Emirates Airways Customer Perception

For this project, we have used both primary and secondary data. As part of our primary data, a survey questionnaire was created and handed out to 50 passengers who have and continue to fly with Emirates Airlines. The aim of the questionnaires was to shape people’s perceptions of the brand and analyze whether or not Emirates is meeting its’ marketing mix objectives. Findings are spread out throughout the paper where relevant, and detailed tabulated form can be found in the Appendixes.

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1.1 Introduction to the Organization
In 1974, three years after independence, the rulers of the UAE decided to establish a joint flag carrier: Gulf Air. However, a tense relationship between the airline and the Dubai government existed ever since its inception, as the latter re fused to give in to Gulf Air’s demands to abandon its open-skies policy. In reaction, Gulf Air reduced frequencies and capacities to and from Dubai by more than two thirds between 1984 and 1985 without advance notice (Wilson 2005). Since foreign carriers proved unable or unwilling to fill the gap, Dubai’s then ruler, Sheik Mohammed bin Rashid Al-Maktoum, convened a team of experts – headed by Maurice Flanagan and later joined by Tim Clark and the ruler’s then 26- year old son, Sheik Ahmed bin Saeed Al-Maktoum – to devise an emergency plan.
The group’s recommendation to set up a home carrier for Dubai was quickly accepted by the ruler, but he imposed two conditions:
The new airline should meet the highest quality standards;
And there would be no additional capital injections from the government other than the agreed USD 10 million start-up capital.
On October 25th, 1985, Emirates’ first flight departed to Karachi, using an A300, wet-leased from Pakistan International Airlines. The rest is history.
In 1987, Emirates began to serve it first two European destinations – London Gatwick and Frankfurt.
In 1995, it has operated an all wide body fleet, and in 2001, 2003 and 2005 Emirates placed some of the largest aircraft orders ever.
As of October 2007, Emirates’ route network extends to 91 destinations on all continents.
In its last business year, ending March 31st, 2007, the airline transported 17.5 million passengers and 1.2 million tons of cargo on 102 aircraft. Currently, 118 aircraft are on firm order (of which 20 will be all-freighters), including 55 A380 and 43 B777.
2.0 Situation Analysis
According to Kotler & Keller (2008), situation analysis is a “systematic collection and evaluation of past and present economical, political, social, and technological data. It is aimed at (1) identification of internal and external forces that may influence the organization’s performance and choice of strategies, and (2) assessment of the organization’s current and future strengths, weaknesses, opportunities, and threats.”
2.1 Market Summary

Airline Industry Portfolio

The UAE airline industry is one of the aspiring industries not just in the Middle East and the surrounding South Asian, North African Region, but the world itself. The industry’s huge market growth and success in the Middle East and the world is crucially based on the UAE, and especially the cities’ strategic geographical location and the government’s determination to make the country an international business hub connecting the East to the West and vice versa. During the global recession and economic crisis, the airline industry in the UAE in comparison to other airline giants such as British Airways, Lufthansa, Air France and KLM and other business sectors within the country was the least affected. The UAE airline industry, which includes Etihad and Emirates, was affected by the crisis but has successfully resurfaced at being profitable in the year 2010 and has since contributed effectively to the growth of the country’s total economy (Bloomberg Business week, 2010).

Emirates Airline Portfolio

Emirates Airlines is one of the most successful and major airlines in the Middle East, currently operating around 3200 passenger flights per week, from its hub – the emirates of Dubai – to over 110 destinations in 62 countries (Emirates Airlines, 2011). This makes Emirates one of the fastest growing airlines in the airline industry. The Airline Industry is one of the dynamic and fastest growing industries in the world and has influence in the country’s economic growth, international investments and in tourism, mainly due to the Airline Deregulation Act of 1978 – which allowed the industry to change its’ category of a public utility service to a much market driven industry (Florian, 2010).
2.1.1 Market Demographics and Needs
Emirates Airlines’ initial market consists of consumers and businesses located in the United Arab Emirates, mainly the Emirate of Dubai. Emirates’ goal is to cater the needs and demands of the ever growing population of the UAE – especially the expatriates residing in the UAE – who are the thriving workforce of the UAE and make up approximately 75 percent of the population of the country (UAE-Economic Development, 2010).
Dubai’s and as a result Emirates’ spectacular growth in recent has been accentuated by two complementary factors: sound politics and its very favourable geographical location.
Currently the Emirates Airlines market demographics are divided in three sectors, and they are:
2.1.2 Market trends and target market growth
The soaring price of oil and the financial crisis had a tremendous effect on the airline industry. Most of the airlines were suffering from fuel price hikes and were running out of cash. However, Emirates Airlines had proven to be the most efficient and profitable despite the extra costs because of its strategic placement of its products in the market share – by creating separate market sectors. These market sectors are part of Emirates product portfolio and have been divided in product share.
Emirates Airlines current product share is:
(Source: Emirates Group, Annual report, 2010)
The reason for Emirates Airlines to design such a product share was simply to adjust its marketing strategy after the effects of the global financial crisis. The adjustment was made to accommodate factors that were pertaining to the demand (requirements) and supply (drivers) for its customer base who were also affected by this crisis.
The current product share seems to be working fine for Emirates especially after the global economic crisis, which scarred many businesses in the UAE, especially government owned businesses. The crisis, however, has enormously affected its’ overall performance rating as a “prestige high class inboard service” that Emirates Airlines previously used to market to clients as a high value service. Emirates had to revaluate its’ cost and benefits to accommodate the passenger market needs of a cheaper, faster and safer means of transportation by downsizing its experienced onboard staff members and replacing them with inexperienced workforce and by underplaying the various onboard service options it previously use to boast about just few years before the crisis.
2.2 SWOT Analysis
SWOT analysis is a tool that identifies the strengths, weaknesses, opportunities and threats of an organization, as it’s a fundamental and simple model that analysis the capabilities of an organization as well as its potential opportunities. The information for the analysis is derived from environment and further categorized into internal (strengths and weaknesses) and external (opportunities and threats) analysis. (M. McDonald, 2007)
SWOT Analysis
2.3 Competition
As said by the managing director of Emirates, “forget about protection against competition. That’s not how Dubai works” (Business Strategy, 2005). Well carriers such as Lufthansa, British Airways, Air Canada, and Air France are among the few competitors of Emirates. Emirates Airline is not affected by their direct competition in the air space. It is the accusations of unfair competitions posed on Emirates Airlines by these leading airlines that cause a major threat to Emirates. As a lie is continuously repeated, people start to eventually believe in it.
2.3.1 Accusations
“Spearheading the region’s development strategy, and emblematic of the economic success of the UAE, Gulf carriers benefit from financial support from their local state, which provides a wide array of services: airports, civil aviation authorities, airport and navigation charges, and finally complementary infrastructure. Furthermore, these airlines enjoy a favorable tax environment, as there is no corporate tax or social security charges in their country” (Business Strategy, 2005).
In return to such accusations from its competitors, Emirates have denied these accusations by providing the below fact and figures (Emirates Group, 2011):
Emirates purchases fuel on the same terms and conditions as other commercial airlines. Fuel accounts for 30% of Emirates total expenditure.
Emirates Group states that it has recently paid the Government of Dubai US $776 million in dividends in return for the seed capital gifted to the airline at its ince
Emirates total cost of benefits provided to expatriate employee amount to more than US 400 million per annum.
On the other hand, Emirates also faces competition from its’ neighbors such as Qatar Airways, Etihad airways and other competitors such as Gulf Air, Singapore Airlines, and low cost airlines such as air Arabia. For analysis we will shed light on Etihad and Air Arabia. (See Appendix)
Etihad Airways are competing with Emirates strategy for best standards in quality in its’ three product classes. In addition, working aggressively on its infrastructure expansion plans poses a high level threat to Emirates Airlines.
Air Arabia: Due to the economic downturn and recession, customers have become highly price sensitive to the market. Air Arabia has become the emerging low cost airlines based in Sharjah and supported by its’ government, which attracts customers in terms of monetary value by providing cheap travel with an increasing high standard.
3.0 Marketing Strategy
Baker (2008) states that “Marketing strategies is a process that can allow an organization to concentrate its’ limited resources to the greatest opportunities to increase sales and achieve a sustainable competitive advantage” We would use this guideline to affirm, dissect and comment on Emirates Airlines marketing strategy.
3.1 Mission Statement
A mission statement is a “strategic marketing and business development tool that adds value because they define your products / services, goals and culture to your employees, suppliers, customers, vendors, and the media. A Mission Statement captures the uniqueness of your company and acts as a base line for quality, service and your marketing messages” (John, 2006).
Emirates Airlines, or rather Emirates Group’s mission statement is simply “committed to the highest standards in everything we do” (Emirates Group, 2011). Being a vast enterprise by itself, Emirates Group has been quiet successful in embodying the mission of “committing to the highest standard” onto one of its’ two core corporation – Emirates Airlines, the other being DNATA, by marketing the brand of Emirates as the pinnacle emblem or a luxury standard throughout the world as an emerging Global Brand. This mission has contributed to the company garnering global praises for excellence in every aspect of its’ business in travel and tourism since it’s’ commencement.
Emirates Airlines is a brand that is truly emerging as a global icon with its logo representation in Arabic script as a symbol of its origin. Emirates has committed on building an operational and service approach as a true global provider, by delivering high quality service and catapulting itself as the industry’s youngest and most advanced fleet to retain its ever growing loyal customers worldwide. Emirates is able to achieve this boasting quality as an emerging “global brand” by updating its fly roster to 100 destinations in over 60 countries with more than 14 million passengers annually.
3.2 Value Proposition
A value proposition is the collection of reasons why a person or company benefits from buying something (L. Richman, 2006). This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings
Throughout the years, Emirates Airlines has successfully created a customer-focused value proposition, by offering a combination of products and services, information and experiences customized for its market demographics for each of its destination, it has also claimed that the geographical location of its hub (Dubai) is also a value proposition. This approach had led to an array of product offerings such as:

The popular onboard ICE system (an Information, Communication and Entertainment system) fully loaded with hundreds of entertainment channels on demand
All-in-one communication device accommodating customer needs of surfing the net, emailing or simply calling a land line whilst in the sky
Competitive pricing and time effective routes to over 110 destination
Dubai and personalized exclusive lounges for its clientele and the frequent flyer program “Skywards” also adds value to Emirates Airlines. Skywards Program plays a key role in facilitating Emirates build strong customer relationships.

All the above product offerings have facilitated Emirates to deliver its’ value proposition to its customers and support its’ mission statement of committing to high standards.
3.3 Marketing Objective
Important part of marketing strategies is its’ objective. According to Dess, “an objective of an organization should be directed towards generating greater profits for the company and also towards customers and society at large” (2008).
It is given that an objective of any competitive organization in its’ marketing strategy is to be successful in a specific setting which needs a detailed investigation and detailed studies of the surrounding environment of the market, its’ competitors and key factors that influence the market (both internal and external). With this in mind, the organization should than aim for best results to benefit the company.
Hence, Emirates Airlines or rather Emirates Group has carefully devised and constructed an objective and fused it with the group’s mission statement. Emirates Group’s mission statement is simply “Committed to the highest standards in everything we do”.
In the beginning, Emirates Airlines objective was simply to be the national carrier for the Emirate of Dubai. Later on, with successful entry to the Middle East and Sub-Continent market with a strong financial backing from the Government of Dubai – the objective was to be the Elite Flying companion and a dominant figure which focused on the provision of the inflight “experience” as a customer value in the market. Due to success and further expansions to other markets, Emirates soon realized that its’ objectives kept on changing and adapting to the targeted market. Below are Emirates current objectives:
(Source: Emirates Group, 2010)
In our opinion, Emirates decision on keeping the objective of the company specific and coherent to current situation of its’ target market is a good decision in this ever changing and growing industry, where various factors such as laws, resources, political barriers, wars and international laws can directly or indirectly effect a company’s objective and therefore effecting the marketing strategy.
3.4 Target Markets
According to Nils (2007), “Target Market is the specific group of customers that a company aims to capture from the total population. It is particular market segment at which the marketing campaign is focused after penetrating the market”.
ServiceEmirates Airline targets the whole globe at its’ target market. To reduce the complexity, target market is be divided into three parts which are further sub segmented into four parts to suit the target market according to their needs.
Business travellers pay a lot of attention to convenience since they have to spend a lot of time on airports and airplanes. Touch points that they come across are lounges, frequent flyers, safety and good service and interaction systems.
Emirates Airlines serves this market quite perfectly. It segments it with the help of quality and service such as skywards awards, availability of lounges in airports, comfortable seats, in-flight services (internet, telephone systems, entertainment systems lastly good food service)
Leisure travellers pay a lot more attention on the flexibility of prices and destination compared to business travellers.
Emirates Airline segments this market by destination and price by providing them with opportunity to book early and save, facility to provide visa, holiday packages for new destination each time and lastly a huge variety of destination routes.
Cargo: A very strong focus on cargo traffic, which generates 20 percent of Emirates’ revenues – one of the highest percentages in the airline industry
3.5 Positioning
“Positioning is the perception in the minds of the target market” regarding companies brand or product (Ries, 1981). Elaborated by Ries (1981), positioning is “an organized system for finding a window in the mind. It is based on the concept that the only time communication can take place is at the right time and under the right circumstances”.
Apparently, true needs and physical value are the main ingredients in which the company has to base its’ brand positioning in the minds of the target market.
Business class focuses on brand values such as punctuality, reliability frequency, prestige and state conscious (Stephan, 2007). Therefore, airline should position itself to suggest it as a choice for successful people, for the product category of the “business class”.
Leisure class focuses on price of the ticket as their prime factor. Therefore, brand position should be done in terms of value for money.
According to Simon, “Emirates has set out to be an innovative, modern, and customer-oriented provider of high quality air travel services” (2005). He also added that brand positioning is that of a “leading, international and quality airline serving the global community” (Simon, 2005).
In terms of the Emirates’ target market (business and leisure travelers), Simon adds, “Today, air travel is affordable and accessible, and for Emirates, the whole world is our oyster. All customers are important to Emirates, and we strive to provide them with the best possible value for their money, regardless of which class passengers travel in. However, we’ve always considered the frequent business traveler – the people who literally fly to work- as pivotal to our marketing strategy” (2005).
In terms of the target sub-segments (price, quality, destination, service), officials of Emirate Airlines say “From the service provided at the point of ticket purchase to staff at the check-in counter; from facilities offered in our airport lounges to in-flight entertainment and service. At all customer touch points, Emirates pays close attention to our product and service to ensure that we deliver on our brand promise of innovation and quality” (2005).
In terms of delivering the value proposition of the brand Mr. Simon (2005) further adds,
“We operate a fleet of modern, wide-bodied aircraft equip these aircraft with the latest in-flight amenities and entertainment systems”;
“We invest in the latest technologies to enable faster and more efficient handling of such functions as ticketing, baggage and cargo handling”;
“We recruit our award-winning cabin crew from over 100 countries around the world and train them to the highest standards – so you can be sure there will be someone who speaks your language onboard”;
“We hire gourmet chefs to design and plan our in-flight catering menus”;
“We invest millions of dollars to provide advanced engineering support for one of the world’s youngest fleet of aircraft; and the list goes on across the airline’s business units.”
However, during the process of building a brand, the company also faces emerging challenges to sustain its’ global brand image. Brand Indigo LLC acknowledges that “high levels of brand recall concurrently raise the expectation levels of customers” (2010). We’re living in an age where the majority of the people are tech savvy and any form of criticism and dissonance can be openly discussed in various blogs. This therefore may wear down the built brand esteem (Brand Indigo LLC, 2010). Brand Indigo LLC suggests that “service recovery plans will have to be in put in place in quick earnest, or else customer franchise maybe negatively affected” (2010).
In addition to all the above, A Dubai based newspaper reported to Emirates that they are receiving reports about their slipping service which can be supported drops in Emirates Skytrax Airline year ranking (Gulf News, 2010).
3.6 Strategy Summary
The strategy summary reflects on the ways that the company will meet its objectives by placing strategic communication patterns that can help develop the desired position.
With the perspective of branding in mind, the first and utmost aspect relating to Emirates rise as a global brand is its leadership’s vision and foresight in linking the brand to its marketing strategy and committing the budgets and resources required for its strategic and tactical impact.
Given the aspirations of the Emirates brand in being global, innovative and a customer-oriented provider of high quality services, the key to its success has been Emirates airlines ability to apply the brand in all aspects of its customer interactions. By paying close attention to its product and service to ensure that Emirates deliver on what the brand promises of innovation and quality.
Another Cornerstone of Emirates Marketing strategy is sponsorships; Emirates branding employs all the major traditional and new marketing tools, but the most effective approach that help it to connect with its’ customers and enhance its’ brand awareness by sponsoring the major sporting events.
4.0 The Marketing Mix
Kotler & Keller (2006) define the marketing mix as the combination of elements that you will use to market your product. There are seven elements: Product, Place, Price and Promotion, People, Process, and Physical evidence. They are called the 7’Ps of the marketing mix.
4.1 Product/Services
“A product is simply a marketing offering, whether tangible or intangible, that someone wants to purchase and consume. In reality, while decisions related to the consumable parts of the product are extremely important, the TOTAL product consists of more than what is consumed” (Christian, 1994).
The total product offering and the decisions facing the marketer can be broken down into three key parts (Appendix 2):

Core Benefits
Actual Product
Augmented Product

Core Benefits: The first layer of the product as defined by Cant (2009) is “it represents the heart of the product”
Emirates airlines Core Product is the Air transportation of passengers and Cargo
Actual Product: The second layer of the product as defined by Cant (2009) is “the tangible product or service offered to the consumer”
For Emirates: Emirates First Class, Business class, Emirates holiday, in-flight entertainment system, luxury service, online check in, courteous spa.
Augmented Product: .the third layer of the product as defined by Cant (2009) is “the tangible product plus the additional customer services and benefits (also called features).
For Emirates: National carrier of Dubai, chauffer service, lounges and spa, Dubai as transit hub and the most important is the private terminal at Dubai international Airport.
Source: Three Levels of a Product, 2010, Marketing Teacher, accessed 12/02/2005, http://www.marketingteacher.com/lesson-store/lesson-three-levels-of-a-product.html
Questionnaire findings suggest that people fly with Emirates for benefits other than the medium of transportation, such as travel experience (Appendix 2).
4.2 Price
The price of the marketing product mix is the “amount of money charged for a product or service or the sum of the values that consumers exchange for the benefits of having or using the product or service” (Armstrong, Gary and Philip Kotler, 2009).
Yield pricing
Which offers its’ consumers discounted rates on early purchases, higher rates on late purchases, and the lowest prices on unsold inventory before it expires (Kotler & Keller, 2006).
Time Pricing
It is an important element of Emirates’ pricing policy. With ticket fares varied by season, day, hour, “early bird” offers allow Emirates to charge a passenger less.
The airline tries to position itself as having the highest value possible for consumers. Passengers who purchase business class, for example, have a complementary limousine pick-up, included in the fare of the ticket. Through collecting primary data research for our project, we found Emirates and Etihad have almost the same prices, with Qatar Airways having prices that are much lower than it’s’ competitors.
In response to competitors’ reactions, it is best for Emirates to continue managing to maintain prices, simultaneously adding value by constantly improving the quality and consumer’s expectations of its services.
Questionnaire findings show that 60% of the people surveyed say Emirates is relatively expensive compared to others (Appendix 2).
4.3 Promotion
Defined as “the communication link between sellers and buyers for the purpose of influencing, informing, or persuading a potential buyer’s purchasing decision” (Kurts, 2010). Many promotional activities are not really focused to stimulate immediate purchase, but are rather aimed to move the potential buyer a step forward in the buying process (Van W.1997).
For Emirates, sponsorships believed to be the “best ways to connect with passengers”. (Emirates, 2011). Emirates have sponsored more sporting events than any other airline or company in the world” (Hagey, 2009). According to the head of Emirates Airline’s marketing department for the past two decades, below are breakdowns of how the budget was spent in the past, compared to the present (Hagey, 2009).
70.00% of budget
Public Relations
55.00% of budget
Marketing now makes up about 2.7%, compared to 2.3% previously (Hagey, 2009).The key indicator of success is the association people have of various events with the brand. For instance, the Arsenal player and the word “Emirates” immediately connects. In fact, the mere association of Arsenal or Dubai with Emirates is proof that sponsorship model works wonders for Emirates.
The airline also advertises in newspapers, billboards, magazines, and even on television channels such as CNN, for instance. Emirates use reminder advertising to increase brand awareness in the various markets. With the right amount of spending on advertising, Emirates marketing mix is very much in line with the company’s objectives. .
The most memorable ad with the passengers seems to be the “Dubai Welcomes the World” with “Wonderful life” by Black playing in the background (Appendix 1). Passengers have stated that it gives them a sense of calmness and excitement and they associate the advertisement with the cosmopolitan image of the emirate of Dubai (Appendix 1).
Sales Promotions.
Emirates Airlines often offers best deals, and discounts on specific travel destinations, at specific times of the year. The website of the airline offers the best available prices and gives the consumer the opportunity to pick the price of choice, at flexible dates.
Emirates Airlines offers children on board the airline various branded gifts.
Emirates could stress more on social media in order to build strong customer relationships with its passengers and build its’ own network of loyal customers.
4.4 Place
Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet (Jerome, 1975).
Emirates Airways distributes its’ ticket through quite a few touch points such as:
Sales agents ( all over the world)
Corporate website
Customer service call center (Reservation and booking)
In the future, Emirates Airlines can strengthen its place strategies by deploying more sales agents and branches in general. Moreover, it can provide more touch points in the leading malls around the world for an easy access for individuals to book flights.
Questionnaire findings show that 80% of the people prefer to use the Internet as the source of ticket purchase, as it provides the best discounted price (Appendix 2).
4.5 People
Service, expertise and skills of the people who work for the company and they can be used to set you apart from your competitors” (Stephen 2007).
Recruitment and use of the staff and people
It is an essential ingredient in any organization, and with the appropriate staff members at hand, the organization can obtain a competitive advantage.
Emirates Airline has a staff of 36,652 (Emirates Fast Facts, 2011), who go through training to obtain the right skills and service knowledge that is vital in a service-providing company. Emirates could work on the inseparability characteristic of its service. It is therefore crucial for the cabin crew to remain patient and positive in conflicting situations, so as not to distort people’s perceptions of the ‘brand’. Prior to downsizing, Emirates had a staff of very experienced cabin crew members. Recently, however, as previously mentioned above, Emirates uses a mix of experienced and inexperienced cabin crew members.
To improvise its’ people strategy Emirates should make their cabin crew wear name tags to create a friendly atmosphere on board the flight, but would also add to the cabin crew’s responsibility of complying with the right behaviour that would not damage the brand.
Most of the Emirates passengers that were surveyed agree that the cabin crew is friendly and welcoming (Appendix 2).
4.6 Process
Defined as the “procedures, mechanisms and flow of activities by which services are used by the customer” (Koichi Shimizu 2003).
Emirates airline has a simple process for its passengers since the time of booking their flight to the time they depart or arrive from Dubai Airport. Emirates own its own terminal three at Dubai international airport to further simply the process (See Appendix 3). The diagram illustrates the whole process through which a passenger goes through since the time he arrives at the airport car park to departure.
Emirates airline offers various types of check- in processes. For instance: online check-in, self-check – in at the airport to simplify the process even f

