Emirates Airlines is one of the leading airlines in the industry. It has maintained many sources of competitive advantage in terms of cost and uniqueness which had led to a cost advantage and differentiation advantage. Although cost advantage and differentiation advantage are mutually exclusive, Emirates Airlines was able to sustain both. As for the competitive scope, the company can have either a broad target or a narrow target. Most probably Emirates Airlines is favouring the broad target because it is using both differentiation and cost instead of focusing on one of the factors. On the other hand, a business strategy is a long term plan of action used to reach a particular goal or objective. In the case of Emirates Airlines, its goal is both to have a cost advantage and a differentiation advantage which makes the company’s strategy sustainable.
In terms of cost, Emirates Airlines is using various strategies to have a cost advantage. It is having a 30% decrease on labor cost; it is using more labor from the Indian subcontinent. It is also using economies of scale. A good example for the economies of scale is its purchase of the aircraft (75 A380). Above all that, the company doesn’t have to pay any taxes because it’s in a country with no taxes policy. These enable Emirates Airlines to have an advantage in terms of cost.
As for differentiation, Emirates Airlines is having differentiation because of many points. The company is offering, if we can say, glamour in its first class such as showers and beds. Moreover, it is offering free meals for the passengers. The company is also having associations with other international high profile organizations which made it have a competitive advantage based on differentiation. In addition, the company is having a geographical scope such as it has international destinations around the world. It has also a dedicated terminal and free transport.
The question that remains is whether the strategy is sustainable or not....
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