dissertation study into the etihad airways' global growth strategies to achieve rapid growth...
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An investigative study into the Etihad Airways' Global growth strategies to
achieve rapid growth in the Airline industry.
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ABSTRACT
The Etihad Airways was started in 2003 and it was on a goal to be one of the great
international carriers and it has become successful in that. It is the national airline of the UAE
and at present one among the most impressive and fastest emerging airlines in the globe. The
airline functions near to 1000 flights per week serving 66 destinations across 44 nations from
its home base in Abu Dhabi. Main areas served by the company are Europe, Asia, North
America and the Middle East and major targets include London, Moscow, Mumbai, Damascus,
New York, Toronto Kuwait, and Islamabad. Etihad Airways' fleet consists of 57 Airbus aircraft.
Its fast development has been the fastest in history of aviation and with more than 100 aircraft
orders in the pipeline there is more growth to come. It was certainly motivated by the runaway
success of Dubai’s Emirates which in several ways it is similar to. Sheikh Khalifa bin Zayed Al
Nahyan the Emir of Abu Dhabi leads the airline but day to day management is vested in
Australian James Hogan. Etihad’s progress has been amazing with the multi award winning
airline, a real risk to staid legacy carriers who are moving down market. Etihad also has a
widespread freight subsidiary called Eithad Crystal Cargo. The brand concept was included
entirely throughout all customer touch points – from ticketing to final destination. The loyalty
system provides flexible rewards for both business and leisure travellers, and a variety of
personal preferences varying from communications to in-flight preferences. Guest-centric
strategy of Etihad has been at the base of its growth and assures to guarantee sustained
distinction in this very competitive market.
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TABLE OF CONTENTS
An investigative study into the Etihad Airways' Global growth strategies to achieve rapid growth in the
Airline industry. .........................................................................................................................................1
ABSTRACT...................................................................................................................................................2
TABLE OF CONTENTS..................................................................................................................................3
CHAPTER 1..................................................................................................................................................6
INTRODUCTION..........................................................................................................................................6
1.1. Introduction.....................................................................................................................................6
1.2. Background of the Research............................................................................................................7
1.2.1 Overview of the Airline Industry................................................................................................7
1.2.2 Overview of Etihad Airways.....................................................................................................10
1.2.4 Basis for Selection....................................................................................................................13
1.3. Research Problem..........................................................................................................................13
1.3.1 Research Questions.................................................................................................................14
1.3.2 Analysis of the Problem...........................................................................................................14
1.4 Aim of the Research.......................................................................................................................15
1.5 Objectives of the research..............................................................................................................16
1.6 Scope of the study..........................................................................................................................16
1.7 Limitations of the research.............................................................................................................17
1.8 Outline of the study........................................................................................................................18
1.9 Conclusion......................................................................................................................................19
CHAPTER 2................................................................................................................................................19
CRITICAL LITERATURE REVIEW.................................................................................................................19
2.1 Introduction....................................................................................................................................19
2.1.1 Benefits of critical literature review........................................................................................20
2.1.2 Literature Search Strategy and Sources...................................................................................20
2.1.3 Critical literature review structure including keywords...........................................................22
3
2.1.4 Limitation of the Literature Review.........................................................................................23
2.2. Business growth and strategy........................................................................................................24
2.2.1 Introduction.............................................................................................................................24
2.2.2 An Overview of Business Growth Strategy..............................................................................24
2.2.3 Empirical and Theoretical Frame Work of Business Growth Strategies...................................25
2.2.4 Strategies of Etihad Airline......................................................................................................27
2.2.5 Conclusion...............................................................................................................................28
2.3 Globalization and Global market....................................................................................................29
2.3.1 Introduction.............................................................................................................................29
2.3.2 An Overview of Globalization..................................................................................................29
2.3.3 Global Market and Marketing Theories...................................................................................30
2.3.4 Conclusion...............................................................................................................................34
2.4 Airline Industry and Etihad Airways................................................................................................35
2.4.1 Introduction.............................................................................................................................35
2.4.2 Empirical Frame Work of Airline Industry and Etihad Airways................................................35
2.4.3 Conclusion...............................................................................................................................37
2.5 Middle East Economy.....................................................................................................................38
2.5.1 Introduction.............................................................................................................................38
2.5.2 Middle East Economy and Businesses.....................................................................................38
2.5.3 Conclusion...............................................................................................................................41
2.6 Conclusion about Literature Review...............................................................................................41
2.6.1 Theoretical Frame Work of the Research................................................................................41
2.6.2 Empirical Evidences Found......................................................................................................42
2.6.3 Key Authors of the Research Work..........................................................................................43
CHAPTER 3................................................................................................................................................44
RESEARCH METHODOLOGY......................................................................................................................44
3.1 Introduction....................................................................................................................................44
3.2 Research Philosophy and Approach...............................................................................................44
3.2.1 Importance of Pragmatism Philosophy....................................................................................45
3.2.2 Why Inductive Not Deductive?................................................................................................46
3.2.3 “Onion” Model Application.....................................................................................................47
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3.3 Research Study on Etihad...............................................................................................................49
3.3.1 Designing of Questionnaire.....................................................................................................49
3.3.2 Sample Selection Techniques..................................................................................................50
3.3.3 Data Collection........................................................................................................................51
3.3.4 Pilot Testing.............................................................................................................................51
3.3.5 Dependability and Validity ......................................................................................................52
3.3.6 Generalisability........................................................................................................................53
3.3.7 Process of Research Analysis...................................................................................................53
3.4 Alternative Method........................................................................................................................54
3.5 Issues about Ethics.........................................................................................................................54
3.6 Research Limitations.......................................................................................................................55
3.7 Conclusion......................................................................................................................................56
CHAPTER 4................................................................................................................................................57
DATA ANALYSIS AND FINDINGS................................................................................................................57
4.1 Introduction....................................................................................................................................57
4.2 Presentation and Analysis of Secondary Data................................................................................58
4.3 Findings from Secondary Data........................................................................................................61
4.4 Presentation and Analysis of Primary Data.....................................................................................63
4.5 Findings from Primary Data............................................................................................................75
4.6 Conclusion......................................................................................................................................78
CHAPTER 5................................................................................................................................................79
RECOMMENDATIONS AND CONCLUSION.................................................................................................79
5.1 Introduction....................................................................................................................................79
5.2 Conclusion .....................................................................................................................................79
5.2.1 Objective 01 - Critical Evaluation of Organizational Growth....................................................79
5.2.2 Objective 02 - Pursued Marketing Strategies..........................................................................80
5.2.3 Objective 03 - Pursued Organizational Strategies....................................................................81
5.2.4 Objective 04 - Influences Of UAE Government and Middle East Economy..............................82
5.2.5 Summary of Conclusion...........................................................................................................83
5.3 Recommendations..........................................................................................................................83
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5.4 Future Research..............................................................................................................................84
REFERENCES.............................................................................................................................................86
APPENDIX.................................................................................................................................................91
CHAPTER 1
INTRODUCTION
1.1. Introduction
The world economy is changing rapidly over the years and it has influence on all sectors of
industries. Due to these changes international airline industry and transportation industry turn
out to be competitive and profitable industries. In later twentieth century the world economy
process encompassed with radical changes which made changes in to the business and
consumers buying behaviours (Morrison, 2006). Tremendous development of the
globalization activities make more demand for the air transportation than ever and it guide to
increase of air traffic growth in the world. In 2010 world travel industry have the benefit of
some development after hard 2008-2009 period. In modern world, Middle East airline industry
is growing considerably and many new airline companies are challenging big airline companies
and it create a condition where profit margins become shrinking rather it was. In 2009 major
airlines of the industry incurred net loss of USD 9.9 billion and it was USD 16.8 billion in 2008.