Emirates Airlines: Key Performance Indicator Analysis

In this simulation you chose a sector to operate in (budget, mid-range or luxury). What have you learned about these sectors as a result of your experience in this simulation? What would you have done differently at the beginning of the simulation and why? What would you have done differently to be more successful during the simulation and why?”
In this sector we operated as Emirates Airlines in mid-range as a view that there is a huge population in the sector and even if circumstances favours even budget and luxury passengers would opt for mid-range. In this sense during the start we sold 3 flights which we had as it doesn’t had head room and toilets and leased three flights for the operation. We started 1st quarter selling tickets for 35 cents and it’s a mistake that we changed to luxury airline selling for 48 cents right after the 1st quarter. As this would have changed our target customer and all the operation should also been changed accordingly. We incurred heavy expenses on Promotion and advertisement which hadn’t created any impact. There were complaints from customer for poor food services which we realised and started allocating cost for quality and services. High concentration would have been made on maintenance and market research which is the important factor in competitive industry like Airline.
There are certain factors which can be focused and done differently at the beginning of the stimulation:
Strategic Approach: we did not have any strategic approach when we started our simulation. And that is the reason we had made unreasonable decisions like shift to luxury and sales of aircraft. if we had a strategic approach we would have sold the flights when there is huge profit and avoided lease payment to be added in the expenses. Also we would have shifted to luxury at least after the 4th quarter when we had a good customer base and market. Hence instead of having a single strategy, it would have been better if we had followed a mixture of strategies in terms of pricing, marketing and services.

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Systematic Approach: there is no systematic approach at the beginning of the simulation. We blindly sold the flights without ascertaining the financial position and brought new flights during 6th quarter which we wrongly numbered and resulted in the purchase of another 3 flights when the company is already in a loss and thereby realised and sold a flight at 7th quarter. The fuel, flight operation and maintenance cost got drastic increase and because of the increase in the number of passengers we did not suffer huge loss. Hence if we had a systematic approach from the beginning we would have reached a good profit.
Pricing: A price cue is defined as any marketing tactic used to persuade customers that prices offer good value compared to competitors’ prices, past prices or future prices (Rao, 2010: 150); at first we sold the tickets for 35 cents as mid-range airline and suddenly hiked the price to 48cents as luxury airline. We did not have idea about the impact and did not take steps to offer service according rather invested in promotion and advertisement. We realised it as mistake and felt that the pricing is an important factor in attracting customers only during 5th quarter and reduce the price to 40 cents and only after that we were about to increase the number of customer. Hence if the pricing factor has given significant importance on the start of the simulation, the company would have escaped from losses.
Actions would have been taken during the stimulation for success:

Proper maintenance of aircraft in order to avoid fine from FAA.
Good system for customer reservation system to be flexible, fast and user-friendly.
Strong investment in market research to enable sales forecast and market situation analysis.
Proper training and quality to make the customer feel satisfied and get the luxury in food and other services.
Good systematic maintenance of accounts in loan interest repayment, lease payment, depreciation in order to have a clear view of the actual profit.
Strategic allocation of expenses on promotion and advertisement, sales forecast and social performance
Strategic approach on pricing and increasing the number of sales person according the number of flights operated.

What were the KPI’s you used in running your airline and did they change? Critically appraise the value of the information you had available to you in the results packs during the simulation. How did you use this to affect your decision making?”
The below are the Key Performance Indicator we as a team of Emirates Airlines believed at the beginning of the simulation which we tried following throughout the quarters but some were forced to reframe it due to company’s situation and response. Thus once an organization has analyzed its mission, identified all its stakeholders and defined its goals, it needs a way to measure progress toward those goals. Key performance indicators are those measurements which help to define and measure progress towards organizational goals (Geoff, 2009: 419)
Flight Operation: The important KPI we followed is in terms of flight operation. We believed that achieving 80% of maximum mileage per day would definitely yield a profit. As flights can be flew only with the maximum passenger and also includes the number of flights used. Hence it can achieve all in one KPI. We achieved this until quarter5 reaching 70% in each but it got changed due to purchase of 3 more flights without knowledge which made the company to focus on the reduction of expenses and deviated from the miles operating.
Promotional and sales forecast: Emirates Airline team believed that high investment in promotion, advertisement and sales forecast can lead company’s success. In terms of sales forecast, our KPI was in a correct way. But in terms of promotion and advertisement we changed and reduced the level of expense as the company started to incur loss.
Financial Perspective: we thought revenue is an important factor for an airline company to be successful as there will arise uncertain circumstances due to weather or fuel price, hence had a KPI to increase the revenue through Fares. We started a s mid-range and attracted maximum customers and shifted to luxury charging huge fare as a KPI of increasing the revenue. We are badly affected till 5th quarter because of this factor and then reduced the pricing.
The information we got through the value packs and incident feedback was very helpful in refining our performance and take corrective measures. Not only in terms of finance but also in terms of flight operation and service, the index feedback gave us the measures for improvement. The company was in a tough situation after the shift to luxury airline, where the incident feedback helped us to identify what was going wrong. The below are the some changes we effected from the information we got through the value packs,
Increased the number of flights and number of flight routes.
Decreased the ticket fares in order to increase the number of passengers.
Concentrated on cabin services to increase the quality service to the passengers and reduce complaints.
Taken measures and allotted funds on aircraft maintenance to avoid accidents and escape from fine.
Got knowledge that the huge loss of the company is due to the purchase of 3 additional flights resulted from mistake in numbering in the software.
Came to know that a flight was unused hence sold the flight to avoid maintenance expenses.
We felt the importance of passenger service and allotted more fund towards it.
Giving due consideration to theory, evaluate how a merger or acquisition might have changed your outcomes and the way you operated during the simulation? What additional implications would there have been for your company?”
Merger and Acquisition are often used inter-changeable concepts while merger is the combination of two companies in order to form a new company and Acquisition is a company’s purchase of another company where there is no formation of new company (Scott C. Whitaker, 2012). Merger and acquisition have a common goal of attaining synergy.
There are certain factors that should be taken care while going in for merger or acquisition as it results in cultural risk, business, employees and customer retention risk. These risks may not be applicable if Emirates would have planned the merger or acquisition in the initial stage that is before 4th quarter but if it is after that the above said risks should be taken care of. Hence it is evident that the nature of company to which going to be merged or acquired should be taken into account that it should be similar in business and should be stronger in operation as emirates are operating in a tough situation.
There are many advantages for company to go in for a merger or acquisition. We as a emirates airlines can merge or acquire a financially strong airline whereby we become economically strong and can reduce the cost of capital (Donald M. DePamphills, 2009). In emirates during 5th quarter, we had a NIL balance of cash flow after the overdraft loan hence during such situation merging with company with good cash flow will be a potential decision. Also there will be a positive impact on the stock price especially for companies like emirates where we had our stock price in negative numbers. Not only in financial terms, merger and acquisition also helps in terms of operation synergy. For e.g., if we Emirates team go for a merger during our mid-quarter with a company which is technologically strong we would have had a chance for competitive advantage and fast growth platform (Scott C. Whitaker, ). We would have not made a mistake of unsystematic approach in buying a flight during our 6ht quarter by which we suffers a heavy loss. There are major operating cost involved in terms of Airlines they are fuel, maintenance, interest expenses, lease amount, promotional activities, market research, taxes and so on. These costs would have been spread between two companies after merging.
Merger and acquisition are also helpful to use the assets and skills of the other companies merging or acquiring with. We as Emirates team lacked in terms of allocation of expenses and proper maintenance of aircraft. Hence merging with a managerial strong company would have helped us to move in the right path. It helps in improving the operating efficiency with a combined activity of the merging firms thereby can enjoy the market power. This is called market power theory. With this the company can have a control on the pricing and suppliers and also can have customer base.
As a team of Emirates Airlines only in the 1st quarter we were able to make a profit. It may be because of the sudden shift to luxury airlines which made us to suffer from continuous losses till 6th quarter. Our stock price also went on negative price. Hence merger or acquisition during the mid-quarter would be the better decision as it would have reduced the cost and share the total cost. We also had a reduction of pricing on 5th quarter which can be avoided when we had merger with our competitor. We lacked in many operation areas like customer satisfaction, aircraft maintenance and proper allocation of expenses, hence merger and acquisition would have been potential at early stage.
Appraise how successful your company was in your industry. Were your relative success / failure due primarily to your analysis and diagnosis or the choices and decisions you made? Which models and theory did you consider when participating in the game and how did this help you?”
Planning, executing and monitoring are the key aspects for a company to be successful. And in industry like Airline where there are ample numbers of risks, it is important that the firm follows a strategic approach. We as a team started to operated Emirates airlines as mid-range where in the first quarter we are able to have a good level of passengers and thereby revenue. We did not have a view on the level of risk in shifting to luxury range all of a sudden in the second quarter and increased the fare at a higher rate. Only during fifth quarter we came to know the importance of price factor and reduced the fare. The team did not understand that shifting to luxury range should be accommodated with high quality service to be competitive. We felt its importance from the incident report at the time when the company is already in loss. To my knowledge the company started off well but faced tough situations and failures and also attained the survival stage where it can reach a decent profit in the next quarters. We had a systematic approach to some extent and made many innovative measures like online reservation system which is a success to us, but the decision what we made to buy a flight when we were in deficit lead to failure. Also we are not managerial approach as we wrongly numbered and the software bought additional 3 flights which added to a further loss. We had a clear view in allocating resources for aircraft maintenance, but because of the above mistakes we made during the simulation, we were unable to allot adequate resources for maintenance which lead to engine failure and fine from FAA.
At the beginning of the simulation we used resource dependency theory (Aldrich, 1977) where we believed the company can be affected to some degree with its external environment. Hence we took measure to influence the environment. Our external environments are customers, public and the airline industry. We thought investing heavily in promotion and advertisement would definitely create competitive advantage and a brand image among the customer where a hike in the fare will become a hidden factor. Hence during the second quarter we allotted $40000 on advertisement and shifted to luxury airlines with fare of 48cents. But only during the subsequent simulation we felt that there is no relation between the promotion and competitive advantage in a highly completive airline industry and understood the importance of cost and service factors. Hence we reduced the price and concentrated on quality and training. We also started concentrating on cabin services and passenger services with the rise of customer complaints which came to our knowledge through incident feedback.
We as a team felt the importance of strategic approach during the simulation. During the end of the quarter we were clear about the strategies to be followed and we were sure that our company will make a good profit if it has another two quarters as we could find the changes in stock price with our corrective measures. The simulation gave us a vast experience about the concept of risk management, strategic approach and resource allocation. We also felt the importance of group dynamics in running a successful business.

Financial Analysis At Emirates Airlines

Emirates Airlines is one of the large airlines of the world. It is also considered i most luxurious airlines. This is Dubai’s national airlines. It was found in 1985. It serves almost 2400 flights per week. All these figures clearly depict its glory. (Emirates Airlines, 2010)
The financial analysis is done by using the financial statements of Emirates Airlines, the largest airline in the Middle East. In the analysis we deal with the following determinants:
Liquidity Ratios
Profitability Ratios
Turnover Ratios
Leverage Ratios
Liquidity Ratios:
These are the ratios that determine the capability of a firm to meet its short term obligations. It includes:
Current Ratio
It describes the ability of a company to meet its short term liabilities with its short term assets.
=Current Assets/Current Liabilities
Current Ratio = 31,919/17,753
Current Ratio = 36,870/19,552
Current Ratio = 1.797
Current Ratio = 1.8857
In 2009 Current ratio was 1.797 while in 2010 it is 1.8857. By above analysis it is clear that company has more liquidity in year 2010. Company has more short term assets to meet its short term liabilities.
Quick Ratio
Slightly tougher test than above it depicts it eliminates those assets that may be difficult to convert into cash like inventory etc.
= (Cash + Short-Term or Marketable Securities+ Accounts Receivable) / Current Liabilities
Quick Ratio = 2619+4549+7109/17,753
Quick Ratio = 1176+9335+7008/19,552
Quick Ratio = .804
Quick Ratio = .8960
Quick ratio was .804 in 2009 while it increased to .8960 in year 2010. Strengthening of quick ratio clearly shows that company has strong liquidity position in year 2010.
Cash Ratio
It measures the capability of a firm’s cash, along with other investments that can be easily converted into cash in order to pay its short term liabilities.
= (Cash + Short-Term) / (Current Liabilities)
Cash Ratio = 2619+4549/17,753
Cash Ratio = 1176+9335/19,552
Cash Ratio = .403
Cash Ratio = .5375
Cash ratio analysis is also depicting the same result as quick and current ratio as company’s cash ratio is also increased in year 2010.
Profitability Ratios:
They include:
Gross Margin
= Gross Profit / Sales
Gross Margin= 489/3159
Gross Margin= 598/3121
Gross Margin= .1547
Gross Margin= .1910
Gross profit margin was .1547 in 2009 while it increased to .1910. This clearly shows that company has increased its gross profit margin and profitability increased by significant amount. Gross profit individually can not comment on net profitability of company.
Operating margin
= Operating Income or Loss / Sales
Operating Margin= 467/3159
Operating Margin= 559/3121
Operating Margin= .1478
Operating Margin= .1791
Emirate’s operating margin was .1478 in 2009 and .1791 in 2010. Operating margin is also increased in 2010. This ratio is supporting the fact of increased profitability of Emirates Airlines.
Net Margin
= Net Income or Loss / Sales
Net Margin= 507/3159
Net Margin= 613/3121
Net Margin= .1604
Net Margin= .1964
Net profit margin can be considered as most accurate ratio for evaluating profitability of any organization. Company’s net margin increased from .1604 to .1964 in year 2010. This clearly shows that company is moving strongly towards profitability. Difference in ratio is also very significant which shows that company is getting success in its operations.
Return on Assets
= Net Income + After-tax Interest Expense)/ Average Total Assets
ROA= 507+20/3947
ROA= 613+14/4638
ROA= .1335
ROA= .1351
Return on Assets shows any organizations total return over their assets which tells that how good organization is in utilizing its assets. Company’s ROA increased from .1335 to 1.1351 in year 2010. But change in value is not significant.
Return on Equities
= Net Income / Average Shareholders’ Equity
ROE= 507/15571
ROE= 613/17475
ROE= .0325
ROE= .0350
Return on Equities shows total return over shareholder’s equity. ROE was .0325 in year 2009 while it increased to .0350 in year 2010. This shows that company has created more worth for its shareholders in year 2010.
Leverage Ratios:
The ratios are used to depict that more the debt more are the risks associated with the company since the company’s assets are the first right of its debt-holders. They include:
Debt/Equity Ratio:
= (Short + Long-Term Debt-Term Debt) / Total Equity
D/E Ratio= (2852+16753)/17475
D/E Ratio= (1372+15140)/15571
D/E Ratio=1.121888
D/E Ratio= 1.060433
Debt to equity ratio shows total debt over total equity of any company for a given period. Here total debt consists of total long term and short term debt which when divided by the total shareholders’ equity for that period gives the Debt to equity ratio. D/E ratio was 1.121 in year 2009 and decreased to 1.06 showing that the total debt coverage of the company decreased in the period.
Interest Coverage:
= Operating Income / Interest Expense
Interest Coverage= 559/14
Interest Coverage= 467/20
Interest Coverage = 39.9285
Interest Coverage= 23.35
Interest Coverage calculates as operating income over interest expense of the company. This ratio tells the interest covering capacity of the operating income for a given period for the company. Cleary the reduction in the interest coverage shows the reduction in the interest paying capacity of the company in the given period.
Turnover Ratios:
Receivables Turnover Ratio = Total Sales/ Average Receivables
Receivables Turnover Ratio = 3121/697
Receivables Turnover Ratio = 3159/590
Receivables Turnover Ratio = 4.4777
Receivables Turnover Ratio = 5.3542
Turnover ratio calculates as total sales for a given period over average receivables for the same given period. This has increased for the company from 2009 to 2010 from 4.477 to 5.352. This increase clearly shows that total sales have increased significantly over credit sales and thus the current assets in the form of cash must have improved.
Average Collection Period = 365/ Receivables Turnover
Average Collection Period = 365/4.4777
Average Collection Period = 365/ 5.3542
Average Collection Period = 81.515
Average Collection Period = 68.1707
Average collection period is the average period in which the cash for the company will be collected. This is calculated as average receivables over a division of total sales over 365. Average collection period for the company have reduced from 81.515 to 68.17 indicating that collection has improved.
Benefits of Analysis
Financial analysis diagnoses company’s current condition. It also tells about company’s past records and its future prediction. Company’s financial strength and weakness can be known by analysis of its financial statements. Analysis is profitable for both: Company insiders and outsiders. Company’s management can know about success and failure for their strategies in monetary terms while outside investor can sense his investment risk with respect to size of investment and type of investment. In this particular example, financial analysis of Emirates Airlines shows that profitability of this company has increased in year 2010. This judgement came through analysis of several profitability ratios. So it is clear that Company management can rely on their strategies as these were proved successful. Liquidity ratio also increased from 2009 to 2010 which shows that company has increased its liquidity to meet its short term liabilities. An investor can find this as a good sign. Leverage ratio has declined in year 2010 which shows that company is less risky in year 2010. This is another good sign for an investor. Receivable turnover ratio tells about company’s credit policies. (Financial Ratios)
By above analysis it can be concluded that company has increased its profitability by significant amount in year 2010. Liquidity ratio tells that company has strengthened its liquidity in 2010.
After calculating the leverage and turnover ratios we can conclude saying that the cash collection of Emirates Airlines has improved for the year 2010 as compared to 2009. The reduction in the collection period is a clear indication of this. Also the debt ratio of the company has reduced indicating that the company is in the better and strong financial condition as compared to 2009.

