoe, 2004). This performance aims to enforce the loyalty of customers (Forgas,
Moliner, Snchez & Palau, 2010) and to attract new passengers in order to increase
the worldwide market share and to gain competitive advantage (Oum, Park & Zhang,
2000).

6
W13034743

1.4 BENEFITS
For Qantas, this cross-border SA enlarges the operating distance in Europe,
Northern Africa or the Middle East (Qantas, 2012). Moreover, Qantas raises their
offer of one-stop flights, which is reflected in considerable time savings (Qantas,
2013). Qantas cancels it loss making routes in Europe, which are now served by
Emirates and profits by its restructured Asian network (Qantas, 2013). In this context,
Qantas can reduce capacity in Europe without losing market presence (Kleymann &
Seristoe, 2004). At the same time, they seek to enforce the home market dominance
with more inbound travel (Kleymann & Seristoe, 2004).
Otherwise, Emirates can expand their network with more connections and direct
flights to Australia and New Zealand (Emirates, 2013). Moreover, Emirates gains
new costumers for the European destinations and expects a touristic upswing
(Qantas, 2013). According to Preeces (1995) framework a motivation for the
companies is to achieve economics of learning, but especially Qantas is in a position
to benefits of the high standards and reputation of Emirates airlines.
In summary, these airlines seem to be feasible partners, because of the expectation
of increasing sales revenue, the decreasing costs and risk for their operations and
the savings of investments by common performance (Ansoff, McDonnell, & HarveyJones, 1987).

2. RISKS
2.1 CHOICE OF STRATEGY
Figure 2.1 shows 3 different kinds of market entry strategies. In this particular case
Emirates and Qantas signed a long-term cooperative agreement without equity
contribution (Qantas, 2012). Altogether, Kang and Sakai (2000) state that the
collaboration can be seen as flexible, because the companies are able to react fast
to changing external factors. However, collaboration without an equity involvement
includes a moderate risk, but eases the possibility to dissolve the partnership (Kang
& Sakai, 2000).

7
W13034743

Figure 2.1: Classification of foreign market entries

2.2 WHY IS IT NOT A MERGER?

There is a development towards an oligopolistic market with a high concentration of
premium airlines (Hanlon, 2007) and an equity investment could increase the
potential synergies with a higher level of integration, but both companies stayed
independent. In this case, the high costs of a merger could be a barrier for both
parties, because Emirates has cost intense aircraft orders and Qantas needs to
restructure the unprofitable international business. Besides, both airlines can be
seen as national flag carriers with national interests (Kang & Sakai, 2000, p.29).
Emirates might stay a governmental owned company, because of the beforehand
mentioned national strategy and the Qantas Sales act forbids a majoritarian foreign
ownership (Qantas, n.d.). Furthermore, the new entity could lose certain traffic rights
and international aviation agreements could expire, because these agreements were
concluded between states (Kleymann & Seristoe, 2004). Another point can be the
awareness of different cultures (Thomas, 2008).
2.3 RELATIONAL RISK
Das and Teng (2001) state, that manager in a strategic cooperation need to be
aware of the special relational risk, because each independent company unavoidably
has their private goals. If the companies act opportunistic or exploit the partnership
with a hidden agenda, conflicts can arise and the SA is threatened to lose its
effectiveness (Das & Teng, 2001). Furthermore, for this SA without a mutual equity
involvement, but with the intention of retaining flexible, a lack of focus in the
commitment can accrue and increase the possibility of opportunistic behaviour (Das
& Teng, 2001). Especially in a SA with competitors involves the risk of losing unique
resources like knowledge, which makes it difficult for managers to balance the
degree of cooperation (Das & Teng, 2001). In this case, Emirates as one of the
leading airlines in service and technology (OConnel, 2011) faces the challenge of
8
W13034743

protecting the own know-how and simultaneously contributing it to create synergies

