This paper explores the bing air power company “ Fly Dubai ” in a mode that analyzes and evaluates their current operations and attempts in a mode comparative to strategic direction. Further to this, the paper suggests that Fly Dubai is still comparatively immature in the market and requires a significantly more sum of experience before it can be labelled as competitory with other companies in the industry- viz. , Emirates Airlines, Etihad Airlines and Air Arabia, SAMA, NAS in Saudi Arabia.
The first portion of the paper comprehensively analyzes the air power industry at the present, and this serves purpose to derive cognition about the competition and the market before a constructive and logical analysis can be made about Fly Dubai. Therefore, of import factors such as the external environment, internal environment and Porter ‘s Five Forces are discussed.
The 2nd portion of the paper is straight comparative to Fly Dubai every bit good as their main rivals in the industry. Here, certain Generic schemes are analyzed and proposed to indefinitely assist the company derive a competitory advantage. Another of import model we used is the Product Growth Matrix, which analyzes the state of affairs that they are confronting, and we have proposed that they use Market Development.
Ultimately, the paper ends with a decision and recommendations, which we believe would outdo, back up Fly Dubai.
Separate 1- Industry Analysis
This paper is focused on developing Strategic Management for a major public air power company and their enlargement into the industry with a new scheme to give them a competitory advantage against their competition. Unlike a concern program, a strategic direction focuses on the two major factors that surround strategy of concern development for the related industry, and the company. Since the nucleus value of a concern is bring forthing acceptable returns, this paper concentrates on the methods that they peculiarly went through in order to accomplish it.
Although strategic direction is progressively of import for the success of merchandises, it is besides of import to set up that the industry is fleetly go uping with fresh thoughts continually doing a consumer ‘s life comparatively easier and more enjoyable. A service-based concern is extensively labor-intensive, and to sell the service requires an first-class concern development squad and hence, it is besides necessary to fruitfully market your employees and their accomplishments in order to derive more concern.
Therefore, in this paper, we will be analyzing the public air power concern based in Dubai that merely concentrates on renting riders through the usage of their Low cost bearers. This company is known as “ Fly Dubai ” . Our Strategic Management analysis will reason theories and models normally used in the corporate universe today such as PEST Analysis, Competitor Analysis, SWOT Analysis, Porter ‘s Five Forces, Porter ‘s Generic Strategies and many more. Ultimately, we will set up a figure of consequences and based on it we will supply several recommendations and a decision.
The Aviation industry in the UAE developed in 1985 when Emirates Airlines was founded after Gulf Air reduced their flight services to Dubai. This is when Sheikh Ahmed bin Saeed Al Maktoum took action and started the company in order for citizens in the UAE to be able to go more often. In October 1985, the company flew their first paths from two leased planes. Nowadays, many other air hoses have emerged in the UAE to vie with Emirates including Etihad Airways, Air Arabia and Fly Dubai. ( AFP, 2009 ) .
Not with standing the increased success in commercial air hoses looking in the UAE, Fly Dubai differs mostly due to the fact that it is a cost effectual air hose. Harmonizing to Saif Mohammed Al Suwaidi, Director General of GCAA said: “ Air operations in UAE so important growing in the first one-fourth of 2010 ” ( n/a, 2010 ) . The Middle East Business Aviation Association ( MEBAA ) has confirmed that the figure of concern jets in Middle East part have grown to about 500 aircraft in the past few old ages demoing a growing of about 30-40 % . Further to this study, the Aviation industry is expected to turn at 15-20 % yearly over the following four old ages to go a multi-billion dollar industry. It besides assumes that from the twelvemonth 2012-2018 the MENA part will have 20-25 % of the new concern amounting to about ?300 billion. ( n/a, 2009 ) .
The first general method, which is normally used in the analysis of the external environment, is through the PEST Analysis. It is progressively of import to understand the nature of external milieus as they inevitably play a major function in set uping the company ‘s operations. Fly Dubai ‘s PEST projections can be seen on the following page.
Deductions on the Aviation Industry
Low authorities intercession
Supports foreign direct investings which leads to political stableness
In respects to locally owned companies, the authorities does non step in and really supports their operations
Investings help increase the state ‘s GDP which is favourable for the authorities
Inflation over the past few old ages has led to more costs
Stable involvement rates and no revenue enhancements
Rise in GDP and disposable income
GCC unemployment rate had decreased from 12.4 % to 10.5 % ( McGinley, 2010 )
Inflation has led to higher labour and operating costs, but besides shows the enlargement in the UAE
This has led the concern being able to borrow more without the stew of revenue enhancement and increased cost
The state ‘s growing in GDP and disposable income mean that consumers have more money to pass on Aviation services
This gives a positive mark to increase liquidness in the market.
