The Emirates Group Company Analysis

Introduction

The Emirates Group is an organization that is based in Dubai, United Arab Emirates. The company is in the aviation industry. The company is located in the United Arab Emirates, which is one of the regions that have recorded remarkable economic performance over the last couple of years. The UAE is emerging as a world economic power that will compete with other powerhouses such as the US and China. The fact that this region was not affected by the last global economic crisis was an advantage that gave the organisations operating in the region a chance to thrive. There are a number of top organisations in the region that have global operations and have become major competitors in the business world.

One of these organisations is the Emirates Group, which is going to be the major focus of this essay. The company offers flights within and outside the United Arab Emirates. The Emirates Group is a multinational organization thatto has operations all over the world. It was founded in the year 1959. Its headquarters are in Garhoud, Dubai where it is located within the Dubai International Airport. It is among the largest companies in the United Arab Emirates with a turnover of more than $18.4 billion. It has employed over 62,000 people across all its business units. This puts it among the largest employers in the entire Middle East region. Its main business unit is the Emirates Airline, which operates and offers aviation services in about 17 airports (The Emirates Group, 2013).

The main operational base for the Emirates Airline is the Dubai International Airport. The Emirates Airline happens to be the largest airline that operates in the Middle East as a subsidiary of the Emirates Group. It is the largest in terms of passengers carried of and revenue generated, as well as fleet size. It makes so many flights that it is capable of operating as many as over 3,400 flights in a week. It has terminals in around 150 cities that are spread in about 74 countries across the world (The Emirates Group, 2013). Worldwide, the Emirates Airline is ranked among the top ten carriers.

Strategic Posture

Mission

Any organisation that is committed to success should have a mission statement that directs its actions and clearly defines its purpose. The mission statement is supposed to give a clear distinction of the organisation from other organisations. It should be clear, precise, accurate, and relevant to the business. The Emirates Group has a mission statement that is simply stated, but it has a deep and broad meaning. The mission statement is: “Committed to the highest standards in everything we do” (The Emirates Group, 2013). This is a statement that clearly indicates and directs the activities of the organisation. In fact, the Emirates Group is among the companies that offer the best flight services in the globe. This is guided by its mission statement, which states its commitment to ensure quality standards in all the company’s activities.

The organisation has succeeded in embodying its mission. Its employees and management are always committed to provide the best services to the customers. Providing top quality services gives maximum satisfaction to employees. The Group’s core business, which is executed in the Emirates Airline, has thrived in a big way in the industry. Its other major business executed in DNATA has also been a success. This is where the brand marketing is done. It markets the Emirates Group as the organisation that offers the best luxury services across the world.

Objectives

An organisation should have clear objectives. The objectives of an organisation are also important in guiding its business activities and its investment decisions. An organisation always works towards achieving its objectives. All it’s business strategies and efforts should be in line with the objectives. It is important to note that every business organization has one major objective, which is to make as much profit as possible (Thorne et al., 2011). However, there are other specialized objectives that are different for each organization. The objectives are distinct depending on the type of business conducted.

One of the chief objectives of the Emirates Group is to establish the United Arab Emirates as a tourist destination. The Group is aware of the post-oil era, thus it proactively ensures that the economy of the region does not slow down. It is worth mentioning that the major economic booster of the UAE at the moment is oil export. The fact that this valuable resource might one day become extinct cannot be ignored and the government will need alternative ways of maintaining the country’s economy. The Emirates Group has put this as one of its objectives.

The organization also aims at becoming a center for financial prosperity. It aims at making higher profits by increasing the revenue and reducing the operational costs. Another objective is to develop excellent information technology, as well as professional services. IT is essential in boosting the innovation capabilities of an organization. On the other hand, innovation is regarded as the lifeblood for business organizations in that it gives the organization a competitive edge. It can indubitably be deduced that the objectives of the Emirates Group are in line with its mission statement in that they are all aimed at improving its performance standards. They are also considerate of both the external and internal environments (The Emirates Group, 2013).

Strategies

Today, businesses operate in an environment that is highly uncertain. Despite these uncertainties, the organization is expected to achieve both its long run and its short term objectives. It is, therefore, the obligation of the top management to formulate ways in which the organization will achieve its objectives, regardless of the numerous uncertainties that face the firm. The management develops a strategy that the organization follows to achieve its objectives. It is important to note that there could be an overall strategy, which could also be referred to as the corporate/business strategy. There could also be various departmental strategies such as marketing strategies, production strategies, and so on. Strategic management is normally performed by top managers (Thompson, 2001).