(Das & Teng, 2001). A conflict between the two partners can arise, if one party
benefits more than the other (Das & Teng, 2001). According to Ansoff et al. (1987)
the airlines follow a market development strategy, but the combined market and
product knowledge reduces the risk of failure.
Regarding the antidromic financial situations in 2012, there is the risk of choosing the
wrong partner. According to Das and Teng (2001) a SA between a strong with a
weaker company tends more to fail as with an equal partner. One reason can be a
missing fit of resources, which disables the creation of value (Das & Teng, 2001).
Thus, Emirates risks of displeasing costumers, who want to utilize an Emirates flight,
but will be referred to a code-shared Qantas flight, which might cannot offer an
accordingly high standards. That can arise because of a missing fit of strategy as
Emirates might expect to keep the standards high or even ameliorate them, but
Qantas pursues the aim to reconstruct their international business and to achieve
savings (Qantas, 2013).
In this case, parts of the Qantas staff could resist the collaboration, because of the
unequal power structure between the companies, if the Emirates airline forces many
changes (Ansoff et al., 1987). In summary, the choice of a SA is combined with
heightened risk because of the restricted ability of implementation control and
increased coordination for joint decisions (Das & Teng, 2001).
2.4 PERFORMANCE RISK
Even if the partners manifest high commitment in the SA, there are general external
environmental risks of performance, which can affect its success like new
governmental policies, recession and internal frictions between the companies (Das
& Teng, 2001).

9
W13034743

3. CULTURE
3.1 NATIONAL CULTURE
Before partners commit to a SA, it is
crucial to be aware of the particular
culture (Hofstede and Hofstede, 2005).
The NC of an individual is deep-rooted
and influences the values and basic
assumptions of each CC (Gancel,
Raynaud & Rodgers, 2002). According
to Hofstedes (n.d.) framework to
analyze NC, the main differences of the
UAE and Australia are reflected in their
attitude towards PDI, IDV and UAI.
Therefore, the IDV differences can have
high impact on the SA.
3.1.1 POTENTIAL IMPACT

Figure 3.1: National Culture Australia in

comparison with the UAE (Hofstede, n.d.)

Both countries have different approaches of solving problems and finding decisions
(Buda & Elsayed-Elkhouly, 1998). Australian managers are more direct and
dominant, whereas Arabian executives tend to avoid direct interpersonal conflicts
(Buda & Elsayed-Elkhouly, 1998), which might lead to tensions and communication
problems. The differences in PDI can be reflected in different conflict producing
leadership styles. The strong national IDV and high short-term orientation of
Australia (Hofstede, n.d.) might reinforce Qantas concentration to achieve more
individual objectives.
3.2 CORPORATE CULTURE
3.2.1 EMIRATES AIRLINE
First of all, it is necessary to highlight the UAEs share of 85 percent of foreign
residents, which might influences, the validity of the national analysis and affects the
CC (Federal Foreign Office, 2013). As an example Emirates takes more risks with its
innovative and offensive strategy than other competitors (OConnel, 2011), which
contradicts the high UAI ranking. According to Trompenaars (1997) framework,
Emirates seems to be based on a family culture with a strong hierarchical thinking.
Thus, the company pursues the goal to be a global connector with staff out of more
than ninety countries and an international management board, but the company is
finally controlled by Sheikh al Maktoum (Emirates, 2013). Tim Clark states in an
interview with Bloomberg (2012) that the UAE executed a one-time payment with the
premise to establish an innovative world class airline without state intervention.
Nowadays, the board of Emirates takes decision rather in a more personal and fluid
10
W13034743

strategy approach, than in a bureaucratic process, which increases the flexibility

(Sull, Goshal and Monteiro, 2005). The statement of Abdulaziz Al Ali, confirms
Emirates culture of a high context communication with high amount of personal
relationship and face-to-face business (Sull, et al., 2005).