Yet, with current economical growth after wrest economic crisis, industry is expected to make
USD 2.2 billion profit in year 2010 (James, 2010).
As recent Middle East airline Etihad Airways achievements are remarkable, some awards
including World’s Leading Airline at the World Travel Awards in 2009/2010 and many more
global and regional awards showed that organization is challenging established airlines in the
globe. Furthermore, in 2008 at Farnborough International Air Show Etihad proclaimed the
biggest aircraft order in commercial aviation history for up to 205 aircraft – 100 firm orders, 55
options and 50 purchase rights (Oxford Business Group, 2009). So, factors suggest that Etihad
is looking for high development in commercial airline industry. In 08 years of commercial
6
operation organization achievement shows that there should be some strategies, which they
have pursued to get fast development in short period of time. In this research it is going to
assess the strategies followed by the Etihad Airways to get fast development in the airline
industry. Researcher will analyze empirical and theoretic frame work connected with the case
study and will be gathering data to assess research aim. This study is in the theme of strategic
management in international business environment (Oxford Business Group, 2009).
1.2. Background of the Research
The global airline industry is likely to make profit after some of its hard times. Nowadays,
Middle East airlines are rising in the airline business. By means of the huge inflow of risk capital
their achievements are remarkable. Etihad which is a younger airline is progressing quickly and
it creates lot of research opportunities for researchers to examine Middle East Airline industry
(James, 2010).
1.2.1 Overview of the Airline Industry
The growth of transportation industry increased the process of globalization as pointed by
Morrison (2006). With the globalization airline industry turn out to be more profitable industry
as it was linking nations faster than before. North America region is the market leader followed
by the Europe and Asia –Pacific in the airline business. The following graph demonstrate the
development of airline passengers traffic by place and is suggesting that Middle East region is
rising for the airline industry in terms of passengers traffic (Oxford Business Group, 2009).
7
Figure 1
Growth of Airline Passenger Traffic by World Region
(Balobaba et al. 2009)
Airline industry is extremely unstable industry and very responsive for the market variation.
During the period of first Gulf War in 1991 and after 2001 September 11, terror attack in air
traffic has fallen all over the world drastically (Balobaba et al. 2009). Furthermore it took
many years to bring back the industry and the following world airline net profit graph
demonstrated the unpredictability of industry success.
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Figure 2
World airline net profit 1987-2007
(Balobaba et al. 2009)
Due to economic crash in the globe in 2008 and 2009 years also incurred net loss on the whole
and in past few years dozens of new discount airlines have been started in emerging countries
and some are getting big success in the competitive airline industry (Adib nd). In the
meantime, Emirates as Middle East based airline has engraved out a place for itself as a main
long-haul airline and for that airline employ the policy of routes spanning over the globe
covering key hub in Middle East. Furthermore, according to World Travel and Tourism Council
(WTTC), 72.2 million workers were in the travel and tourisum industry in 2009, which was
anticipated to develop to 81.9 million employees in 2010. WTTC expecting to on that basis,
group assesses whole effect of the industry on global GDP at $5.47 trillion or 9.4% of global
GDP for 2009 furthermore this will develop by 4.4% annually between 2010 and 2020, on an
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inflation-adjusted basis (Plunkett, 2008). In the meantime, growth of aircraft manufacturing
will make key alterations to the worldwide airline industry. The modern sophisticated aircraft,
Boeing’s 78 planed their product launch in early 2011and this craft offer enormous
developments to passenger comfort with very long international range. Besides that engine
allow developing fuel efficiency around 20% so these technical alterations will have important
improvements to the airline industry in near future. Furthermore, there will new direct routes
open, for instance there will be new fleets from Europe to emerging Africa and Southeast Asia
destinations. So, it is fact that global airline business is growing considerably and owing to its
unpredictability make challenging situation for the organization in the air transportation
business (Blanke, 2009).
1.2.2 Overview of Etihad Airways
Etihad Airways, established in July 2003 by the Royal (Amiri) Decree is the national airline of
the United Arab Emirates. Though, organization has taken another four months to begin their
commercial operation but Etihad manage to add at least one new route as it began. Following
fast development in today Etihad Airways is operating “fleet of 57 aircraft operates close to
1000 flights per week, serving an international network of 67 destinations in 45 countries”
(www.etihadairways.com, 2011). The organization which regarded as the fastest growing
airline in the airline industry and capital of the UAE, Abu Dhabi, is the airline hub. The Middle
East based airline organization is considering hospitality and culture and they are encouraging
city of Abu Dhabi as attractive business location in Middle East region. Organization has get
important success in the airline industry and awarded numerous international and regional
awards with World’s Leading Airline at the World Travel Awards in 2009 and 2010‟
(www.etihadairways.com, 2011). In comparison with other regional airline Etihad
development is remarkable and recent survey in 2010 benchmarked Etihad success in last
seven years with Middle East set up airlines of Qatar Airways and Emirates Airline. That it has
identified to attain development Etihad attain in last 07 years period, it has taken 18 years for
Emirates and 13 years for Qatar Airways.
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Figure 3
Strategic Comparison
(Etihad Airways Business Review 2010)
As discussed in above, Etihad proclaimed the biggest aircraft order in the commercial aviation
history for up to 205 aircraft of 100 firm orders, 55 options and 50 purchase rights
(www.etihadairways.com, 2011). The Etihad is improving their aircraft, in Business Class,
Economy Class, and First Class cabins. Furthermore, organization is offering some value adding
service like some ground services for instance limousine pick-up in 19 targets, and high quality
lounges in Abu Dhabi, Frankfurt, Manchester, Dublin, and London.
1.2.3 Theoretical frame work associated of the research
Moreover, taking into account the research background it is important to examine theoretical
framework associated with the work, like examined above the total work is falls in category of
strategic management in universal business environment. As explained by the Morrison (2006)
in global business environment understanding of culture, environment and development of
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right strategy in right time make the success. Etihad Airways, as the quick growing airline,
there should be some strategies which organization has developed; by recognizing those
important strategies followed by the organization add significance to researcher. Though,
taking into account strategy development this may have clear link with earlier academic
theories. So, in this research it is considering following theoretical framework for the intention
of critical assessment of strategies pursued by the Etihad airways.