The Emirates Group has established a strategy that has favored its business and contributed to its ultimate success. The business strategy of this organization is based on the open skies environment, as well as the geographical benefits of its hub in Dubai. It looks forward to opening the hub to the international gateway, a move that is likely to bring many more customers from all over the world. This strategy has been of great benefit to the organization as it is partially responsible for its success. The management maintains that the business strategy has been working because it has driven the Emirates Group’s meteoric growth. Under this strategy, the organization ensures that over 70% of its bilateral air service conventions are open skies or they give way for restriction-free frequencies moving in and out of Dubai. This helps in bringing in many travelers and high revenue (The Emirates Group, 2011).

The organization also embraces innovation as part of its business strategy. The company tries to offer the best services that are highly satisfactory to its customers. In doing so, it looks at the aviation and travel industries with the 21st-century eyes. This is believed to be the same way that its customers view the industries. In general, the organization’s corporate strategy is to ensure that its customers get a satisfactory traveling experience. In doing so, the company establishes links with its customers and tries to address their interests. As a result, it can recognize what is best for the customers and its success. It’s business strategy shows strict adherence to its mission statement, which is to improve its service standards.

Corporate Governance

Board of directors

The major responsibility of the Board of Directors is to oversee all the activities performed within an organisation. The directors are usually elected by members of the organisation. Therefore, they are ranked at the top of the organisation’s management hierarchy. The Emirates Group is headed by Sheikh Bin Saeed Al-Maktoum. He is the chairman of the organisation. He is also the CEO and the Chief Executive of the Emirates Airline and the Emirates Group in general. He has been in this position for about 25 years and has been responsible for the unprecedented success of the company because he spearheaded most of the aviation’s success. The Executive Vice Chairman is Maurice Flanagan. He worked in a number of nations before joining the Emirates Group in the year 1985 where he became one of its founding members (The Emirates Group, 2013).

The other top member of the board is Tim Clark. He is the current President of the Emirates Airline and has been instrumental in the success of the Emirates Group since its inception. He has played a major role in transforming the airline to the global giant it is today. The President of Group Services and DNATA is called Gary Chapman, a man who oversees the organization’s HR, IT, finance, as well as legal functions. He has been in this position for 20 years. Abdulaziz Al Ali is the Executive Vice President of the Emirates Group’s Human Resource department. He has been the major figure that has led the organization’s recruitment and training functions and overseen the employment of over 62,000 employees. He has held this position for about ten years, although he has been with the company since the year 1988. However, he had joined as a management trainee (The Emirates Group, 2013).

Adel Ahmad Al Redha is also a member of the board holding the position of Executive President and Chief Operations Officer. He oversees engineering, as well as flight operations. He is also responsible for overseeing airport services and service delivery. Adel joined the Emirates Group 20 years ago as an engineer. The Executive Vice President in the Chairman’s Office, Facilities/Projects Management, and P&L is a man known as Ali Mubarak Al Soori. He is the one who has been responsible for buildings that are currently erected within the Emirates Group’s premises. Al Soori joined the Emirates Group in the year 1986 and was promoted to his current position in the year 2003. He has overseen the construction of multi-billion dollar property in the Emirates Group (The Emirates Group, 2013).

Further, Ismail Ali Albanna is the current Executive Vice President, DNATA. He is responsible for the growth and expansion of the ground handler and ensures that its rate of growth is proportional to the rate of growth of passengers and cargo in Dubai. Ismail has served the Emirates Group, specifically the DNATA section, for a period of about 40 years. He is among the board members who have been in the organization for the longest time. However, he has held his current position from the year 2003.

The Executive Vice President Service Department is Mr. Nigel Hopkins who is responsible for IT, legal, insurance, as well as insurance services at the Emirates Group. Nigel has been with the organization since the year 1994, but he was promoted to his current position in the year 2005. Finally, Thierry Antinori is the Executive Vice President and Chief Commercial Officer. He is responsible for the company’s commercial operations. He also oversees revenue optimization, as well as destination and leisure management. He is probably the board member who has been in the organization for the shortest time having joined in the year 2011 and later promoted to his current position in the year 2013. However, Thierry has been in the aviation industry for over two decades and has served in similar senior positions in France and Germany (The Emirates Group, 2013).