Figure 3.2: Trompenaars Model of Corporate

Culture (Trompenaars & Hampden-Turner, 1997)

3.2.2 QANTAS AIRWAYS

In contrast, Qantas could be associated with the Eiffel-Tower culture, which features
a bureaucratic and job-orientated structure with defined processes (Trompenaars &
Hampden-Turner, 1997). This cultural approach can reduce the ability to react for
environmental changes, because of time-intense modification procedures
(Trompenaars & Hampden-Turner, 1997). A deep assumption according to Schein
(2004) is Qantas presentation as a national airline with a main part of Australian
employees (Qantas, 2013). According to official reports Qantas espoused values
seem to represent a more defensive strategy, which might focuses on safety, risk
management and international alliances and the vision to prepare the company for a
profitable future (Qantas, 2012).
3.2.3 POTENTIAL IMPACT
According to Trompenaars and Hampden-Turners (1997) model both companies
seem to have a strong CC wherefore conflicts can arise. One impact of the CC
could be the fact that it is Emirates first SA. The Arabian airline highlighted in an
article its former independence (Ulijn, Duysters and Fevre, 2010), which nowadays
could result in a dominant behaviour or missing ability to accept different
approaches. In contrast to Australias short-term orientation, the UAE seems to
follow a long-term strategy towards an economic center as well as Emirates with
high investments for future growth (OConnel, 2011). However, cultural diversity can
also ameliorate the skills of both companies in order to learn about the preferences
11
W13034743

of each others developed markets, to increase the creativity and problem solving
process because of new perspectives and to enhance the ability to react on
changing needs and environmental factors (Schneider & Barsoux, 2003).
3.3 EXTENT OF IMPACTS
Both the national and CC differ in certain categories and conflicts can arise.
However, the moderate intensity of this specific SA in comparison to Joint-Venture
and mergers is (Ansoff, et al., 1987) a supporting argument, that differences can be
accepted as long as the companies are capable to imply the common and different
cultural positions (Ulijn, Duysters and Fevre, 2010). An important base is the mutual
awareness of cultural differences in order to manage these features successful
(Schein, 1999).

4. EXCHANGE R ATE MOVEMENTS

The airline industry is highly affected by international trade, because airlines deal
with competitors worldwide and earn revenues in foreign currencies (Forsyth &
Dwyer, 2010). An analysis and comparison of the Qantas and Emirates home
currencies is important to measure potential benefits and disadvantages, because a
large part of the financial transactions were realized with the home currency (Forsyth
& Dwyer, 2010). In this context the Graph shows a relevant depreciation of the USD
in comparison to the AUD, which are the relevant currencies in this SA as the
Dirham is linked to the $-rate (Forsyth & Dwyer, 2010).

Figure 4.1: Currency Chart of USD AUD exchange rate movements (XE, 2013)

12
W13034743

Moffett, Stonehill and Eiteman (2012) distinguish between transaction, translation

and operating exposure of international currency fluctuations. Though, operating
exposure has the highest significance in relation to long-term effects of XR
movements (Dhanani, 2003). In this context, the effects of XR fluctuations alter
depending if the home currency enhances or depreciates (Madura & Fox, 2011) and
if the focus lies on the home or international market (Forsyth & Dwyer, 2010).
4.1 OPERATIONAL EXPOSURE
In an international view, the appreciation of a currency can be accompanied with less
inbound costumers and the negative effect of losing market share to foreign
competitors in the long-term (Dhanani, 2003, p.42). With this in mind, a strong
Australian dollar can reduce the share of European costumers travelling to Australia,
whereas Qantas domestic outgoing flights are expected to increase (Forsyth &
Dwyer, 2010). A potential decline of sales figures, because of XR caused price
adaptions of one partner would lead to relative higher prices. This affects the portion
of profit participation of the other partner due to the code-share agreement between
Emirates and Qantas, as well as it can reduce the attractiveness to book the
combined product. Especially, a strong appreciation of the USD connected with a
lower demand (Forsyth & Dwyer, 2010) could result in relevant disadvantage for the
SA, because of Dubais role as a hub. Otherwise, depreciation might ameliorate the
cost competitiveness and enables the companies to attract customers with cheaper
prices, but can weaken efficiency in the long-run (Oum & Yu, 1998).
Furthermore, fuel supply became one of the main portions of costs for airlines. Since
the price of fuel is connected with the USD (Kaiser, 2007) and the AUD gained value
towards the American currency, Qantas can purchase fuel relatively cheaper. A
permanently strong AUD might make Qantas a better strategic partner for Emirates
in a long-term view, because of potential cost reductions by joint fuel procurement.
4.2 TRANSACTION EXPOSURE
A currency appreciation in the home market of an airline has the effect that national
input supply prices increase relatively in comparison to competitors with another
currency (Forsyth & Dwyer, 2010). Even if in this term international transactions
become relatively cheaper, the airline overall costs will rise and the international
competitiveness decreases (Forsyth & Dwyer, 2010). An appreciation of the Dirham
would generate relative higher national input costs (Forsyth & Dwyer, 2010) for
Emirates and the need to recalculate the offsetting of long-term contract as fuel
supply, infrastructure usage fees and code-sharing flights to avoid transaction
exposure caused losses (Dhanani, 2003). A strategic tool can be hedged XR
agreements to reduce the influence of such movements (Forsyth & Dwyer, 2010).