Theory or Theoretical
Frame Work
Author of the Original Work /
Respective Research Material
Author
Relevance to the Research
Work
Porter Generic Theory of
competitive advantage
Porter (2004) - Competitive
Advantage
Analyze the Etihad Airways
competitive strategy using
the model.Marketing Process of
Organization
Kotler and Armstrong
-Principles of Marketing 12th
Edition
Analyze marketing process of
organization applicable for
Etihad Airways 4P General Marketing
Theory
Kotler and Armstrong
-Principles of Marketing 12th
Edition
Application of 4P to the
Etihad Airways strategy
development process Ansoff’s Product-Market
Expansion Grid
Kotler and Armstrong -
Principles of Marketing 12th
Edition
Analyze Etihad Airways
strategy of business
development using the
model PEST concept specifically
PandE impact on business
Used data published in
www.economist.com and IMF
Analyze Middle East political
and economical impact on
Etihad Airways. Table 1
As a result, growth of airline industry and major development of Etihad in the beginning stage
is an inspiration for this research. Furthermore, emerging Etihad Airways challenging establish
12
Middle East Airlines so it made improved platform to examine strategies followed by the
company.
1.2.4 Basis for Selection
Conducting the rational for selection it can generally classify in three diverse sections as
academic, industrial and personal, so in following it is offering suitable details for rational
under each of these sections.
Academic: There is different academic research that has been done regarding the
airline industry by different researchers. As described above, Etihad as a beginner in the
industry its performance is surprising. Although its performance is excellent, there are
incomplete researches accessible about Etihad Airline. So, researcher believe that this
would add value to the academic world and people who study the Etihad Airways and
strategy progress will be benefited by studying this research in the future.
Industrial: As Etihad is a surprising performer, crucial evaluation of their strategies
pursued to attain such type of competitive position will be benefited to the other
organizations who are in the industry and who plan to enter into the industry when
improving their strategies.
Personal: Through this type of research I hope to use my knowledge that I have
procured from my studies. In addition, I am looking career in a section of business
consultation in management so this kind of research will improve my knowledge and
talents in analyzing business and their development jointly with strategic options
accessible.
1.3. Research Problem
The research firstly plans to crucial assessment of the growth strategies being followed by the
Etihad Airways. Here is a clear research problem, and a clear, sharp focus about the major
development of the airline. So, the central research problem is,
13
• What were the crucial strategies that were pursued by the Etihad Airways to become
quickly developing airlines in history of the airline industry?
1.3.1 Research Questions
On the basis of above central research question, researcher has made various research
questions to resolve all through this study, the following will elaborate those research
questions,
What are the significant organic developments of the Etihad Airways
throughout the last four year time in parts of financial, operational, marketing,
and other development areas?
What are the significant marketing strategies that were developed by Etihad to
become successful airline in a small period of time?
What are the significant operational strategies that were developed by Etihad to
become successful airline in a small period of time?
In which ways central government of United Arab Emirates and Middle East
economy influence for the crucial development of the Etihad Airways?
1.3.2 Analysis of the Problem
As discussed in the opening of the chapter, nowadays airline industry is going through major
changes and these alterations offer important opportunity for the airline companies. Currently,
Middle East airline industry is progressing considerably corresponding to the world air
transport industry development. Most of the beginners of Middle East airlines in the area are
challenging big airline companies and it makes circumstances where profit margins become
shrinking rather it was. Etihad, which was among the beginners of airline, is challenging
developed airlines in the area and outside the area. This research is crucially examining the
development strategies being followed by the Etihad Airways. In such situations evaluating of
organization development is vital to recognize strategies behind such a fast development. So,
14
the researcher crucially assess organic growth of the Etihad Airways in the last four year period
in regions of financial, operational, marketing, and other likely development areas (National
Airline of the UAE, 2009).
Secondly, after reading the background and crucial review of the literature researcher has
recognized that there are numerous significant marketing and operational strategies affecting
development of the airline business. Though, in order to assess which extend those aspects
linked with the quick development of Etihad Airways business, researcher going to assess
crucial operational strategies and marketing strategies followed by the Etihad Airways. As
discussed in the beginning session, Etihad’s developments are inspiring and by comparing to
the other Middle East airlines their performances were surprising. As a result, researcher
determined to recognize and assess those marketing and operational strategies followed by
the organization (National Airline of the UAE, 2009).
Etihad Airways belongs to UAE government and the impact of the government is not possible
to ignore. Under the topic of research background most of the matters connected with the
research problems are examined. Actually, most of the research on the problem was done
through analysis. So, here there is a real research problem, (crucial assessment of government
influences over development strategies) and an obvious, sharp focus (National Airline of the
UAE, 2009).
1.4 Aim of the Research
The research is primarily intending to look into the crucial assessment of strategies followed by
the Etihad Airways in recent history. In this study, researcher is viewing to evaluate Etihad
performance of the universal challenging airline industry. Moreover, reason behind their
considerable achievement in small period of time being awarded as World’s Leading Airline at
the World Travel Awards in 2009/2010, would crucially assess reason of this study. A major
part of the study allocated for empirical and theoretical framework connected with
organization development and assessed integration of those empirical evidence and
theoretical framework for the Etihad airways. As a review of the whole work used sources of
15
data as corporate information, existing material on corporate strategies associated to past and
current development, and human resources concerned in notifying or executing these policies.
1.5 Objectives of the research
In order to cope with the above central research aim the following main objectives will meet
the cause of the study,
The research will crucially assess organic developments of the Etihad Airways in
the last four year period in parts of financial, operational, marketing, and other
development regions possible and important.
The research will crucially assess marketing strategies followed by Etihad
Airways to attain major development in comparatively small period of time in
competitive and unstable world airline industry.
The research will crucially assess operational strategies followed by Etihad
Airways to get major development in comparatively small period of time in
competitive and unstable universal airline industry.
The research will crucially assess central government of United Arab Emirates
and Middle East economy’s influence for the major development of the Etihad
Airways (Andersson, 2005).
1.6 Scope of the study
The research discovers Etihad Airways’ developments in small period of time, together with
the vital regions of growth during last four periods, the operational and marketing strategies
pursued by the organization to gain such major growth, and how central government of UAE
and Middle East economy influenced organizational development. Data was collected from
both survey and available secondary information regarding the company and its development
(United Arab Emirates, 2006). The study is stimulated by the progress of world airline industry
and the gap of the information about Etihad Airways as a beginner with excellent performance.
The majority of the publication connected with well created airlines like British Airways,
16
Ryanair, Southwest Airline and lots of more developed airlines in North America and Europe
region. The survey can fill a void in the literature relating to the survey of emerging Middle
East airline performance of airlines like Etihad Airways, as there is less empirical study to date
on progress of Etihad Airways (United Arab Emirates, 2006).
1.7 Limitations of the research
All through the work researcher has recognized numerous key drawbacks connected with the
research study. Generally those limitations can be categorized in four main areas like
availability of time, collection of data, availability of data, and availability of resources (Levine,
2010).
Availability of Time: This study is a part of the MBA work and very restricted time is given from
the University. So it is practically not possible to analyze all the important strategies followed
by the Etihad. Though, to cope with strike time frame researcher has selected cross-sectional
time horizon to continue with the work. If researcher can expand obtainable time horizon then
the quality of the results and findings of the research will add more value to the academic and
commercial world (Levine, 2010).