Most of the Emirates Group’s top board members do not have an international experience, but they have been in the aviation industry for a significant period of time. They have been serving the company for the most part of their careers. These members are highly involved in the company’s strategic management and they have actively participated in the organisation’s future directions. They do not own significant shares of stock. The company’s stock is not publicly traded. The stock is also not divided into different categories, thus the board members do not have varying voting rights.

Top management

The top management in an organisation is an essential position since it is involved in making major strategic decisions on behalf of the shareholders. The top managers are responsible for the success or failure of the organisation. In most organisations, the top managers are separate from the board of directors, despite the fact that they are all supposed to work towards a common goal of organisational success (Thorne et al., 2011).

However, at the Emirates Group, it is interesting to note that the board of directors is made up of most senior managers. The decision or the policy to separate the two bodies is wholly dependent on the organisation itself. In the Emirates Group, the board of directors is involved in strategic planning and management of the organisation. The directors possess the required skills that will enable the company face the future challenges and lead the organisation to its goals. It is worth noting that the company has other managers in the middle and operational levels who are separate from the board of directors.

The top management of the Emirates Group has exceptional experience having been in the industry for a long time. The management has knowledge and skills that have been vital to the success of the organization. The managers have both domestic and international experience, a factor that has facilitated the company’s success both in Dubai and in the international scene. The Emirates Group has subsidiaries that have been partially or wholly acquired. However, the managers of these acquisitions are not included in the top management team. Only one of the top managers has been in his current position for a period less than 3 years. Thierry Antinori joined the company in the year 2011. He was an external employee who joined as an Executive Vice President for Passenger Sales worldwide. He was later promoted to his current position of Executive Vice President and the Chief Commercial Officer of the Emirates Airline in June of the year 2013.

External Environment: Opportunities and Threats

Societal Environment

Organizations operate in an environment that is highly unpredictable. This exposes them to a number of threats in the future. It also presents opportunities that they may capitalize on. Among the threats that the Emirates Group may encounter include competition from other players in the industry. The Emirates Group faces major competition both at the local and the international level. Locally, the Gulf Airline and the Etihad are the two major competitors. There are many competitors in Europe and America. Another major threat could be the probable increase in fuel costs. This could increase its operating costs and reduce its profitability (Wald, 2007).

The organization is also likely to be affected by government policies, especially in the international level. Changes in policies that restrict environmental pollution may affect the company because it is a major contributor to air pollution. In addition, any government policies that might restrict air travel will have an adverse effect on the Emirates Group’s operations and performance respectively. In terms of technology, the firm faces a high demand for innovation in order to cope with the increasing competition, thus it might not have the ability to keep up with the demand. This might lead to the company losing its competitive edge to rivals (Betz et al., 2010). However, it can counter this threat by hiring more employees and IT experts to boost its current labor supply.

Opportunities, on the other hand, include tapping into new markets that are emerging continuously. The organization can develop advanced airline, as well as aviation services to expand its operational base. It can also enhance its airline infrastructure business to increase its opportunities. The prospective growth of the Dubai tourism industry presents Emirates Airline with a massive growth opportunity. The tourism industry in Dubai is rapidly growing, meaning that more people will be traveling in and out of the country (Graham, Papatheodorou & Forsyth, 2010). Technology presents the organization with several opportunities as well.

For instance, most passengers book their flights online. This is a new line of growth that the firm can tap to expand its future operations. It should also actively engage in innovation to bolster its aviation services and increase its competitive advantage. Finally, the organization can form partnerships that will facilitate its expansion. This will present the organization with opportunities for growth (Wald, 2007).

References

Betz, F., Khalil, T., Hosni, Y., & Mostafa, H. E. (2010). Creating and managing a technology economy. Toh Tuck Link, Singapore: World Scientific Publishing Company Pte Ltd. Web.

Graham, A., Papatheodorou, A., & Forsyth, P. (2010). Aviation and tourism: Implications for leisure travel. Farnham, England: Ashgate. Web.

The Emirates Group (2011). Annual Report 2010-2011. Web.

The Emirates Groups (2013). Our company. Web.

Thompson, J. L. (2001). Understanding corporate strategy. London, UK: Thomson Learning. Web.

Thorne, D. M., McAlister, D. T., Ferrel, O. C., Ferrell, L. (2011). Business & society: A strategic approach to social responsibility and ethics. Mason, OH: South-Western Cengage Learning. Web.

Wald, A. (2007). Aviation management: AktuelleHerausforderungen und trends. Berlin, Germany: LIT Verlag Münster. Web.