Total Quality Management (TQM) in Fly Emirates

.Emirates in the Middle East is the major airline and subsidiary of emirates group. It is the national airline of Dubai, United Arab emirates which thus operates near around 2000 passenger’s flights in a week from its hub at Dubai international airport, terminal 3 to 100 destinations in 60 countries in the 6 near about continents. The organization is a subsidiary of the emirates group which has more than 50,000 employees and is owned by the government of Dubai under the corporation of Dubai. The other cargo activities are thus undertaken by the Emirates sky group division. The airline has been ranked among the top 10 worldwide in terms of passengers, revenue, etc. and has thus become the largest airline in the middle east in terms of revenue, passengers, fleet size, etc. and in the recent survey of 2009, the airline was the seventh largest in the world in terms of the passenger carried and fourth largest in terms of scheduled international passenger kilometers flown. The organization has thus built a strong brand name as the trendsetter in the industry, peculiarly in terms of service excellence and the consistency of profitability and thus the organization was ranked fifth best airline in the world from all the perspective by the research consultancy by Skytrax in the year 2009. (2009)

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culture of the organization
The airline is the subsidiary of The Emirates group. The culture of the organization have always been in providing facilities up to the brim and up to the certain extent and that is why the organization have always been in top 10 airlines around the world. It is the quality of the organization that it has been steadily capturing the traffic from North America to South Asia and almost all the continents of the world, allowing all the passengers to bypass the traditional hubs of London, Paris, Frankfurt; the home bases of British airways, Air France with the transit stop at the Dubai international airport instead. The culture has also been to change the organization to the brand name and thus from 2004, the company changed its slogan to Fly Emirates. In the year 2008, the organization launched a slogan mainly around their root network of 100 destinations in more than 50 countries across six continents – Fly Emirates. Keep discovering and most recently it launched a campaign to promote Dubai as the destination using the slogan Fly Emirates. Meet Dubai. And some more like The finest In the Sky, Be Good to Yourself, When was the last time you did for the first time. The culture has been to provide optimum quality services to the passengers. They thus provide different class of seats like the First class which thus have a full suite, complete with closing doors to ensure privacy, a mini-bar and a coat rack. It also includes the feature of 58 cm LCD screen and a 2 meter fully flat bad and thus for the first class, they were ranked second by Skytrax. After the first class, they have the business class with the feature seats of 150 cm that recline to flat beds, 43 cm wide TV screen and thus these passengers have the ability to customize and save seat and the third is thus the business class. The organization culture thus includes innovation and providing new ideas and thus has the perspective of providing every possible feature to the passengers and for that they were the first airline who launched IFE system for all the three classes. IFE thus stands for In – flight entertainment system which thus have the feature like ICE which stands for Information, Communication and Entertainment. The culture has also been in investing different events like the organization is the official sponsor of the Fifa World cup, sponsors of many football groups like AC Milan, Arsenal F.C. they will thus also sponsor Rugby world cup 2011 and thus their branding have thus made them the official partner of International Cricket Council up to 2015. Another quality culture of the organization is that they have been always expanding their staff and recruiting more and more staff which is thus a good sign for the company’s growth. The global financial crisis have thus not impacted much on the airlines and thus they are recruiting more staff and thus they tell that their plans are on going and always promising and their aim is thus to acquire the number one position for maintaining the quality and the serviced rendered and not the size.
total quality barriers faced by the organization
There are many quality barriers that have been faced by the organizations that thus include the fare problems, the pilot’s problems and not delivering any facilities on the lounge. The fare problems thus include the problems that are faced by the customers on the online booking. They just complain that if there is a problem in their website and many a times they do not get any response. A fare problem thus include that while booking a ticket when the customer looks in the fare conditions, system tell them “Skywards flex” and when they look on miles they earn, the system shows them the both legs “Saver”. Another problem on the website is that while the customers are looking at the mileage calculator, the system always shows saver. Another problem include that while going through the whole process, the endorsement box always reads flex fare and when the customers go the manage booking, the system shows saver fare, then the customer call the reservation counter, they tell them to call the Skywards and the Skywards do not know it. Another problem includes many of the times the customers are not replied for their complaints. The problems become severe when the pilots complaint about the organization and make a statement that another threat or another accident is possible. The pilots say that there is a concern about the morale, management and the fatigue of the UAE – based airline. The pilots say that they do no want to see another smoking hole in the ground. Another pilot says that often they are made to flight to their maximum allowable time and the accident which took place on march 20 at the Melbourne airport, the reason for the accident was that the pilot had rarely slept in the day and before that accident the pilot had flown more than 95 hours in the last month an thus the pilots thus made the statement that if a fatigue related accident is going to take place, it will be definitely from the Fly Emirates and another pilot says that when people are tired, mistakes usually occur and the result of the mistake of the pilot can take many lives. Another flaw that has been usually observed in the Emirates is that not giving privilege to the old customers and thus making a feeling that it is rather running for the new passengers. These are some of the quality barriers that the organization has faced and is facing now too. (2006)
reasons for why these elements are barriers to total quality and why these barrirs are considered to be total quality barriers
When we look into the matter of the fare problem, it is the barrier to the total quality as the fare problem can not only reduce the quality but can also take some critical eroticization from the customers, there are millions of customers that do the online booking and if they face a problem sooner or later every time they book their tickets, certainly they will just remove their habit of going through this airline and would thus prefer some other airline. The several customers while booking if undergo through a problem, it is the responsibility of the company to sort out their problem when the complaint is put forward by the customer but when the complaint is not dealt with, the customer rather becomes unhappy by the facilities provided and rather do not prefer the same airlines again the next time he travels. The pilot’s problems are thus a severe one and thus have to be sorted out. At the time of global crisis, the Fly Emirates thus appointed fewer less pilots and thus the major problem that arose was the fatigue problem. A person when tired and not completely fit tends to do some mistakes and the pilot’s mistakes can take lives of lot of people. This will thus reduce the faith of the customers in the airlines and could pose a serious threat for the economy of the airlines. The flaw that arose in the recent times was also the crucial one. Emirates is thus not giving privilege to the old customers and thus they feel it is running only for the new passengers. At the international business level, you have to take care of the old customers as to broaden your business farther and farther. The travelers that will sooner become your permanent customers have to be dealt with properly and thus they are the people who indirectly promote the business
characteristics of a quality culture and the differences between FLy emirates culture and quality culture
Quality culture is thus a culture maintained in an organization to thus have the quality maintained. The culture thus is inducing in the organization to thus have a future good prospect. It thus includes providing quality facilities to the customers to the maximum. Characteristics of the quality culture thus include brooding up the business to have a good mind set in the people mind’s that the organizations always maintains quality. The difference between the Fly Emirates culture and quality culture was thus that they failed to provide quality to certain customers and thus the customers were disappointed. The factors might be many to make the difference between the emirates culture and the quality culture but once the customers is dissatisfied with the facilities, he never prefers the organization again and when the customer put forwards a complaint to the organization and then no regards are paid, the quality of the organization is thus not maintained. Likewise quality culture within an organization tells to deal with every customer properly and with quality while the Emirates could not develop relationship with the old customers, could not satisfy the customers properly and thus the quality of the organization could not be maintained.
report and analysis of the total quality system of fly emirates
Fly Emirates has always been known for the quality and that is why they have been ranked under 10 by Skytrax. The managers have always been saying that their basic motive is to acquire number one position in quality but not in size. The quality is always maintained by the organization. The organization was the first airline in the world to introduce a personal entertainment system on a commercial air craft. All the three classes have in – flight entertainment system which thus include ICE system. ICE thus stands for Information, Communication and entertainment. The facilities thus they serve in the three seats of class are as follows – The first one is thus the first class which thus has a full suite, complete with closing doors to ensure privacy, a coat – rack, a mini – bar and storage. They also feature an ICE system of 58 cm LCD screen and the seat converts into the 2 m fully flat bed and thus they were ranked second by Skytrax in the yea 2009. The business class feature seats with 150 cm pitch that recline to 200 cm long angled flat beds. Other features include privacy partition, massage function, winged headrest, an overhead seat of light and two individual reading lights, USB ports, in – seat power supply and an RCA socket for laptop connection and a 43 cm wide screen of TV. The economy class thus offers a 30 inch seat pitch and standard seat width. The seat features adjustable head rests, an ICE in – flight entertainment system. Thus they are always leading from the front providing the quality and maintaining the quality system in their organization.
how cultural change could be implemented and maintained within the fly emirates
The organizations culture has certainly less flaws but these flaws had to be removed by changing the culture of the organization. It includes satisfying every customer and taking a feedback from the customer and thus implementing on the feedback. For example if a certain lot of people claim that the sitting facilities in the business class are not comfortable, the organizers can have a look at the needs of the people and make the people feel comfortable and make them think they are listened and made them grow faith in the organization. This is the best method for the promotion and growth of the organization as the customers will help increase the customers as mouth publicity is the biggest publicity in the business class. It also includes developing a good customer organization interface by maintaining the old relations, giving privileges to the old customers. The failure of addressing the culture of an organization is thus the most frequent reason for the management initiatives that have limited the resources. We can thus say that the cultural change could be brought by change in behavior towards the old customers, developing a good customer organization interface, dominant values and looking towards the need and the beliefs of the people make the customers feel that they are an integral part of the organization, commitment by the organization and keeping it firm. Thus the culture of good team work as the organizers could thus be developed like investing at the proper place and many more.
recommendations on improvement of total quality management system of fly emirates
There are many recommendations that can be given to the organization on improvement of the total quality system of Fly Emirates. The recommendation thus include creating a consistency of purpose to serve the customers, adopting new philosophies and new ideas at different times, ceasing dependency on something peculiarly to rather achieve more success, improving constantly with time with new projects, new services offered and with new plans ejected. The recommendation also include opening up a different institute for training up the pilot’s, adopting and instituting leadership within the organization and driving out fear from every employee of the organization, separate distances between various staffs and managers, equal treatment to every employee should be given and thus the success should be shared among every employee, set some targets for the workforce, influence them by some slogans, removing barriers that rob people of pride of the workforce and removing the annual ratings and the merit system. Start a program that could institute self improvement within every employee of the organization, put everybody in the organization to work for accomplishing the transformations. The recommendations also include developing or creating some ethics for the organization which could rather maintain the discipline of the organization, creating the integrity, building up trust among the customers to have more business in the future. The communications among several employees is thus too important as the communications bind the employees together and bind everyone together. So these were the recommendation on improvement of the total quality management of Fly Emirates. (Emi10)

Business Strategy of Emirates Airline

In 1974, three years after the independence, the rules of the EAU decided to establish to a joint carrier of flag: Air of Gulf. Nevertheless, a tense relation between the air line and the government of Dubai existed after his beginning, as this one re fading to yield before the demands of the Air of Gulf to leave his politics of open skies. In the reaction, the Air of Gulf reduced frequencies and capacities to and of Dubai for more than two thirds between 1984 and 1985 without the notice previous(Wilson 2005). Since the foreign carriers demonstrated incapable or desinclinados to fill the hollow, Dubai then the rule, recepiente of Sheikh Mohammed Rashid To – Maktoum, summoned a team of experts – headline Maurice Flanagan and later affiliated by Tim Clark and the son then 26-year-old of the rule, Sheikh’s Recepiente Ahmed Saeed Al – Maktoum – to design an emergency plan. The recommendation of the group to establish to a carrier of house for Dubai was rapidly accepted by the rule, but heimposed two conditions: the new air line should find the standards of the highest quality and there would be no additional injections of capital of the government in addition to the financing of starter of 10 millions of reconciled USD. On October 25, 1985, the first flight of the Emirates left to Karachi, using an A300 wet – leasehold of Pakistan International air Line. The air Line of Emirates is the carrier of flag of United Arab Emirates and a principal air line of the Middle East. His key bucket is the International Dubai Airport, which joins it with an extensive network of international routes.The air line is a branch of the group of Emirates, an international public corporation that also supports the honor of making work four of the commercial flights the longest continues – from Dubai to Los Angeles, San Paulo, Houston, and San Francisco. This offers extensive trips of air in the EAU and Middle East. The air line also supports a division of separated load, for the name of Emirates SkyCargo. It is between the most rapid air lines of growth of the world, which gained enormous income for 500 million dollars in 1993.
Air Lines of Emirates support 127 aircraft quickly, consisting of Airbus A330-200, Airbus A340-300, Airbus A340-500, Airbus A380-800, Boeing 777-200, Boeing 777-200ER, Boeing 777-200LR, Boeing 777 -300 and Boeing 777-300ER. The airline investigating its fleet frequently, in accordance with its policy to support a young fleet. In 2008 the Emirates for the second air line to demolish the Airbus 380-800, after Air Lines of Singapore. This has also asked for 58 Airbus A380-800, making it the biggest customer of this Airbus. The use of air line of his plane is the highest in the industry, climbing to 13.7 hours in a day.
aviation, value U.S. $ 19 billion, adding 71 new planes. This is now the client as principal cast of two ultra-modern new aircraft – A340-600 HGW and double-decker A380 super-jumbos.
Emirates Airline covers 101 destinations, in 60 countries of the world. It flies to Canada, U.S, Brazil, Australia and New Zealand. In Europe, it serves France, Germany, Greece, Italy, Russia, England, Switzerland, Turkey and Malta. The airline carries passengers to destinations like India, Pakistan, Bangladesh, Maldives, Sri Lanka, Malaysia, Singapore, Thailand and Philippines in Asia and Egypt, Morocco, Sudan, Libya, Angola, Kenya, Mauritius, Uganda, Nigeria and Ghana in Africa.

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Air Lines of Emirates support 127 aircraft quickly, consisting of Airbus A330-200, Airbus A340-300, Airbus A340-500, Airbus A380-800, Boeing 777-200, Boeing 777-200ER, Boeing 777-200LR, Boeing 777 -300 and Boeing 777-300ER. The airline investigating its fleet frequently, in accordance with its policy to support a young fleet. In 2008 the Emirates for the second air line to demolish the Airbus 380-800, after Air Lines of Singapore. This has also asked for 58 Airbus A380-800, making it the biggest customer of this Airbus. The use of air line of his plane is the highest in the industry, climbing to 13.7 hours in a day.
Air Lines of the Emirates is one of the first 10 airlines in the world, based on revenue, passenger kilometers. This is also the largest air line in the Middle East, in terms of income, fast-size, and passengers walked. The airline is the seventh largest in the world in terms of international passengers is taken. This supports the state of the air lines of the world’s larger quarters, in terms of kilometer international demolished because of the passengers. In 2009, Singapore Airlines, the fifth best air hose was voted the world by signing the agreement with the survey Skytrax, the earliest positions ninth (2008), ninth (2007), called up the (2006) and third (2005).
The Emirates Group
Air Lines of Emirates (including his subsidiaries Load of Sky by Emirates of load) is only one division of the Group for the Emirates, a few globally active national travel and tourism conglomerate, which provide good aviation-related support services. Finally, the group of Emirates 43.6 percent of the Air Line SriLankan.
The Dubai Government’s aviation-
Related Activities
dress of an even higher level of aggregation, the Emirates Group, for his {your} part, it is only one element of a complete bundle related to aviation, full as it is about responsibility Sheikh receiver Ahmed Saeed Al – Maktoum (1) (1) World of Dubai Central Consortium (activity: the construction of Jebel Ali Airport City is also the new mega-airport in Dubai).
(2) Department of Dubai Civil Aviation (activity: that all statutory tasks related to aviation, which operates the airport DXB, Dubai Libre of taxes and the people of the Load in Dubai)
(3) Business of the airspace in Dubai (activities: leasing of planes, airport planning and direction, consultation, maintenance and related to aviation
SWOT Analysis
Many of the forces in the Emirates they come from the ruling which the Court has taken in his foundation, and from his single organizational structure. Not only carrier benefits of having failed to be created from scratch just 22 years ago, leading to flat hierarchies and essentially all of the costs of heredity, but which is more important is the central role of aviation in the strategy for the development of Dubai, Emirates also by ensuring a very favorable political environment. Emirates extract profit well below costs in its airport in the house. Obtaining the fees are generally the same as that of the main airports, has no air line flying into DXB to pay any additional cost (as cost of noise, the cost of ATC, security expenses, etc.), the Emirates – just like any other company doing business in Dubai or, indeed, in most states, the Gulf of Mexico – to take advantage of the low tax rate from Dubai diet, which only holds branches of foreign banks and companies of energy to the corporation. Obviously this is an advantage, while the company is profitable. The laws of immigration of Dubai is quite generous by international standards. Only it does not support this one for foreign experts who can be easily recruited by the local signatures.
This also applies to passengers in transit who do not have to clean the immigration of DBX changing planes. second of the fort in the Emirates is his service awarded in all classes, which are connected or surpassed only by a few other airlines such as Air Lines, Singapore.
It is almost impossible for foreigners to discern any great weakness. But although apparently not reliable as a source, some cartels on the Internet related to travel blogs complaining about the quality of services as sanding (as he stabilizes himself) in general and the lack of consistency that service in particular. In fact, the Emirates was less affected in the recent profit Syntax and other awards for the quality of exceptional service.
Clearly the factor of the main contributions to the success of the Emirates, and a huge opportunity for future growth, is very favorable position in Dubai. Approximately 3.5 billion people live within eight hours of flying. Moreover, Dubai is placed directly in the intersection of some basic flows of passengers and cargo, p.ej. Asia (Small Stone / India) – Africa, Asia in the southeastern part of Europe, Europe-Australia/New Zealand, India – North America, sits on the economic importance of which grows in parallel with an increase in the emerging economies in the vicinity. In addition, DXB has become a master – and often saves time – go point for passengers (and it loads) travel from smaller towns, especially in Western Europe, the road to Australasia and up to Africa. In fact, for passengers flying, let’s say, Hamburg to Sydney, Emirates offer a universal one union instead of at least two stops in almost all of Oneworld, Skyteam or encaminamientos of Estrella’s Alliance. And for flights to Asia, Emirates offer the same universal service as his European competitors, but to a greater number of destinations). What is more, not only has EAU government has been very hit in the negotiation of agreements on free trade in all major economies in the U.S. to the emerging markets of Asia (but not with a European reluctance Union), who very likely will increase demand for air travel to and from the EAU. What is more, has the Arabic entire peninsula has been one of the faster growth regions worldwide. From the many nearby countries, including the most populous, Saudi Arabia, they have dealt with the gradual liberalization of his markets for air transport, the new opportunities for growth are also the Emirates in his region in the house. Finally, for the decision of the Emirates to work a huge fleet of A380 allows the air line to continue to grow by no means airports are forced to groove it serves, though – even their European competitors primary buckets.
A much more likely threat is the increase that lobbies for some of his competitors in key markets such as Australia, France and Germany, and largely without the benefit of Canada, for the legal protection from the extension of the Emirates in his “to house the cover with lawn “. For example, Lufthansa campaign vigorously against the project by Singapore Airlines to serve the Berlin and Stuttgart, although the operators of these two airports have tried a lot of time to attract more intercontinental services that Lufthansa has not prone to, or, in the case of Berlin, it has not provide a profitable way.
Air Line of Emirates has been protected by regulation or the rules and policies formulated by the Government of Dubai and other countries where they work. Bosom of the government of Dubai is the only holder of the industry the company has been able to join
to the policy of all governments to ensure him that the company will lead commercial activities successfully and with power. In addition, the company also formulates its own policies for protection against possible government restrictions and limitations.
It is said to be one of the largest and most competitive industry in the world in terms of air management and air transport, Air Line of Emirates, to be economically stable and guessed stability. Despite the many dangers that they find in different parts of the world, trying way air line of the Emirates that they could overcome such struggles and the strain of having a better economic conditions.
The airline of the Emirates is affected by the situation in the society in which they work. Along with this, try the air line of Emirates harder to see him that they give to each community an equal opportunity to utilize the resources provided by the organization. The company follows the high reputation and relationships in the community to which they belong (2004).
The appearance of the technology of information and the Internet have a power line of Emirates has worked in recent years. Different Ello / ES adopt the company’s systems and Internet are used to reach his client over the world and to know the latest trends in global business. Apart from these, the company uses including facilities that help to improve his productions and activities.
An Emerging Global Brand
Emirates is a brand that actually occur as a global icon with its logo represented in the Arabic writing as a symbol of his origin. The air line at the Emirates construct an operational strategy and approach to the service of a truly global purveyor, supplying high quality service and boasting of one of the youngest and more advanced fleet of industry who will win the loyalty of its customers worldwide. Today, the Emirates flies to 78 destinations in 55 countries with more than 12 million passengers annually. Meanwhile, most of the air lines of the world has in the past year stabbing costs and slashing services, Emirates started eight new major lines only in 2004. Last summer it began his first U.S. flight, JFK airport of New York City and that he has already said that no fewer than nine U.S. destinations.
Emirates Branding
Emirates brand positions all traditional and new instruments for the marketing major, but the way that has helped him to walk with their customers and increase their knowledge of the brand the fastest sound sports patronage of the event owner. As Simon said: “When we launch a new route, we do not just go there with an advertising campaign to promote our products and services.We together a complete campaign that builds up our reference letters as a corporate citizen and really he promotes social, cultural space and Community events. by hand with our publicity and campaigns of public relations, Emirates decide to sponsor events, groups or businesses that attract coverage of world television. Our study shows that choosing the right protection, we have been able to spectacular jumps in the promotion of our knowledge about the brand in new markets. “
Using Jay Barney’s VRIO Frame work, we can better understand the competitive advantage of Emirates Airlines and the reasons behind its success.
Air Lines of Emirates has valuable human resources and a personal good experience. Vice Chairman of the power line has more than 50 years experience in the business of aviation. The airline provides excellent information to his staff and it is pervasive in order to improve their skills without considering expenses. Also, air lines of the Emirates is the international carrier in Dubai that is politically stable area and having to its strategic location, especially for passengers in transit. Cardinal humans and the location of the airport to resolve an important role in the help of potential prowess of the power line and avoid threats.
I would consider to be the strategic location of Dubai, a scarce resource that provides the power line a great demand for their services. Human capital is a scarce resource as well. For example, the Sheikh Ahmed, an object of value and a scarce resource, and his image has a large contribution to the success of the airline. This is similar to Richard Branson and Virgin Atlantic Ocean.
The position of Dubai is a resource that cannot be imitated easily since Dubai is the commercial capital of the Middle East.
The cooperation between all divisions of Emirates Airlines has been very cost cutting and increased efficiency. His leadership and policies of the compensation they are worth mentioning too.
In conclusion, the air lines of the Emirates has a competitive advantage that supports the benefit is based on the work of the framework VRIO.
The competitive advantage is a position that a signature occupies against its competitors. A company that had the advantage among competitors can overcome the expected revenues and it was a possibility that the main signature in the commercial sector or industry. Many forms of competitive advantage can not be supported indefinitely because of the promise of economic rents invites competitors to duplicate the competitive advantage that is supported by a signature. Therefore possesses a signature of a competitive sustainable advantage when his processes that create value and status could not be a duplicated or imitated by other signatures.
In analyzing the competitive advantage, numerous theories and models are presented including the Five Forces Model
Bargaining power of suppliers
Suppliers of materials keys that arranges an end product can have a significant influence in the competitive spirit in an industry – mainly the timing of the lead-availability of the product as well as his ultimate prize.
Bargaining power of customers
When customers are the source of revenue in an industry, they are obviously important in determining its attractiveness. The information is available, their price sensitivity, geographic concentration, and switching costs affect the revenue side, a competitor in the market can expect to receive. Customers will always seek to optimize their purchasing position, and will therefore use all available information to them so that they get the optimal price for the product that suits their needs.
Threat of substitute products
When a replacement product is available in the market had the advantage of being first can be significantly reduced – especially if it is comparable price and features. These substitutes can simply increase competition in an industry – such as the impact of the introduction of the iPod in the MP3 player market.
Potential entrants
The ideal situation for any competitor is to participate in a market that is closed to others. Barriers to entry – when you’re on the right side of the fence – can be an effective source of competitive advantage and thus increase the overall attractiveness of an industry.
Industry rivals
The player who arranges industry making the competition for the ratio of the market. The factors that determine the degree of the attractions include the grade of rivalry between the players, the category of implicit complexity had economies of scale as existing players, and the level of investment to become a viable competitor.
In the Additional Study of Five Forces In The Competitive Advantage, the Air Line of Emirates Are The use as the subject. The Air Line of Emirates, in a brief definition, is a principal air line in the Middle East. This is the National Air Line of Dubai, United Arab Emirates (EAU). The lines of Air Line Between the first 10 carriers all over the world in terms of Income, Passengers’ miles, & the biggest air line speed donated in the Middle East in terms of Income, fixed size, & the Passengers went; andnow the seventh biggest air line. In the business of air line, There Is note doubt thats the Establishment of A Few very Enormous commercial facilities and Organization is risky.And the care of stable it is undoubtedly risked also “also”, into effect. But These thoughts Were Already eliminated in the minds of the person’s work behind the WHO Air Lines of Emirates. They did Strategies Using Five Forces Of The Competitive Advantage to analyze the ambience of the business.
The strategy
The strategies of the emirates are a function of the ambience where this works and the product of the strategic intrinsic thought from within the carrier.
Threat of New Entrants.
It seems apparently that the airline industry is a low entry barrier industries. Finance, the main barriers to entry are readily available in the Middle East and the technology and expertise available for purchase. The threat – lucrative markets that offer high returns will attract business. This results in many new players who will in practice
profitability decreases. Unless the entry of new signatures could be blocked by new entrants, the price for profits drop down to a competitive level (perfect competition).This will prove to the dam is at the line (clear, right, etc.), the economies of the differences in product, capital of the brand, etc.
Power of Suppliers
Boeing and Airbus are the two main suppliers and the struggle between them is likely, observable, but not horrible. Moreover, the probability of a provider that integrates vertically pretty remote. Negotiating Position – also described as the market outcome.Suppliers of major issues, components, labor and services (such as domination) to the signature can be a source of power on the signature. Suppliers can shoot back to work with the signature, or p.ej to receive prices that exceed the high places of the only resources.
Power of Buyers
Bargaining power of buyers of industrial air management in the Middle East is quite low. Negotiating Position – also described as market outcomes. The customer’s suitability to put your signature under the pressure and this also affects the sensitivity of the client contrary to the changes in prices.
Availability of Substitutes
The threat is really limited, because the distances in the Middle East and the quick steps to make himself a symbol of the area. The threat – the existence of closely related products of alternative increases customers’ propensity to switch to alternatives in response to increases in the price (the high elasticity of demand) the buyer’s willingness to pay. In an ordinary business that sells retail, substitutes are always present clients that the common motive in the choice of options is: the interpretation of the relative prices of substitute products, buyers who change costs, and perceived level of product differentiation.
Competitive Rivalry
The industry of air line are generally very competitive and highly competitive industries in general, once again, winning the returns because the cost of competition is high. East could mean disaster in the low times of the cycle. Middle East, gives a different story thanks to the preparation of the governments in the suppression of shock. Rate – for most industries, this is the most important factor that competitive spirit in the industry. Sometimes rivals compete aggressively and sometimes competing competing in dimensions not prices as innovation, marketing, etc.
The role discovers that the success of the brand of Emirates Air Lines has not happened for a typical kind of happiness, but rather for the planning of good strategy and appropriateness of direction to act quickly and with the decision, which has contributed to the wave of the company over its competitors as much on regional markets and the global
The role of passing it discovers that what started as an air hose with aircraft that is given has made for herself now an air hose with the largest and the youngest fleet of Airbus and Boeing in the industry of the entire airline. The role of talking to the customer’s first service and services, has helped to make the Emirates a top position in the classification of the Award of Excellency Skytrax. This role identifies some issues and benefits of the planning of the brand’s image and strategy, and the effect on markets, customers and economies that affect the success of an organization.

