Emirates Airlines’ Internal and External Factors Case Study

Introduction

Strategic management entails the establishment of long-term objectives and goals based on the vision embraced by the organization (Hill, Jones & Schilling 2014). For instance, if an organization identifies diversification as its strategic plan, all the decisions and operations it undertakes need to focus on diversification as the main aim. Thus, the integration of a strategic management approach to decision-making is crucial since it fosters the prioritization of decisions that result in the attainment of long-term goals and objectives (Morschett, Schramm-Klein & Zentes 2015). Nonetheless, several internal and external factors influence the effectiveness of strategic management in an organization. Thus, this paper concentrates on the various aspects that affect strategic management in contemporary corporate environments.

Articulation of the Mission Statement

The mission statement should be precise and clear since all stakeholders need to understand it before putting their inputs towards its realization. The mission statement is also informative and inspirational to the important stakeholders, including customers and employees (Dess, McNamara & Eisner 2016). For the enhancement of precision and clarity, the mission statement needs to avoid including monetary amounts, numbers, percentages, ratios, goals, or objectives. Instead, the mission statement should embrace a qualitative approach that communicates about the company’s techniques, strategy, and operations.

The inclusion of pecuniary amounts, statistics, fractions, ratios, or objectives in the mission statement makes it less inspirational. Employees and customers find inspiration in well-articulated words and phrases that provide information about what the organization intends to become in the future (Hill, Jones & Schilling 2014). Thus, the inclusion of quantitative elements in the mission statement renders it less motivating.

Further, the mission statement needs to be realistic. As such, the statement should communicate a pursuit that is achievable to stakeholders. The realistic nature of a mission statement makes the audience believe in it, hence committed to its realization. The inclusion of numbers, ratios, and figures among other quantifiable components may make it appear over ambitious and unrealistic.

Moreover, the integration of quantitative components in a mission statement undermines its flexibility (Dess, McNamara & Eisner 2016). The dynamism of the organizational environment requires companies to consider the regular alteration of their approaches to coping with new trends. As such, numbers, ratios, and percentages among other numerical representations create rigidity in the mission statement.

Political Trends Affecting Emirates Airlines Significantly

The airline sector plays a considerable role in streamlining transport. Political differences usually affect the operations of airline companies since security issues create disruptions (Morschett, Schramm-Klein & Zentes 2015). The recent political skirmishes in the Middle East have affected the operations of Emirates Airlines, resulting in increased costs. For instance, the recent limitations on the Yemen airspace, owing to the political disruptions caused by ISIS, triggered Emirates Airlines to use longer routes, thereby making the airline company incur greater operational costs.

Besides, the political turbulence experienced in the Middle East affects oil prices (Hill, Jones & Schilling 2014). The fluctuation of oil prices destabilizes the cash flows of players in the air travel sector. Particularly, the falling prices of oil in other regions that are not affected by political tensions in the Middle East has made Emirates airline experience higher operating costs compared to its rivals (Dess, McNamara & Eisner 2016). The oil price issue has undermined the competitiveness of Emirates Airlines on several occasions. Thus, there is a need to establish a strategic plan that can facilitate the adaptation of the company in its political environment. Additionally, the dark political trend experienced in the Middle East affects the tourism industry adversely. Tourists and business people avoid destinations that are marred with political conflicts combined with religious extremism. The case influenced Emirates to record low passenger numbers traveling to destinations such as Dubai, thereby straining the profitability of the leading airline player significantly.

Staffing Strengths and Weaknesses

Staffing is one of the crucial aspects of managing an organization. Having a strong staffing approach is essential for spearheading the productivity of the workforce. An example of a company with a strong staffing approach is Delta Airline Inc. The airline’s player embraces the essence of creating a diverse workforce to meet the varied needs of workers from different backgrounds (Dess, McNamara & Eisner 2016). The accommodation of different employees is crucial for bolstering their productivity in such an industry.

The Emirates airline is also commended for its efficiency in customer relations and service (Hubbard, Rice & Galvin 2014). The excellent service provided by the employees denotes the job satisfaction they realize. The provision of services to customers promotes the business excellence element of operations. Dish Network Corp. is one of the companies that display weaknesses in its staffing approaches. Employees working for the streaming industry player complain of long working hours without holidays (Hill, Jones & Schilling 2014). Compulsory overtime undermines the welfare of the workers and consequently their productivity. Dillard’s Inc. has recently been under fire for offering poor sales incentives to its employees. The retail industry player compensates its employees based on hourly sales instead of introducing commissions. The issue demotivates employees, thus undermining their productivity.

Market Penetration, Market Development, and Product Development

Market penetration infers to the increased sales an organization acquires by enhancing its competition with rivals to improve its market share (Hubbard, Rice & Galvin 2014). Huawei is one of the smartphone companies that have seen considerable penetration in the recent past denoted by 7.3% market share in 2015 from a 5.5% share in the previous year. The penetration offers stiff competition to its top rivals, namely, Apple and Samsung.

Market development entails the establishment of a business strategy that concentrates on fulfilling the needs of new market segments. In the recent past, PepsiCo, Inc. introduced an array of nutritious beverages to fulfill the dynamic needs of new customer segments, thus posing stiffer competition to Coca-Cola. Consequently, Pepsi engaged in market development by providing beverages to the health-conscious segment of its market.