Turning societal tendency in the Aviation industry
Young work force
Low cost entreaty ( n/a, 2010 ) .
Increased figure of touristry
More people are utilizing chartered services which indicates an overall industry growing
A younger work force will cut down costs for pensions
Because of the recession, people have decreased their disbursement by apportioning cheaper air hoses
Tourism will increase by 40 % in following 3 old ages. ( n/a, 2008 )
New plane theoretical accounts available in the market
Better operational engineering
These theoretical accounts which companies have ordered do them more competitory as their service is more desirable by holding modern engineering
Business operations can run smoother as engineering helps them cut down costs and better quality of the service
LCC do n’t concentrate on gross revenues offices for take downing their costs, so they focus on their web site and do it more efficient for them and clinets.
Strategic Group Map
As we can see from the graph above, the two measurings we have chosen for our strategic group map is merchandise quality and monetary value. The graph above shows us that Emirates air hoses and Ettihad air passages have the biggest market portion and they are viing against each other. As Emirates Airlines announced in their web site, “ that they aim to increase their market portion to 70 % by 2010 without compromising their repute for quality ” . ( Emirates, 2010 ) . Although they do n’t get down from the same point, but Ettihad Airlines are seeking their best to vie with Emirates by giving better offers and monetary values to same finishs, so people got attracted and did n’t mind the 45 proceedingss drive to Abu Dhabi for the same sort of quality and cheaper monetary values. Now these two companies are indirect rivals for Fly Dubai. The major rival for Fly Dubai is Air Arabia, where they launched in Sharjah Int. Airport before Fly Dubai was established. So, people were cognizant of Air Arabia and tried the experience of winging on a low cost bearer. That ‘s their major rival, and they have other rivals but from different states such as, Al jazeera air hoses where they are based in Kuwait, and Fly Nas and Sama air hoses where they are based in Kingdom of Saudi Arabia.
Five Forces Analysis
Michael Porter, the adult male behind the theory of distinction provinces that a concern needs to pass more money on making these values added merchandises or services in order to do it comparatively obvious that the merchandise or service is different. ( Cordle, 2008 ) .
Michael Porter developed the Five Forces Analysis, which chiefly helps companies in covering with internal and external competition from clients and providers every bit good as from other rivals. It besides establishes the hazard of the current merchandise or service offered. This is all incorporated into a diagram, which is illustrated below:
Menace of new entrants
Merchandise distinction: Medium as the air power industry has been rather advanced on merchandise development and has used all the thoughts available- nevertheless ; they have besides proven to be strong competition and adapted similar characteristics every bit good as their ain unique characteristics.
Capital demands: High as the engineering used is invariably altering, developing and turning which would warrant the demand for high capital technological assets and new aircraft theoretical accounts
Cost advantages independent of size: High as costs by and large vary depending on how big the constitution is, how many staff members are employed, and the sum of clients that use the services or purchase the merchandises
Entree to distribution channels: High as the air hose companies can get clients through different agencies such as the cyberspace, travel bureaus, gross revenues calls and from their ain offices
After this analysis we can see that the menace of new entrants is “ low ” because the industry is difficult to come in.
Dickering power of purchasers
Concentration of purchases: High as the sum of purchases is decided by the purchaser and finally determines gross revenues gross
Options and replacements: High as there are a big sum of bearers that consumers can take from and all have entree to
Monetary value or cost sensitiveness: High as consumers would by and large choose a concern that offers a just otherwise inexpensive monetary value for the same merchandises
Importance of quality: High as consumers have adapted to a certain gustatory sensation and they invariably assess merchandise quality and client service to find their bargain
Sum of money saved by consumer: High particularly during the fiscal crisis where nest eggs and endurance is has grown to be highly of import. ( n/a, 2009 ) .
Here the bargaining power of purchasers is “ high ” .