Servqual Tool in Emirates Airlines

Servqual Tool
The quality of services in emirates airlines: the challenges of continuous improvement
In this paper the concept of quality is discussed to examine its development and applications. Service quality is reflected upon with an elaboration of the seminal SERVQUAL tool in a separate section. The paper also contextualizes customer satisfaction within the overall discussion on quality and business performance. Customer satisfaction and service quality are both also reflected upon to contextualize requirements of the changing times, and the adaptability of these two- inexplicably interconnect pillars of business performance. Quality and customer satisfaction are implicitly linked together in this paper in different sections – they remain linked by their respective definitions upfront. Business performance is an undercurrent to the discussion in this paper given the origins and nature of developments surrounding quality. Customer satisfaction is explicitly a key performance measure but its interconnections with profitability and loyalty are pondered over in trying to elaborate on the concept of market orientation.
The paper is divided into four sections- the first one looks at quality in general mapping its development. The second section discusses service quality and its measurement. The third section looks at customer satisfaction and other key variables that shape customer orientation. The last section provides a profile and critique of SERVQUAL.
Quality has always concerned the societal intent of consumption. The reasons are fairly colloquial at one level where lack of quality can result in insufficient and unsatisfactory delivery of requirements from a product or service. At another level – given the growing complexity of the business processes over the last century quality has evolved into a discipline – characterized by an equally intertwined interface between control, assurance, and management in general (Dooley, 2006).

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Broadly speaking in the business context – quality is the ‘perception of the ability’ of a product to satisfy its users. By extension it also applies to the processes and management of the processes that shape the product. However, the satisfying paradigm underpinning quality has multiple manifestations: “conformance”, “fitness for use”, “basic minimum requirements vs. attractiveness”, and as a matter of “interest and individual disposition” to name a few (e.g. Juran, 1945; Pirsig, 1974; Corsby, 1981; Kano, 1984; Reeves and Bednar, 1994).
The definition of quality is rather difficult to come by because of the sheer nature of its wide applicability and strands of origin- ranging from the practical business origins to metaphysical origins. The American Society for Quality aptly captures this subjectivity in understanding quality by stating it as …“a subjective term for which each person has their own definition” (Wade, 2005; ASQ, 2007). Quality management is made up of two complementary aspects one is quality assurance and the other is quality control. The former is about ensuring a basic minimum standard through upfront production process design. The latter is about reviewing and monitoring output to wean out the ‘defectives’. Assurance is thus inherently preventive and control is mainly curative in a functional sense (Gunter, 1998).
Irrespective of the disparate origins, quality management can be safely said to be largely associated with the idea of excellence. A range of concepts and their operationalisation stem from this broader view of quality and mark the growth in research and practice of quality management. Six Sigma, Quality Circles, and Total Quality Management- are but a few from amongst numerous such frames of reference (dti, 2007).
The idea of quality at the advent of the century had been around as a selection paradigm- accepting the superior and rejecting the inferior and biased towards ‘control at best’- most of the time the evaluation came from the end user. Along the business value chain as production became large scale after the 1st World War- quality assurance procedures started becoming formalized. It was not only the ‘end of the road’ customer assessment but also a series of filters ensuring only the better quality output being delivered to the customer made control and assurance an important in house practice . The inspection oriented quality control schema had its problems mainly in terms of competent individuals that could ensure monitoring despite not being the ‘know all’ skill set champions. Formalized roles of inspection and quality manager thus emerged and along side assurance models provided a great lift to quality management as a capability. Generic tools for quality management like the control chart emerged in the 1920s and statistical process control matured towards the middle of the century. The revival of the manufacturing of war torn Japan on mature principals of quality control and management finally brought quality management into the forefront. By the end of 1970s it was a global pre-occupation with everyone trying to imitate the success of Japanese low cost and high quality products (dti, 2007; Dooley, 2006).
When the word total quality came to the fore in 1970s and finally pinned quality management as a fundamental capability that ran through the organization. The West’s take on quality management was more about ‘standards’ than ‘culturalisation’-but based around the same operational frameworks as in Japan. These gave rise to national standards in response to the need to have a quality association with the national economy as a whole. At the business level quality is now a key management responsibility (Gitlow et al., 1989).
Aside from the generalized profile of emergence of quality management above there are a few key landmarks that need to be noted. The first is probably the statistical developments in the 20s and 30s and the emergence of concepts related to probability of acceptance, risk, tolerance levels, and sampling aspects (Shewart, 1931; Dodge and Romig, 1959) – establishment of standards and societies also marked the 1930s and 40s (Hutchins, 1995; Dooley, 2006).
Industrial production was never under as much pressure as in the II world War. While quality assurance could not keep up with the pressure control came to the forefront to ensure acceptable working products. The maturing of the statistical processes and standards in this regard was a key development. The large scale transmission of these standards to the then military suppliers ensured that the War provided an acceleration to the diffusion of quality management standards and systems (Dooley, 2006; Grant and Lang, 1991).
With the end of the war in the formative phase of reconstruction quality was again given a ‘less rushed’ attention. The role of top management, the interface between organisation wide processes, among others found attention. Total quality control came to the fore as a holistic concept with a stage gate approach right from design to delivery to consumer (Fiegenbaum, 1951, 1957, 1961).
As mentioned, the post war Japanese revival is a key factor in development of quality management. Over the 1950s and 1960s the ideas of cultaration of quality with pride in workmanship, top management support, liberalized communication and quality circles took hold stemming from Japanese success. The good practice concepts like quality circles emerged as competencies that were tightly woven into the culture of business unique to Japan and required some effort when it came to imitation by the west (Koyangi, 1964; Deming, 1967; Juran, 1967). Quality became integral to organisational behaviour, goals, and associated personnel development.
The coining of ‘Total Quality Management’ (TQM), encapsulates this coming of age of quality management as an indispensable competency in the competitive arena that is augmented by increasing customer expectations (Deming, 1986; Anderson et al., 1994; Akers; 1991; Stratton, 1990). The main characteristics-changes and developments though numerous can be safely said to be around making quality:
– a responsibility for everyone,
– a necessity rather than a differentiator,
– relate better to services and information, and ever increasing set of non-manufacturing industries.
– relate to best practices, dissemination and learning
– recognized a key function and accordingly resourced in organizations
– reinforce the primacy of the customer
(Green and Welsh, 1988; Marquardt, 1991; Dooley, 2006)
As TQM goes from strength to strength the balance between assurance, control, and the new fangled third strand – learning is becoming vital given the dynamic nature and complex requirements that are associated with quality (Green and Welsh, 1988). The standardized tools need to be customized for organisational applications with a sense to create the competitive edge-because the omnipresent paradigm itself is tending to defeat the objective to seeking the competitive edge through quality (Dean and Bowen, 1994). Context specificity or in other customization of model and tools is the call of the day for research and practice alike The generic nature however needs to be preserved in the background given wider economic and societal association of quality management. For instance, as new frontiers like e-commerce – open a fertile bed of quality concepts and models will be very valuable for learning and adaptation to the economic and social context (Doty et al., 1993; Dooley, 2006). .
However, having an adaptable bed for quality management across diverse industries to draw from is not sufficient. The societal realties have also undergone transition – quality needs to broaden its founding grounds to reflect on new aspects like information management and the virtual realm where quality may have to question its own foundations that are deeply rooted in manufacturing. The successful adaptation to non-manufacturing i.e. services however, is evidence of the emergent nature of quality management that can take on fresh challenges.
Service Quality
Service quality is a subjective concept that remains challenging to define and to measure (Cronin and Taylor, 1992). This associates itself and can be understood as the application of total quality in the service sector in the main and also implying the service function in frontline delivery of product in other industries. The understanding of service quality has been synthesized from extant literature by Jennifer Rowley (1998). In her work it is seen as a “perception judgment from a comparison of what they feel service organizations should offer and the performance of the organisation offering the services”. There is no dearth of definitions that try to pack in comprehensiveness to this abstract concept. For instance, Hedvall and Paltschik (1989) refer to ‘willingness and ability to serve’ with a mention of ‘access’, Lehtinen and Lehtinen(1982) view service quality in a three-dimensional space that looks at ‘interactive, physical and corporate’ quality facets. Furthermore Gronroos (1984) simplifies the idea by seeing service quality as shaped by ‘technical and functional’ aspects of quality (Rowley ,1988).
The link between service and performance and by extension satisfying the customer is challenging because services have a unique combination of characteristics. The first of these combinations is their intangibility- causing issues in measurement as they are a function of the ‘experience’ of the customer. The next is their perish ability –meaning that they cannot delivered from existing stock and thus lending a dynamic nature to service delivery that is difficult to condition. The third is inseparability between production and consumption of service and the last is heterogeneity or customizability as each end user receives a different level-nature of service partly owing to individualized perceptions that are involved in assessment (Zeithaml et al., 1985; Rowley, 1998).
The need is thus to work on ‘perceptions’ to assess quality given the cognitive frame of reference that dominates the characteristics of service. The associated requirement is to be able to classify services so as to peg a cognitive frame on a type of service Such an attempt has provided for groupings within the service industry as a starting point to deliver customized measurement models (Dotchin and Oakland, 1994). The influences on consumer expectations have also been classified to augment such efforts (Gronroos,1994) . While the seminal work towards generic developments like SERVQUAL (Parasuram et al., 1988) that is discussed in detail in the last section of this paper, provide founding grounds to service quality measurement- literature sees several issues in the applicability of this generic framework. This also relates to the inclusion exclusion and reconfiguration of the understanding of service attributes and the industry categories discussed before (e.g. Sasser, 1978; Dotchin and Oakland, 1994). A critical perspective on SREVQUAL comes later but upfront – it is of essence is to recognize the importance and complexity in measurement given the sheer abstractness of the idea of service and its quality.
The customization of measurement efforts and models in light of different service industry groups has been key to efforts at improving measurement (Dotchin and Oakland, 1994). In SERVQUAL the conceptualization of satisfaction has been found to be too simplistic and the multiplicity of the ‘total experience’ is arguably not captured – this is in addition to the non-customized generic nature of the SREVQUAL tool. A longitudinal and sometimes phenomenological analysis is suggested to capture these nuanced but important characteristics of service quality (Singh, 1991; Rowley, 1994).
However, the difficult in devising a comprehensive tool still disposes wider practice of measurement to simplistic methods. Important adjustments and realizations like the use of ‘importance and satisfaction grid’ (Harvey, 1995) provide a very useful feedback and prioritization. For instance, high importance and poor satisfaction is a combination that merits urgent management attention.
Another important variable in the service quality metric that needs to be accounted for is the nature of the contract. Again this is because of the attribute of ‘psychological contracts’ that is unique in nature to services (Thornrow, 1998). This has found particular appeal in measurement related to provision of public services. Having formal, informal and psychological components in service contracts provide a platform for balancing expectations and perceptions. These are otherwise very difficult to manage given the basic characteristics of service discussed at the onset of this section. Finally the perceptual plane needs to be also looked at with a balance though by classical definition the perception of the customer is the defining feature of quality-for service quality in particular the perception of the provider and the resultant psychological interface is also key to the metric. The role of customers is also not to be taken uni-dimensionally. There are different stakeholder brackets eg. users, influencers, deciders, approvers that associate with a service category and also vary in their significance (Rowley, 1988). These influence the generic satisfaction and associated performance variable.
Given this multiplicity and the psychologically complex nature of interactions, the ‘relationship exchange’ process (Morgan and Hunt, 1994) is key to providing some cognitive stability to overtime service quality measurement. It is also a suitable conduit to ensure that feedback is smoothly translated into strategic action for improvement. Such relationships can be supported by associating service with some ‘bonds’ (Chu and Lin, 2004). For instance, providing unique services, incentives, and even building social ties between provider and customer. However, on the other hand, the impact of such relationships on service quality needs to be moderated for a reliable assessment. They provide grounds for stabilizing the psychological map to better associate performance and expectations but at the same time bias it.
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Customer Satisfaction
Broadly speaking customer satisfaction is a performance indicator of the extent to which a firm has managed to meet customer expectations through its business deliverables. Having formed the foundation of the marketing concept for nearly half a century the attempts at harnessing the good practices and measurement approaches is a much explored realm when it comes to customer satisfaction (e.g. Drucker, 1954; Levitt 1960; Gronroos, 1990).
Over the last few years customer satisfaction has received a reinvigorated interest. Possible reasons for this have been seen as the after effects of a maturing TQM paradigm that is linked with several recognition awards, and also, arrival of national customer satisfaction barometers (Garvin, 1991; Johnson et al., 2001; Helgesen, 2006)
The associated concept of customer relationship orientation is posits a strong link between customer loyalty and profitability with customer satisfaction (Zeithaml, 1988; Oliver, 1996). While customer loyalty has been referred to as central to ‘competitive advantage’ (Porter, 1985; Chao, et al., 2007)- this is delivered through customer -satisfaction. This is the basic rationalization behind customer satisfaction being so central to both short term and long term performance assessment.
That the ‘ultimate aim of any firm is to achieve customer satisfaction’ remains the central thesis of market orientation (Levitt, 1960). Customer orientation seeks to align “organizational values, beliefs, assumptions and premises” to deliver a mutually enabling relationship between the customer and the firm (Day, 1994; Strong and Harris, 2004).
Strong and Harris ( 2004), define a set of tactics that can deliver customer orientation. They define three sets of tactics. The first define relational tactics (essentially relationship marketing) that engages a nurturing philosophy for long run gains. The second tactic as human resource tactic is more about the direct interface with frontline of the customer and rest of the organisation –essentially empowering the front line through training and support to reap rewards of realized quality of experience of the customer. The final tactic relates to procedural aspects that routinise and systemize customer care and support systems. The study posits that there is a strong interaction and dependency between the three tactics. This key work that examines customer satisfaction and its manifestations under the customer orientation paradigm shares ground with some key extant literature (Narver and Slater, 1990)
However, other studies tend to put one set of such aspects – though differently labeled as more important than the others. For instance, Chao et al. (2007) say that while satisfaction remains an abstract idea sometime there is an overt component of interpersonal relationship building that because of over emphasis- instead of complementing customer orientation tends wean resources away from conditioning deliverables to meet consumer expectations. Research suggests that such a lopsided drive is ill-found in the long run While relationship marketing remains important it has to be pegged on consumer satisfaction from products and services for sustainability (Chao et al., 2007).
Businesses need to focus attention on relationship building. This however has to be conditioned for long run profitability. Customer satisfaction through meeting expectations from goods, transaction services and pure services, and a sustained follow up and support culture has to be the basis for relationship building. For instance, financial incentives/offers are likely to be ineffective and short lived if quality is undermined. As most of the research in customer orientation gets focused on relationship building this is an important consideration to use as a moderator. Value to the customer can never be undermined for seeking short term profitability. This is because such profitability is not suitably tied in with satisfaction which in turn guides customer loyalty.
Views to the contrary also exist mainly from some practitioners. Bruce Clapp (2007) of the Carlson marketing group says that “relationship strength is more important than satisfaction as a true indicator of loyalty. Customizing the experience of our customers, in-branch and in home, impacts the strength of relationship as it builds. In the experience, ensuring our message is relevant requires that we be closer to our customer. The communication we use, whether direct mail, e-mail or in person, must be tailored to the needs of the customer at an individual level. The term mass customization has gained ground as we look for ways to become partners with our customers and be there when they have a financial need…changing the perception about communication from irrelevant to relevant….mattered ” (Bruce Clapp in ABA Bank Marketing, 2007)
The above text signifies another important side to the changing times that of information and its quality as a deliverable that has become a key product attribute. Relationship management that works to harness this may improve the quality perception of its product without making changes to the product itself. The result is then improved customer satisfaction. The level of abstraction in the idea of ‘satisfaction’ and the changing times with an information overload -have created shadow characteristics for products and services. The idea of ‘value’ is ever more a backdoor into customer satisfaction.
Customer orientation in the milieu of – discussed tactics that include relationship management and the intertwining of satisfaction, loyalty and profitability is a complex arena. It is thus not strange to see that the core variable – customer satisfaction that inhabits the arena is often found missing from hundreds of studies that explore business performance (Capon, et al., 1990 –review of 320 empirical studies). The inter-linkages are so strong that even controlling for the satisfaction part (if a suitable measurement was deployed) tends to capture most of the variation in most cases. Given that studies seek to look at different sets of variables for instance, in say, production management exclusively – they understandably steer clear of satisfaction measurement and inclusion – resulting in poor significance and scope of such studies.
Studies which do involve the customer factor in examining performance have more significance in results but have their own issues. These are to do with industry specific nuances where the interaction between customer satisfaction, loyalty and profitability vary a great deal (e.g. Reichheld and Sasser, 1990; Soderlund and Vilgon, 1995; Page et al., 1996). Accounting for the differences in methods and measurements the issue remains that the customer orientation metric is also industry specific. Though it is omnipresent and universally central to business goals the way it manifests itself is what may vary across business types. For instance, the rate at which profitability increases with loyalty and conversely loyalty increases with satisfaction may vary (Helgesen, 2006).
In the days when customer was not inundated with choices -the notion of satisfaction was relatively stable despite its metaphysical connotations. As the number of choices has gone up so is the fickleness of satisfaction. Satisfaction can thus no longer be the guiding tenet for loyalty. The relationship perspective has thus become very important – and as argued above is widely contested in terms of how important? To the extent that it takes away resources from developing the arguably ‘real’ good or service it is overdone. However the ‘value’ it brings in terms of influencing consumer selection in an ambiguous setting of multiple satisfying options remains critical. The issue is that of a balance without a quality good or service to back up the relationship promise failure is imminent. However without being able to retain customers or attract them to quality products and services as there is always a ‘better’ out there investments in the ‘real’ good or service is also low yielding.
The challenge of customer satisfaction as the key variable in consumer orientation is to condition itself to the changing notion of ‘value’ that is now integral to information flows in every consumer-provider interaction. This conditioning should take into account the factors that affect loyalty and profitability because a knock on effect on these is very likely. Finally, there is also industry specificity to consider to an extent but to a lower extent- the times have not changed enough to question the centrality of consumer satisfaction- they are just placing new demands on it.
The recognition of the importance of customer -‘assessment and perception of the quality’ of service has led to the emergence of concept behind SERVQUAL, and its delivery as a tool. This was primarily through the work of Parasuraman, Berry and Zeithmal (1985, 1988, and 1991). The development is a good example of research being driven by the interests of the industry and in the process delivering an instrument of direct utility to the industry. In this section SERVQUAL is reflected upon with a view to explain its foundations, ponder over- the developments, posited advantages and critiques, and in the process, provide a holistic perspective on this key development in service quality management.
The basic concept behind SERVQUAL works on a ‘gap’ between the expected and perceived quality of service. The nuances on how this gap has been dealt with in this model –instrument, issues surrounding subjectivity, reliability and validity, and applicability across industries, have provided for generous discussion and developments over the last two decades. The customer view based on a set of questions is primary and the only view that matters in assessing this gap. The original ten dimensions that comprised SERVQUAL namely: reliability, competence, access, responsiveness, courtesy, communication, credibility, security, understanding customer and tangibles – were eventually synthesised into five. These dimensions were based around the following areas: “(1) tangibles: physical facilities and personnel presentation; (2) reliability: performing the promised service dependably and accurately; (3) responsiveness: helping customers and providing prompt service; (4) assurance: knowledge and courtesy of employees and their ability to inspire trust and performance; and (5) empathy: caring, individualised attention the firm gives to its customers” (Parasuraman et al., 1988, 1991; Shahin, 2007).
These provided for a rationalisation for 22 questions for customers to generate the gap metrics. These questions have since been pondered upon to reflect on the possibility of supplementary questions. Attempts have also been to tailor the instrument to work around reliability, validity and customisability issues. The last implies to the discussions in literature relating to the issues surrounding the generic nature of the instrument, and the need for reflecting on it given the range of applicability to a wide spectrum of industries (e.g. Buttle, 1996; Sullivan & Estyes, 2006; Nyeck et al., 2002).
SERVQUAL is popular in both the profit and non-profit sector (arguably more so in the latter) primarily due to the generic yet very useful nature of the investigative questions to a range of industries. It has the hallmarks of a good instrument – in being low on time consumption, easy to use and though argued – recognised by practitioners to have acceptable reliability and validity. The comparable aspect for benchmarking reasons is also of great appeal (e.g. Brysland and Curry, 1984). It can provide a useful progress chart if done over successive years both for self assessment against set goals and comparative assessment to feedback into objectives and planning.
Francis Buttle’s critique of Servqual (1996) provides some key shortcomings. The first one has to do with the subjectivity of expectations and perceptions. The second relates to the assumption the model makes about a “direct relationship” between service and quality- a perception that shares ground with the ‘gap model’ discussed later in this paper. The final rather philosphical but valid point is related to subjectivity and asks one to reflect on whether the right things are being measured for the desired assessment (Buttle, 1996).
Luis Lages and Fernandes (2005) get metaphysical and question the “level of abstraction” associated with respondent customers. The posited Service Personal Values (SERPVAL) scale to refkect this presents three dimensions of service value to “peaceful life, social recognition, and social integration”(Luis et al., 2005) . In this scheme of things as a possbile supplement to SERVQUAL – customer staisfaction relates to all dimensions and loyalty and repurcahse intentions are the attributes than can be distilled from the assessment (Kang et al., 2002).
The validity position that has been contested in research also stems from the assumption in SERVQUAL as being generalizable across industries and products. Such research posits that some of the areas/dimensions outlined above may have higher or lower position given the nature of the industry or product, and by extension suggests requirement for some customisation in applying the tool. The attempts to make SERVQUAL more robust and improve its application are ongoing. This also indicates the utility of the instrument’s design as a time tested foundation for service quality measurement (e.g. Carman; 1990, Cronin et al, 1992; Brian et al, 2000). Illustrated below is a template of the SERVQUAL instrument
Figure 1: The SERVQUAL Instrument
DIRECTIONS: This survey deals with your opinions of __________ services. Please show the extent to which you think firms offering _________ services should possess the features described by each statement. Do this by picking one of the seven numbers next to each statement. If you strongly agree that these firms should posses a feature, circle the number 7. If you strongly disagree that these firms should possess a feature, circle 1. If your feelings are not strong, circle one of the numbers in the middle. There are no right or wrong answers – all we are interested in is a number that best shows your expectations about the firms offering ________ services.
E1.They should have up-to-date equipment.
E2.Their physical facilities should be visually appealing.
E3.Their employees should be well dressed and appear neat.
E4.The appearance of the physical facilities of these firms should be in keeping with the type of services provided.
E5.When these firms promise to do something by a certain time, they should do so.
E6.When customers have problems, these firms should be sympathetic and reassuring.
E7.These firms should be dependable
E8.They should provide their services at the time they promise to do so.
E9.They should keep their records accurately.
E10.They shouldn’t be expected to tell customers exactly when services will be performed.
E11.It is not realistic for customers to expect prompt service from employees of these firms.
E12.Their employees don’t always have to be willing to help customers.
E13.It is okay if they are too busy to respond to customer requests promptly.
E14.Customers should be able to trust employees of these firms.
E15.Customers should be able to feel safe in their transactions wi

