Having been thought to be the national airlines of the united states, Etihad Airways stands tall as the main airline service provider in UAE ever since its establishment by Royal Decree in Abu Dhabi in the entire year 2003. The airline company holds the distinction of becoming the quickest growing airline company in commercial aviation. The business has a Board of Governors to govern it with HH Sheikh Hamed bin Zayed Al Nahyan as its chairman. The business's accolades know no bounds after having won the 'World Leading Airline' Award in the entire year 2009 by the earth Travel Awards. Also, the business holds the distinction of being awarded as the 'Best Long Haul Airlines' at the 2010 Business Travels Awards. Moreover, in '09 2009, Etihad was presented with the award of the 'Best Marketing Strategy' by the center East Business Achievement Award'. With so many awards in its bag, it is high time for the business to follow a market penetration strategy and increase more customers to its current tally. The business is headquartered at the capital city of UAE, Abu Dhabi. So far as the Asian destinations are concerned, Etihad covers markets in the Indian sub-continent, Middle-East and South East Asia. Fortunately for the business, all these markets are on a growing spree in conditions with their GDPs, which facilitate the utilization of airlines especially in the first class and business class segments. The business officials have guaranteed promptly performance of 91% of Etihad Airways. The business's earnings collection for 2009 was more than 2. 3 billion USD. The marketplace penetration spree in the company can be seen from the actual fact which it reported a growth of as high as 24. 5% in passengers' earnings when compared with 22% which is the industry average. (Etihad Airways, 2010)
Product Value Proposition: A Comparison with the competitors
Threat of Substitute Products: The competition in this category have been recognized as Jet Airways and Oman Air. According to the recent global recession, it has turned into a mind-set for all the companies to opt for flying at low costs. Actually there are passengers who will be ready to go for flights that offer no fringe benefits either.
Threat of Rivalry: The competition in this category are Emirates Airlines, Air Arabia and Fly Dubai in terms of market share which is the largest threat to the business in conditions of its market penetration strategy. As these airline companies are increasing their range of fleets every day, competition is getting even tenser.
The Risk of New Entrants: With UAE and its own Asian counterparts advancing at a growth rate much better than elsewhere, there is a huge likeliness that new commercial airline companies would open in sometime. So, this would increase the various reasons for that your customers would prefer switching.
The Bargaining Power of Suppliers: With Boeing and Airbus being the sole two suppliers in the category, there may be a large amount of dominance from these suppliers. This can only be reduces of the business succeeds in its marketing penetration spree and buys more fleets as necessary.
The Bargaining Power of Customers: That is comparatively low in the aviation industry. The clients generally need to pay the purchase price that is asked. Here, price reduction can be a good way for better market penetration. (Etihad Trumps its Competitors, 2010)
As we have seen in the previous analysis, the direct rivals of Etihad Airways are Emirates Airlines, Air Arabia, Fly Dubai, Qatar airways, Gulf Air and Oman Air Airlines in UAE and other Middle East regions. As far as its other Asian competitors are concerned, Singapore Airlines also poses a major threat. The biggest of most is Emirates Airlines.
Also, the business has lots of indirect competitors. They can be in Telecom Industry and also Holiday Cruise Line Industry. Telecom industry has made communication so easy that video calling is so easy and cheap that people would not need to visit places for meetings. Some Holiday cruise Line industry players like Carnival Cruise Liners and Star Cruises took up the work of not only transportation but providing hotel facilities and other amusement facilities, beyond Etihad Airlines' reckoning. So far as direct competitors are worried, with Emirates, customers receive larger value for this being more than 25 years old on the market, for Air Arabia, it is because of its cost leadership strategy while the other competitors offer same value as Etihad Airways. This needs some change of strategy by the business. (Ranjan, 2002)
We can easily see that for both Business Class and First class which the company quotes as Etihad Pearl Business and Etihad Diamond HIGH GRADE, the company has a good degree of market share immaterial of the actual fact whether the market growth is high or low.
Marketing Mix Strategies
To reach break even by the finish of 2011 by decreasing costs at the same time increasing yield.
To maintain customer value throughout.
To start a status quo development of providing luxury at least costs.
Increase profits by more than 5-10% each year.
Increase customer value by 8-10% by the finish of 2015.
Increase the amount of staffs by 15%.
Also, the company can increase inbound holidays to Abu Dhabi by 2030 which would make it the only real player on the market.
As far as the first class and business class is concerned, Etihad Airways segregates its services as Etihad Diamond First Class and Etihad Pearl Business Class. That is integrated with actual staff provision and the multi-cuisine availability up to speed. The company's augmented products give it maximum competitive advantage. It has been diagrammatically represented in the subsequent diagram. Abu Dhabi being the centre of tourism for most, gives the company a spot advantage. The business has chauffeur service for its customers not only at Abu Dhabi airport but other airports as well where in fact the company's airlines operates. That is especially for the 1st class and business class passengers. Also, the company provides 24 hrs departure facilities in support of one hour early arrival as against the normal 3 hour early arrival in other company's flights.
The potential product of Etihad Airways will not include lounge which may be developed over time in order to draw more customers in the targeted segment. The business also doesn't have the baggage at the entranceway grab facility. Once this is provided, it might be more convenient for the passengers to avail the facility. Also, hot-towel can be provided to passengers at departure to match the likings of 1st class and business class passengers.
The company has market penetration pricing strategy to be able to raise the market share in United Arab Emirates. If the company can deliver the same services at the same price when compared with Emirates Airlines and British Airways, it includes chances of achieving its break-even as it targets. Once, it has been done, the company can boost prices by about 5% and fall in the same group of customer perception as Emirates Airlines. In this manner the customers would also not consider the business as a low cost carrier which could damage the image to be a first class or business class carrier. (The Marketing Mix, 2002)
Etihad Airways would not only avail booking facility at its main offices but also increase sales in general throughout the Asian region that this targets. Also, it can raise the level of ticket distribution at its corporate website. This might enable the busy passengers of 1st class and business class to customize their air travel. The drawback in this regard is that the company does not have many sales agents. The company should anticipate appoint more sales agents and eventually increase its sales.
The company's staffs have been highly acknowledged throughout its flight services. The only real problem has been in a certain case whenever a passenger was treated inferior to an employee when he required a better seat to facilitate his long-broken leg. Such issues have to be worked after otherwise with the kind of education and courtesy; the company has high prospects especially in the very first class and business class sectors. The company has scored 91. 5% in a survey conducted Ethos Consultancy on customer support benchmarking. If the business wishes to help make the most out of the survey, it will further provide better training and development to its staff. Also, it must be considered that no matter just how many flights the company increases, a customer would always go for better hospitality which becomes even more important in the very first class and business class services. The employees can work as catalysts to word-to-mouth marketing.
Sales Promotion: THE BUSINESS'S customers prefer the option and bundled pricing efforts and the steady updated facilities regarding offers in this respect. This might help a long way in increasing market penetration.
Direct Marketing: By taking part in a number of travel and tourism events, the company's staff spread direct word-to-mouth marketing which includes been a matter of great appreciation.
Sponsorship: The Company has also been between the pioneers in sponsorships by sponsoring in large sums at events like Abu Dhabi Grand Prix as well as the Ferrari F1 team. The motorsports fans of the company were highly delighted at this step. Also the company's involvements at events like Abu Dhabi Golf Championship, Gaelic Athletic Association (GAA) have been appreciated largely by 1st class and business class customers.
The following graph shows the position of Etihad Airways as compared to its competitors:
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