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    Emirates faces competitive rivalry from 37 airlines that fly to and from Dubai. The Middle East airline industry has shown strong growth of 11% over the last decade. Emirates has advantages that lower the threat of new entry, including its established brand, accessible distribution through its own terminal, and lower fuel and catering costs as the national carrier. While suppliers like aircraft providers have bargaining power, Emirates can substitute suppliers. Customers have bargaining power through price sensitivity but Emirates differentiates itself through luxury services and nonstop routes. Budget carriers are the main substitute threat.

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    Emirates faces competitive rivalry from 37 airlines that fly to and from Dubai. The Middle East airline industry has shown strong growth of 11% over the last decade. Emirates has advantages that lower the threat of new entry, including its established brand, accessible distribution through its own terminal, and lower fuel and catering costs as the national carrier. While suppliers like aircraft providers have bargaining power, Emirates can substitute suppliers. Customers have bargaining power through price sensitivity but Emirates differentiates itself through luxury services and nonstop routes. Budget carriers are the main substitute threat.

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    types of 5 porters

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    5 PORTERS

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    Emirates faces competitive rivalry from 37 airlines that fly to and from Dubai. The Middle East airline industry has shown strong growth of 11% over the last decade. Emirates has advantages that lower the threat of new entry, including its established brand, accessible distribution through its own terminal, and lower fuel and catering costs as the national carrier. While suppliers like aircraft providers have bargaining power, Emirates can substitute suppliers. Customers have bargaining power through price sensitivity but Emirates differentiates itself through luxury services and nonstop routes. Budget carriers are the main substitute threat.

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    Emirates faces competitive rivalry from 37 airlines that fly to and from Dubai. The Middle East airline industry has shown strong growth of 11% over the last decade. Emirates has advantages that lower the threat of new entry, including its established brand, accessible distribution through its own terminal, and lower fuel and catering costs as the national carrier. While suppliers like aircraft providers have bargaining power, Emirates can substitute suppliers. Customers have bargaining power through price sensitivity but Emirates differentiates itself through luxury services and nonstop routes. Budget carriers are the main substitute threat.

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    EMIRATES - PORTERS FIVEFORCES

    Ankit Yadav
    Smba08037 (section G)
    1.The threat of the entry of new competitors

    t h e e x i s t e n c e o f b a r r i e r s t o e n t r y ( p a t e n t s , r i g h t s , e t c . ) : - n a t i o n a l carrier(henc
    e enjoying many benefits)

    brand equity:- renowned player, markets heavily, old in industry, veryhigh brand value

    switching costs or sunk costs:- not very high to switch to suppliers as very high
    supplier base( except aircraft providers)

    Capital requirements: - part of emirates group, so capital is not an issue.

    Access to distribution: - very accessible, has its own terminal & directmetro & busses.

    Customer loyalty to established brands: has a program like skywards & frequent flyer
    miles.

    absolute cost advantages: in terms of fuel & flight caterings

    G o v e r n m e n t p o l i c i e s : - v e r y f l e x i b l e d u e t o n a t i o n a l c a r r i e r s & mon
    archy. The intensity of competitive rivalry
    1.The intensity of competitive rivalry

    Number of competitors:- 37 airlines fly from & to Dubai

    Rate of industry growth: - Middle East showed the strongest growth at11 percent in the
    last decade.

    exit barriers :- fuel & capital costs

    diversity of competitors: international flyers, domestic flyers & globalflyers

    fixed cost allocation per value added:- additional cost for services likemeal choices for 1s
    class flyers

    level of advertising expense:- really high (up to 10% of total revenuesfor airlines like jazeera)

    S u s t a i n a b l e c o m p e t i t i v e a d v a n t a g e t h r o u g h i m p r o v i s a t i o n : - n e w services like
    onboard Spas, fully reclining seats, live TV.

    1.The bargaining power of customers

    Bargaining leverage: - between tickets of budget & luxury flights for same destination.

    Buyer volume: - no of people flying to a destination, (more passengersto India then Nepal).

    Buyer switching costs relative to firm switching costs: easier to switchbetween airlines as people
    might find competitive schemes & offers orcheaper tickets or better services with other service
    providers.

    Ability to backward integrate: - emirates has its own emirates flight kitchen, catering
    food to its flights.

    Availability of existing substitute products: - no. of flights


    t o a particular destination, e.g. only emirates operates direct flights to SanFrancisco from
    Dubai, hence has competitive edge. As no other carrierhas a direct flight on this route.

    Buyer price sensitivity: - difficult to compete with competitive prices of budget carriers, but
    emirates compensates it by offering world class food, services, comfort & in-flight
    entertainment.

    D i f f e r e n t i a l a d v a n t a g e ( u n i q u e n e s s ) o f i n d u s t r y p r o d u c t s : - A 3 8 0 ai
    rcrafts, world class service, choices of menu for elite class, its own private terminal,
    non-stop direct flights to various routes some of themworlds longest non-stop direct flights.
    1.The bargaining power of suppliers

    Supplier switching costs relative to firm switching costs: - very high (only 2 suppliers)

    P r e s e n c e o f s u b s t i t u t e i n p u t s : - a l o t o f s u b s t i t u t e s a r e p r e s e n t f o r suppliers
    as there are over a hundred airlines currently operating & most of them are planning for
    expansions.

    Supplier concentration to firm concentration ratio: - very high (twosuppliers) many


    airlines.

    E m p l o y e e s o l i d a r i t y ( e . g . l a b o r u n i o n s ) : - U A E d o e s n o t a l l o w a n y employee
    unions so there are no such concerns.
    1.The threat of substitute products

    Buyer propensity to substitute: - very high as there are two types


    of p l a y e r s i n m a r k e t , b u d g e t & l u x u r y . T h i s l e a d s t o a h u g e p
    rice

    difference. So a lot of people prefer going for cheaper tickets for shortdistance flights. Hence
    emirates looses business.

    Relative price performance of substitutes:- Huge price differences dueto services offered, but
    in luxury segments Emirates leads the market.

    perceived level of product differentiation:- in case of emirates theperceive


    d value is fairly good due to new aircrafts, courteous crewwhich provides
    personalized services, gourmet food with at least 4meal choices for
    b u s i n e s s c l a s s & a b o v e , i t s o w n w o r l d c l a s s n e w private terminal to fly from, fleet
    of new latest technology aircrafts.

    PORTERS 5 FORCES:
    Competitive Rivalry
    # 37 airlines fly from and to dubai
    # middle east has stongest growth with 11% last decade
    #Fuel and capital costs.
    Threat of new entry
    #old in industry, very high brand value
    #very accessible, has its own terminal and direct metro and buses
    #in terms of fuel and flight caterings.
    Power of Suppliers
    #Bargaining leverage.
    #Availability of existing substitutes products.
    #Differential advantage(uniqueness) of industry products.
    Power of Buyer
    #bargaining leverage
    #Buyer price sensitivity
    Threat of substitution
    #Buyer propensity to substitute
    #relative price performance of substitutes.

    https://prezi.com/3of8ohwa0m6c/emirates-air/
    http://www.studymode.com/subjects/five-forces-emirates-airline-page1.html
    http://www.ukessays.com/essays/marketing/a-strategic-study-of-emirates-airlines-marketingessay.php
    http://www.studymode.com/essays/Emirates-Airline-515654.html

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