Strategic Management of Emirates Airline

This Assignment includes three parts. The first part is strategic planning of Emirates airline. The second part discusses the type of decisions which are made in different levels of Emirates and explain the information systems used in these levels. The last part highlights the ethical issues involved in the organization’s processes.
Part 1: Strategic Planning
The purpose of this part is to consider the overall strategic management process and consider what is happening in the environment in order to judge how those happening may affect the organization. In addition there is a consideration of organization’s strengths and weaknesses and the opportunities and treats that has significant impact on the organization process.
Company overview
Emirates is a national airline of Dubai in the Middle East. Emirates flees to over 100 destinations in 60 countries around the world from Dubai International Airport with a fleet of 137 aircraft. Emirates Air line has been existed for 25 years. Although Emirates is a young airline, over one decade it has become one of the most respected brands in the world. The key of their success is using new technology and information systems in their business processes. (Emirates group, 2010)
Company’s mission:
Generally, Emirates’ growth has never been lower than 20 per cent annually, and the airline has recorded an annual profit in every year since its third in operation. Their effort is to continue their explosive growth and increase the percentage of this growth.
Mission statement analysis
This analysis will help organization to reveal objectives, goals and plans for achieving them which are important for the long term survival in the industry.
In any organizations, managers need to focus their efforts and resources on long-term, general objectives, and provides a foundation for short-term, specific objectives in order to achieve their mission statement. (Robson 1997)
General objectives:
As mentioned in mission statement, Emirates is trying to increase the percentages of their annual benefits.
Emirates carried 21.2 million passengers and 1.3 million tonnes of cargo during the previous years (Annual report, 2010), and they need to carry millions more across a growing network of international destinations if they want to increase their profit. Therefore their aim is to provide the best service in the industry in order to have more passengers and cargo.
Specific Objectives:
Currently, Emirates’ flights account for nearly 40 per cent of all flight movements in and out of Dubai International Airport, and their main aim is to increase this market-share to 70 per cent by end of 2010 without compromising the reputation for quality.
Moreover, they are trying to add 18 new passenger aircraft to their fleet, increase seating capacity by 14 per cent. They also plan to increase frequencies on many existing routes as well as expanding cargo capacity by 17 per cent. These specific objectives are all to support the general objective which mentioned above.
Environmental analysis
The organization’s environment is an important point to be considered by managers because environmental factors can significantly influence organizational operations. Good managers must be aware of their organization’s environment and know how any changes may affect the organization and their organization’s available resources. (Robson 1997)
Remote environment
Remote environment analysis lists all those events, issues and facts which will influence the company performance, but over which they have little influence and those facts are usually out of control.
Nature of the environment
The United Arab Emirates (UAE) has the seventh largest proven oil, according to the Oil and Gas Journal in January 2009. Because of this geography, United Arab Emirates has rich natural resources and high amount of natural resources of fuel. The availability of large amount of fuel in UAE helps Emirates to provide fuel for its aircrafts much easier than its airline companies. (Business news, 2007)

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Political challenges
One of the reasons that had significant impact on Emirates was experiencing a downturn of their competitors because of the Gulf War. Gulf War was a war which took place in the Persian Gulf between 2 August 1990 and 28 February 1991. Because of this political war, Emirates was the only airline to fly in the last ten days of the war. (Press, 2001)
Dubai International Airport’s Terminal 3 was built exclusively for the use of Emirates at a cost of $4.5 billion. Terminal 3 is the largest building in the world by floor space. The influence of this environment is that many people may want to use this flight in order to visit the largest building in the world even though they have other choice of airlines.(Caswell, 2008)
Industrial environment
United Arab Emirates (Dubai), which was a fishing village at the southern end of the Arabian Gulf, has grown to become one of the leading trade center of the Middle East. Large number of businesses and trades are running in there. This influences Emirates Airline deeply because many people start coming to Dubai from oversee and also many people need to flight to other countries. Emirates, by providing good airline services, is one of the high demanded airline in this country.
SWOT analysis
SWOT analysis is a basic tool for analyzing the organization’s status. SWOT analysis addresses organizations strengths, weaknesses, opportunities and threats.
A SWOT analysis defines the relationship between the internal and external appraisals in strategic analysis. It is an exercise in identification and analysis. Analysing the key factors of the environment and the fundamental internal strengths and weakness of the organization will help dictate the strategies appropriate to the firms. (Robson, 1997)
Strengths are the positive internal factors that add value to the company.
New business idea:
One of the facts that makes organizations stronger is when they create a new business idea. In 2005, Emirates began flying non-stop to New York. This happened when only Delta Air Lines had the same service. Therefore Emirates started to give a service which was not provided by so many airlines, and that helps them in increasing the number of their customers
Another internal factor that makes the business strong is having good reputation among customers. For example:
In 2009, Emirates was voted the fifth best airline in the world by research consultancy firm Skytrax.
*Skytrax is a United Kingdom-based consultancy, the public face of Inflight Research Services
Competitive advantage:
Emirates has won some competitive advantages which made this company as one of the good airlines. To answer this question that how Emirates is able to retain its competitive position in the industry, looking at how good Emirates is serving its products could be the answer. Product in Emirates is the services that airline is providing for its customers such as flight, food.
Emirates’s offering is divided into three main lines; The First Class seat, the Business class seat and the Economy class. In all three classes passenger are provided by high quality and comfortable seats, in-seat laptop power-outlets, and an ICE system on a LCD screen. Business and firs class have more facilities include massage function, privacy partition, winged headrest with six-way movement, two individual reading lights and an overhead light per seat, in-seat power supply, over 600 channels of entertainment on ICE.
Emirates was the first airline in the world to introduce a personal entertainment system on a commercial aircraft and that was a good reason for them to gain completive advantages.
These are the negative internal factor that destroys values of company or put the company in risk.
Actually it is difficult to say what are the weaknesses Emirates, because Emirates is considered as one of the most respected travel brands around the world. However there are still some weaknesses that Emirates need to improve. I can say that one of the Emirates’ weaknesses is having expensive ticket price especially for the business and first class. Emirates started to lose some of its customer when Qatar Airline offered the same flight with cheaper tickets.
Opportunities are external positive factors that represent the reason for an organization to exist and develop.
One of the opportunities that can add value to the company is having partners, agencies or distribution. Emirates has 6 subsidiaries and its parent company(Emirates Group). These subsidiaries which are operating separately can give Emirates benefits.

Emirates SkyCargo
Emirates Official Store
Emirates Aviation College
Emirates Engineering

Threats are external negative factors which could place the organization mission or operation at risk.
Market demand
In the commercial airline industry, unfilled seat on a regularly scheduled flight represents a threat cost to the operator. Although Emirates attempt to offer the best services for the travellers, it is not possible all the seats get fill during all the flights.
Competitor intentions
Another threat that might be danger for Emirates is it’s competitive in the market. While Emirates has one of the most modern fleets in the industry, and has service levels make other airlines to emulate, and start using the same strategy that Emirates is using.
(Williamson et al. 2004)
Part 2: Information system Analysis
There are four managerial levels in any organization that are responsible for organization’s plans and decisions; strategic, tactical, knowledge and operation levels. In this section, first the type of decisions that made in each level is discussed. Later, the information systems which are used to help the managers to make the right decision in that level of organization are listed. (Laudon, 2001)
Strategic Level
Decisions in strategic level:
In strategic level senior managers need to develop their skill of making the best decision possible. This type of decision usually concerns about general direction, long term goals. These decisions are the least structured but they could have significant impact on the future of the organization.
One type of decisions that is made in the strategic level is planning for gaining long term benefit, which is the Emirates’ objective. This type of decision could require managers to add new destination in their flight schedules.
Another long term decision in Emirates is buying new air plane (Airbus 380). Buying a new aircraft is a strategic decision because manager should consider this decision is it going to benefit them in future or not.
Information systems in strategic level:
Executive Support System (“ESS”) is the type of information system which is used in strategic level in order to help senior managers make strategic decisions.
A mentioned, making profit is one of the Emirates’ goals. Profit Planning System could help the organization to catch this aim. Profit planning system sets a profit target for the coming period. It is like a summarized version of estimated income statement. It starts with a forecast of expected sales and desired percentage for gross profit keeping in view the market conditions.
Another information system used in Emirates is Facilities Location system which helps manager access to external information decide where to locate new facilities. This type of system will help in gathering, analyzing and summering the key internal and external information used in the business.
Tactical Level
Decisions in tactical level:
Decisions in tactical level support the strategic decisions. They tend to be medium range, medium significance, with moderate consequences. The data used to drive this type of decision is usually found in summaries of routine transactions e.g. sales orders from the next level or classification. (Laudon, 2001)
For example in Emirates one of the main strategic decisions is to increase the profit of the year. Therefore the tactical decisions which are made by middle level managers would be how middle process could help this decision to be successful. The data used to drive this type of decision is usually found in summaries of routine transactions e.g. sales orders from the next level or classification.
Decision about determining ticket prices or producing a low priced ticket, or offering some seasonal promotion in order to attract more customers are those kind of decisions which are made in tactical level. Another tactical decision in Emirates could be determining optimal booking policy for multiple fare classes.
Information systems in tactical level:
Management information system (“MIS”) and Decision-support system (“DSS”) are two important information systems which support movement level. Management Information System mainly concerns with internal sources of information and usually takes data from the Transaction Processing Systems and summaries it into a series of management reports. (Laudon, 2001)
Budgeting System which used to prepare short term budgets is an example of this type of system. All the Emirate’s annual reports are provided by such system and they will be used by the middle managers.
Another system which is used in Emirates is Pricing Analysis System which is for determining ticket prices and promotions.
Decision-support system (“DSS”) is also one of the important systems specifically to help management make decisions in situations where there is uncertainty about the possible outcomes of those decisions. This system helps in gathering relevant information and analyzes the options and alternatives. Then the system provides spreadsheet and databases to create “what-if” models, and provide managers with the best decision to choose. (Robson 1997)
A example of DSS in Emirate is Compensation Analysis System. This system provides a comprehensive overview of the organization expenditure, monitor wages, salaries and benefits for the manager and they are able to plan.
Knowledge Level:
Decisions in knowledge level:
The decisions in this level are made by engineering and designer. This type of decisions involve creating new investment, designing new career paths and identifying new markets. The information which is needed for this level is structured internal knowledge such as research reports, product-oriented marketing metrical and techniques and methods. (Robson 1997)
Information systems in knowledge level:
Knowledge Management systems are used in knowledge level. The aim of theses system is to take documents with knowledge embedded in them, such as memos, reports, presentations, articles and store them in a repository where they can be retrieved easily. Examples of such system are:
Competitive Intelligent System which works based on a detailed business model that identifies what information it should collect.
Market Analysis System which provides tools for analysis of financial markets using technical analysis.
Operational Level
Decisions in operational level
Operational decisions are every day decisions and used to support tactical decisions. In the operational level the daily requirement are reviewed in order to make the decision. Thus, the operational decision is highly structured and their impact is immediate, short term, short range. The data used to drive this decision type is usually prescribed or defined in the procedures and rules of the organization. (Laudon, 2001)
Information systems in operational level:
An Operational Information System is a class of information system which provide information base for the day to day operation of the airline. In this system the information about lights, passengers, crew, situational, and environment gather. Some of these flows are carried by additional information such as passenger booking via the internet and form the travel agencies.
Transaction Processing System is one of the current systems in airlines companies to support of transaction and analytical processing on newly received operational information. This system includes source concentration, event derivation, and the ability to provide initial view or states of operational data to applications, where subsequently received events update these view.
Order Processing System is another system which is used in operational level and keeps track of daily orders and transaction.
Part3: Ethical issues
There is no doubt that with help of Information Technology and Information Systems human activities will be done more efficient and effective. However some concerns have been risen in usage of IS/IT that may make them to be unethical.
Ethical issues in usage of IT
One of the main concerns about the information technology is Internet. Internet has been changed the way people used to live. Nowadays people shop through internet, buy ticket online, communicate with friends, family, college in the other side of the word, and that means traditional business such as travel agents have lost their customers to the new competitor which called internet.
The other viewpoint of using internet is internet crimes (hacking into data, falsification of data). Internet has broken all the boundaries of personal securities. That could be a huge harm for a organization if their private data be stolen.
Ethical issue in usage of IS
Developments of information systems also involve ethical considerations in how information is used.
As mentioned information systems provides information to managers in organization to make plan and decision. The question is that “Do managers make legal decisions?”
On the other hand information systems are all about gathering information, analysing data. The ethical issue of this fact is that, are the information collected in ethical way.
Geographic Information System is a good example for show the unethical aspect of usage Information Systems.
American satellites orbit the earth, scanning for various kinds of data, which can then be used in a GIS. Analysis of resulting data tells researchers a great deal about, for instance, natural resources located in other countries.
The problem is that poorer countries, without the financial resources to send up their own satellites, claim that the U.S. is taking information from them without any kind of payment.
What is most concern in decision making not only is “Is this a right decision” but also is “Is this decision the best decision”. Managers will always need to access to the useful information in order to make the best decision.
An organization should have several types of information systems operating at the same time. The success of an organization which has information system in all the departments such as Finance and Accounting, Sales and Marketing, Manufacturing and Human resources department is guaranteed.
Here are two more information systems that I think will help Emirates to have better services:
In a company like Emirates which has 6 subsidiaries, Partner Relationship Management (PRM) is a system for improving communication between Emirates and their channel partners.
Another recommended system for Emirates is Customer Relationship Management (CRM) to help them stay close to existing customers. Skyward is the famous Customer relationship Management system for Emirates. Considering the strong competition in today’s market, they need to improve their CRM performance in order to increase the number of loyal customers. Resources:

Business news, March 08, 2007, Robust growth poses threat of inflation to high-flying Dubai [Accessed on Feb. 2010].
Emirates group, 2010 [Accessed on Feb. 2010].
Press J, 2001, International Directory of Company Histories, [Accessed on Feb. 2010].
Laudon J, Laudon K.C, 2007, Management Information Systems – Managing the digital firm, 9th Edition, PEARSON Prentice Hall.
Oleason V. Schwan K, Eisenhauer G, Plale B et al. Information System-An example form Airline Industry- Article-,college of computing Georgia Institute of Technology.
Report by Mark Caswell, 13/10/2008, Dubai’s Terminal 3 opens, [Accessed on Feb. 2010].
Robson W. 1997, Strategic Management and Information Systems – An integrated approach- 2th Edition, Pearson Education Limited, Great Britain.
Williamson D. Jenkins W. Coole P. Moreton M, 2004, Strategic Management and Business Analysis, 1th Edition, Elsevier Butterworth-Heinemann.


