When acquiring an asset, an organization needs to be keen on the likely benefits that will accrue from the transition. In the case of Emirates buying new Airbus A350XWB, the management needs to start with a cost-benefit analysis to determine whether the purchase will be beneficial to the company in short or long term.
The cost of the asset amounts to billions of dollars thus the management needs to be careful that the large outflow of funds will not affect the business negatively. The following are important elements that the company needs to consider when making the purchase.
Futuristic effects of the airbus
Emirate management anticipates an increased traffic of passengers and goods in its destinations; the increase is a futuristic business that the company should tap into. By acquiring the new plane, the company will be preparing to enjoy large business in the future. The move then is a strategic planning move where the company will benefit economies of scale and better services to its customers.
The contact with Airbus seems to suggest that Emirates will be the company launching the plane; with this the deal is expected to be favorable to Emirates. When buying an asset, the buyer needs to consider the buying cost, in the event that the cost can be lowed, then it’s advisable to get such a deal.
One opportunity that Emirates Airline is having is globalisation; the world is becoming a global village; for this, transport and communication networks are having an increased demand. The company being a player in the industry is likely to enjoy high demand of its services so, when strategic decisions and alliances are made, then the company can tap in the market effectively.
Another opportunity that faces the company is an increase in international trade. Demand for cargo and passenger transport is on the rise, thus the acquisition of the new Airbus A350XWB will be of benefit to the company.
As a cost management policy
Other than the new Airbus A350XWB being larger in capacity, the plane is expected to be fuel efficiency and accustomed to the needs of the customers. The efficiency of the plane is likely to work for the benefit of the company; with the new plane, Emirates will be able to offer high quality services at lower prices.
The airline industry is facing challenges coping with increasing fuel costs, with the new asset; the company will offer quality and still maintain operational costs as low as possible.
For customer service and products/services differentiation
The contract allowed Emirates to negotiate with Airbus regarding the kind of plane that the company would like to have; the nature of the contract thus allows for customization of the plane to suit the needs of Emirates.
The plane will bring the services of emirates a notch higher with customers getting new experience with the plane. As part of the negotiation, Airbus is compelled to give special features to the plane; this further improves customer service at Emirates.
Customers are the backbone of a company, the airline industry customers are rational thus they choose a carrier that suits them; when emirate Airline acquires the new Airbus A350XWB, it will improve its services to customers. The plane will assist the company remain competitive despite price wars among airline companies; it will be able to offer quality services at a low cost.