International Marketing Essay
Many researches has been conducted on flight companies that are operating and connecting all the continents, but this research is about a company that started in 1940s in an Arab country in the middle east, the company is call flight Emirates, first the company was aimed to deliver flying service in United Arab Emirates and in the region, but as soon as the company raised revenues and added new shares the company thought of going further and compete in the global market. The amazing and surprising part in this company is its ability to rapidly grow and compete perfectly in the global market not only that, it has achieved its objective in that competition as you will see in the paper.
The contents of this research are four parts, in the first part we will take you through how the company started and expanded to the global market up to United State of America, vision and mission of the company in the market place. In the second part you will see how the PEST and other driving forces has effect the company operations in United States and other countries, while reaching part three the research will show how the company’s segmentation, distribution, pricing and product strategy are being perform, and we shall conclude with a comprehensive summary, analysis and present the results that we have got through out our research.
The unifying them in this research is the company ability to compete in a higher competitive environment like USA not only that but resulting on generating revenue and adding value to its original capital, the company also can be count as one of the biggest flight companies in the world due to its capability and differentiation in the market place. Finally, let’s hope that our research will be a vital added value to previous researches in the same matter.
PART ONE: 1.1 About flight Emirate: The beginning of Emirate flight goes back to 1959 when Sheikh Rashid Saed the government official opens the Dubai international airport and announces that Dnata company with only five staff will be in charge of ground handling services, in 1978 Mr.Manrice Flanagan was appointed by Sheikh Rashid to be the general manager of dnata company which is the operating company for flight Emirates, Mr. Flanagan later on in 1984 design how the company could possibly move to serve in air service, and with acceptance of Dubai government the company requested Pakistan international airline to lease them two aircrafts, the deals were struck to fly into Karachi, New Delhi and Bombay in India. In 1985 Sheikh Mohamed gifts two Boeing 727-2005 to the airlines, these two Boeing increased the operations where the airline was able to fly to more than twenty countries.
Sheikh Ahmed later on in 1990 signed an agreement with Asian Aerospace exhibition in Singapore to add airbus A310-300s to the company. In 1992 Emirate flight become the first airline to install video system in all seats in all classes in the same year the France government allow officially the flight to operate in the country, by that time the company’s work forces become 11,000 employee. Ten years later exactly in 2011 the company managed to fly to more than 120 destinations world wide, and recorded a profit of ($1.6 billion) and bought the largest Boeing in history 50777-300ER. Flight Emirate as part of its marketing strategy has sponsored number of events and competitions e.g in 2012 the company sponsor Tennis in united state and crick’s Indian premier league. As we mentioned earlier the Dnata Company headed by smart board of directors is not an easy company and the proof is that its ability to raise the capital to $ 2 billion and the workforces from 11,000 to 62,000 employees in 2012 as it was the most profitable year for the company. The company now call the Emirate group and consist two parties Emirate and dnata company and has expanded into many business for instance, hotels, workshops and tourism and the are operating all over the world.
1.2 Flight Emirate in North and South America: Flight emirates operates in North and South America challenging Americans airlines in delivering air services it flies to Brazil, Chile, Mexico, Peru, Urguay, Canada and United States, within the United States the company operate in more than six states creating a competitive environment and adding valuing advantage to this market.
The free market economy adopted by United States is a difficult market to compete in if you don’t have a competitive advantage, the flight emirate with its uniqueness and appropriate tactics has a lots of winning games as we shall discuss it later on in part three, and you will realize that the company has attracted the market using different approaches.
1.3 Flight emirates management orientation toward global business: Flight emirate as we stated earlier in our introduction started as a small company call dnata in Dubai, therefore the management structure in the early 1950 was regiocentrics but after the Dubai government increased the capital and instructed many deals the company management changed in 1960s to be geocentric orientation as the views the entire world as a potential market and strive to develop their brand and integrate in global market. The reasons why we categorize the company as a transnational company are the followings: (1) The company operates in more than 100 countries and flies all over the world. (2) The company’s work forces are more than 62,000 employee spread in six continents. (3) The company assets i.e (flights, workshops, hotels etc) are not all based in Dubai. In conclusion to this regard the emirates company management can be classified as a combined of two management structures, reogiocentric and geocentric because in its starts the focus was regionally but later on they progress in global scale till they adapt the geocentric orientation structure.
1.4 Flight Emirate vision and mission: Vision: The vision of flight emirate is very simple as we mentioned earlier the company started as ground services company in 1940s but after Dubai government decided to inject more capital the business increases and ambitions become more than just being a ground service company therefore in 1960s the company decided to focus broader in flight services not only in Dubai and in the region but even globally. Now the vision is to be a “leading company in flight and tourism world wide providing excellent, safe and customer satisfaction”. Mission:
The mission of the company is to ensure that the flight is the choice of every traveler and to create a business competitive environment and add valuable service to the market. Differentiation, opportunities and development of a star brand in the Gulf region and all over the world is the purpose of the company’s today’s focus.