Menace of replacement merchandises
Monetary value restrictions: Medium as this affects the highest sum they are able to bear down to consumers and finally demonstrates the sum of gross they will do
Ability to upgrade: High due to the rapid promotion of engineering and the debut to newer theoretical accounts of aircrafts from different companies
Costss in production: Medium as engineering can enable cheaper production but they still employ a big sum of staff in the part
Monetary value of replacement: High as this can negatively impact each companies gross revenues growing if another company additions clients due to cheaper prices- this finally seems to profit Fly Dubai more due to their cheaper monetary values
Performance and quality: Low as Low cost bearers are new companies that merely started up a few old ages ago and their range in the concern is low. That is, they do non wing to many finishs and they do non hold a broad client base at the minute. It is high for companies such every bit Emirates as they have experience, and their high quality trade name name and services is hard to fit
Here the menace of replacement merchandises is “ Moderate ” .
Dickering power of providers
Low cost bearers purchase their complete air fleet from providers such as Boeing and Airbus. They so manus this to third party companies to input amusement systems and supply the inside for the different categories, which finally create value-added comfortss by utilizing this method.
Here we can see that the bargaining power of providers is “ Moderate ”
Rivalry among viing houses
Numerous rivals: High competition as each company is seeking to capture the same mark market and hence use their advertisement, selling and publicity techniques
Industry growing: High-the market has shown that this industry has grown significantly over the old ages and more people are deriving entree to going
Differentiation: Medium as there is merely a bound to the invention that can be done on an aeroplane. However, Low cost bearers have incorporated many other constituents on their plane such as amusement, shopping and many more.
Sum of fixed costs: This can be determined by factors such as rent, rewards and capital outgo. From this, we can state that it is high.
Height of issue barriers: Low for Low cost bearers as they control a comparatively little market portion, but it is high for Emirates and Etihad who have a huge figure of clients which they cater to.
Here we can see that the Rivalry among viing houses is “ Moderate/high ” .
In decision, we see after analysing the five forces, we can state that the market is moderate to high, which is difficult to acquire in because of the troubles, high get downing cost and the experience needed to come in to air hose industry.
Core Competencies/Key Success Factors
A nucleus competence is defined as “ a company ‘s basic concern and country of greatest expertness that provides consumer benefits, non easy for rivals to copy and can be leveraged widely excessively many merchandises and markets. ” ( Campbell & A ; Luchs, 1997 ) Basically, a nucleus competence should carry through three things:
Concrete on the popular finishs to spread out their market.
Significantly better the undermentioned properties.
Availability / Scheduling
Terminal / Ground Services
Prove to be disputing for rivals to copy their cost leading scheme.
Based on this, air hoses would hold three major competences to derive a competitory advantage over each other in the part.
The first nucleus competence that low cost bearers will hold is related to their monetary values, which is significantly cheaper compared to other air hoses in the part. To carry through this, they will necessitate to place and analyse their operations and costs exhaustively to see where they can minimise their costs so that their low menus will non interrupt their ability to bring forth net income. This will give them a competitory advantage, as clients would prefer low cost air hoses, and retain their trueness to the trade name.
The 2nd nucleus competence they will offering extra services to clients. By and large, people associate a low-priced air hose with no service- but Low cost bearers will distinguish them here and offer a particular service by adding extra costs for the service.
The last nucleus competence will be the huge assortment of finishs they travel to. Although the companies are still comparatively little now- they will finally spread out and wing to a big figure of states in the different parts which will pull more people to utilize their service for less inexpensive monetary value from the other air hoses.
Industry Environmental Scan
External Opportunities and Menaces
Lack of monetary value competition in the UAE market: Since most of the air hose bearers are comparatively high in costs compared to others in the universe, local air bearers do non prosecute as actively in monetary value competition. Fly Dubai nevertheless has started with this.
Potential to pull clients from the full part: Since the other air hose companies in the GCC do non frequently fly internationally to popular finishs, the local air bearers in the UAE can pull them as they do wing to these countries.
Expansion into international markets: Due to their value added services and province of the art planes, they appeal more to clients and hence if air hose companies in the UAE situate themselves more internationally, they can derive more clients.
Contract to corporations and executives: The air hose companies can farther increase the sum of frequent circulars and derive more gross by aiming companies that are situated around the GCC. In peculiar, transnational companies are 1s that have executives that need to constantly travel, and therefore they can take advantage of this state of affairs.
Increasing costs in the air power industry: Due to the addition in engineering and the value added services they provide, costs have become progressively expensive for the air power industry. Furthermore, the costs of labour are besides rather high which adds to their entire disbursals.
