Table of Contents1. Introduction 32. Company Overview 33. Environmental Macro-Analysis 33.1 PESTLE Analysis 43.1.1 Political Factors 43.1.2 Economic Factors 43.1.3 Social Factors 53.1.4 Technological Factors 53.1.5 Environmental Factors 53.1.6 Legal Factors 64. Industry analysis 64.1 Porter’s Five Forces Model 64.1.1 Threat of New Competitors 74.1.2 Threat of Substitutions 74.1.3 Bargaining Power of Customers 84.1.4 Bargaining Power of Suppliers 84.1.5 Rivalry among Competitors 85. Internal analysis 95.1 VRIO Framework 95.1.1 Competitive Strategy and Position Analysis 95.1.2 Competitive Advantage 105.1.3 Key Success Factors 106. SWOT analysis 126.1 Strengths 126.2 Weaknesses 126.3 Opportunities 136.4 Threats 137. Conclusion 13References 15?1. IntroductionThe key purpose of the following report is to conduct a comprehensive external environmental and internal organizational analysis through the application of several marketing tools. In this regard, an organization has been selected that is Emirates Airlines from the airline industry. The report includes macro environmental analysis through implementation of PESTLE analysis to assess potential effects in the airlines industry. Along with this, industry analysis has been carried out by using Porter’s Five Forces Model. For internal analysis, a VRIO framework has been applied to evaluate competitive strategy and position analysis. The report also includes the key success factors of Emirates Airline as part of internal analysis. Lastly, a brief conclusion has been incorporated that summaries the complete report. 2. Company OverviewEmirates Airline launched business operations in 1985 with the two aircrafts only. Its Boeing 777s and A380s became the large fleets of the airline and served the customers with the most comfortable and most efficient huge aircraft with latest facilities. Beside travelling and transportation services in the skies, company also offers air catering, lounges of excellent standards, and entertainment for in-flights and accommodations for young flyers. Emirates has been serving to more than 155 destinations of over 80 countries with its fleet greater than 265 aircrafts globally. More than 1500 Emirates flights take off for any country via Dubai every week and are in continuous progress of expansion (Emirates Airline, 2017; Emirates History, 2017; Company Overview, 2017).3. Environmental Macro-AnalysisThe macro-environmental analysis of Emirates Airlines has been conducted via application of PESTLE analysis (Dwyer and Tanner, 2002). 3.1 PESTLE AnalysisAs stated by Dwyer and Tanner (2002), political, social, economic, environmental, legal and technological are the factors of PESTLE Analysis which are very essential to study the success of any organization/ company. This is used by marketers to warn off the current scenario and upcoming threats to devise the marketing strategy accordingly which may affect it. It holds the same importance in airlines business like any other. Therefore, all the external factors affecting the number one airline, Emirates airline of UAE, will be highlighted in the report. Being the 5th among the top airlines, it encounters many problems (Yuksel, 2012; Dwyer and Tanner, 2002). 3.1.1 Political FactorsThe international politics has greatly affected the international airlines flying over six continents. The increasing international security concerns and the terror attacks done currently in Europe as well other regions across the globe is the possible reason for reduction in airlines usage. It has been flying to various emerging parts of the globe like Iraq, Africa and the South East Asia with much stable politics. The demands of the consumers may be adversely affected with the issues in politics or security. The Trump’s government brought implications for the Middle East airlines to continue its flights to US which has put restrictions on citizens of few Muslim Countries (Mhlanga and Steyn, 2017; Annual Report, 2017; Barakaat, 2017).3.1.2 Economic FactorsBeing an international airline, the revenue generated is of various currencies. Revenues may fluctuate with the international macroeconomic conditions and sudden fluctuations in exchange rates. Oil industry of the country is primarily fuelling the matters. However, latest investments in numerous sectors have clearly indicated that the airlines are equally benefitted due to these projects. The demand for travelling by consumers is increased. With the declining in oil prices, the airlines’ developments will increase which will surely reduce the highest quality travelling to other Gulf Regions and Dubai (Business Teachers, 2017; Annual Report, 2016; Tugores-García, 2012).3.1.3 Social FactorsThe air travel is merely increased due to the rapid growth in consumers through increase population. Baby Boomers are the most profitable travelling segment that is in the highest level of management and being busy in continuous trips. The millennials are really coming up as travelling lovers with entirely different set of expectations than former. The expectations are merely based on technology reliance and coziness in fair rates. Whereas, middle class has emerged as potential customers for airlines to further study for opportunities and flourish this segment (Mhlanga and Steyn, 2017; Annual Report, 2017; Barakaat, 2017).3.1.4 Technological FactorsIt is mandatory for the airlines to be technologically updated, enhanced efficiency and to work precisely upon expectations of customers. There is an increase in the customers who are admiring the airlines management and personalized programs through technological applications on gadgets, specially focusing the millennial travelers. The routes can be decided and plans are customized to the already existing needs of customers. Major concern for technological progress is in regards to fuel efficiency that needs to be worked upon effectively (Räsänen, 2010; O’Connell, 2011; Piccoli and Ives, 2005). 