13
W13034743

4.3 TRANSLATION EXPOSURE

XR movements affect the value of assets bought or credits received in a different
currency as soon as they are settled in the financial report in the own currency.
Because of the missing equity involvement, less importance can be assigned to
translational exposure.
4.4 CONCLUSION
These fluctuations can have positive effects (Forsyth & Dwyer, 2010), but
unexpected occurrences as financial crises can have extensive impact in relation to
XR movements (Fratzscher, 2009). Qantas and Emirates recognized the need to
enhance efficiency (Oum & Yu, 1998) by developing potential benefits and synergies
in a cross-border SA, which can work against negative effects of XR movements in
order to strengthen their international competitiveness.

5. LEARNING OUTCOME OF THE MODULE

Prior to my time at Northumbria University, I was already studying Business
Administration and Leadership. During this time, I could get a first insight of the
various kinds companies operate international. While my internship at the logistics
division for Audi, it became clear that large firms cooperate with international
suppliers and serve the needs of customers worldwide as well as these companies
have subsidiaries themselves in many countries. Having these impressions in mind, I
was sure that studying International Business Management at Northumbria Business
School would prepare me with the knowledge to be successful in a globalized world.
5.1 KNOWLEDGE ABOUT GLOBAL BUSINESS
I especially remember the lecture about governmental intervention, which imparted a
deeper understanding of the different reasons and forms of intervention in
international trade. Through the examples how countries can affect the economic
activities of companies, I realized the need of being aware in which extent
governments can influence business decisions. The lecture transmitted important
knowledge in order to cope with governmental intervention and even to benefit of
favourable policies by developing the right strategy. Another lecture I found highly
useful was based on internationalisation strategies and the importance of selecting
an appropriate partner to be successful. I am certain that this knowledge helped me
to develop myself further on a professional level in order to transfer it into my future
job.

14
W13034743

5.2 EXPERT LECTURES

These lectures gave me a valuable insight into the opportunities and challenges of
emerging markets. In this context, I was especially impressed by Dr. Shokris lecture
about Iran. The countrys young population with a high affinity for technology could
arouse the interest of companies for more investments in this viable market.
Emerging markets are less saturated and offer various potential opportunities and
ways for economic growth. Maybe, my professional future will be in self-employment
and with this in mind these lectures equipped me with the relevant business
conditions of many countries as well as the knowledge about key capabilities of a
successful company in order to be provided for future elementary decisions.
5.3 INTERNATIONAL COLLABORATION
After my first lectures I was overwhelmed of the international diversity in this course.
It gave me the chance to cooperate with people from all over the world and to learn
about different approaches of finding solutions in business issues. Especially, during
the seminars I appreciated the possibility to work in small, international groups.
Within these groups, we could collaborate and discuss challenging exercises, which
was a good a simulation of international business meetings in order to find a joint
solution. The seminars improved my capability to cooperate respectful with other
cultures as a consolidation of theoretical and practical experiences. As a result, I am
sure that applying this new knowledge will be a significant benefit for my future
career.