Case Study of Emirates Airlines

Emirates Airline group has started its 1st routes out of Dubai with only two aircraft in 1985 by the Govt. of Dubai and it was supported by the creator of Germania (German Airline). Emirates airline had started their operations with flights to Mumbai and Karachi and then followed by Delhi in September. These days the industry is measured to be a subsidiary of The Emirates Groups which is headquartered in Dubai, UAE. The group has got diverse recognitions and in 2007 Emirates was noted to be the eight-largest airline in the international marketplace in terms of intercontinental passengers being accepted and also renowned to be the fifth-largest in the global market in accord with the planned international passenger-kilometres flew. Emirates group is also well-known for being one of the only five airline industries that operates in the total wide-body aircraft sense. Emirates has made frequent considerable announcements with allusion to the future projection of its existing state-of-the-art fleet.

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Emirates Airlines is one of top six airlines in the world to have a 5-star rating from Skytrax, along with Singapore Airlines ,Eithad Airways , Emirates Airlines, Qantas Airways, British Airways, Cathay Pacific. Emirates operates more than 700 weekly flights to over 100 destinations in 60 countries around the world with on going expansion, flights departs from Dubai to six continents with international standards of services. In 2009, Emirates Airlines carried nearly 40 percent of all the flight movements in and out of the Dubai International Airport, and we would like to take this market share to 70 percent by 2010 without any compromise on quality and repute.
Emirates First Class
The International Emirates Airlines First Class has their own safe haven in spacious personal suites, each capable of with an electrically operated sliding door, an individual mini-bar, changeable ambient lights, and its own wardrobe, mirror and vanity table.
All the seats have a built-in massage system, with modifiable pace and strength. Our Emirates A380 and B777 crew will renovate your seats to a fully flat bed with a mattress, so one can reach at their destination comfortable and rejuvenated. Each suite in the A380 and B777 has a 23″ television screen, allows their customer to look at over 1,200 on-demand video and audio channels of our award winning ice Digital Widescreen entertainment system including Hollywood and Bollywood movies along with other Arabic movies as well and live channels as well. The isolation partition separating the adjacent suites in the middle string can also be lowered, allowing the customers to share the experience with their journey accompanying person.
Dine-on-demand serving of food service, allows the customer to order from our a la carte menu any time they need. Making their understanding of the Emirates A380 and B777 really outstanding, they will be treated to the excellent service from our award winning multilingual crew members from over 100 nations.
Emirates has launched a very high class onboard shower Spawhich in the history of aviation,is the first time one can have an revitalizing shower at 43,000 feet.Which is located on the upper deck of the Emirates Aircrafts and there are two elegantly designed onboard Showers for our 1st Class customers.Which bring all customers at their destinations refreshed and revived.
The service on board the Emirates First Class cabins include a social area consist of a full-fledged bar staffed with a bartender, a break-out seating area just nearby fitted with two couches and bar stools, a full-fledged chef on board the aircraft and any-time dining. A turn-down service includes the renovation of the seat into a fully-flat bed and an air-hostess making the bed when the passenger is ready to sleep. Emirates provides this kind of a whole new dimension of luxurious air travel to their customers with an outstanding service.
Emirates First Class attribute mood lighting on the Airbus A330-B777 with light schemes correspondent to the time of day and flight situation.
Impact of External Influences
In this era of rivalry, indulgent the consumer is very important for marketers. Consumer desires and preferences are constantly varying, given the changes in factors like their demographics and lifestyles. These changes can bring great business opportunities for attentive marketers and threats for marketers who fail to become accustomed. 

Consumers obtain, devour, consume and dispose off the products and services created by organizations. They went through a number of cognitive and behavioural processes whilst making their purchases and spending decisions. The awareness of how they make a decision on one brand as a substitute of another and what factors influence their decision-making so crucial for marketers, not only to make available to the existing needs of their consumers but also to prepare for their future needs as well. This information is also vital to make a variety of business decisions associated with product development, packaging, pricing, distribution, promotions, communication, etc.
Consumer Behaviour helps to comprehend the internal variables like motivation, personality, perception, learning, and attitude, and external variables like reference groups, family, social class, and, culture, and their influence on consumer decision-making process.
Consumers are faced with many external influences, including an individual’s culture, subculture, household structure, and groups that he associates with. Marketers and business owners call these external influences because the source of the influence comes from outside the person rather than from inside (which would be internal, or psychological, influences). You also could refer to them as socio cultural influences, because they evolve from the formal and informal relationships, the individual has with other people.
Clearly ours airline Emirates’s FIRST Class is an luxury segment service which organizes to the needs of high class executives who wish to fly to their destinations not just the ordinary business class but want an experience which is even more luxurious than the business class. We organize to their needs in the best way possible.
We more than just a airline, we host one of the most luxurious & coziest services available, we are just 1 of the only 6 airlines in the world which enjoy a 5 star rating by SKYTRAX.
But still we have consistently under-performed from our capacity and are running into losses consistently into losses from last 2 years.
This is a serious issue which needs a timely surveillance to counter the increasing red lines on the balance sheet.
Consumer behavior can provide an insight of the problem by applying the various theories to the problem. As ours is a service provider company, consumer behavior becomes all the way more important as one can draw a lot of conclusions by simply studying the psychology of the customers and the great problems can be countered in a effective way.
Behavior of any customer is derived by two factors:

external factors
internal factors

Though the internal factors are totally in control of an individual and are hard to control, but still they can be managed by looking after the external factors which themselves directly affect the consumers buying decisions.
So that`s why we need to take a close look at the external factors that effect consumer behavior
In the section below
Global & National culture
The definition of culture offered in one textbook is “That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man person as a member of society.”
According to the above mentioned definition we will discuss culture in different ways.
The set of basic values perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Culture is the most basic cause of a person’s wants and behaviour. Every group or society has a culture, and cultural influences on buying behaviour may vary greatly from country to country.
Sub Culture
A group of people with shared value systems based on common life experiences and situations.
Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes nationalities, religions, racial group and geographic regions. Many sub culture make up important market segments and marketers often design products.
Culture is a challenging issue for many marketers since it is intrinsically imprecise and often difficult to understand. One may violate the cultural norms of another country without being informed of this, and people from different cultures may feel uncomfortable in each other presence without knowing exactly why?
So we can understand that how this factor can play an important role in attracting customers if deal with efficiently.
For this our company has already ready by offering 5 star services which is acknowledged by the SKYTRAX agency and this can become our USP if promoted wisely. As our Emirates First Class is an elite class service so we need to make specially according to the routes on which it operates like Dubai-London flight can keep themselves up to the customer expectation by upgrading their flight services according to the demographics of the passengers traveling.
We`ll have to serve to the needs & expectations of the passengers who belong to the different nationalities like mix of different nationals by maintaining the standards this can be done by taking consideration of the cross cultural factors into consideration and have to check all the possibilities which bring these differences clear from the business point of view.
Family & Household Influences
A major factor that affects one`s choice of the services is his family & household income. These factors may include the perception about a service which may be same for the whole family & the complete may think of a service as compliant to their requirements & representing family status or not.
This also makes an chance as if one influencing member of the family is convinced about the service then whole family may become a customer.
So a lot of prospective lies in this factor if intent professionally
For this we may promote our service by
Being a sponsored at charity events as higher class people have a good attendance at such events.
We can hold events of massive show-buzz as that will help a lot to promote the service.
Like we have to sponsor or put our big participation in the International Football and Cricket matches and Emirtes be the official airline of the main events in the world .This will creat a great buzz in the society and at the same time a sample of the service can be given to plausible customers.
Opinion leaders
Opinion leaders are one who can be of great help as they lead a lot of people, and their followers either follows them blindly or they affect their followers decision to that extent that the likelihood of the follower consuming that product becomes very high. So if we can ensnare these opinion leaders we a gain a lot on consumer base.
So we can achieve this by asking for review of critics of lifestyle magazines which are read by upper-upper class this can affect decision of a lot of followers.
We may Add to this by doing so that some top level executives of some companies can also be asked to travel as their peer group can be affected by this.
Reference Group
As for as reference group is concerned, these are the ones with one comes in contact on the basis of his/her interaction in daily life. This interaction may be on a regular basis like viz. Family, work group, friend circle, etc. OR on a less regular basis like shopping group, virtual group, consumer action group, etc.
A lot of customer base can be gained if dealt with reference group properly since person comes in contact with persons from various aspects of life in his/her reference group & his decision making depends on this reference groups.
Like on is most affected by family & friend group & often if someone in these group appreciates the service the buying decision can absolutely swing in favour
To get this as talked earlier event sponsorship & some personal events can be of great help, as well as doing corporate dealing with companies can be of great help as this can start the buzz in the corporate circle and help get the support of these reference groups.
Income & Social Groups
Income group are not of much issue as this is a service in luxury class & one who can afford it will definitely not give a much thought to the cost then & so not much to consider in this section.
Almost every society has some form of social structure, social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests and behaviour.
Social group are of concern absolutely as these are normally inherited & affects a lot how you distinguish the product & this social class also becomes the reference group & a product’s possibility to get a boost from word of mouth publicity increases. Added to that are some features like a whole class may give preference to a certain product over the other & this can be of great benefits.
To accomplish this same high society events can be a good place to promote, at the same time if we can grab some personal functions of high class society people will also help.
Emirates Airlines is Dubai leading luxury airlines. Emirates airlines are anticipated to provide customers luxury and comfort as each aircraft meets the sophisticated and global technical standards so that you can feel like a king of good times, traveling in air for having an experience of lifetime. The extremely high promising characteristics of Emirates Airlines that has made it truly a world-class airline, are its peaceful and stunning atmosphere with very comfortable seats. Further to add on is its flight entertainment system and its exciting and vibrantly dressed, professionally trained, multilingual staff and very friendly crew, the comfortable seating, regularity of flights and the overall extra quality service makes the Emirates Airlines most accepted and promising in all over the world.
In a short span of time Emirates Airline has engraved a place for itself. The airline offers a number of unique services to its customers. These include: personal valet at the airport to assist in baggage handling and boarding, accompanied with refreshments and music at the airport, audio and video on-demand, with extra-wide personalized screens in the aircraft and three-course gourmet cuisine.
Emirates has achieved A 5 Star status acknowledgment, which means that Emirates Airways has the highest standard of product after going through several stern quality evaluations categories. Fly Emirates delivers high values of service in on-board and airport environments. Skytrax also recognizes Emirates Airways to be at the most important position for product and service innovation. This honour makes Emirates Airways one of only 6 airlines in the entire world to have a 5 star rating, so fly with Emirates and enjoy the relieve.
Thus Emirates airline offers luxurious services that having a variety of attributes that brings more benefits to the customers. They have very small size target market and they are trying to grape it. They normally use bolt from the blue and pleasure positioning strategies.
In TV commercial, it is clear that Emirates airline came up with the slogan ” keep discovering good times”. It reflects that attributes and customer benefits clear in the mind of customers. They were tried to reflect luxuries, comfort and relaxation benefits of customers. Emirates First Class is the luxurious brand of Emirates airline. They came up with the ideal of touching appeal in the commercial that truly show attributes of airline and customer benefits.
Emirates Airline frequently uses excellence characteristics to position their brands. One way they do it is with ads that reflect the image of a high-quality brands where cost, while not inappropriate, is considered secondary to the quality benefits imitative from using the brand.
They have all the way through very well laid out marketing strategy effectively accomplished. Today, the air travellers not only wants to travel faster but also be entertained. Recently, the Emirates airline introduced two initiatives to enhance guest convenience. First of these is the introduction of the online check in,so a customer don’t have to wait for long to boarding in a queue,24 hours before arriving at airport which saves lot of time as well as hassle for their valuable customer. Secondly Roving Agent at the airport. Rather than waiting at the check-in counter to collect their boarding pass, travellers can directly come near the security check-in counters. Deployed outside the security check-in area will be airline’s Roving Agent, who will reach out to guests and check them in using a mobile digital device and printer.
The quality provided by Emirates is rated high among all airlines in Dubai. That was the main reason that it covers the market very quickly.
In just over few years, after entered in to the Airline market, Emirates Airlines has achieved a market share of 40% and has one of the most antagonistic growth plans for the coming years and focus to gain the 70% share of the air industry market.
Therefore Emirates First Class must be come up with the new positioning strategies like positioning by quality. It cannot come up with price positioning because it deals with luxury class. But they can increase the quality in the services with insignificant increment in fares.
For this our company has already ready by offering 5 star services which is accredited by the SKYTRAX agency and this can become our USP if promoted intelligently. As our Emirates First Class is a premium class service so we require customizing according to the routes on which it operates like Dubai-London flight can keep their standards up to the customer anticipation by advancement in their flight services according to the demographics of the passengers travelling.
We’ll have to provide according to the needs & expectations of the passengers who belong to the different nationalities like mix of different nationals by marinating the values this can be done by taking contemplation of the cross cultural factors into consideration.
In this strategy our most important focus on the personalized services enhancement in term of quality according to customers.
We can come up with the slogan “fly your own style”. It easy reflects offered personalized services to customers.
An additional way is to communicate a explicit image or position for a brand is to correlate it with a specific use or application.
In today’s competitive business environment, the stress on productivity, cost and efficiency are greater than ever before. Emirates First Class offers you special travel solutions. Fly at your own ease anywhere, anytime and decide who flies with you in the extreme comfort, safety and privacy. Be it business or leisure, select from our range of business jets and Euro copters and you are secure of the most superb service complimented with the premier safety standards, allowing you to arrive at your destination stress-free and refreshed.
Key features:

A personal suite with close rest room and shower
Personal & prudent service including VIP, diplomatic and the head of the state flights
Qualified & highly trained and supportive professional crew
Traditionally planned luxurious interiors
Modified service to meet the customer requirements -ultimate flexibility
Highly modern technology to meet the business needs of the customers in a conference room
Separate sections for guests and staff
To maintain all these characteristics at a high brand recall values we will launch our campaign with a central tagline of  “Paradise onboard; Fly with Pegasus”

We will focus on the service that we will make available to the customers which in spite of being a 5 star rated can gain on customer base by focussed on the demographics of passengers boarding on the route and then customizing our services.
We can come up with the slogan “Paradise onboard; Fly with Pegasus: “Fly your own way”.
It straightforward reflects offered customized services to customers.
Frequently the competition for a particular product comes from outside the product class. For example, luxury airlines compete with other economy airlines.
In this kind of positioning strategy, the company can come up with the model of influencing the customer to use airline services. The company is totally focusing on niche market of high segment class customers. For these target customers, price factor is not an issue. They normally influences by status.
The Emirates First Class provide customers a high class status in society. To manipulate new customers, the company tries to attach name of the customer with luxurious aircrafts. Thats why Emirates Airlines currently operates with a brand new fleet of Airbuses and new aircrafts.Emirates is going to expand their fleet with the entry of 15 new aircrafts, 4 Airbuses A380s and 11 Boeing 777s in 2010.In addition to this Emirates has a plan to bring more 146 aircrafts in pipeline , 50 more Airbuses A380s ,21 Boeing 777s,5 Boeing 747s and 70 Airbuses A350 XWBs plus 50 more options on the way. Also Emirates having number of awards that create it strong brand value in the market.
The company must be selling its brand image in the market by new positioning strategy by product class.
We can come up with the slogan “Paradise onboard; Fly with Pegasus: “because class can’t be compromised”.
Competitors might be as important to positioning strategy as a firm’s own product or services. In today’s market, an successful positioning strategy for a product or brand may focus on explicit competitors.
The biggest competitors, across the globe are:

Singapore Airline
British Airline
Etihad Airline
Qantas Airline
Lufthansa Airline etc

For this kind of positioning, the company can be focused on Dubai attractions for their business and attract the customers across the globe to emphasise on the service and quality . Emirates should have to focus on the high-class customers which have their own businesses. For example most of the restaurants and hotel industries are focus in this strategy for emotional appeal towards nationality, like Arabic Foods Restaurants, Italian restaurants, Asian food chains etc.
The other strategy could be that the company can tie-up with international hotels and resorts because most of the hotels provides airline services as their services to customers. The company must give prominence on that. It can get our hands on new customers.
We can come up with the slogan
Paradise onboard; Fly with Pegasus: “because sometimes poleis arrange themselves with the pair of wings”.
Critical Reflective Writing
From this project, it has been a immense learning experience. I have learned a lot about, a variety of this which are different from theory but still the purpose of the theories learnt in the classrooms. The project has helped a lot to come across the real brainstorming progression which requires us to think a lot to use our space to market our product and the constraints of the brand positioning, resources available at your set out, etc just add to the problems.
But still it has been a great satisfaction to work on the project and has positively helped us to brush our skills in the field of marketing.
The trouble of utilizing the perception of consumer behaviour was a real hard-hitting assignment given. You have the constraint of luxurious services in which you have to keep an eye on the base line that you not even by mistake make the product feasible to the general public or even market it as one as then you will loose the customers who take satisfaction in the status of the service provided. So you always have to keep your eyes open to it.
Then there was a good constraint of positioning strategies to be followed under the the policy of positioning by price & quality to be followed in this case.
Also the limitation of resources was a great source of learning as this helps us learn that how in real world, the plans are always governed by the limitation of resources and definite intrinsic liabilities & constraints connected with the product itself.
Generally this has been a great learning experience, has helped a lot by providing us a nagging window into the real corporate world & the real life problems faced by the marketing guys sitting behind the glass walls of the corporate offices.

Country Analysis Of The United Arab Emirates

The United Arab Emirates, once seven independent states under British oversight, has emerged into a global economic powerhouse because of its abundant natural resources, successful financial investments, and extensive focus on real estate and tourism. Having the world’s sixth largest oil reserves and fifth largest natural gas reserves, the UAE is poised for year over year economic growth, which has allowed them to focus more heavily on economic diversification and political reform. As this desert country continues to grow, so does their reliance on energy, which has spurred a major governmental effort to identify renewable energy sources to offset consumption. Renewable energy initiatives that the UAE have pursued drove the investment recommendations made in this analysis.