3.1.5 Environmental FactorsNearly 12% of carbon emission in total of transportation industry is due to the airlines segment. Extreme weather changes and natural calamities might obstruct the operation of airlines in every region of the world. This could also affect the airline operations significantly in Middle East as well as in other regions around the globe (Annual Report, 2017; Barakaat, 2017; Business Teacher, 2017). 3.1.6 Legal FactorsThe competing American and European airlines try to limit the operations of incredible Gulf Airlines (Qatar Airways, Etihad and Emirates) to the boundaries of Gulf Region through the protectionist policies. The policies are based on alleged subsidies’ accusations as well urging of renegotiation of Agreements with Gulf Air for Open Sky. Gulf airlines have increased dramatically their traffic on American and European routes in the last few years, which is considered to be part of agreements done for liberating markets of air travels. The safety concerns are very alarming for the travelers particularly for the travelers travelling from the countries marked with high risk to the US, and it has been the latest restriction of travelling. However, it is very much possible that it is the hidden measures taken by European and American Airlines to save their legacy by restricting the airlines of Middle East countries. It is done so that they may not have easy access to the markets and regions of their country by the Middle East airlines (CPD Article, 2015; Barakaat, 2017; Mhlanga and Steyn, 2017).4. Industry analysisThe industrial analysis of airline industry for the Emirates Airlines has been conducted by using the Porter’s Five Forces Model (Narayanan and Fahey, 2005). 4.1 Porter’s Five Forces ModelAccording to Gruny (2006); Narayanan and Fahey (2005), Porters Five Forces model is an exquisite tool in order to analyze the industry environment. The model is based on five core industrial forces that build a competitive environment for business operating within that specific market or business environment. These five forces assist in identifying the level of competitions with comparison to competitive. This model also shows industry attractiveness and leads the way to gain higher profitability. Along with this, the application of Porter’s Five Forces Model reflects the initiatives that Emirates Airline must take in an airline industry. In this regard, Emirates strategies and the entire environment have been reviewed through the implementation of Porter’s Five Force framework. These five forces include threat of new entrants, bargaining power of customers, bargaining power of suppliers, threat of substation and rivalry among competitors. These have been evaluated as below (Tugores-García, 2012; Räsänen, 2010; Porter, 2008);4.1.1 Threat of New CompetitorsFor Emirates Airline, the airline industry possesses low entry barriers for new entrants. This is because; the key reasons include the requirement of huge investment for operating business in Middle East. Similarly, high technologies and human capital need to run the venture. Along with this, as Emirates Airline is a national airline of UAE hence, it is supported by local government in terms of policies and funding. Also, Emirate possesses an edge over competitors through its brand value and excellent customer services. Despite of intense competition, it is challenging for a new entrant to take position of Emirates at regional and international markets (Tugores-García, 2012; Räsänen, 2010; O’Connell, 2011; Mhlanga and Steyn, 2017). 4.1.2 Threat of SubstitutionsHowever, the threat of substitute products and services is quite high. For instance, other airlines start offering good quality of services but at low prices. In addition to that, the competitors including Qantas, Qatar Airways, Singapore Airlines and Cathay Pacific are offering similar services and therefore they are the direct substitution of Emirates Airline. Hence, it is quite challenging for Emirates to sustain competitive advantage through new initiatives. As customers will remain loyal through the facilitation of better benefits as per their expectations at reasonable prices but with higher quality (Annual Report, 2017; Tugores-García, 2012; Räsänen, 2010; O’Connell, 2011; Mhlanga and Steyn, 2017). 