Collection of Data: Since the researcher is an MBA student it is tough to collect data from
organization, as researcher not establishes himself as a researcher, organizations are reluctant
to give information. Moreover, workers are getting pay for their duties and hectic global
organizations are demanding more work from the worker so their time availability to give
information is very restricted. Besides that, researcher has sent his survey questions to the
general email address of every nation, so genuineness of the information and truthful
feedback is one more drawback of the work. Although researcher asks for information sample
size of 50, the response rate is low as 34% (Levine, 2010).
Although some offices like London Heathrow Etihad office rejects to provide information.
These are the main issues associated with the data collection limitations.
o Accessibility of Data: Etihad is a beginner in the market and it is a private owned
organization, so, obtainable information about the company is very restricted. Actually
17
there are no appropriate researches initiated about the Etihad’s strategies followed.
Furthermore, organization is in the Islamic religion believing area, so the accessible
financial information also link to Islamic Banking. This restriction affected worth of the
study.
o Accessibility of Resources: Researcher is an MBA student and the accessibility of
monetary support is restricted. So, it is hard to access some of the information without
meeting the necessary people. If research got chances to interview few key workers in
the Etihad Airways, the value and importance of the result will be further. Therefore,
the availability of financial resources for travelling and collecting information was
another restriction of the work.
1.8 Outline of the study
Chapter Name Brief Outline of the StudyChapter 01- Introduction This section analyses the research background and the rational
for choosing the subject and in addition, work enhanced areas
of research aim, objectives, problems, problem analysis, and
drawback. Chapter 02- Critical
Literature Review
This part analyze empirical and theoretical framework
connected with the research objectives. Furthermore, starting
of the chapter examines the significance and methodology of
literature review. Chapter 03- Research
Methodology
This part analyses process of research and methodology
followed to perform study. Chapter 04- Data
Analyzing and Findings
This part present the primary and secondary data collected
and evaluate the data to acquire information. Besides, in this
part recognized the key information connected to the research
objectives.Chapter 05- Conclusion
and Recommendation
Analyze to what extend researcher meet his desired objectives
and suggest some strategies to Etihad based on the findings. Chapter 06- Personal
Development
Researcher describes personal growth due to this dissertation
and area required to be improved.
18
Table 2
1.9 Conclusion
This section draws the basic outline of the study with stress of the study specifically on the
objectives. The episode described rational behind the choice of the work and research
objectives from this study. In later part of the section it crucially analyzed drawbacks
connected with the study and its affect on the entire work of the researcher. As a whole, the
chapter discussed in detail about the background of the research, motivation for work and
detailed explanation about findings going to be.
CHAPTER 2
CRITICAL LITERATURE REVIEW
2.1 Introduction
While considering research, crucial literature review is essential owing to numerous reasons
and this section of the work is nearly one third of total work the researcher is doing. In crucial
literature review, it is looking various angle of the original research question accompanied by
empirical work and various theories existing. It is totally important to have crucial assessment
of earlier work before carrying on with the new works to recognize and analyze what have
been done in the past history connected to the current research. Crucial literature review can
be explained as the vital abstract and assessment of current conditions of knowledge
associated to the particular subject matter with views and evaluation of the current
researcher. Though, structural and methodical decisive literature review verifies appropriate
19
background for the new research and offer appropriate foundation for new research (Saunders
et al, 2009; Walker and Butler nd).
2.1.1 Benefits of critical literature review
Saunders et al. (2009) pointed out various benefits of critical literature review for the research.
• Appropriately structured literature review offers a sound background to expand
research aims and research questions by crucially analysing empirical and theoretical
proof.
• Crucial literature review offer chances to the researcher to recognize existing
knowledge gap connected to research area and offer improved platform for upcoming
research.
• By carrying out crucial review, researcher is able to capture and gather strong proof
and associated knowledge for the research and it disregard work copying.
• Crucial review explore the data associated to the subject matter, research question
and it offer sound understanding of appropriate theoretical structure connected with
the research (Iatrou and Oretti 2007).
2.1.2 Literature Search Strategy and Sources
While crucially reviewing literature it is very important to know dimension and area that have
to discuss for the significant research. So, researcher must have clear boundaries and suitable
scope about the research literatures. In addition, while doing crucial review it is extremely
significant to have correct literature search plans to recognize and choose the most suitable
literatures and sources for literatures to add more value for research. Therefore, the following
section discusses significant approach for the thesis to choose literatures and assess most
suitable sources for the literatures (O'Connell and Williams nd).
20
The above research focuses on the part of airline industry and globalization impact to the
airline business and how organization responds for universal competition to become booming
company. Additionally, research concentrates on specific airline company, Etihad to know
likely strategies followed by them to become unbeaten universal player in the airline industry
with major affect of globalization, although this is a research devoted to affect of globalization
to the airline business growth. The researcher will be discussing certain literatures connected
to these areas and build up review structure can be seen in the next section. However, in this
part concentrates on literature search plans and sources (O'Connell and Williams nd).
The following literature review section is divided into three main areas to discuss in details.
Each of the part will contain between 1,300 to 1,500 words discussing literatures associated to
the subject matter and each of the part will discuss between 6 to 9 empirical and theoretical
literature given by different writers. As Saunders et al. (2009) described, this review will start
with more general scope connected to each part and narrow to most specific parts of the
research questions. It will offer short summary of the key ideas and at the end it will review
key writers’ ideas. In addition, discussion will reduce to particular area relating with the
research questions and empirical evidence and highlight the most vital theories and proof
connected to the research questions (Clark 2010).
To have proficient literature review it is important to define parameters of the literature going
to be. As a result, defined research parameters for literature are as follows
Parameter Narrow Scope Broader Scope Langue Specifically Middle East Airline
industry
Airline industry in the World
Subject area Growth strategies, Etihad Airline,
Globalization impact to airline
business, Middle East economy,
Marketing strategies
Business growth, Airline
industry, Globalization impact
for business, World economy,
Business Strategy Business Sector Airline Industry Service
21
Geographical Area United Arab Emirates, Qatar Middle East Publication Period Last 5 years Last 15 yearsLiterature type Scientific journals, Refereed
journals and books, News papers
Journals and books
Table 3
Literature review strategy (Taneja, 2008)
In the following literature review, to be further efficient and value adding to the research it is
essential to choose most genuine sources which are available in near past. For the research it
will greatly depend on the repeat journals like The Economist both printed and web site, news
papers like The Times, Financial Times most possibly the web site versions, scientific magazines
published about the airline industry which is accessible in the British Library, and some of the
universities suggested books obtainable in the collage and personal library as sources (Taneja,
2008).
2.1.3 Critical literature review structure including keywords
• Business Growth and Strategy: In this part it will discuss common theories connected
with business development, development plans, and some of the key argument about
the strategies growth. Besides, in the part possibly it will add some of the empirical
evidence associated to the business development and strategy growth.
• Globalization: Elaborate discussion about globalization and its impact to the business
growth and mainly airline industry. In addition, in this part it discuss about the global
market and its openings specially airline business. Furthermore, key arguments about
international changes impact for the airline business sector together with empirical
evidence.