Product development infers to several steps adopted by a company to facilitate the designing and establishment of newly rebranded offerings. The film industry has seen drastic changes in the way the product appears to customers. In the recent past, DVDs replaced tapes before online platforms were established to facilitate the accessibility of films in softcopy versions. Product development makes the product or service suit the changing trends in the market.

The BCG Matrix

The BCG matrix facilitates the assessment of product lines to evaluate business growth opportunities. ‘Cash cows’ and question marks form two of the BCG matrix quadrant. Investors find ‘cash cows’ more desirable relative to the question marks. Large companies in stable and competitive markets represent the sources of income. On the other hand, companies in markets with high growth potential, yet having weak competitive edges, represent the question marks (Dess, McNamara & Eisner 2016).

The potential of reaping profits in the ‘cash cows’ is usually higher compared to the question marks situation. Importantly, ‘cash cows’ operate in stable markets. Thus, they have a significant return on investment. Conversely, the weak competitive edge of players in the question marks quadrant makes it difficult for them to make substantial profits amid the potential for growth in the market. As such, the lack of competitiveness disappoints investors.

Nonetheless, several limitations make the BCG matrix ineffective in analyzing product lines with respect to business opportunities. The matrix disregards the influence of synergies in fostering the performance of business units. Additionally, the BCG matrix is biased since it regards high market share as the sole actor that triggers business success. Further, the matrix identifies growth as an important indicator of attractiveness in a market. Moreover, the ‘dogs’ could also earn as much as their counterparts in the ‘cash cows’ quadrant (Hill, Jones & Schilling 2014).

The Divisional Structure of Operations

I would prefer employing the divisional structure of operations in the three restaurants I would open after graduating. The divisional structure of operations entails the splitting up of operations into units that focus on specific aspects of the products or services offered by the organization. The divisional structure offers the individual functional units with an opportunity to conduct their research among other efforts to foster success (Dess, McNamara & Eisner 2016). The divisional approach is applicable in the operations of at least three restaurants, owing to its strengths in a competitive business environment.

The divisional approach to operations fosters accountability. Clear accountability of the different units in the restaurant instills a sense of responsibility. The accountability of the different departments that make the restaurants will be integral in assuring that every manager pursues the success of his or her department, thus resulting in the overall success of the businesses. Further, the divisional approach to operations is integral since it inspires departmental coordination. The cohesion that results from the accountability of different departments of the restaurants has the potential of reinforcing coordination. Departmental coordination is important in the running of businesses such as restaurants, owing to the stiff competition in the industry.

The divisional approach also broadens the skills development aspect of the workforce. Collaboration between departments allows team members to engage in inter-professional relationships that provide opportunities for broadening skills. In turn, the improvement of skills would foster the productivity of the employees, thus steering the success of the three restaurants.

Variables in a Business Code of Conduct

The code of conduct in a business environment sets the rules that guide the behavior of employees as they execute their roles and responsibilities. The code of conduct or ethics is made up of several variables that make it effective in shaping up the organizational culture. Thus, I would consider the following variables in the establishment of a business code of conduct:

1. Principles also form an important element of the business code of conduct (Hill, Jones & Schilling 2014). The integration of principles in a code of conduct reinforces the values upheld by the business organization. The principles usually seek to underline the aspects of customer satisfaction, profitability, and unceasing improvement. They offer employees with the credos they need while executing their tasks.
2. The inclusion of values is important in a code of conduct for adoption by employees in a given business organization. The values define the approach to dealing with different stakeholders, including customers and suppliers. Importantly, the values underscore the essence of respectful interactions among employees and other stakeholders in their day-to-day undertakings.
3. The establishment of the business code of conduct would also consider the integration of the management support aspect (Hubbard, Rice & Galvin 2014). Particularly, this management support aspect provides the employees with platforms of reporting cases of misconduct without exposing the privacy of the reporters. As such, the variable would be essential in fostering the commitment of employees while fostering their conduct.
4. The inclusion of the personal responsibility variable is also essential in a business code of conduct (Frynas & Mellahi 2015). The personal responsibility aspect underlines the moral and legal consequences of failing to observe individual accountability. This aspect is crucial for reinforcing the core values of the business organization. Further, the variable ensures that employees account for their daily actions.
5. Moreover, I would also include the compliance variable in a business code of ethics. The adherence to the rules provided in the code of conduct facilitates the compliance of the organization with the rules and regulations governing the industry. Observing the legal requirements when conducting business is important in any given environment.

Reference List

Dess, G, McNamara, G & Eisner, A 2016, Strategic management: Creating competitive advantages, McGraw-Hill Education, New York, NY.

Frynas, J & Mellahi, K 2015, Global strategic management, Oxford University Press, New York, NY.

Hill, C, Jones, G & Schilling, M 2014, Strategic management: Theory, an integrated approach. Cengage Learning, Upper Saddle River, NJ.

Hubbard, G, Rice, J & Galvin, P 2014, Strategic management, Pearson. Australia.

Morschett, D, Schramm-Klein, H & Zentes, J 2015, Strategic international management, Springer, New York, NY.

Rothaermel, F 2015, Strategic management, McGraw-Hill, New York, NY.