Deficit of skilled labour: In some countries, the air power companies here lack skilled labour to execute certain undertakings such as aircraft technology and care, selling and other activities. Emirates is the lone company who has skilled employees in these sections whereas others are non as efficient.
Damaging impacts on the environment: The emanation of C and nursery gases from the aircraft fuel has proven to be damaging to the environment and therefore companies need to be cognizant of this and someway forestall it.
Falling monetary values: In certain industries such as existent estate, monetary values have fallen drastically, and this leaves corporations with less money to pass on services. As a consequence, companies have cut back their travelling costs.
Rivals increasing: Due to the increasing sum of free zones in the UAE, transnational companies have found it convenient to get down their developments in the part as it is low in cost. As a consequence, there is an addition in competition from other air hoses internationally.
Industry Internal Scan
Internal Strengths and Weaknesses
Support and backing from authorities: The UAE authorities owns and controls all of their air hoses and hence they all gain fiscal support.
Diversified and province of the art planes: The planes, which they own, are newer and significantly better than many other air hose companies around the universe.
Popular and turning companies: The air power industry consists of the few primary companies offering flights and since their services are comparatively good, this improves their trade name image to the population.
Value added services provided to all clients: The service incorporated in the UAE air hose companies are significantly better than others around the universe
Memberships: They all have ranks in outstanding constitutions such as Middle East Business Aviation Association which improves their trustiness
Based largely in UAE which limits their consumption of clients from abroad and around the part: Most of the aircraft companies focus entirely on renting clients in the UAE which limits the possible concern they could be doing
High employee turnover due to low morale: Labor Torahs are invariably being refined in the UAE, as it is still a underdeveloped state. Further to this, they require more experience human resources staff in order to actuate employees to bask their occupation and remain at the company every bit good as executing extremely
Business chances such as lading transporting are non ever taken advantage of and are expensive: The UAE is a concern hub and many companies around the universe are set uping themselves. However, most of these companies have limitations so they can non bring forth many merchandises and local companies merely produce merchandises for the UAE- the remainder is imported. This greatly increases the sum of costs as exported goods are expensive, and they do non partake in exporting their ain merchandises, which could potentially gain them more gross.
Part 2- Company Strategy Analysis
A mission statement may be identified as the intent behind a company ‘s being. The purpose is to make an internal image towards employees and an external image towards the public bespeaking their purposes of runing the concern, every bit good as what they wish to carry through. Fly Dubai does non hold a mission statement on their web sites, but from the words of the president ( Sheikh Ahmed bin Saeed Al Maktoum ) , he mentioned the followers:
“ Our mission is to convey some two billion regional dwellers low-cost, efficient and flexible travel options to and from Dubai. ”
Nine Essential Components of a Mission Statement
Concern for Survival, Growth and Profitability
Concern for Public Image
Concern for Employees
Judging by the assorted indispensable constituents of a mission statement, it is clear that Fly Dubai still needs to work on developing theirs more. ( FARNBOROUGH, 2008 ) .
Fly Dubai Generic Strategy
Basically, a company that excels in the industry with exceeding public presentation that output significantly larger net incomes than their challengers, they are said to possess a competitory advantage. There are two common schemes that allow a company to make this end, and this can be identified as:
Niche Differentiation Strategy ( CAPA, 2009 ) .
In order for a company such as Fly Dubai to implement a Cost Strategy, they need to be able to present the same benefits as viing air hoses, but should run under a lower cost. In the research surveies on Strategic Management, the resource-based position is a well-established principal that helps a concern addition competitory advantage by working on their Value Chain and implementing value-added principals. In the following subdivision, I will depict Fly Dubai ‘s value concatenation, which will let us to see how they gain a competitory advantage.
The Value Chain
The value concatenation comprises of a figure of activities that are normally found in concern operations, and is identified as of import in deriving a competitory advantage and development and prolonging stockholder value. The diagram below best represents the value concatenation and the important inputs that are analyzed:
Inbound Logisticss: This refers to how Fly Dubai receives their air power merchandises and services before administering it.
Operationss: This refers to how Fly Dubai uses their resources and alter it into a service. Their resources are chiefly their fleet of planes, which are docked at several international terminuss, and in this method they pick up and drop off riders.