PART TWO: The Business Environment: 2.1 Political, Economic, social and Technological analysis (PEST): The business environment where the company operates is an important situation that we have an obligation to express in this research, many forces drives and affect the market place of any operating company, to analyze the situation we read the political, economic, social and technology changes.
Political and Economic aspects: The country where flight emirate generated from is United Arab Emirate in middle east one of the world’s largest country in oil production, the economic growth and political stability are the sign of advancement in that country. UAE currently undergoing rapid expansion in investment and private venture, the government made number of commitments to strengthen and reform its investment regulatory and make conducive environment for exports and imports. United States and UAE are strongly partners in many political alliances, economic benefits, social and cultural activities the exchange numerous of interests in regard to these issues.
Politically, the relationship between the United Arab Emirates and United States has been positive and productive for more than 30 years they are a reliable allies in many military, economic, and social affairs, the United State view UAE as source of stability, tolerance, innovation and a leading figure in the Gulf region. After the US tragedy in September 11 2001 where 2,996 including hijackers killed, the US foreign policy changed a lot including the relationship with UAE based on the fact that two of the hijackers were from UAE, immediately after the attack the background security checks for an Arab visitors was very high and research shows how some harassment and hates developed against Muslim in US. In conclusion to the political environment where flight emirates operates i,e in US there is no negative impact due to the strong and smooth relationship between the two countries. Economically, the UAE is the US single largest export market in the Middle East with $1.5 billion in 2011 most are machinery, aircraft, industrial and other valuable items, US imports from UAE in 2011 was 2.44 billion most are crude oil, aluminum and other things.
The US petroleum companies played a big role in development of UAE energy sector, more than 800 US firms are operating in the UAE investing in different sectors and injecting UAE market with new jobs and opportunities of Arab youth. The research also found that the US, UAE relationship is a long term partnership and each state in US probably has its own trade relationship with UAE. Research also found that UAE is the larger operator of Boeing 777 aircraft in the world, in November 2011 Emirate flight placed an order for $ 24 billion record breaking for 50 Boeing 777-300 ERs, before that there were number of orders for purchasing Boeing from US which make the company the most consumer of this type of flights.
In conclusion to economic relationship between the two countries, the flight emirates is the world’s largest operator of Boeing 777 and serves non-stop flying from Dubai, also the robust trade and investment relationship between UAE and USA is based on the political stability and diplomatic understanding. Socially, the UAE and US have a lots of social partnership in numerous of activities, UAE is an open country for visitors and legal immigrant, its population is extremely liberal and open minded society compare to the other countries in the region, UAE attracts many investors and tourist including US citizens, the US population in UAE estimated to be 4,000 people working in different sectors of production.
UAE population in USA is recorded not to be affected by any violence or discrimination against any human right because US treat and protect the entire resident equally but individual harassment does exist because of personal behavior. According to researches, after September attack where two were from UAE as we stated earlier the Americans views on Islam and Arab has changeed a bit of which number of travelers to and from Arab world has decreased. Technologically, as technology refers to the application of science and research into industrial or commercial objective, it has affect societies all over the world, flight emirate in its existent relies on technology in all its operation and has benefit so much in US market on this matter, marketing customers service and other operation are possible in flight emirate because of technology and the latest news in this regard is the announcement of the company recently that it will allow all the passengers to use their cell phone in its all flight operating in US market very soon, that could not be possible if the company was not connected with USA. To conclude this topic technology has not negatively affected the operations of flight emirate in USA, it has really been a source of inspiration for the company.
2.2 The Effect of Culture and Sociology: In United States market culture as (education, religion, values, attitude etc) play a big role in business place, flight emirate with its unique study of American’s culture has found it a useful environment to operate in, US is a multi cultural community where different ethnic groups coexist without any discrimination. US market is a free economy where competition is the only factor that can push you to the top or crash you down, flight emirate adapted those diversities and without any exclusion and that is why it has been able to compete with US fight companies in the market place, as we stated earlier the only side effect on flight emirate in US market was what follows September attack when a group of terrorist from middle east and with Islam background hijack US flights and threaten US as a sovereign country, the result on that was the reduction of travelers from and to Arab countries, raising the searching system which actually targeted travelers from Gulf countries and individual harassments by some indigenous citizens.
In conclusion to culture and sociology the company does record much challenges in US market based on these aspect but the following points are what we think to be the company’s threats in US market: 1-Flight emirate generated from Arab country therefore it might be a target of terrorist and use as a cover to make insecurity in USA. 2-Services in the flight emirate are indirectly affected by Islam as the crew do welcome passengers by Quran prayers on board, this activity does not satisfy non Muslims on board. 3-Wearing of AL hijab by Arab women is not an acceptable sign by some people. 4-Citizens of UAE started to avoid traveling to USA because of long waiting visa due to background security checks.