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UAE’s economy has seen extreme growth in recent years, as seen by above average GDP and eight figure year-over-year trade surpluses since 2003. This economic boom is more impressive when considering the country’s strong push to alleviate its reliance on oil exports and diversify into other industries. Currently, profits from oil exports represent roughly 33% of the economy. Volatile oil prices, which heavily correlate to UAE profitability, are becoming less important to overall financial growth. Actions like this help to mitigate risk for potential investors and should make the UAE more attractive in the foreign investment arena.
Capital markets in the UAE are also modern and robust. They enjoy two stock exchanges, have implemented an extensive market oversight organization to protect the integrity of their markets, and have created several government-owned investment institutions to help foster investment diversification. The Emirates welcome new business, as they have established Free Trade Zones that offer many benefits to investors that set up operations within UAE borders. The UAE ranks number one among Arab countries in foreign investment and is considered a global business center for its constant pursuit of social, economic, and technological advancement.
Political reform has been prevalent in the UAE throughout history. The first federal constitution was established in 1971 that brought these seven Trucial States together to operate as one entity. Although the UAE has experienced some growing pains in transferring authority from individual states to a federal governing body, the political stability is high. The UAE has recently rolled out a detailed, objective action plan called “Vision 2021” to help them methodically reach their goal over having balanced power among state dictatorship and federal policy.
The UAE has seen massive growth in its economy, population, infrastructure, and energy consumption for many years. The citizens of the UAE emit more greenhouse gases per person than any other country, and because of its geographic location, nearly all of their buildings are air-conditioned and water is obtained through energy-intensive desalination plants. Because of the exponential increases in demand for electricity, the UAE has focused its efforts on developing renewable energy sources. Estimates currently project that the demand for domestic power will more than double by 2020, and the UAE is tackling these consumption hikes head-on. Abu Dhabi, the capital of the UAE, is aiming to obtain 7% of its energy from renewable sources by 2020 and is currently planning the construction of a zero-waste city that will rely solely on renewable energy sources. This renewable energy push poses significant foreign investment opportunities, as an already economically-thriving country aims to eliminate energy reliance in parallel with having world-leading economic growth.
United Arab Emirates
The United Arab Emirates (UAE) was established in 1971 and is comprised of seven independent emirates or states, Abu Dhabi, Dubai, Sharjah, Umm al-Qaiwain, Fujairah Ajman and Ra’s al-Khaimah. It is located on the Arabian Peninsula and occupies 32,000 square miles between Saudi Arabia and Oman on the Persian Gulf. The country is over 80% desert and has no natural water sources. (The UAE, 2010)
As the largest of the emirates, occupying more than 75% of the country (United Arab Emirates, 2011), Abu Dhabi is the country’s capital. Another major city is Dubai, which is considered to be a financial and commercial mecca for the country.
The UAE’s history dates back to the 18th and 19th centuries when the dominant tribe in the area was the Qawasim. The Qawasim’s control of the maritime trade routes in the lower Persian Gulf and much of the Indian Ocean eventually provoked the British into a naval attack in 1819. After defeating the Qawasim, the British signed a series of treaties with the sheikhs of each of the emirates to preserve a maritime truce. This eventually led to the area becoming known as the Trucial States. In the truce, the sheikhs agreed not to engage in foreign relations or to relinquish any of their territories without British consent. In exchange, they were promised protection against naval attack, and assistance in any land attacks.
In January 1968 the British announced that they would be withdrawing from the Persian Gulf. Over the next three years, the emirates that made up the Trucial States worked to form their own federation. Agreement was finally reached between Abu Dhabi, Dubai, Sharjah, Umm al-Qaiwain, Fujairah and Ajman on December 2, 1971, and the United Arab Emirates was formed. On February 10, 1972 the seventh and final emirate, Ra’s al-Khaimah, joined the federation. (United Arab Emirates, 2011)
Currency & Exchange Rate Arrangements
After federation of the UAE in 1973, a new national currency was created, the Emirati Dirham (AED). In 1997 the AED was fixed and pegged to the US Dollar (USD). Currently pegged at a rate of 3.673 (The World Factbook: United Arab Emirates, 2011), this remains the country’s currency arrangement today. However, prior to the implementation of the AED in 1973, a host of different currency arrangements were used throughout the region.
Prior to 1966, the Persian Gulf rupee was the currency utilized in the Arabian Peninsula, which was pegged to the British pound (GPD) at a rate of 13.33. (Symes) Due to a devaluation of this currency in June 1966, the Bahraini dinar and the Qatar-Dubai riyal were adopted by the emirates.
The Bahraini dinar (BHD) debuted in 1965 in Bahrain, an island nation located north of the UAE in the Persian Gulf. The BHD was adopted by Abu Dhabi in 1966 and was used until 1973 when it was replaced by the Emirati Dirham. (Symes) It is currently pegged to the US Dollar at a rate of 0.377.
The Qatar-Dubai riyal was introduced in 1966 as a result of the Qatar-Dubai Currency Agreement. This agreement was reached between the countries of Qatar and Dubai because of a push by Britain for the Trucial States to take responsibility for their economic future. The Qatar-Dubai riyal was used by all of the emirates except Abu Dhabi from 1966 until 1973. Its value was equal to that of the Persian Gulf rupee prior to its devaluation. (Symes)
Political Structure
The formation of UAE meant significant changes to the overarching political structure. The creation of the constitution of the United Arab Emirates in 1971 established some formality within the conglomerate, although individual states still maintained significant power to control finances and natural resources. Since much disparity exists between the size, maturation, and political complexity within each emirate, the political environment is much different as well. The most developed emirates, Abu Dhabi and Dubai, have fairly sophisticated governments comprised of multiple hierarchical levels, while more remote settlements typically have only one ruler and several local representatives who are appointed solely by the ruler.
The UAE constitution established executive, legislative and judicial branches of government, and called for the formation of a number of fundamental councils to sustain these branches. The Federal Supreme Council has both legislative and executive powers, and is comprised of each emirate’s ruler and a separate President and Vice President who are elected by the Council every five years. All general policy, enactment or ratification of federal laws, overarching financial decisions, and international relations strategies are made by the Federal Supreme Council. The Federal National Council, UAE’s version of a Parliament and main legislative entity, is a 40-member body that represents the voice of the UAE constitution. Fifty percent of these members are chosen by an Electoral College, while the remaining twenty members are chosen by emirate rulers. The FNC has the authority to amend federal legislation and, amongst other duties, is responsible for reviewing the federal budget and managing international activities. The UAE constitution also formed the Federal Judiciary, which consists of five appointed judges. These judges have the authority to try cases involving senior officials, and often rules on disputes between emirate entities.
The biggest barrier that the UAE government has faced since its inception is the lack of cohesion between local policy and federal oversight. The UAE is growing and developing rapidly, and it is imperative to tailor the political systems to make them more responsive to the country’s needs as it faces the challenges of this development. Much emphasis has been placed on formalizing the local political environment to provide more stability and consistency from emirate to emirate, as well as ensuring that local government policy is representative of the federal political strategy and values. The first major breakthrough occurred in 2007, when the UAE launched the “UAE Government Strategy”. This strategy outlined a number of initiatives aimed at enhancing the six UAE government strategy sectors: social development, economic development, public sector development, justice and safety, infrastructure, and rural development. This initial reform strategy was undoubtedly a success, as the UAE has made significant strides towards unifying political efforts and operating within a common framework.
In 2010, the UAE announced its “Vision 2021”, which vowed to steer the country through upcoming challenges by operating efficiently and responsibly, displaying determination and innovation, and by being proactive in all governmental matters. The UAE is driving towards their vision very methodically, as the government recently released its “Government Strategy 2011-2013” as the first step to achieving the goals outlined in Vision 2021. This Government Strategy outlines seven general principles, seven strategic priorities, and seven strategic enablers that will be used when developing strategic and operational plans and will push the country closer to its vision (See Exhibit 1).
The political environment of the UAE is changing rapidly. The balance of power is slowly shifting from individual states to a central government entity through the establishment of an overarching constitution and the creation of formal federal councils. Individual emirate states have been slow to embrace this cohesion. Inter-state relationships have historically been relatively unstable in the UAE, which was highlighted in 2009 when Abu Dhabi provided Dubai with a $10B bailout when they could not repay a $4.1B Islamic bond and was in financial turmoil with creditors. This bailout caused strife between the two largest and most powerful UAE entities, and questions still linger as to whether Dubai will be able to meet its financial commitments.
Despite these recent events and overall political reform, the UAE political system is relatively stable. World Bank currently ranks the political stability of UAE in the 74th percentile of countries, while all Middle Eastern countries have a combined rating in the 37th percentile. Government effectiveness is also rated exceptionally high: in the 77th percentile (Middle Eastern countries combined are rated in the 48th percentile). Business Monitor International ranks UAE political stability at 82.1 (of 100). BMI uses specific objective data to analyze political risks, including distribution of wealth, policy stability, foreign relations, etc. These political risk ratings highlight the effectiveness of UAE’s government reform efforts. Despite residing in a hostile region, having individual states that control almost all local governmental matters, and the presence of rivalries within the states, UAE is viewed as having a stable political environment (See Exhibit 2).
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Over the past forty years, the UAE has transformed from a relatively unknown country into a thriving economic force. The UAE economy is the third largest in the Middle East behind Saudi Arabia and Iran. Their financial success started with the exportation of oil, an abundant resource in the UAE, and since then their economy has grown into other industries such as financial services, trade, retail sale, real estate, and tourism. The following discusses the UAE economy in detail.
Foundations of Economy
Oil was discovered in the lands of what is now the UAE in the early 1930’s. Once discovered, oil exportation began, and oil sales continued to grow, especially throughout the 1960’s. In 1971, the seven emirates formed the UAE, becoming the only Arab federation in the world. As the oil business continued to grow and prosper, the UAE used its financial success to develop the country and expand their economic goals. The UAE has since grown exponentially as an economy, due to success in areas such as natural gas exportation, foreign investment, trade, financial services, real estate, and tourism. Its government policies have also helped to spur this rapid growth. The UAE promotes a free market through its free trade zones created to attract foreign investment.
As much of the world faced financial struggles in the past few years, Dubai was hit especially hard. Similar to the real estate problems recently faced by the U.S., Dubai real estate prices rose constantly due to over-speculation on the assumed future value of property. When demand for real estate did not meet investors’ high expectations, Dubai was left owing billions in debt it could not pay. The Central Bank of the UAE provided Dubai a $10 billion loan to pay off its debt obligations. As a result of these recent financial difficulties, growth in the short term appears to be slower than recent years as the country recovers from its financial downturn. The UAE economy grew at a rate of 2.5 % in 2010. However, the economy should rebound in time. Its projected growth rate in 2011 is 3% and targets a 5% rate in 2012 and beyond. In the long term, the UAE will more than likely return to the fast-paced economic growth it enjoyed in previous years.
Current Analysis of UAE Economy
As discussed above, the country has faced extreme financial growth in the early 2000’s, but has dropped significantly in growth through 2008, 2009, and 2010. We will now analyze the performance of UAE’s economy by examining the gross domestic product, economic performance indicators, international trade, and resources and infrastructure.
Gross Domestic Product
Since 2003, the UAE’s Gross Domestic Product (GDP) growth rate has exceeded the worlds GDP every year. In 2009, the GDP of both the UAE and the world declined, but the UAE’s growth rate of -0.7% was better than the world’s growth rate of -1.9% (Worldbank). According to the UAE government website, this decrease in GDP was based on a decrease in oil prices. The per barrel price dropped from $95 in 2008 to $60 in 2009. The government projected a real GDP growth of 2.5% for 2010. The UAE currently ranks 35th in the world in GDP at around $230 Billion (Worldbank). UAE’s per capita GDP rose steadily from $23,523 in 2003 to $58,272 in 2008, but fell to $50,070 in 2009. The overall world per capita GDP faced a decline in 2009 as well. The UAE ranks 7th in the world in per capita GDP. The GDP growth and GDP per capita indicators show that the UAE’s economy is growing at a high rate in comparison to the rest of the world.
The non-oil sector industries that contribute to UAE’s GDP (UAE Govt Website):

Manufacturing – 16.2%
Construction – 10.7 %
Wholesale and retail trade and repairing services – 9%
Real estate – 8.2 %
Government services – 8.0 %
Transportation, storage, and communication – 7.1 %
Financial services – 5.8 %
Hotels and restaurants – 1.8 %
Agriculture, livestock, and fishing – 1.7 %
Electricity, gas, and water – 1.6 %
Household services – 0.5 %

Economic Performance Indicators
The UAE faced double-digit inflation rates from 2005 through 2008, anywhere from 13-19% per year. In 2009, the UAE’s inflation rate dropped to -11.3% (Worldbank). These dramatic increases and decreases are substantially different from the 2-3% cost of living annual increase that most economies target. UAE officials project that inflation will remain around 2% this year (Khaleejtimes).UAE’s unemployment rate has slowly risen from 2.75% in 2004 to 4.25% in 2010 (Trading Economics). Although unemployment has risen, it is still low in comparison to many other countries around the world. UAE’s Growth Rate of Industrial Production was 3.2% in 2010 (estimate), ranking them 102nd in the world (CIA)(analysis). The current interest rate of the UAE, called the Emirates Interbank Offered Rate (EIBOR), is 2.5% for a one year loan (Worldbank). The EIBOR one year interest rate has remained at or near 2.5% since the end of 2009. The average overall interest rates have dropped in the past four years. In 2007, the average interest rate was 5.5% (Trading Economics). As of January 2011, the current average interest rate in the UAE was 1%. The UAE government spent around 32% of its GDP in 2010, and the UAE government will continue to operate in a budget surplus. The EIU forecasts that UAE’s budget surplus will continue to narrow in coming years, as the government budget will face deficits from 2013-2015 (EIU).
International Trade
The UAE exported $192 Billion in 2009 and imported $150 Billion, resulting in a trade surplus of $42 Billion (Trading Economics). The UAE has enjoyed a trade surplus between $20 Billion and $62 Billion since 2004. The UAE’s top importing partners are China, India, US, Germany and Japan (UAE Embassy). The top five exporting partners of the UAE are Japan, South Korea, India, Iran, and Thailand. The major exports of the UAE are oil, natural gas, re-exports, dried fish, and dates. The major imports of the country are machinery, transport equipment, chemicals, food (UAE Embassy).
Resources and Infrastructure
UAE land is rich in natural resources. The UAE contains about 10% of the world’s oil reserves, and has the world’s seventh largest supply of natural gas (UAE Embassy)(See exhibits 4 and 5). The exportation of oil is the major source of revenue for the UAE, accounting for about 30% of its annual GDP (UAE Embassy). The UAE government has used this oil revenue to invest heavily in the country’s infrastructure. These investments in the country have promoted the rapid growth of other industries in the UAE including tourism, re-export commerce, and telecommunications (UAE Embassy).
Short-Term and Long-Term Prospects/Forecasts
Short Term Forecast and Prospects
As the UAE continues to recover from the global financial struggles, growth in the next few years will be slower than the extreme growth rate it enjoyed in the recent past. The UAE’s GDP is expected to grow by 3.3% in 2011 (7days). Dubai plans to pay off its debt in 2011, which is a positive for the country. After 2011, the economy’s anticipated growth is 5% per year for the next few years (EIU). Inflation in the UAE is expected to rise by 2.8% in 2011(Arabian Business).
Oil exportation will remain a solid revenue stream for the country. Existing and newly developing non-oil industries will also enjoy growth in the coming years. Trade, tourism, and business service industries should maintain strong growth as the UAE continues to diversify its economy. Healthcare and Information Technology (outsourcing services, smartphones, servers, and disk storage) industries are anticipated to increase by 15-20% this year (Arabian Business).
High food prices are an immediate concern to the UAE and other countries in the Middle East. The UAE government has subsidized the food markets in the country. Political unrest in the Middle East and unused real estate in Dubai are also concerns. Inflation from rapid economic growth in non-oil industries is also a risk.
Long Term Forecast and Prospects
The UAE economy should remain strong for the next twenty years. Oil exports will provide a constant income source to the country. Volatile oil prices can be a threat to the economy, but the country’s foreign investments should provide enough support if and when oil prices drop (EIU). Other UAE industries should develop further as long as the country continues to invest in expanding these industries. Developing and employing its country’s people will be a focus in the coming years, as the country is heavily dependent on foreign workers. Inflation could also be a concern as the country continues to grow.
Exchange Rate Behavior and Forecasting
The United Arab Emirates dirham is pegged to the International Monetary Funds’s Special Drawing Rights. It is effectively also pegged to the U.S. dollar most of the time with the average exchange rate at 3.6725 USD/AED (See Exhibit 5).
In 2008, after reviewing its currency regime, the UAE decided to keep the dirham pegged to the US dollar for the next 30 years.
Capital Markets
The capital markets of the United Arab Emirates are very modern. There are two stock exchanges in the UAE: the NASDAQ Dubai and the Abu Dhabi Securities Market (ADSM). In keeping with Muslim teachings, all trading is based on assets or other tangible goods in order to avoid what is considered usury, which is not in compliance with sharia, an Islamic ethical foundation. Sharia has impacted the structure of financial institutions and the way certain investments such as gold are traded, but most offerings and services are similar to other parts of the world.
Stock Exchanges
NASDAQ Dubai opened in September 2005 and maintains investment standards that it considers comparable to those of leading international exchanges in New York, London and Hong Kong. NASDAQ Dubai offers both primary and equity listings for companies based in the region, as well as internationally-based companies representing Australia, China, United Kingdom and the United States.
NASDAQ Dubai offers a variety of options of investments including equities, debt, derivatives and other securities. As the market continues to grow, it has plans to expand its offerings including exchange-traded funds, subject to regulatory approval.
NASDAQ Dubai has set itself up to be the “international listing destination for equity securities in its region”. (NASDAQ Dubai) The region is defined as the Gulf Cooperation Council (GCC), which includes the UAE, as well as the Middle East and North Africa, Turkey and the Indian sub-continent.
 NASDAQ Dubai is the only exchange in the GCC region that offers:

A book-building IPO with full access for foreign investors
A free float of as little as 25% of issued share capital
International standards of regulation
Links to investors through a broad mix of local, regional and international Members
Contractual market-making, to provide liquidity
Multi-currency listings – including US dollar and UAE Dirham 
Minimum lock-up period of 180 days for founding shareholders
Over The Counter (OTC) trading

(NASDAQ Dubai)
The Abu Dhabi Securities Exchange (ADX) was established in November 2000 and is primarily UAE companies. ADX is located in the emirate of Abu Dhabi but also has branches in Fujeirah, Ras al Khaimah, Sharjah and Zayed City.
The exchange has high standards of protecting investors by requiring fair and accurate transactions with stringent controls. They also ensure financial and economic stability by creating trading that ensures liquidity and stability of the prices for the securities listed on the exchange.
Market Oversight
The UAE created the Securities & Commodities Authority (SCA) in 2000. Its mission is:
to protect investors and enhance the principles of sound and fair practices, and to improve the efficiency of UAE capital markets through the development of the necessary legislations, the enhancement of supervisory regulations and the development of investment and legal awareness. (Securities and Commodities Authority (UAE))
The UAE is trying to ensure that its markets are attractive to investors from around the world for listing and investing.
Government-owned Investment Institutions
The UAE has created several government-owned investment institutions that act like private-equity firms to help invest diversify the government’s investments. The focus is to create more overseas investments because the UAE realizes that its natural resources will one day be depleted.
These investment institutions recently clarified their roles and investment approaches in order to enhance international understanding and cooperation.  In particular, they clarified that they haven’t ever and will never use its investment organizations or individual investments as a foreign policy tool. (UAE US Embassy)
Foreign Investment
The Arab World Competitiveness Report 2007, issued by the World Economic Forum (WEF), ranks the UAE in the top position among Arab countries and in the 29th position among the 40 most advanced economies. It states that “Sound economic management has contributed to stabilizing the macroeconomic environment and strengthening public institutions.” (UAE US Embassy Financial Sector)
The UAE is considered a global business center and is trying to diversify from their reliance on natural resources by building up their economy in a variety of industries. While the UAE is becoming a more global economy, business is conducted on the basis of personal relationships and mutual trust so it is important to be patient and build these relationships rather than being too direct. Companies are still a family affair, with the ultimate decision-maker being the head of the family.
Establishing a Business
The regulations around the establishment and conduct of businesses are shared at the federal and emirate levels. There are three methods for establishing a business in the UAE:

Joint Partnerships
Branch Offices
Free Trade Zone
Joint Partnership

In order to establish a business that sells products or services freely throughout the UAE, at least 51% of the business must be owned by a UAE national. This type of business structure offers the broadest alternatives for operating a company in the UAE. All businesses require a license and licensing procedures vary from emirate to emirate.
Branch Offices
Foreign companies can establish wholly-owned branches and representative offices in the UAE, provided that a UAE national is appointed as a local agent. The UAE considers a branch office as a regular business that is permitted to perform and enter into contracts or conduct other activities as specified in the license of its parent company. 
The UAE national that is the local agent for the branch office assists with all the administrative requirements of setting up the office including obtaining visas, licenses and dealing with local authorities.
Free Zones
The UAE has numerous Free Trade Zones (FTZs) that can be an attractive alternative for foreign investors and businesses to set up operations. There are over 20,000 companies in 21 Free Zones around the UAE. Businesses in a FTZ can only conduct business within the FTZ or abroad. If the company desires to sell products in the UAE, a UAE official agent is required, and a joint venture needs to be formed.
Companies located in FTZs do not have the UAE ownership requirements that come with a joint partnership. All imports and exports in and out of the FTZ are exempt from tax and all profits are fully repatriated without penalty back to the company’s parent country. FTZs also offer no corporate tax for the first 15 years which is renewable for an additional 15-year period. No personal income tax exists either.
An independent Free Zone Authority (FZA) governs each free zone and is responsible for issuing FTZ operating licenses and assisting companies with establishing their business in the FTZ. Companies can either register a new company in the form of a Free Zone Establishment (FZE), which is a limited liability company governed by the rules and regulations of the Free Zone in which it is established, or establish a branch or representative office of their existing company based within the UAE or abroad.
Financial Market Performance, Future Outlook and Investment Opportunities
As a mainstay to the economy, oil exports now account for about 30 percent of total UAE gross domestic product. Since the UAE began exporting, it has been using the associated revenues to improve the quality of life for her people since 1969. The UAE is in a strategic location bordering the Gulf of Oman and the Persian Gulf, a vital transit point for world crude oil. With a prime location on the global map, the UAE has invested billions of dollars in logistics and infrastructure, capitalizing on its potential as a world-class logistics hub.
As the UAE builds wealth from oil exports, their rapid development will continue. The building of roads, office buildings, housing and so forth – all require more energy. Rising populations consume more energy as well (See Exhibits 6). Natural gas plays a disproportionate role in energy generation, accounting for 98 percent, and the increasing demand is surpassing available supply.
Economic growth across the UAE has led to massive increases in the demand for electricity. Current estimates indicate that the domestic demand for power will more than double by 2020, even given the global economic slowdown.

