Competitive Advantage Analysis
Etihad Airways is a leading provider of airline services, the competitive advantage of which is on a high level. It is proven by its fast growth in commercial aviation. However, despite an increase in clients and fleet, the company still has some shortcomings, the elimination of which will help it take a better position on the market. Thus, it is necessary to identify the competitive advantage of the business with the aim to provide recommendations, which will help to keep its leadership and increase profits.
The analysis of the company showed that in comparison to 2013, flights of Etihad’s passengers increased by 24% in 2014 (“Etihad,” 2014). After the addition of new aircrafts, the fleet comprises 110 units (“Etihad’s Expansion,” 2013). However, despite the constant development of the company, it still has very serious competitors because of their lower prices. A good example is Air Arabia, a low cost strategy of which lets it increase the number of fleets every day (Powley, 2016). In contrast to it, Etihad supports efficiency through penetration that helps to fight with the biggest rivals. The company also offers chauffeur-driven vehicles, lounges, and spa together with multi-cuisine facilities and courteous staff members, which bring more benefits to the airlines and make it compete with Oman Air and Air Arabia (Powley, 2016). Sponsorship for F1 also provides Etihad with a better position on the market of Asia than the ones enjoyed by Fly Dubai and Jet Airways (Powley, 2016).
The company constantly proves its quality with the help of marketing communication. Such approach induces the audience to provide an appropriate emotional and behavioral response. Etihad changes communication strategies depending on the market circumstances (“Etihad,” 2014). It is done through digital marketing, advertising sponsorship, and social media. Etihad offers potential customers direct travel trips and provides a fast response to its requests on Facebook or Twitter, proposing hotels, restaurants, and historical sites of the place to which the client is flying. Such strategy proves its care for the safety of passengers and a high level of the quality of services (“Etihad’s Expansion,” 2013). The company also proposes clients a specific target that enables them to be in contact with Etihad (“Etihad,” 2014). Etihad Airways does not only constantly represent next-generation aircrafts, but also industry-leading inflight products. A high-quality Airbus has first-class apartments and studios of business class, beverage and food managers (“Etihad’s Expansion,” 2013). Oman Air also uses a marketing communication strategy promoting Oman as a must-visit luxury destination that is supported by the Oman’s Ministry of Tourism, but such an initiative is weaker than Etihad has. A good competitor is Air Arabia, which strongly emphasizes the development of innovative campaigns in various advertising resources (“Etihad’s Expansion,” 2013). It widely uses creative advertisements in English that include online banners, email contents, and storyboards that attract the attention of numerous clients.
Etihad Airways has competitive advantage in the use of computer technology as a result of concluding agreements with the leading workforce management software provider, Kronos Incorporated. Such approach lets the company to optimize the management and planning process for its 4000 cabins and crewmembers (“Etihad’s Expansion,” 2013). The airline also plans to triple flights implementing a modern crew planning system to optimize crew utilization and increase the quality of services provided to clients.
Suggestions to Improve Competitive Advantage
Etihad is a fast-developing company that constantly increases the number of clients and fleet. It has numerous Airbuses with convenient rooms and cabinets for business meetings (“Etihad,” 2014). Thus, the first important recommendation is to concentrate more on simple passengers, but not only on business-class customers. Many people fright daily preferring the economic class and requiring normal treatment that is cheaper for the company because of no necessity to rent additional crew for cooking, cleaning, and providing other services that are demanded by rich customers (“Etihad’s Expansion,” 2013). Besides, the number of wealthy clients is much lower, and the scope of the market is limited (“Etihad,” 2014). Every newly emerged company will be an effective competitor. It especially concerns rivals, who can propose something new and interesting. Thus, the company will have to invest a lot of money to attract clients by some discounts or the implementation of technological innovations that competitors do not have or offer but at a higher price (“Etihad,” 2014).
Other crucial recommendation is emphasizing the provision of prompt services to clients. The company should reassess its profitability taking into consideration the peculiarity of the geographic area. Thus, it will be effective to use market penetration through price-cutting that will help to attract clients from a low-budget market (“Etihad’s Expansion,” 2013). The company should increase a range of customers proposing services to low and high-income travelers. An important factor is supporting loyalty and proposing discounts and promotional offers to corporate clients. It is important to appreciate customers with different levels of income and show respect for all people, and it will attract new clients (“Etihad’s Expansion,” 2013). A significant recommendation is improving competitive advantage by expanding the functions that are offered by competitive aircrafts focusing on improving the technology strategy (“Etihad’s Expansion,” 2013).
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The analysis of Etihad has showed that the company is a prosperous business with a constant increase in the number of clients. The business network is built basing on the collaboration strategy that helps to support its prosperity. However, managers of the airlines are driven by the goal to boost business prospects of their own airline with mutual and profitable alliances, some of which have no ability to survive without the intervention of Etihad or get a marginal status in case of the appearance of other investors. Thus, with the aim to keep its leading position on the market, the company should consider business expansion orienting at a wider audience that will definitely help to raise profits.