PART THREE: THE COMPANY MARKETING PLAN 3.1Marketing (country) selection and entry strategy: Flight emirate operates in more than one hundred countries and flies over six continents, the research has an interest in US market and here are the reasons why the company chosen to compete in US industry: -The airline copes and encourages free competition with other market player using a strategy known as “the open skies strategy”. -The political environment and the strong relationship between USA and UAE encouraged flight emirates to choose US as useful market to operate in. -USA is an open economy where the market competition is the art of the game, flight emirate with its quality services and competitive advantage choses to be part of it. -US dollar is the most powerful currency in the world, since the company adopted this currency to be the company main fare in its all operations than the company got it profitable to operate and expand in US market. -Flight emirate benefit more from long haul flying which also save fuel consumption as well as non-stop flying from Dubai to USA is profitable. -The Boeing 777 is the major aircraft used by the company hence all the accessories, parts and maintenance is cheaper and available in United States. The above reasons plus the growing business opportunities between US and UAE has increases the demand for direct flying from Dubai to United States.
3.2 Segmentation, Targeting and positioning: Flight emirate like any other flights in the airline industry has a specific strategy on targeting and positioning its self in the market place, below are the airline targets: 1-Emirate flight is one of the big airline in the world, the rapid growth of Dubai and its good relationship with other countries especially US had given a chance to the company to position it self as the major carrier between the two countries and inside the US, the company currently operates in eight states in US market targeting the following segments: 2-The demand for traveling to Dubai by tourist and business people has increased and especially in summer session where Dubai attracts more than seven million tourists.
3-Expatriates, because Dubai is a working environment and highly paid city, the demand for people to travel to and from Dubai increased hardly, many US citizens live and do business in Dubai while the also regularly visit their homes, therefore flight emirate is playing that role of targeting those group. 4-Transit passengers, before the haul long flying strategy being implemented by many companies were suffering from waiting hours, passengers from US did fly to middle east or Dubai connecting through Europe, flight emirates made it easier to dominate this segment by offering direct flight between Dubai and USA and found it very profitable. Because of demand increase within the United States, flight emirate with its quality services and golden brand attracted those groups and the company positively responded and got it much profitable.
3.3 Information and research strategy: The aim of this strategy is to keep the company growing and competitive in the market place, the information and research are the heart of any successful company, it explore opinions and attitude of customers and allow the company to predict the future result of the company’s operations. Flight emirates value information technology and research and has invested a huge of amount approximately $200 million and deployed 2,200 employees, recruited from the most qualified institutions in the world. The company’s IT department and research after ensuring solutions for the company also provide services for other business in the region as the generate revenue to the company from that services.
Research found that flight emirate invest heavily in information technology and research for smooth operation and acknowledging the customers needs and demand in US market.
3.4 product strategy: Oil prices has been unstable and challenging in world’s market place for many flight companies to perform perfectly with out any conciliation or interruption, flight emirate has made it easier by signing a deal with several major oil companies to supply jet fuel to them all the time with a specific price, that deal remain unchangeable no matter what the future market may present, this fuel strategy has maintained the company profitability high among the competitors. The fight also gain a lot of profit base on product strategy through it plan of long haul flying, direct from US to Dubai because this kind of service attract big number of passengers of which the company provide cheap prices.
In this strategy also the company has divided its portfolio into two, airport services and infrastructure, the airport service has to ensure the safety of passengers baggage and belonging up to the last destination, this strategy has build confident between the company and the customers. The free competition strategy that was adopted by the company enable the customers view their opinion in the services, employee training and capacity building in the company has been a successful part of the product strategy because it keeps the delivery of service in a high position. Buying new aircraft every short period is one of the promotion for product strategy and what kept the company delivering excellent services in US flight industry.
3.5 Pricing strategy: Pricing strategy is the secret of any successful company, the first thing the company does was to keep US dollar as the standard currency of exchange in the company, based on the fact that dollar is a powerful and stable currency and is convenience to all passengers regardless of their country of origin, this strategy made the company’s profit always high. The company has a sufficient strategy that enable passengers enjoy cheap pricing either in short or long haul flying, this has been a competitive advantage to the company, the company has been in the market for a short time which mean the company does not charge legacy fee in its ticket because there is no burden of pension as other companies do, the well train and qualified financial managers that the company has are playing a role of keeping the financial plan in a safe environment. The most important factor that keep flight emirate cheap and profitable is the variety of aircraft that operate in different allocation this gives the passengers the option of choosing the cheaper the can afford. All the above are supported by the fact that prices of flight are not being fixed any where because it depend on the market demand, what keep flight emirate cheap and affordable is their continuation of reading the market rightly.
Subject: United Arab Emirates,
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 20 October 2016
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