• Airline industry and Etihad Airways: The most significant part to the research questions
and deep discussion about airline industry particularly Etihad’s position as new
performer in the market. Any empirical research evidence, upcoming forecasts and
likely theories will discuss here so far as probable.
22
• Middle East Economy: A further important part in the entire research and here will be
discussing literature connected with current economic progress of Middle East nations,
ongoing matters and impact to the business sector more closely airline business, and
Islamic culture impact to the airline business as some empirical evidence showed that
airline business effect by the cultural and national believes.
• Key words: Business development, development plan, development opportunities,
Globalization, universal market, Airline Industry, Etihad Airways, Economic growth,
Middle East Economy, Islamic Religion Influence, Pricing model, consumer satisfaction,
reliability, security, Cost Management, Investment.
2.1.4 Limitation of the Literature Review
• Time: For the whole research time allocated is very less. In such small period of time
require reading literature, expanding proposal, building up questioner, data collection,
data analyzing and research presentation. Therefore, this is a big restriction for the
detail critical analysis. In addition, limited time obtainable for the administration with
supervisor and it will have an effect on quality of the work.
• Word Limit: For the whole research obtainable word limit is around 20,000 and this has
use for whole research presentation. So, this will be another restriction to present
more literature elaborately.
• Resource availability: Including of the supervisor time obtainable and finding most
suitable resources will be a further restriction. Additionally, as MBA student in small
period of time finding literature will consume cost and it is another resources
drawback.
(Murphy et al. 2010; Schmid 2006)
23
2.2. Business growth and strategy
In this part of vital literature review it will be discussing empirical and theoretical framework
connected to business development and business strategy growth for improved corporate
future. This part will analyze structural argument associated to the business development
strategy in universal changing business environment and how it impacted to the Etihad
Airways (Building Brand Value and Influence in the Airline Industry nd).
2.2.1 Introduction
In the past, businesses growth strategy improvement has developed considerably. In today
businesses are looking development chances outside their main territory and whole globe
became one single market for the business (Morrison, 2006). Most of the literature has
developed in relation with academic practices and owing to fast business growth many new
thoughts, theories has developed considerably. Furthermore, owing to high competition and
too much demand, universities, research organization, individual business personalities and
students carried out big number of empirical researches about business progress. In this part,
critically analyze some of those previous works which are important to the core research
questions.
2.2.2 An Overview of Business Growth Strategy
Kumar (2010) refers that business growth means major development of turnover, profitability,
product or service and significant lessening of time taken for conveying client requirement and
inventory. Yet, this is not practically accepted in all circumstances as non profitable
organizations are not looking financial point of views as development perceptions. Even some
organizations are taking into consideration development in both organic and inorganic which
make them to more consumer satisfaction. Though, Kumar’s (2010) argument is satisfactory
while concern with financial development and shareholder value increase in profit oriented
organizations. Furthermore, taking into account service sector practically there is no inventory
and it’s basically service oriented by using people gathered talents. So, Kumar’s (2010)
24
description cannot accept entirely for universal theory however part of the argument is
adequate in many occasions.
Hess (2007) initiated idea for business development and he referred business development as
creating more consumers, launching new products, and enhancing operation efficiencies.
Therefore, taking into account Hess’s (2007) argument it is further suitable than Kumar’s
(2009) argument as Hess (2007) not narrow the business progress as financial progress as
Kumar (2009) said. Hess (2007) argued wider range focusing essential three elements of the
business which are clients, product and operation. So, taking into account Kumar and Hess
business growth definitions, Hess (2007) concept is satisfactory in various occasions than
Kumar (2009) as this can be applied in service sector, non-profits organization and profit
oriented manufacturing organization. So, the development parameters depend on the
organization objectives and aims (Ethihad Airways, 2010).
Mayer and Wit (2004) argued organization management repeatedly taking into account what
organization has to attain, mainly which representing the purpose of organization existing.
Additionally, they argue strategies are course of action for accomplishing organization’s
intention. So, taking into account above development and organization purpose there is a clear
link between organization purpose and progress. Based on the organization purpose they are
determining parameters for development. As a result, organization strategies are directly
focusing on attaining organization purpose. Hence, Mayer’s and Wit’s (2004) argument can
redefine organization strategies as course of action for attaining organization development
within the firm’s decided parameters (Meyer and Wit, 2004).
2.2.3 Empirical and Theoretical Frame Work of Business Growth Strategies
In Porter’s (2004) opinion competition is the core of the achievement or fall down of
organization. Therefore, competitive plans are important for the organization to do well in
competitive market. Porter has developed generic competitive strategies to gain
accomplishments in the market. According to Porter (2004), business can obtain competitive
advantages by three main policies of Cost Leadership, Differentiation and Focusing. However,
25
in some events, businesses were achieving successes by practicing mix strategies. In airline
industry budgetary airlines are a different section and rest of the airlines usually practicing mix
strategies of differentiation and cost leadership, but goal is brought probably worldwide clients
for big commercial airlines. In addition, depending on the empirical research made by Raynor
(2011) concerning the Southwest Airlines, he recognized disruptive policies of innovative
operation. Cost reduction did not convey considerable financial results till they procured high
fuel efficient aircraft. Furthermore, he argued cost effectiveness and competence is not the
only basis to make higher financial return. The reality they pointed out was to make
considerable financial return required, novel cost reduction policies combined with enabling
technologies. Hence, taking into consideration Porter’s (2004) argument, differentiation, cost
leadership and focusing are not only the competitive advantage aspects but also technology
playing considerable position in attaining competitive advantages amongst competitors
(National Airline of the UAE, 2009).
Lynch (2007) argued while developing corporate strategies, the nation’s economic activities,
social and cultural behaviour should not be overlooked and growth of strategies depending on
the environmental
viability. In addition,
taking into account
Lynch’s (2007)
arguments corporate
strategies are influencing
by the surroundings
where they are
privileging. Depending
on opportunities, threats
and resources
accessibility,
organizations are developing their long-standing strategies. Furthermore, Lynch points out
those emergent strategies consider logical and rational process of execution to attain higher
26
Figure 2.2: Porter Model (Sources (Porter, 2004))Figure 4
shareholder return. Further considerably attaining long-standing corporate purpose depends
on opportunities accessible in organization surroundings and abilities of taking the
opportunities (Building Brand Value and Influence in the Airline Industry nd; Lynch 2007).
Latest empirical research done by the Too and Too (2010) recognized fast variations of the
external business environment force. The business has to consider internal potentials and
resources accessibility as basis for developing competitive advantages. In addition, they
recognized in present scenario very little comprehension is done on internal abilities that are
suitable for infrastructure asset management. So, they highlighted it is very important to focus
on internal abilities while taking on new business strategies. Furthermore, in view of Too and
Too (2010) findings, it is totally vital to realize organization’s strength and weakness while
developing strategies. So, Lynch (2007) also described while developing strategies not only
opportunities and threat of the environment but also strengths and weakness of the firm have
to be considered (Too and Too, 2010).