4.1.3 Bargaining Power of CustomersThe customer base of Emirates Airlines is quite vast from all over the world, however, still the bargaining power of customers is high. Company used to provide wide range of offers and leverage to customers via introducing multiple tickets options with different prices but luxury quality for similar destination. Along with this, Emirates Airline introduces new aircrafts; provide wide range of menu, non-stop flights direct to destination and also private terminal to attract new customers. This creates differentiation and competitive edge for Emirates to get privilege customers to get world class services (Annual Report, 2016; Tugores-García, 2012; Räsänen, 2010; O’Connell, 2011; Mhlanga and Steyn, 2017). 4.1.4 Bargaining Power of SuppliersThe bargaining power of suppliers is low; this is because there are only two aircraft manufacturing companies globally that are Airbus and Boeing. All the major airlines, even most of the airlines place order for latest aircraft to both of these companies. As Emirates is a large customer so it would not be feasible for the business to keep changing the suppliers. Along with this, Emirates gets customized and personalize aircrafts from these companies. Hence, this is helpful in creating differentiation among competitors (Tugores-García, 2012; Räsänen, 2010; O’Connell, 2011; Mhlanga and Steyn, 2017). 4.1.5 Rivalry among CompetitorsOn the other hand, the level of competition and intensity is quite high in airline industry due to vast number of airlines offering similar service at reasonable cost to customers. Most of the airlines including Qatar Airways, Cathay Pacific, Thai Airways, Turkish Airline and many other brand offer promotions and initiate best services to attract more customers. Along with this, more than 37 airlines fly to and fro from Dubai. Hence, the competition in airline industry is quite high among competitors (Annual Report, 2017; Tugores-García, 2012; Räsänen, 2010; O’Connell, 2011; Mhlanga and Steyn, 2017). 5. Internal analysisThe internal analysis of Emirates Airline has been conducted by using the VRIOS framework along with analyzing the key resources and competencies as well (Barney and Hesterly, 2010; Barney, 2014).5.1 VRIO FrameworkAccording to Andjelkovic Pesic, Jankovic Milic and Stankovic (2013), VRIO is a framework to assess internal capabilities and resources of an organization that are useful to gain competitive advantage. For the environmental assessment and evaluation PESTLE analysis has been used and to understand the industry trends Porter’s Five Forces model has been applied. Similarly, to comprehend and analyze the internal resources of Emirates Airline VRIO framework has been implemented. This model was introduced by Barney in 1991. The key purpose of this model is to examine the firm internal resources and the strategies that an organization applies to get sustainable competitive advantage. In this regard, Barney (2014) stated that organization must possess four organizational resources to gain competitive advantage that include value, rarity, difficult to imitate and organized. 5.1.1 Competitive Strategy and Position AnalysisThe key strategic capabilities and resources of an organization refer to as the abilities and skills to attain the competitive advantage within a market. These have been further classified within two categories, one is resources and another is competency. In the case of Emirates Airlines, the company has been supported with wide range of resources that include number of aircrafts, flight numbers, innovative technologies and equipment, talented workforce, financial resources and headquarter. Along with this, company also possesses strong team of top management including the CEO and Chairman of Emirates Mr. Ahmed Bin Saeed Makhtoum to provide strategic guidance and direction to the business. Furthermore, Emirates Airline has resources including online booking, reservations, check-in and point-to-point routing. IT is also key organizational resources to develop and manage the competitive business environment (Piccoli and Ives, 2005; Barney and Hesterly, 2010; Barney, 2014; Teece, Pisano and Shuen, 2008). 5.1.2 Competitive AdvantageAlong with organizational resources, Emirates Airlines has adopted several business strategies to create differentiation among competitors. One of the key strategies is differentiation generic to provide high quality services in order to gain potential customers as compare to market and industrial rivals. This is because; Emirates Airlines has become a market leader in airline industry. In this regard, Emirates Airline is also renowned as first airline globally that started television screens within aircrafts. Similarly, company also introduced e-ticketing system for the first time in UAE market. Another key aspect of competitive advantage is the large segmentation and geographic presence of Emirates Airlines. In this way company has gained potential competitive edge over competitors. In addition to that, company also provides extensive training to the employees to equip with best and most innovative technologies including plane simulator. Hence, all these initiatives and strategies provide a competitive advantage to Emirates Airlines (Piccoli and Ives, 2005; Annual Report, 2017; Annual Report, 2016). 5.1.3 Key Success FactorsOn the basis of above analysis on resources capabilities and competitive advantage, following are the key strategic initiatives that provide competitive edge to Emirates Airline (CPD Article, 2015; Annual Report, 2016; Annual Report, 2017).