Any innovative idea launched by any company carries a risk of some degree. Before launching any product to the market, the environment is scanned thoroughly to avoid copying rivals, assure level of innovation and creativity. In that sense the risk of new product launch is very high. New ideas that people are not familiar with are not always welcomed by the large public, simply because they are new and never seen before. Here is where strong marketing skills come into play. It is up to the marketing department to assure that the new product does not turn into failure. For example when Coca Cola launched its Vanilla flavored Coke, it was a complete failure due to its weak marketing degree. The idea itself was creative and innovative, yet it was a failure because the public failed to recognize it as a soda innovation.
This is where planning has a major role for any organization. Part of planning is having a base for a corporate strategy that will determine where the company is going. A corporate strategy is a key to the future success of any company, which takes it up on the corporate ladder. Any innovation that is introduced to the market is associated with risk management and the finding and management of new incentives. The degree of innovativeness that is used by a company to develop new products is a matter of strategic risk- one step can either save the situation, or completely break it down. Keeping ones company in today's market is as difficult as being a painter: one has to be creative, have a unique taste and style to be different from all others and at the same time not be too contemporary for other people not to understand the basic concepts. A marketing manager is an artist of some kind too, that draws the colors of innovation with courage, bearing in mind all the undercover risks. (Crawford & Benedetto, 2008)
The company I have selected for this case study is Emirates Airlines. It was founded in 1985 and started out very small. It is fully owned by the Dubai government. Emirates Airlines began its career when Gulf Air began to cut back its services, so a new venture had to be created. Leasing a new Boeing 737-300 plane from Pakistan International Airline, the first flight being to Karachi was launched starting out the long journey of Emirates Airlines. Its success soon went over the borders to India, expanding with flights to Delhi. Today, it reached to a point where it operates 185 flights to India per week, for 10 cities. ("Emirates commits further to India", 2009)
In 2005 Emirates began to fly the first non-stop flights to New York City, using brand new Airbus airplanes.
In 2007, the company purchased over 130 aircraft. In October 2008, all operations were moved to an area especially devoted to Emirates Airlines in Dubai International Airport, Terminal 3.
In the first months of 2009, a net profit jump of 165% has been announced, comparing to the data in 2008. Numerically, in 2008 the net profit was AED 284 million and it jumped to a proud AED 752 million in 2009 ("Emirates earns Dh752m profit", 2009). The airline soon got famous for the number of aircrafts it owns. To mention only a few, Emirates placed an order for 58 total Airbus A380 airplanes, which are the super jumbo planes designed for 481-656 passengers. Today, this multi billion airline is operating flights to 106 destinations, including 60 countries across 6 continents; these include the longest non-stop flights like Dubai-Los Angeles, Sun Francisco, Sao Paolo and Houston. Daily, it operates around 2000 flights. It ranks among the top 10 carriers worldwide. The total number of employees reaches around 50.000. Each plane owned by Emirates airlines has the unique calligraphy style designed logo, as well as the FIFA World Cup logo on some, since it is one of the official sponsors. (Emirates Airlines, n.d.)
The slogan itself- "Emirates: keep discovering" suggests that this airline is full of innovative ideas and maintains a healthy competitive environment. Today, it competes with giants like British Airways, Cathay Pacific and Singapore Airlines on the famous 'Sydney Kangaroo route', which is a non-stop flight from Dubai to Sydney. It is becoming a major threat to its rivals because it makes people 'skip' major airports like London Heathrow or Paris Charles de Gaulle and choose Dubai instead. This is a very risky step, but the profit numbers mentioned above already speak for themselves. Calculations show that the area given Emirates in the airport is the largest in terms of floor space (370 acres), and by 2011 its passenger number will reach to 43 million ("Dubai's Terminal 3 opens", 2008). The risk here is quiet big. It completely shifts the focus from Europe to the Middle East, making Dubai the main hub where passengers will start travelling from. There is a risk of culturally difficult adaption (Western vs. Eastern), which is perfectly balanced out by the international staff that is trained to perfection to assure the comfortable journey of passengers.
Emirates Airlines stands out with its unique uniform: the Emirates hat, the red kick-pleat skirts, fitted blouses and matching leather shoes and handbags; onboard crew is wearing service waistcoats, jackets and tabards; male flight attendants wear a chocolate brown suit, pinstripes, a light shirt with a red tie. This gives the company its own unique image, having their colors defining their name brand.
Emirates Airlines has worked on being considered environment friendly as well. It uses a program called "Flextracks" which is one that automatically calculates and shows 'shortcuts' to get to a country and burn less fuel. Also, planes with only one engine are used, to lower the carbon emission. Here is some level of risk involved, because there is a possibility of the ticket costs not matching with the fuel saving costs but this problem is maintained by the good offers given by the airlines. However, the idea of environment friendly airlines is quiet creative. (Emirates Airlines, n.d.)
It is obvious that the airline has worked on its on-board entertainment as well. It was the first airline to have the seat-back screens on every seat including the Economy class, incorporating the unique In-Flight-Entertainment (IFE) system which is a subsystem of the ICE (Information, Communication, and Entertainment). The features include 600-1000 channels, a connection to your personal email server (for a small pay), the use of mobile phones and text messaging. Other types of entertainment include movies, music, video games and free access in 10 languages.
The features that will be launched very soon are done through Apple Inc., where the users will be able to hook up their gadgets, have them charge and at the same time enjoy the music and movies that are on it.
In order to be a diverse company, Emirates has taken new subsidiary sectors:
- Airport Services: Marhaba pickup service
- Engineering: constructions of plane engines
- Hospitality Services/Catering
- Tour Operator Operations: Arabian Tours agency, organizing different trips like desert safaris and boat trips, general tourism around the UAE
This has been made to ensure that if the airline industry would start declining (which is currently not the case) to keep the profiting service sectors going. This is also a part of risk management, to assure that there is always a "Plan B" in case of unforeseen economic situations or market fluctuations.
Finally, having discussed all the details about the achievements of Emirates Airlines within its entire existence and until today, we can tell with certainty that this company has a very high level of risk management. During its growth, the company has encountered many problems. Stating only the fact that before starting out it did not have any one plane, but now they are considered one of the biggest owners of the Airbus and Boeing aircrafts.
A big applause can be given to this airline for not only having a full aircraft ready, but also having entertainment according to its high class rating. The IFE integrated planes, that are quiet a big investment became very profitable, as passengers paid more attention to the attractiveness of the incentives that came with the option of choosing Emirates Airlines.
- Crawford, C. M., & Benedetto, A. D. (2008). New Product Development Management (9th ed.).
- Dubai's Terminal 3 opens. (2008). Retrieved March 8, 2010, from http://www.businesstraveller.com/news/dubais-terminal-3-to-open
- Emirates Airlines. (n.d.). How we fly our planes. Retrieved March 8, 2010, from http://www.emirates.com/english/about/emvironment/how_we_fly.aspx
- Emirates Airlines. (n.d.). The Emirates Story. Retrieved March 8, 2010, from http://www.emirates.com/english/about/the_emirates_story.aspx
- Emirates commits further to India. (2009). Retrieved March 8, 2010, from http://www.ameinfo.com/198449.html
- Emirates earns Dh752m profit. (2009). Retrieved March 8, 2010, from http://gulfnews.com/business/aviation/emirates-earns-dh752m-profit-1.523791