Competition and Business Unit Strategy

Emirates Airlines & Etihad Airways

Emirates and Etihad are two major companies in the airline industry. Emirates is a global company and it is one of the main competitors for many companies worldwide. Emirates is one of the airlines that have the independent business unit strategy. On the other hand, Etihad is the leading airline when it comes to the UAE. The main difference between Emirates and Etihad is that Emirates has its operations worldwide while Etihad’s main focus is the UAE. Etihad has opted a cost leadership strategy and due to this it is considered to be the national airline of the country. In the commercial aviation, Etihad is the fastest growing airline. Due to the business strategy that the Etihad has, it was awarded the “Best Marketing Strategy” award in 2009 (Etihad Trumps its Competitors, 2010). Etihad has 91% time performance stated by the company officials.

On the other hand, the strategy of differentiation of Emirates has showed the growth in the business performance of this company. This has not only expanded the business of the company but on the other hand it has affected the business of other companies that are working in the airline industry. One of the main factors is the strategy that this company has opted and due to the growth in the business. The differentiation strategy on which this company is working has forced the Etihad airline to reposition the company and to focus on the other international destinations so that it can also work efficiently in other parts of the world in which Emirates is working. Emirates has an efficient strategic decision process which can create a difference in the business of this company (Emirates tops airline service quality survey, 2013). Emirates works on the people in different regions and these includes people from one part of the world to another part of the world. This makes difficult for the Etihad to compete with the Emirates and its strategies. Emirates has not only efficient business strategy, but it also offers the low-cost travel options that makes it unique and difficult to compete with this company. To become one of the top company, Emirates has focused on more professionalism and deferential plans in accordance with its competitors.

Now coming towards the Etihad, it is the leading company in the UAE and also working at a cost leadership strategy that creates a challenge for its competitors to compete with it. In the analysis of the Etihad strategy, the main point is the threat of substitute products. Due to the global recession, Etihad has worked in accordance with the conditions and offers its services on a low cost that has proved to be effective for the business of this company. This is also proved to be positive for the business of the company. The main strategy that has caused the competition between Etihad and Emirates airline is the threat of rivalry. This is the competition of the market share on which both airlines are competing. Both companies have worked on the market penetration strategy to increase the market share (Rotemberg, Saloner, 1994). For this purpose both of the companies have worked on the fleet every single day and they are increasing this with every single passing day. This has made the competition tougher and even tenser for the companies to work on strategies.

Both companies are using different competitive strategies and to some extent this has worked for both of the companies, but Emirate has an upper edge on this. Although there are some factors in which Etihad is working more efficiently. Emirates is working on the strategy of differentiation, which has helped in the growth of the business of this company. While Etihad has opted the cost leadership strategy, which has helped the Etihad to work more efficiently especially in the UAE, but due to the lack of the focus on the expansion, there is a need to work more specifically so that it can compete with the Emirates on the global level. Both of the strategies that Etihad and Emirates have chosen are appropriate for them because of the strong competition and by working on the capabilities and competencies that are essential for the two business units to take the lead in the airline industry.