Outbound Logisticss: This refers to the channels of distribution Fly Dubai uses to efficaciously sell their flights to clients. They largely use on-line engagement, travel bureaus, and contact clients straight, or clients can reach them via their office.
Selling and Gross saless: This refers to the designation of mark markets, which bring Fly Dubai gross revenues gross. Fly Dubai carries out extended market research to make their clients who are interested in low carnivals. Besides, they have to make trade name consciousness among their clients since they merely launched. This measure is of import to spread out their market portion. Besides, through out their selling research, they can develop new attractive bundles as portion of their publicities. It will be hard to develop big selling run because most of their money will be as operational disbursals. Furthermore, gross revenues are more cost effectual when they make it through Internet. However, consumers in Middle East part are non used to purchase from Internet.
Service: This refers to the post-purchase activities that guarantee client satisfaction. Fly Dubai issues a questionnaire, which they can follow up with clients on the quality of their merchandises and client service. Besides, they added extra services to their clients such taking seats when buying tickets. Those excess services will add more value to Fly Dubai image. In add-on, those services will bring forth a good promotion for the company through word of oral cavity.
Firm substructure: Fly Dubai ‘s house substructure ensures that certain policies and processs are followed to back up the primary activities. Fly Dubai operates from Dubai International Airport, Terminal 2. Dubai Government developed high substructure for Dubai Airport to supply first-class services to riders. Since Fly Dubai to the full owned by Dubai Government, they have all the necessary installations under their control.
Human resource direction: Fly Dubai uses extended human resources patterns to enroll the best employees, and efficaciously trains them, develops them in certain company places and eventually gives them compensation for their difficult work through wages, benefits, fillips and motive. However, deficiency of experience is major issue in this new company. So, they supported by Emirates Group to get the better of this failing. Harmonizing to Arabian Business that Fly Dubai has received more than 11,500 applications from flight and cabin crew. ( Sambidge, 2009 ) . This shows the immense sum of appliers who want to work with this company because they believe that it has bright future because of the repute gained from its female parent company “ Emirates Group ” .
Technology development: Fly Dubai uses engineering to take down their cost by selling tickets through their website www.FlyDubai.com. Adding more characteristics to assist clients to publish their embarkation base on balls and to take their place location by excess fees. Analyzing client studies to assist with the general support of the company. Their engineering is besides developed to supervise gross revenues and create functional studies.
The distinction scheme is when a company can successfully boom in the market while bear downing premium monetary values to their consumers for merchandises or services. Basically, leveraging either a better criterion of service quality towards consumers, or holding a better merchandise public presentation does this. Fly Dubai can be differentiated from other rivals by adding flights to popular finishs that have great demand from their mark market. Since their market is fragmented, distinction is of import to pull more clients and to spread out their market portion.
There are several different ways in which Fly Dubai gain a competitory advantage in this manner. It is renowned that they offer a great air hose service along with the most state-of-the-art comfortss and engineering for all categories, and people gather such information when a company expresses their distinction. The company does this in a figure of ways, and this includes:
Fly Dubai can utilize extended advertisement techniques in order to perforate the air power market and make a higher demand for their services. First, it is of import to observe that Dubai is one of the fastest turning tourist finishs in the universe. Their rapid enlargement in major industries has led them to rule the touristry market.
Another method, which Fly Dubai can utilize to derive a competitory advantage through distinction, is by offering lading services, cargo and logistics, technology services, and plentifulness of other subordinates which associate these services with the company. Therefore, this reflects positively on the trade name name.
Fly Dubai has won acknowledgment for their high service quality. They spend extended sums of their budget on the development of human resources, which finally leads to a better service quality, and this improves client satisfaction.
Value Added Features
Fly Dubai has a figure of value added characteristics, which fundamentally offers them more for the money they spend when winging with them. First, they have a service staff, which is guaranteed to please every client they serve. These characteristics contribute to client satisfaction and better trueness in the long tally.
One of the premier theories of analysis for a concern includes analysing the market in several footings that would assist them place ways in which they can better, but more significantly creates a construction in which a company can establish their merchandise lines on. This is known as the selling mix or “ the 4 P ‘s ” as it by and large covers the undermentioned four factors- merchandises, monetary value, publicity and topographic point.
Merchandise: The merchandise entails analysing the services that Fly Dubai presently offers to their clients and how it meets their demands. They are a public air power charter service that flies a mark market of consumers to a figure of states.