2.2.4 Strategies of Etihad Airline
It is significant to examine all these strategy and development concepts discussed above and
Etihad’s performance with respect to those concepts. Going back to Kumar’s (2010) and Hess’s
(2007) argument of development, as profit seeking service Sector Company, Etihad is more
close to Hess’s (2007) arguments. The organization consider organic development and they
have been taking into account profit development, operational capacity development and
number of customer growth as organizations progress for last eight years. Particularly stressing
last three years operation, organization pointed out in 2010 that they have increased their
operation capacity in terms of number of aircraft by 9.6%, revenue by 28.2%, passenger
carrying by 13% and freight handling 20% (www.etihadairways.com ). As a result, there is
obvious relevence between arguments of Hess (2007) and Etihad’s view of business
development (Hess 2007).
While taking into account Porter’s (2004) competitive advantage theories, it is highly
questionable where Etihad is fitting. Organization is considering broad goal as competitive
27
scope as, Etihad highlighted their dream and mandate as “The goal and overall ambition of
Etihad Airways is to be the best airline in the world” (www.etihadairways.com ). So, it is true
that organisation is looking for very big and broad market as competitive scope. Therefore
taking into account competitive benefit, organization is practicing mix strategy as there is no
budgetary airline like Ryan International Airlines or Southwest Airline and there are no proof
that organization trying to distinguish from other. In that sense, company is in a middle
position. Therefore, as conclusion Etihad is looking for broad market with mix strategy. Yet,
going back to Raynor (2011) finding Etihad is more bothered about technology and most of
their aircrafts are new product which has high fuel efficiency as in samples Etihad with modern
aircraft of 06, B777 aircrafts, 19 A330-200/300 aircrafts which are the most modern aircrafts in
the industry. Therefore, Etihad is considering technology as important factor for organization’s
achievement. In addition, growth of Abu Dhabi will have major impact to the Etihad
performance and its present strategies link with the Abu Dhabi and Middle East’s development
and this will discuss in later part of this chapter (Bamber, 2009).
2.2.5 Conclusion
To wind up the above discussion, business growth means considerable progresses of
organization abilities in areas of financial, operation, production and clients. Yet, growth view
of particular organization depends on the organization purpose of existing. As a result
strategies progress of improved corporate future will determine organization’s intention.
Additionally, while taking into account business development and growth strategies
competition cannot separate and in the competitive business environment to achieve
competitive advantages there are three main strategies of Cost Leadership, Differentiation and
Focusing initiated by Porter. Yet, later on empirical evidence recommend that only Porters
theoretical frame work will not be enough to get competitive advantage and it is essential to
join with enabling technologies. However, further empirical and theoretical evidence
recommend while developing corporate strategies that it is very important to examine
opportunities and threat in the environment and organization strength and weakness previous
to building any corporate strategic decision.
28
2.3 Globalization and Global market
In this part of critical literature review, it will be discussing empirical and theoretical
framework connected to globalization and impact for business. This section will assess
structural argument connected to globalization and its impact to the businesses while doing
business in varying business environment.
2.3.1 Introduction
International trading is not emerging concept, it has been occurred over centuries between
nations and there were historical proof regarding the universal trading. Though, with the
recent boom of telecommunication and transport industries (Morrison, 2006), the idea of
global trading encompasses with radical variations and considerable progress. Furthermore, in
second half of the twentieth century interdependency of the countries has been increased
considerably and this has opened entrance for globalization idea to occur. This part crucially
analyzes some of literatures about globalization which are significant to the core research
questions (Doganis, 2010).
2.3.2 An Overview of Globalization
Beck (2003) described that no longer have any nation in the globe kept on without linking to
other nations and hence several economical, cultural and political systems from each other. He
describes that today globe is moving to new era of business, cultural and social together with
interdependency. As Beck (2003) described, today businesses are thinking entire globe as
single market for their product and service. Etihad is looking for a future of world’s best airline
and no longer has organization considered national geographical limitations. With respective
to the airline business, business model itself is a globalization business and they provide
transportation between nations (Beck, 2005).
Ali (2000) described that most international organization use their home country government
power to obtain concessions in international trading. Further described that most of the big
multinational corporation greatly attached with the governments and owing to globalization
29
political and cultural relationship went into the new era. In addition, fast growth of information
technology opened new market and marketing opportunities for business. In opinion of Ali
(2000) government influence and technological influences are key success elements in
international business. Understanding political environment and cultural variations make
enormous success to the international business. Etihad Airway is the national airline of the
United Arab Emirates and organization heavily getting the support from the local government.
So, global trading being a government invested organization will flow further advantages to the
organization. Basically, it is an enormous benefit with consideration to capital injects and
influences to the other nations government while increasing business. Furthermore, in the
airline industry technological factor cannot ignore and as Raynor (2011) described technology
is a vital element in business achievement and Etihad is quickly absorbing technically advanced
equipment and aircraft as strategy for achievement.
Parker (2005) described globalization is not internationalization; so organization cannot utilize
conventional boundary expanding actions. Actually, businesses have to consider further
changes and hyper globalists’ plans to acquire clients to the organization. Taking into
consideration airline industry, merely expansion goal no longer work out, rather than that
airlines require being cautious in other aspects for instance customer service, modern aircraft,
in-flight facilities and in-flight entertainments activities to obtain more business. Traditional
concepts of safety, ticket cost and more targets are no longer competitive factors in airline
business. Those are common circumstance or basic situation to perform the business and it will
not make organization changed from others. As Parker (2005) highlighted in airline business
there should be alterations and hyper globalists’ strategies to acquire market achievement
(Davidson, 2008).
2.3.3 Global Market and Marketing Theories
In business concepts, marketing cannot be ignored while making strategic decision.
Organization like Etihad achieved huge success in short period of time in the competitive
airline business. Marketing strategies are playing very important role in any business while
30
developing long-standing business strategy (Jain, 2012). Thus, considering Etihad Airways is
worth to evaluate global marketing strategies in relation to original marketing theories.
Kotler and Armstrong (2009) described that marketing is above any other business function
and it is how organisation dealing with the clients. Maybe simply they have been highlighted
managing beneficial clients relationship as marketing. In much deeper analysis marketing
defines your achievement in competitive business environment. Understanding client
requirement and reaction and providing them for a profit is the basic idea of marketing. As
Kotler and Armstrong (2009) described understanding client needs and market place is vital
while developing marketing strategies. In the situation of Etihad they are looking for global
market as market place and various demands of the clients, some are cost concern passengers,
some of them are eager about amenities offered by the Etihad during the trip, transportation
service, cargo services, luggage allowances, and various other demand. Thus while pursuing
strategies organisation have to know these clients necessity when following the strategies. In
addition, delivering superior value service is bringing client back to the organisation and Etihad
concern strategy of loyal program of consumers call “Etihad Guest” to widen gainful client
relationship (Kotler and Armstrong, 2009). This is an idea of repeat clients and this offers
chance of low marketing budget. Delivering good client experience will bring client back and
Etihad proven that rising “Etihad Guest” membership from 750,000 in 2009 to 1,000,000 in
2010 by 33%. Thus taking into account Kotler and Armstrong (2009) argument Etihad
developed strategies to widen gainful customer relationship. Below given diagram present
theoretical frame work of the Etihad marketing strategy.