Emirates Stadium: Project Management

1.0. Introduction
The PMI defines project management as ‘the art of directing and coordinating human and material resources through the life of a project by using modern management techniques to achieve pre-determined goals of scope, cost, time, quality and participant satisfaction’ (Smith 2002)
“Through the project management process, business needs and requirements are transformed into deliverables or outputs the project will provide to meet; this transformation process is made up application of constraints such as time, cost, quality, motivation and application of project management tools and technique.”(APM 2002)
According to Dinsmore, and Cabanis-Brewin (2006), project management processes are grouped into the following areas: they are initiating, planning, executing, monitoring and controlling and closing. A good project manager must be skilled in applying this knowledge and be able to integrate these activities as the project moves through its life cycle.
The aim of this report is to critically evaluate the project management challenges and the management approaches in the construction of Emirate Stadium described in the groups’ presentation. Some of the challenges identified in group discussions includes; time constraints, planning approval, design and site constraints, procurement path, organizational/stakeholders management..This report compares some of the identified challenges with the established best practice in project management.
The second part of the report is develop guideline for the 2012 Olympic Stadium which will include an overview of the difference between managing a single, simple project and a project that is part of a large complex programme of work, also to outline the project management challenges of the 2012 Olympic Stadium.
2.0 The Emirates Stadium
2.1 Background of the Emirate Stadium complex
The need to generate additional revenue from the football event and also to provide a state- of the- art facilities for the fans is identified as the requirement for a new football stadium to replace the existing one .by Arsenal Football Club
The Emirate Stadium is located in Holloway in London Borough of Islington town.
The stadium is located in a high density residential area therefore restricting feasibility of increase capacity. Over 2000 new homes were built in Islington as part of the project.
Two of the key points in the club brief to design team were for the pitch to be as good as Highbury, and to create an exhilarating stadium atmosphere through the design.
Over 2,500 legal documents were signed in order to give the project full clearance.
The overall project put at about 390million pounds. . It was opened in July 2006, with seated capacity of 60,432 making it the fifth largest football stadium in the UK
2.2 Main Project management challenges identified by different groups
Based on the group presentations some of the main project management challenges identified include:
* Time constraints,
* Planning and consent approval,
* Design and site constraints,
* Procurement path,
* Organizational/stakeholders management
* Document control
2.3 Some of the management approaches considered by the group include;
* Involving contractor in early stage of the process
* Design and Build contract
* Site investigation
* Collaborating planning and possible overlap during construction to meet deadline
* Several procurement path
* Involvement of the stakeholders
* Redesigning to suit the shape of the site
* Understanding of the scope of the project.
2.4 Evaluation of project management challenges and approach in the group work
2.4.1. Involving contractor in early stage of the process.
This can help in integrating the contractors idea and expertise in the planning and design process, although, Austin, Baldwin and Wasket (2000) identified that it might result in uneven design workload while they wait for consultant and other contractors to develop their own design, this result in the client paying for retainer while the project is yet to start, thereby increasing the cost of the project. Therefore it might be beneficial to delay the introduction of contractor early

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2.4.2 Time constraints
It can be seen that in the case of Emirate stadium, delivering the project on time is very crucial; to enable the club to meet up with football season, Harrison and Lock (2004) stated that delivery a project on time is an extremely important objective to client as well as avoiding the risk of being skimped in respect of quality and reliability of being close to the budget but most time all the objective of the project cannot be met.
2.4.3 Planning and consent approval.
Two sets of people are involved in planning; they the client and the contractor .Obtaining the consent approval and satisfying planning requirement as well as defining the project goals, ensure availability of funds and selecting the design is the primary responsibility of the owner, this is one aspect that group presentations did not consider. On the side of the contractor, proper planning and scheduling contributed to their delivering the project on time.
2.4.4 Contract /procurement strategy
The contract strategy used in the construction of Emirate Stadium is identified as Design and Build. The type of contract is assumed to be the best when time constraint is considered, Rowlison and McDermontt (1999) reported that Design and Build approach involving overlapping of design and construction phases leads to economics and fast project, though the client has to limit the variation to minimum , finds evaluation difficult and also have to make early decisions.
However, Aritua, Bower and Turner (2006) reported that Design and Build procurement options has been criticized for being cost rather than design quality driven.
Chan and Yu-Ann 2005 identified design liability as the most important practical problem encounters in design and build system.
2.5 Best practice in project management
The best practices in project management are those practices that are generally agreed that their application in the project has shown to enhance the chances of success over a wide range of projects. (PMBOK, 2004)
Atkinson (1999) queried, if successful project management means doing something right, that result in a project which was implemented on time, within cost and to a quality parameters requested, but which is not used by the customers, not liked by the sponsors and does not seem to provide either improved effectiveness or efficiency for the organization
Kerzner (2006) affirmed that best practices in project management are those actions or activities undertaken by the company or individual that led to a sustained competitive advantage, it can be learned from both failure and success. Defining project objective at the outset and establishing relative importance of these objectives is crucial (Smith 2002). The Primary objectives of the project are usually measured in terms of time cost and quality, whilst it may be possible to meet one or two of the objectives, meeting all three of them is almost impossible. (Smith, 2002).
However, the general knowledge, skills and processes described in general agreement documents of project management should not always be apply uniformly to all projects, the project manager and the team is responsible for determining the appropriate process and tailored it down to suit the specific project, because every project is unique on its own. (PMBOK, 2004)
3.0 The 2012 Olympic Stadium complex
3.1 The background of the 2010 London Olympic Stadium.
The 2010 London Olympic Stadium is located at the south of Olympic park Stratford, East London. The EDAW consortium working with Arup and Atkins was appointed by Olympic delivery Authority (ODA) to develop the master plan and the design of the Olympic Park, while the design of the Olympic venue or the Athletes Village was tendered separately.
In 2007, The Olympic Delivery Authority Signed a Memorandum of Understanding (MoU) with the consortium known as Team Stadium to design and build the Olympic Stadium. The consortium is made up the designer, Hoks sport. Main contractor Sir Robert McAlphine, structural engineer Burro Happold, service engineer and landscape designer. The project was estimated at 498miliion pound.
The stadium consists of a lower tier of 25000 permanent. Seats set into the landscape with an upper tier of 55000 temporary seats. The sunken bowl built into the ground will contain the field of play and lower permanent seating. However, facilities for athletes within the Stadium include changing rooms, medical support facilities and an 80m warm-up track. Spectator services, refreshments and merchandise outlets will be located outside the venue on a ‘podium’ that will surround the Stadium, rather than being located within the Stadium itself.
Constructions began three months ahead of schedule and it is expected to be completed by 2011.
In addition, construction works in other parts of the Olympic village is still on-going, while some are close to completion, others are yet to start. This is based on the planned milestone schedule set out by the Olympic Delivery Authority., According to the chairman of the Olympic Delivery Authority, some completion date has been moved further, this is to avoid the venue been completed and standing idle in the years before Olympic, as this call for additional cost of maintenance.
(Culled from official site of 2012 Olympic).
3.2. The outline of the Olympic Stadium
“People will be able to see with their own eyes a stadium which is designed to be different: an innovative and sustainable design which uses temporary elements to meet a complex brief, a stadium built for both Games and legacy”.(Olympic Delivery Authority Chairman John Armitt).
The design of London 2012 Olympic Stadium is much more than dazzling or ‘out of this world’ Architectural structure that is norm of modern day Olympic stadium. “The emphasis in the design has been on minimizing the quantity of material, whilst still producing the required performance, ensuring the sustainability of the stadium after the games give rise for incorporation of some temporary structures.
However, design and construction of such large and complex project need effective and efficient management to deliver the agreed scope of the project. The management approach in multi-projects is generally different from single project. Flexibility management process with explicitly define rules and procedure can be a source of success with large complex project. (Dietrich and Lehtonen 2005).
Baccarni (1996) defined project complexity as project that consists of varied interrelated parts and be operationalised in terms of differentiation and interdependency .On the hand Coffman believed that complex project comprises of subset of project that are composed of so many different facets that no individual or small team possesses all of the knowledge, experience, or skills required to design and implement them.
Considering 2012 Olympic Stadium as a part of Olympic park which consists of interrelated and multidisciplinary projects that demand exceptional level of management and system approach which will be described to be inappropriate for a single project… Looking at the technical and organizational complexity of the Olympic park, it is clear that it requires involvement of lots of multi-disciplinary contractors, sub contractors, supply chain, trade, different technology and specialties. Williams (1999) sees technical complexity as a three-fold concept: the variety of task as the degree of interdependencies within these tasks, and the instability of the “assumptions upon which the Tasks are based.” Complex project requires proper structuring and scheduling in terms of Work Break down Structure and further down into related bid package for the qualified construction firms .to bid .For effective organizational management, the services of a planner, scheduler, contract administrator, legal adviser, procurement engineer, accountant will be require in a complex project unlike a single project where all the task will be handle by the project management..
Moreover, managing a large, multi-projects environment or complex projects is refers by some author as programme management, Fern(1991), stated that the common theme of programme management can be identified as the co-ordination of projects’ to gain benefits that it would not be possible to obtain were the projects managed independently. He also defined programme management as the coordinated support, planning, prioritization and monitoring of projects to meet changing business needs. Pellegrinelli(1997) pointed out that programme management is not same as multi-project management, that the nature and practice of program management are much more than resource management though management of scares resources or the establishment of appropriate information system is identified as core elements of programme management. Fern (1991), proposed single objective programme model as one of the generic models to describe how organizations define and practice programme management. According to Fern (1991), programme with single objective are often called macro-project or simple project which consists of large numbers of project which run concurrently, often employ large numbers of contractors and can benefit from programme management techniques.
Furthermore, the differences between managing a simple project and a project that is part of a large complex programme, can be identify in the description of project and program by Pellegrinelli(1997) and Fern (1991), which states that project is a group of related task(activities) which together satisfy one or more objectives, while programme is a frame work for grouping existing projects (or defining new projects) and for focusing all the activities required to achieve a set of major benefits.
Some of features of managing a simple single project include project manager been responsible for directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives, while a large complex programme involves having a programme manager facilitates the interaction of other managers and team manager responsible for work package.
In addition, a single simple project have a set objective and self dependent for delivery, which entails, ensuring that trade-offs between scope, quality, time and cost are satisfactory and acceptable(Wideman,1990), while multi-project is interrelated and interdependent with other project in the programme. Significant increase in the number and independence of element between disparate project within a programme raise structural complexity to a level higher than that of single projects (Blismas et al 2004)
A single project has a linear life cycle and fixed duration in which performance of the project is measured; while in multi-project duration depends on the delivery of the entire project in the programme
Single project involves one main contractor with few sub contractors while multi-project involves large number of contractor, sub contractors and supply chain.
Other features of a single project includes managing risk and uncertainties in line with the project scope and objectives, abbreviated planning process and Single client management
In addition, scheduling and resources allocated is more complex than that of a single project the need and priority of a particular project is considered, detailed communication, organization and strategic management, multi-stakeholders management, development of software for project planning/scheduling and system control.
The purpose of these guidelines is to help in organizing, planning and control 2012 Olympic Stadium to achieve the project objectives. The guideline covers the life cycle of the project from initiation, planning, execution, monitoring and controlling and closure of the project.
3.3.1 Initiation
* This is the beginning of the planning phase, the need is identified, resources, preliminary drawing and block diagram is produce, analysis including budget estimation, project charter including cost, task, and deliverable schedule, scope is defined and impact assessment initiated, conceptual design created followed by detailed design and planning
3.3.2 Project planning
This include developing management Plan, scope planning and definition, creating a Work Breakdown Structure (WBS), activity definition and sequencing, Resource estimating and allocation, Estimating budget and cost control, activity duration estimating, schedule development, human resource and communication planning, risk management planning, contracting, purchases plan (PMBOK, 2004)
* Management Plan: is necessary for the development of preliminary project scope statement, project management processes, environmental factors and organizational process assets. (PMBOK, 2004)
Scope planning and definition is essential for creating project scope management plan that documents how the project scope will be defined, verified and controlled and also the creation and definition of WBS. Secondly development of detailed scope statement as basis for future project decisions. (PMBOK, 2004)
* Work Breakdown Structure (WBS): “Developing WBS with a corresponding project organizations and functional responsibility chart (Wideman,1990) Establishing the programme work breakdown structure and breaking it into work package for contract purposes”. (Wideman,1990)
Activity definition and sequencing is crucial in identifying specific activities that needs to be performed to achieve project deliverable and also identifying and documenting dependencies among schedule activities. It contains the activity list and attributes, milestone list, requested change and approved change requests project schedule network diagram. (PMBOK, 2004)
* Resource estimating and allocation is important in estimating the type and quantities of resources required by each work package
* Estimating budget and cost control: Each work package is treated essentially as a separate and autonomous effort requiring resources and input from variety of source (Clough et al, 2000).”At the earliest possible time, an acceptable program budget breakdown must be established, which properly reflects the best estimate of the work required to achieve the overall project objectives. This will form the basis for regular cost monitoring and reporting” (Wideman, 1990)
* Contracting, purchases plan: Laws and regulations will require public bidding procedure in the government owned project. Advertisements of the project are required to ensure that all contractors who might have interest are offered equal opportunity to bid. A number of work packages may be assembled into a contract package for procurement purposes(Wideman,1990) Type of contract strategy and procurement route to be use and allocation of risk of project is identified
* Human resource and communication planning: this is necessary in identifying and documenting roles and responsibilities and reporting relationships, secondly. Information and communication needs of the projects stakeholders are determined. (PMBOK, 2004)
* Risk management: The purpose of risk management process is to make effective project management decisions about what happens on the project in future. This consist of risk source identification, risk impact assessment and analysis and managerial response to risk in the context of the project (Smith, Merna, Jobling, 2006)
3.3.3 Execution stage
This involves coordinating people and resources, integrating and performing other project activities. Some of the activities of this stage include Directing and managing project execution, performing quality assurance, acquiring and developing project team, information distribution. Selection of consultant, supply chain contractors and sub contractors. (PMBOK, 2004)
· Directing and managing project execution. This process is necessary for directing the various technical and organizational interfaces that exist in the project to execute the work defined in the project management plan. Some of the activities here consist of approving corrective and preventive actions, approving change request and defect repair, validating defect repair, administrative closure procedure. (PMBOK, 2004)
· Acquiring and developing project team: this is essential for obtaining human resources needed to deliver the project and also for improving the competencies and interaction of team members to enhance project performance. (PMBOK, 2004)
· Information distribution: design and foster intensive, open and timely communication within the project stakeholders. Employ multiple channels and mediums, in particular modern information technology and extensive face-to face interactions.
Prepare systems that prescribe for most processes simple and brief procedures for flexibility of details. Restrict optimization to the essential.
* Selection of consultant, supply chain contractors and sub contractors. This process is essential for reviewing bids and proposal, selecting from among the potential contractors and negotiating a written contract, it also entail risk allocation between the client and the contractor. (PMBOK, 2004)
3.3.4 Monitoring and controlling
This process is crucial for collecting, measuring and dissemination performance information, and assessing measurements and trends to effect process improvement
Integration and ongoing progress is monitored against agreed milestones, results reported in accordance with mechanisms identified in the communication plan.Secondly monitoring changes and recommending preventive action in anticipation of possible problem is an important element of monitoring and controlling (PMBOK, 2004)
Health and safety and environment Maintenance of health and safety on the site is vital for a successful project delivery. Mandatory personal protective equipment for all the workers on site is necessary Also all the site machine and equipment should be working properly. Workers should be properly trained to use the equipments.
3.3.6 Project closure:
this involves closing of project and contract closure. It is necessary for finalizing all activities, completing and settling each contract, including the resolution of any open items and closing each contract applicable to the project. (PMBOK, 2004
3.4 Outline of Project Management Challenges 2012 Olympic Stadium
Some of the project management challenges:
Design constraints:
* This involves getting an aesthetics design which depicts legacy of modern day and world class Olympics, as well as being iconic, environmentally friendly and sustainable in terms of future use and maintenance.
* Time constraints;
Meeting deadline for the project for the Olympics events is very crucial and one is of the major indicator of measuring success or failure of the project.
* Site constraints
The soil/site ground is poor from engineering and environmental viewpoint. Owing to past use of the site which resulted in uneven settlement that can only support very light construction. Site is located between two branches of River Lea an old embankment containing sewage artery. The above constraints call for redesigning to suit the site location and environment.
* Complexity of the project
The multi-project nature of the project involves managing large numbers of subcontractors and supply chain. The construction of the stadium is just one component in the Olympic park,
* Resource allocation and scheduling
Efficient allocation of resources in multi-project environment is a major challenge facing the programme manager, as this can lead to success or failure of the projects.
* Global recession and price inflation
The world economic crisis of 2009 is a major challenge for the project, as this will cause price inflation for goods and services required for the project. The initial project estimate will no longer be feasible.
* Stakeholders’ management
The project has different level of stakeholder. They include the financier, the host community, the supporters, the critics, the press and the general public.
* Project Co-ordination and document control..
The complexity of the project comprises large number of document which might have minor and major changes from the initial design that need to be communicated to people involve with the project.
* Logistics Challenges
Transportation of huge numbers of workers and materials to the site using the existing means of transportation, amid the busy city of London.
* Health and Safety
Maintaining safety in the site is a major challenge in construction site with large number of workers and ensuring that all contractors adhere to the health and safety rule in the site.
3.5 Conclusion
The facts remains that projects are distinctive and unique in their own way. Project life-cycle as well as their requirements is different from each other. What worked for one organization in a particular project might not work for another; it all depends on the organizational culture and values, project environment, interpersonal skill, etc. The general guideline as contained in the Project Management Body of knowledge is only to serve as a guide that needs to be tailored down to suit a particular project.
Also it can be seen that project management is more of a practical discipline than theoretical, this can be deduce from the uniqueness of every projects, because change is inherent in any project. There must be a change from the laid down planned and schedule strategy, change therefore cannot be eliminated, most especially in construction because of the project uncertainty, it is expected that plan must change. The ability of the project manager to apply the principles of risk management and improve effective change management will determine result of the project.
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