Monetary value: The type of services that Fly Dubai offers by and large have a high cost border as they are utilizing modern engineering along with the most knowing staff to transport out their operations. Therefore, we can set up that Fly Dubai uses a cost-plus pricing attack where they charge the cost of the operation plus a mark-up for their services.
Promotion: Presently, Fly Dubai uses many major signifiers of publicity, and they by and large rely on loyal clients and repetition concern to do their net incomes. They consider assorted signifiers of advertisement through media beginnings such as telecasting, wireless, newspaper, magazines, film, and Internet.
Topographic point: Their operations are run from their primary location, which is in Dubai, UAE. Although they are presently rather profitable and the industry has witnessed a big sum of growing, they have room for enlargement in the UAE and other GCC states as a start. Dubai is rapidly being recognized as a concern hub and Fly Dubai can work that market to be competitory and increase their overall profitableness.
When developing a Strategic Marketing scheme, it is ever of import to place the chief rivals and happen out information about their services and how much of a menace they are to your company in the market. The most efficient manner to make this is to compare their selling mix with Fly Dubai, which is seen below:
Emirates Airlines ( Indirect )
Etihad Airlines ( indirect )
Air Arabia ( direct )
They offer a scope of flights to assorted different finishs and have a epicurean trade name to talk of. They besides have cargo transit that is widely used by corporations.
This company offers similar services to Emirates but they do non concentrate on luxury and are limited to flights. Etihad has cargo services but the division is comparatively little
They offer similar services to Fly Dubai in footings that it is cheaper- but they are still more expensive. Furthermore, Fly Dubai has better planes.
Emirates has the most expensive monetary values in the part but they justify it due to the high value services that are offered
They offer somewhat lower monetary values than Emirates but their aircraft fleet is really limited and their services are less desirable
Their monetary values are comparable to Fly Dubai, but their services are non as good
Emirates advertises extensively and has many selling publicities which is seen throughout the media
They besides promote through similar agencies as Emirates does, but on a smaller graduated table
Air Arabia focuses on advancing more around trade shows and on the wireless more than anything
Operates internationally and UAE and headquartered in Dubai
Operates internationally and UAE and headquartered in Abu Dhabi
Operates in a limited international focal point and is headquartered in Sharjah
Market cleavage is critical in make up one’s minding which clients the concern wants to aim and consists of spliting the market into four classs:
Fly Dubai is based in Dubai and marks clients from there but in the hereafter hopes to spread out regionally and finally international.
Age: 20 old ages +
Life style: Families and persons with a budget
Income: Enough for going through Fly Dubai.
Fly Dubai emphasizes on their cost effectual monetary values for consumers on a budget while still offering services competitory to that of other air hoses
Persons looking for fast, simple, inexpensive and dependable air menus to go to different finishs around the universe
( Quick MBA, 2007 )
Product Growth Matrix
The Product-Growth Matrix ( besides known as Ansoff ‘s Matrix ) was created by Igor Ansoff and helps companies decide which scheme to utilize in their current market state of affairs, and their planning on how to travel frontward.
Market Penetration: Market incursion is when a company penetrates a market with current merchandises. To derive the advantage here it is of import to derive the rivals ‘ clients.
Market Development: This is when a well-known and constituted merchandise is change to aim a new market the company itself stays the same ; this is a scheme to gain more gross for the company.
Merchandise Development: A company with a market on its current merchandises might utilize this scheme to bring forth new merchandises.
Diversification: Diversification is a signifier of growing selling scheme for a company. It seeks to increase profitableness through greater gross revenues volume obtained from new merchandises and new markets.
Based on the current on-going tendencies of Fly Dubai, and by looking at the industry SWOT Analysis, we have deduced that there are two of these schemes that they could follow. The first would be Market Penetration, and the 2nd would be Market Development.
In the following subdivision we will discourse these two strategic options that Fly Dubai could utilize to leverage themselves in the market and finally spread out to go a larger company that caters to a larger section of the market.
If Fly Dubai uses the Market Penetration scheme, their purpose is to increase their market portion by selling a larger figure of flights. This scheme will assist people derive acknowledgment of their trade name more and increase the demand for their service.
Allows Fly Dubai to derive a higher per centum of their mark market
Additions rivals ‘ clients by taking their portion of the market portion
An increased degree of efficiency throughout the company.