31
Figure 5
A simple model of the marketing process (Kotler and Armstrong, 2009, p. 5)
Besides that, consider theoretical structure of the marketing strategy of 4P concept,
application is obligatory to assess market and organization viability of taking on market. In this
part it is analyzing 4P concept with respect to the Etihad Airways. The concept principally deals
with product, price, place and promotion. Consider product Etihad Airways can classify as air
transport provider, as most of the airlines are doing, Etihad Airways also offering variety of
product for instance Diamond First class, Pearl Business class and Coral Economy class as
product varieties for their clients. Depending on the client capacity and ability they have option
of services to choose from (www.etihadairways.com ). Etihad Airways is further concerned
about value of the service they offer and in-flight design of the aircraft to obtain more
attraction of the clients, and they are more concerned regarding the In-flight entertainment
activities as demanded by the clients. Superior service offering is one key motto of the
organization, improvement of diamond first class and pearl business class is superb product
development of the Etihad Airways. In 2011 Etihad Airways won two awards for “Middle East's
Leading Airline First Class - World Travel Awards Middle East 2011 and Middle East's Leading
Airline In-flight Entertainment - World Travel Awards Middle East 2011” proving these product
improvement activities were achievements (www.etihadairways.com ). As far as price concern
Etihad Airways strategy is different, there are no low cost or budgetary airline and no high
price charging airline. Organization is practicing strategy with concerning pricing strategy. In
32
airline industry mix pricing strategy is familiar and as worked done by Givoni and Rietveld
(2009), pricing is depending on the seasonal aspects and booking time. In addition, they
highlighted pricing as sensitive factor in the airline business with the growth of low cost airline
(Explorer Publishing nd).
Place is one of the important success element in airline business. Importance of the growth of
number of target highlighted by Givoni and Rietveld (2009) empirical research evidence and
this will be discussing in detail at afterwards in this chapter. Dogra and Ghuman (2008) said it
is basic matter in any organization how and in what way organization needs its service or
product accessible to the clients to have profitable exchange. So, it is very crucial to have
written channels and coverage of the product or service availability to get market success.
Particularly in the airline business, there is further need for having big number of accessing
points to the client to acquire more business. According to the Etihad website Etihad flies to 65
international destinations. Through its 28 codeshare partners, Etihad’s network spans a total of
157 cities on five continents as at 31st December 2010” (www.etihadairways.com ). As a basic
strategy Etihad continues in improving its target to develop business and obtain more success
and also evaluating their business growth target is key factor that they are considering (Dogra
and Ghuman, 2008; Givoni and Rietveld, 2009).
Kotler and Armstrong (2009) described promotion as activities that communicate the qualities
of the product and influence target client to buy it. Though, today there are extra activities
relating under the promotion. Advertising, sales promotion, public relationship and brand
development are important activities of promotion. Etihad Airways is eager on promotional
activities heavily and were improving their brand as a policy to obtain more clients. Etihad is
offering sponsorship activities as brand development and promotional activity and give their
sponsorship “as a Diamond sponsor of the Abu Dhabi Golf Championships, as a lead sponsor of
the All-Ireland Senior Hurling Championships and As Shirt Sponsor of Manchester City Football
Club” (www.etihadairways.com ) to increase brand image of the organisation. Those are some
stragies they have followed to obtain considerable development in the airline business sectore.
33
Other than that to assess strategies followed by the organization, be able to make use of
Ansoff’s Product-Market Expansion Grid. Using the Ansoff grid, Kotler and Armstrong (2009)
described that the market growth is company development by recognizing and making new
markets. As per the case of Etihad, organization is diminishing in to group of market
development, as organization offers existing products to the new markets. Etihad Airways in
the business of air transportation and their product is transportation service to the clients who
would like to take a trip between nations. Organization did not alter any changes to the
product, however they continue in developing their market all over the world (United Nations
2007). So, as per the Ansoff’s Product-Market Expansion Grid, Etihad airways is in the group of
market development and for that organization is using concept of additional destination
progress and attaining more mordent aircraft in to their balance sheet. though, organization is
developing some other product also, mainly like most other airline Etihad is having own
holiday business unit, in that point of view organization has developed new product in to their
product portfolio. At last, they have some close connection with product development jointly
with market development (United Nations 2007).
2.3.4 Conclusion
To conclude the above discussion of globalization and marketing concepts globalization has
offered considerable openings for the business. Though, to acquire this business advantages
organizations have to build up good marketing plans. The Etihad Airways have attained major
development in last 8 years period. In order to attain that they have been used numerous
marketing concepts largely. Mainly, the general marketing concepts of 4Ps price, place,
promotion and product management was expellant according to the literature and the market
development and branding are further important strategies that organization has followed. So,
above overall literature offer good platform to assess organization strategies followed to attain
important increase in small period of time.
34
2.4 Airline Industry and Etihad Airways
In this part of critical literature review, the discussion is about empirical and theoretical
framework associated to airline industry and Etihad Airways business. Section will assess
structural argument connected to globalization and its effect to the businesses while doing
airline business in varying environment of business.
2.4.1 Introduction
Like Oum and Yu (2001) described, international air transport industry plays important position
in the world economy by inspiring travelling and transportation between nations. The inflence
of the air transportation industry to the other business areas cannot disregard in any
situations. For the concept of globalization progress owing to major growth of transportation
industry and telecommunication industry but fast development of the globalization, the impact
of air transportation is vast. Large demand of the mobility, alteration of customer buying
behaviour, further demand of globalization enhances the air transport industry. Yet, today
overall inflence of the airline business to other business area for instance freight, hotel and
tourism is huge (Oum and Yu, 2001).
2.4.2 Empirical Frame Work of Airline Industry and Etihad Airways
Givoni and Rietveld (2009) argue while airline faced progress in demand, airlines have a
tendency to answer more frequencies than by rising aircraft size. So, they argued in their
research somewhat increase of demand for the aircraft airline increase the number of fleet for
each target. As a result, by increasing number of fleet for particular target will meet the
demand of the consumer. Further, Givoni and Rietveld (2009) explained more the target and
more the nations covered by the airline, growth rate of the company are high. While airlines
rising number of destination they are covering and frequencies of the fleet for each target,
airlines gain more income. This is because of demand verity of the passengers as passengers
are demanding more comfortable travel schedule than ever. Though, this will affect the airlines
in other ways like when functioning large number of fleets for one target it may not function
with full capacity of the aircraft. Although, aircraft travel with vacant passengers all through
35
the history Etihad functioning more number of fleet to more target as strategy to obtain
further business (Givoni and Rietveld, 2009).
Parast and Fini (2010) discover from their research in the airline industry that labour
productivity is the most important reason for airline profitability development and further they
have argued on-time performance has no relationship with profitability. The finding
recommended for the airline profitability growth depending on the gas price, average annual
maintenance cost, labour productivity and employee salary. Furthermore, with this recognition
managing cost of the operation will increase the profitability of the airlines.