15
W13034743

6. REFERENCE LIST
Ansoff, H. I., McDonnell, E. J., & Harvey-Jones, J. (1987). Corporate strategy (Rev.
ed.). London: Penguin.
Australian Government DFAT. (n.d.). About Australia. Retrieved December 01, 2013
from https://www.dfat.gov.au/facts/democratic_rights_freedoms.html
Bloomberg TV. (2011). Emirates' Clark Interview on Airline's Outlook. Retrieved
December 4, 2013 from http://www.bloomberg.com/video/65549000-emirates-clarkinterview-on-airline-s-outlook.html
Dhanani, A. (2003). Foreign exchange risk management: a case in the mining
industry. The British Accounting Review, 35(1), 35-63. doi:
http://dx.doi.org/10.1016/S0890-8389(03)00002-7
Doganis, R. (2005). The airline business (Enl. 2nd ed.). New York: Routledge.
Elbanna, S. (2010). Strategic planning in the United Arab Emirates. International
Journal of Commerce & Management, 20(1), 26-40. doi:
http://dx.doi.org/10.1108/10569211011025934
Emirates Group. (2013). 2013 Emirates annual report. Retrieved from
http://www.theemiratesgroup.com/english/facts-figures/annual-report.aspx
Fleisher, C. S., & Bensoussan, B. E. (2007). Business and competitive analysis:
effective application of new and classic methods. Upper Saddle River, NJ: Financial
Times Press.
Forgas, S., Moliner, M. A., Snchez, J., & Palau, R. (2010). Antecedents of airline
passenger loyalty: Low-cost versus traditional airlines. Journal of Air Transport
Management, 16(4), 229-233. doi: http://dx.doi.org/10.1016/j.jairtraman.2010.01.001
Forsyth, P., & Dwyer, L. (2010). Exchange rate changes and the cost
competitiveness of international airlines: The Aviation Trade Weighted Index.
Research in Transportation Economics, 26(1), 12-17. doi:
http://dx.doi.org/10.1016/j.retrec.2009.10.003
Fratzscher, M. (2009). What explains global exchange rate movements during the
financial crisis? Journal of International Money and Finance, 28(8), 1390-1407. doi:
http://dx.doi.org/10.1016/j.jimonfin.2009.08.008
Gancel, C., Raynaud, M., & Rodgers, I. (2002). Successful mergers, acquisitions and
strategic alliances: how to bridge corporate cultures. London: McGraw-Hill.

16
W13034743

Hanlon, J. P. (2007). Global airlines: competition in a transnational industry (3rd ed.).

Oxford: Butterworth-Heinemann.
Hofstede, G., & Hofstede, G. J. (2005). Cultures and organizations: software of the
mind (2nd ed., rev. & expanded. ed.). New York London: McGraw-Hill.
Hofstede, G. (n.d.). Australia. Retrieved November 10, 2013 from National Culture:
http://geert-hofstede.com/australia.html
Hofstede, G. (n.d.). Arab Emirates. Retrieved November 10, 2013 from National
Culture: http://geert-hofstede.com/arab-emirates.html
Hunter, L. (2006). Low Cost Airlines: Business Model and Employment Relations.
European Management Journal, 24(5), 315-321. doi:
http://dx.doi.org/10.1016/j.emj.2006.08.001
Kaiser, A. (2007) Oelmarkt: Die Dollar-Daemmerung. Retrieved from
http://www.spiegel.de/wirtschaft/oelmarkt-die-dollar-daemmerung-a-518636.html
Kang, N., & Sakai, K. (2000). International Strategic Alliances: Their Role in
Industrial Globalisation. (OECD Science, Technology and Industry Working Papers).
Retrieved from OECD publishing website: http://dx.doi.org/10.1787/61372320401
Kleymann, B., & Seristoe, H. (2004). Managing strategic airline alliances. Aldershot:
Ashgate.
Lufthansa Group. (2013). Modern, quiet and environmentally efficient: Lufthansa
Group orders 59 ultra-modern wide-body Boeing 777-9X and Airbus A350-900
aircraft [Press release]. Retrieved from
http://www.lufthansagroup.com/en/press/newsreleases/singleview/archive/2013/september/19/article/2599.html
Lynch, R. (2012). Strategic Management (6 ed.). Harlow: Pearson Education
Limited.
Moffett, M. H., Stonehill, A. I., & Eiteman, D. K. (2012). Fundamentals of
multinational finance (4th ed.). Boston, MA: Prentice Hall.
OConnell, J. F. (2011). The rise of the Arabian Gulf carriers: An insight into the
business model of Emirates Airline. Journal of Air Transport Management, 17(6),
339-346. doi: http://dx.doi.org/10.1016/j.jairtraman.2011.02.003
Oum, T. H., Park, J.-H., & Zhang, A. (2000). Globalization and strategic alliances:
the case of the airline industry. Oxford: Pergamon.