By using this scheme, Fly Dubai will be able to bask increased economic systems of graduated table. More specifically, it could increase their negotiation power with providers
Trend towards Fly Dubai Fosters market incursion
It is rather possible for Fly Dubai to incur a high sum of outgo if they pursue this scheme.
This scheme can be boring and clip consuming as it needs to be done right instead than merely executing any undertakings to derive market portion.
If Fly Dubai choose to implement this scheme, it could be viewed or perceived as seeking a monopolistic attack. This could be a major restriction in the heads of its clients as they could hold a negative feeling of the company.
If Fly Dubai uses the Market Development scheme, their purpose is to shift Fly Dubai as being a market leader and known for more than merely a low cost air hose. They could particularly develop in different states where the trade name is non so popular like China.
The market development scheme makes them able to make wider markets for possibilities to come in and develop.
This will increase their market portions in footings of figure of units sold
The market development scheme will increase consciousness of Fly Dubai due to the big figure of tickets being sold
Increase of trade name trust and acknowledgment by old and new clients every bit good as insistent clients to be encouraged to utilize our belongingss instead than others
As the company expands to other parts of the universe, the growing potency within the states grow higher
Can be inexpensive labour cost in some parts
Can be dearly-won to spread out to other countries/continents as the enlargement might necessitate restructuring of the organisation and/or change the channels
Unknown district, can be hazardous to come in all new parts
Governmental limitations can happen depending on the portion of the universe and the state regulations and ordinance, i.e. trade and commercial ordinances
Taxation ordinances might be hard in some states with difficult duties on production revenue enhancements
Political resistances in the state towards the female parent state might happen, i.e. make boycott and trade stoppage
Labor issues- expensive to get labour in some countries/parts of the universe if the company is used to acquiring inexpensive labour
Choice of Strategy
Market development may hold several luring advantages for Fly Dubai in the planetary enlargement of their concern, and their desire to catch Emirates in the industry. However, Fly Dubai may foremost necessitate to make extended research before sing this option and may be required to particularly see the external environment.
The execution procedure is a critical facet in the overall executing of the chosen scheme, which is in our instance Market Development. There are several guidelines or factors to be acknowledged before go oning Fly Dubai ‘s scheme execution:
Fly Dubai must concentrate in increasing their presence in the Middle East market. This execution will increase their market portion since the Middle East market is invariably germinating at a rapid gait.
The net incomes earned by the company can be devoted into the concern and can hence be utilized for other investings that pertain to the company.
By holding more offices around the Earth, it is a good chance for the company to increase their occupation offering and by implementing this scheme it will assist their trade name image to happen.
Planing to increase figure of finishs and increase company size by engaging more employees. ( Galy, 2010 )
Fly Dubai has certain long-run aims that are segregated into of import sections- fiscal aims and strategic aims. If followed right, Fly Dubai can accomplish their coveted ends and have strong base, which can ease their success.
To obtain a 6 % addition in the net gross yearly based on the figures of the 2009 income statements and balance sheets.
Reducing the long-run debt by 20 % during 5 old ages clip, based on the figures of the 2009 income statements and balance sheets.
Infiltrate the Middle East market and increase market portion by 7 % . ( CAPA, 2009 )
To accomplish the quality award on an one-year base.
To increase their finish portfolio by 15 % within a period of 4 old ages.
Increase their range for making budget versions of their merchandises in 5 old ages.
Merchandise Positioning Map
Contemporary Product Positioning
The diagram below illustrates the current place in the modern that Fly Dubai is in, without implementing the alternate scheme of market development.
High Customer Satisfaction
High monetary values
Low Monetary values
Low Customer Satisfaction
New Product Positioning
High Customer Satisfaction
Low Monetary values
High Monetary values
Low Customer Satisfaction
Once the scheme has been implemented, Fly Dubai will catch Emirates in the market and will carry through one of their aims in going the market leader. Etihad will drop in quality and client satisfaction, as they can non vie with either due to the regional barriers and focal point of clients at that place.
To reason this Strategic Management analysis, although Fly Dubai has provided an first-class service towards their bing clients, they are still immature in the market and have serious potency to go a market leader and highly dominant in the industry. This being said, it can merely be accomplished one time Fly Dubai follows the recommendations we have provided which include:
Implement merchandise development by offering lading services
Increase span of advertisement and publicities
Once this is done, they have a formidable opportunity of wining further in the air power industry and in due clip will dominant the market.