Marketing Strategy of Ethiad Airways

Topics: Marketing, United Arab Emirates, Strategic management Pages: 16 (5040 words) Published: March 25, 2013
Table of Contents
1.0 Introduction 3
2.0 External Environment Analysis3
2.1 Porter’s Five Forces Analysis 3
2.2 SWOT Analysis 5
3.0 Marketing Strategy Analysis 6
3.1 Segmentation, Targeting and Positioning 6
3.1.1 Segmentation 6
3.1.2 Targeting 6
3.1.3 Positioning 7
4.0 Strategic Alliances 8
5.0 Sponsorship 9
6.0 Contribution to the Competitive Advantage and its Sustainability10
6.1 Segmentation, Targeting and Positioning 10
6.2 Strategic Alliances and Sponsorship 10
7.0 Conclusion11
8.0 References12

Word Count: 3282

1.0 Introduction
Etihad Airways, the national airline of the United Arab Emirates, has in just eight years established itself as the world’s leading airline. Set up by Royal Decree in July 2003, Etihad commenced commercial operations in November 2003 and became the fastest growing airline in the history of commercial aviation (Etihad, 2012). Abu Dhabi, the capital of the United Arab Emirates, is the airline’s hub. The airline seeks to reflect the best of Arabian hospitality – cultured, considerate, warm and generous – as well as enhance the prestige of Abu Dhabi as a centre of hospitality between East and West. However, nowadays it is very hard to maintain the business in such a competitive market in times of recovery from the recent recession. Therefore, it is crucial to understand that just providing a service is not enough. Firstly, this report overviews the external environment in which Etihad has to survive and compete, evaluating its main challenges and opportunities. Secondly, Etihad’s main marketing strategies will be identified and critically discussed. Thirdly, the extent to which adopted marketing strategies help to achieve and sustain the competitive advantage will be analysed. Finally, the conclusion will be drawn based on achieved knowledge and personal assumptions.

2.0 External Environment Analysis
For better understanding of the marketing strategy that Etihad uses, it is crucial to analyse the external environment in which the company operates. 2.1 Porter’s Five Forces Analysis
In order to examine the positioning strategy and forces of the external environment that may potentially affect the Etihad’s performance, it has been decided to adopt the classical Porter’s Five Forces model. By using this model, it is possible to judge the extent to which an external environment is able to shape the costs, the prices and the profits of the organisation (Porter, 1980).

* Competitive rivalry in the industry - high
In terms of competitors, Etihad Airlines’ main competitors are the companies operating in Middle East, which are Emirates Airlines, Quatar Airways and Gulf Air. These airlines operate in a higher price and quality spectrum than, for example, Air Arabia and are being direct competitors for each other (McKechnie et al., 2008). Rivalry between these companies is very intensive, as there are a small number of competitors on the market.

* Bargaining power of customers - low
In order to have a significant amount of power in the industry, there should be a few customers who can dictate their rules to the organisations, as for example in some B2B cases. However, there are millions of customers, who are willing to fly to and from Middle East, where Etihad operates, therefore, customers have a very limited power.

* Bargaining power of suppliers - high
For the airlines organisations the main suppliers are the aircraft manufacturers and the oil companies. In both cases there are a very few of them. Therefore, airline industry companies have a very limited power over their suppliers. Additionally, as it has been announced by the International Air Transport Association (2008), the global airline industry possesses losses due to the increased oil prices which also decrease the industry’s profitability.

* Threat of new entrants - low
The threat of new entrants depends on the number and complexity of the barriers to...
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