17
W13034743

Oum, T. H., & Yu, C. (1998). Cost competitiveness of major airlines: an international
comparison. Transportation Research Part A: Policy and Practice, 32(6), 407-422.
doi: http://dx.doi.org/10.1016/S0965-8564(98)00007-X
Emirates Group. (n.d.). Our Vision & Values. Retrieved November 25, 2013, from
http://www.theemiratesgroup.com/english/our-vision-values/our-vision-values.aspx
Preece, S. B. (1995). Incorporating international strategic alliances into overall firm
strategy: A typology of six managerial objectives. The International Executive, 37(3),
261-277. doi: 10.1002/tie.5060370306
Qantas Airways. (2012). 2012 Qantas annual report. Retrieved from
http://www.qantas.com.au/infodetail/about/investors/2012AnnualReport.pdf
Qantas Airways. (2012). The worlds leading airline partnership Alan Joyce [Press
release]. Retrieved from http://www.qantasnewsroom.com.au/speeches/the-worldsleading-airline-partnership-alan-joyce-qantas-group-ceo
Qantas Airways. (2012). Working Toward Our Vision - An Overview of Qantas Group
Business Practices [Media release]. Retrieved from
http://www.qantas.com.au/infodetail/about/corporateGovernance/BusinessPractices
Document.pdf
Qantas Airways. (2013). Qantas 2012/2013 Full Year Financial Results [Press
release]. Retrieved from
http://www.qantas.com.au/infodetail/about/investors/mediaReleaseResults13.pdf
Qantas Airways. (2013). Qantas and Emirates inaugural Flight Alan Joyce [Press
release]. Retrieved from http://www.qantasnewsroom.com.au/speeches/qantas-andemirates-inaugural-flight-press-conference-alan-joyce
Root, F. R. (1998). Entry strategies for international markets (Rev. and expanded
ed.). San Francisco: Jossey-Bass.
Sarina, T., & Lansbury, R. D. (2013). Flying high and low? Strategic choice and
employment relations in Qantas and Jetstar. Asia Pacific Journal of Human
Resources, 51(4), 437-453. doi: 10.1111/1744-7941.12006
Schein, E. H. (1999). The corporate culture survival guide: sense and nonsense
about culture change. San Francisco, Hempstead: Jossey-Bass
Schein, E. H. (2004). Organizational culture and leadership (3rd ed.). San Francisco:
Jossey-Bass.

18
W13034743

Schneider, S. C., & Barsoux, J.-L. (2003). Managing across cultures (2nd ed.).
Harlow: Financial Times Prentice Hall.
Sull, D., N, Goshal, S., Monteiro, F. (2005). The Hub of the World. Retrieved from
http://www.donsull.com/downloads/hub_of_the_world.pdf#
Sundaram, N., & Al-Aali, A. (2011). The exceptional performance strategies of
Emirate Airlines. Competitiveness Review, 21(5), 471-486. doi:
http://dx.doi.org/10.1108/10595421111171966
Tagesschau. (2008). Die Welt im dritten lpreis-Schock. Retrieved December 12,
2013, from http://www.tagesschau.de/wirtschaft/oelpreishintergrund6.html
Thomas, D. C. (2008). Cross-cultural management: essential concepts (2nd ed.).
Los Angeles: Sage Publications.
Trompenaars, A., & Hampden-Turner, C. (1997). Riding the waves of culture:
understanding cultural diversity in business (2nd ed.). London: Nicholas Brealey.
Ulijn, J. M., Meijer, E., & Duysters, G. (2010). Strategic alliances, mergers and
acquisitions: the influence of culture on successful cooperation. Cheltenham, UK
Northampton, MA: Edward Elgar.
Westminster System. (n.d.). Retrieved December 01, 2013 from
http://australianpolitics.com/democracy-and-politics/key-terms/westminster-system
XE Currency Charts (USD/AUD). (2013). Retrieved November 22, 2013 from
http://www.xe.com/de/currencycharts/?from=USD&to=AUD&view=10Y

19
W13034743

7. APPENDICES
APPENDIX A

Political

Economic

Social

Technological

Environmental

UAE
Emirates governmental owned + supported (Int. criticism)
UAE change to economic + touristic centre (low fees, labour
costs), aim to develop network
UAE close to oil production
Political crises in Arabian countries
Australia
Australian government prohibits foreign majority ownership +
regulates international traffic
British Westminster system of government
Strong democracy
Deregulated aviation market, open sky agreements
Role of national carriers very political
High security policies since 9/11
UAE
Dubai high economic growth + capita per person
government seeks to generate new business connections
Good reachability of 6 continents; important for MNE
Emirates Airline as a symbol of UAE's growth
UAE: current wealth from oil
Australia
remote geopolitical location as a national disadvantage
UAE
high percentage of foreign inhabitants + Emirates very
international staff + cheap workers for work intense job's,
labour law forbid's strikes and trade unions
UAE: generous immigration law
Australia
high percentage of Australian staff, high wage level, strike's
nearly leaded to bankruptcy
Australia very popular for travellers
Both airlines national flag carrier
many ways to travel for short journeys, long-distance
journeys just flying effective way
Online era: chat, phone, video instead of travelling
Fast technical developement, but any real alternative to oil
Increasing oil price
Companies need for environmental engagement
Airbus + Boeing new and more fuel-efficient planes
UAE
Desert state

Table 1.1: PESTEL analysis of Australia and the UAE (Elbanna, 2010; OConnel, 2011;
Sundaram & Al-Ali, 2011; Kleymann & Seristoe, 2004; Fleisher & Bensoussan, 2007; Sarina &
Lansbury, 2013; Duval, 2008; Doganis, 2005; Qantas, 2012; Kang & Sakai, 2000; Oum, Park &
Zhang, 2000; Emirates, 2013; Qantas, 2013; Hanlon, 2007; Qantas, n.d., Qantas 2012; Australian
politics, n.d; Australian Government, n.d.)

20
W13034743

APPENDIX B

Threat of new
high-cost entrants:
low

very cost intensive (infrastructure, aircrafts etc.)

Existing airlines very experienced
Brand awareness of costumers

Bargain power of
suplliers: high

Aircraft: Boeing + Airbus quasi duopoly, need for

sales figuers, lot of cancellations , technical
differences not very big, high competitions between
both manufacturers
Emirates priority costumer, more A380 orders than
whole industry, high discounts for bulk orders
Gasoline supply: Fuel price increases (war, political
unrest, oil consumption emerging countries
Labor cost: high country differences, UAE: low/
employer friendly labour law; Australia: expensive/
unions

Bargain power of
buyers: high

Undifferentiated product: need to specialize in

premium industry
private buyers + travel agencies most important
buyers
Costumer with high price sensitivity because of high
availability of online information

Threat of
substitutes in other
industry: moderate

Extent of
competitive
rivalary: very high

Flying only efficient way of traveling

Video conferencing + online communication

Very competitive market --> deregulation, open sky,

one world agreement, many Alliances
Pricing competition with low cost carriers
Industry stagnation --> less travellig on premium
fares
In own industry many carriers with similar standards
Qantas dominates domestic market
Regional competitors for Emirates with similar
standards (Etihad, Qatar)
International competitors: Lufthansa, Air France,
British Airways, Singapore Airlines, Turkish Airlines
Differentiation by service, quality and reputation

Table 1.2: Porter- analysis of the high-cost airline industry (Lufthansa, 2013; OConnel, 2011;
Sundaram & Al-Ali, 2011; Kleymann & Seristoe, 2004; Fleisher & Bensoussan, 2007; Hunter,
2006; Sarina & Lansbury, 2013; Duval, 2008; Doganis, 2005; Tagesschau, 2008; Qantas, 2012;
Kang & Sakai, 2000; Oum, Park & Zhang, 2000; Emirates, 2013; Qantas, 2013; Qantas 2012;
Hanlon, 2007; Qantas, n.d.).
21
W13034743