Ahmed et al. (2010) recognized in their research that other than the personal experience
national loyalty is a key element while choosing airline to travel. Besides, they argue personal
experience, demographic variables and nation of origin as the key aspects for the client
perception on the airline. Considering these findings, Middle East countries are mainly
dominating by the Islamic religion and business and government decision are greatly
influenced from their religious believes. Therefore with this research it creates flat form for
argument of Islamic religion impact on the airline development in Middle East. These findings
have clear link with marketing ideas argued by the Kotler and Armstrong (2009), as they have
pointed out personal experiences of the customers bring repeat purchases to the organization.
In addition, Etihad is based on the Islamic religion nation and most of the clients who belong to
Islamic religion are faithful to their religion and they are more chosen to buy their own
community product. Etihad as airline recognize these concepts and they are offering some
benefits to the Islamic religion clients (Ahmed et al., 2010).
Lin and Chang (2008) described on their research that controlling cost and skill to manage risk
are key success elements in the airline business. These research findings will have a strong
connection with Parast and Fini’s (2010) finding on cost management on gas and labours. They
argue that in airline business risk and cost management play critical role and it has important
impact to the client perception on the airline selection. Furthermore, taking into account Lin
and Chang’s (2008) arguments the impact of cost and risk management in the airline industry
cannot be neglected. Owing to appropriate cost management, some of the airline got the
36
further competitive benefits in the airline business. Risk management is another important
element in the airline business (Lin and Chang, 2008).
Doganis (2006) recognized that government ownership of the airline offers important capital
support as organization required and about 70 global airlines, some are substantial size, are
still belonging to the national governments. Adding to his arguments, although government
support for the financial matter when it’s come to the management process state that
management influence offer significant disadvantage to the business. In the above scenario,
Etihad is government owned Airline Company and it is not public or private own organization.
Taking into account Etihad, it is managed by the board of directors who are outside United
Arab Emirates. So, the quality of the top management is competent enough to handle airline
business in beneficial mode and they have proven it in near past. However, the argument
offered by the Doganis (2006) cannot ignore with respective to the Etihad.
Doganis (2001) on his empirical research recognized that the airline profit and fuel price has
key association. Alteration of fuel price has important impact on the airlines profitability.
Doganis (2001) explained that variation of 50-60 US cents will have impact of 12-15% of airline
operation cost. Thus, organization has to handle risk of fuel price increase while developing
sustainable future. As a whole, Etihad airways is concerning on fuel price increase risk
management through fuel hedging agreements. Organization frequently increases fuel price
hedging activities and in 2010 they hedged 82% fuel as strategy to handle fuel price increase
risk. As a result, risk or volatility management is vital in airline industry. As Lin and Chang
(2008) argued risk management is necessary in the airline business and Etihad as organization
is able to handle their risk through hedging agreements (Doganis 2001; 2006).
2.4.3 Conclusion
As a winding up of the above discussion there are numerous aspects impact for the
development and sustainability of airline business. Different researchers and authors have
recognized numerous reasons that justify the development of the airline business.
Improvements of destination, increase of frequency of the fleet, labour productivity, cost
37
management are some of the important elements that determine success of the airline
business. Furthermore, managing fuel price risk is another success factor in the airline
business. Besides that literature shows that the involvements of central government offers
capital inject facilities but it may have drawback while consider to the management. Though,
on the whole there are numerous success factors that decide the airline growth.
2.5 Middle East Economy
In this part of crucial literature review it will be discussing empirical and theoretical framework
connected to globalization and impact for business. This section will analyse structural
argument associated to globalization and its impact to the businesses while doing business in
varying business environment.
2.5.1 Introduction
Nowadays the Middle East part of the globe is going through drastic changes and political
unbalanced condition. Libya war situation, unstable Iraq, Turmoil in Egypt and protest and
political crisis in other nations make situation where unstable. Though, in these region nations
have more control on the oil and natural gas prices over the globe. According to Richards and
Waterbury (2008) Middle East region societies ranged from the very poor nations, like Yemen
and the Sudan, to the very rich nations, like Saudi Arabia and Kuwait but culturally it is leading
by the Islamic religion culture. Therefore, in now Middle East impact for the world economy is
enormous; nations are rich with oil resources, which are directly effecting airline industry, and
the impact of labour market, which also main cost potion of the airline industry cannot avoid
at any situations (Richards and Waterbury, 2008).
2.5.2 Middle East Economy and Businesses
Highlighting numbers www.economist.com website point out in 2009 around USD 150 billion
value of fuel issued to the globe from Middle East and North Africa region and oil cost was just
over USD 60 per barrel. And today the price of the crude oil barrel is nearly double and if prices
keep on in the same rate regional fuel subsidies would rise to almost $300 billion this year.
38
That is almost 7.5% of the total GDP of the area and so, Middle East region’s skill of control
over fuel prices in the globe is very high and the fuel price is the main cost impact for the
airline business. Though, United Arab Emirates, where the Etihad belongs is rich with oil
resources and this is huge benefit for the Etihad Airways operation. Doganis (2001) confirmed
that the impact of the fuel prices instability and profit instability of the airline businesses has
negative correlation. Increase of the fuel prices will guide to decline of profitability of airline
business. Though, being a Middle East airline, Etihad got the sufficient chance of fuel price risk
management and it has proven that they handle fuel price through hedging agreement.
Moreover, International Monetary Fund (IMF) in their regional economic outlook of 2009
about Middle East and Central Asia described some attractive points about the Middle East
economy. According to them the 12 oil exporting nations in which six of them representing
Gulf Cooperation Council (GCC- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab
Emirates) and Algeria, Iran, Iraq, Libya, Sudan and Yemen direct the world fuel price and they
are accounting 65% of global oil reserves and 45% of natural gas reserves. In all of these
countries, 50% of GDP contribute by these oil and gas reserves. Besides, this represents 80% of
government revenue. So, those nations are wealthy with risk capital owing to inflow of cash
from oil and natural gas exporting. In fact UAE also belong to GCC which are exporting oil
heavily so the reality is government is prosperous with risk capital which can be invested in
business. Etihad is national airline of the UAE; so organisation has ability of collecting risk
capital without hassle.
Richards and Waterbury (2008) further argued about the emering Middle East economy.
According to them the area is wealthy with risk capital and nowadays they are concerning
more growth of industrial and service sector. They clarified that till 2020 from 2010, around
25% of world construction will be in this area and it is growing more rapidly. Although nations
are rich with capital investments and money, the economic distribution and social progress are
far more behind the developed nation’s level. Furthermore, Middle East countries, particularly
nations which are in oil exporting are considering more progress of service sector by offering
employment opportunities to staffs all over the globe. As a conclusion, Richards and
39
Waterbury (2008) said, this region is investing heavily in service sector and they are getting
employee from whole globe. The truth about the above argument is that the region is
developing quickly for the service sector.
Further, www.economist.com (2010) highlighted that Doha International Airport increasing
capacity to 20 million customer to 2012 and 40 million clients a few years after that. Hence, in
Middle East market it is truly emerging market for the airline industry and it is developing
considerably during last few years and they are hoping huge growth in near future. As far as
Doha International Airport is concerned it is the centre for Etihad Airways. The growth of Doha
International Airport has direct impact to the Etihad Airways business. As organization is
belonging to government of UAE, the government is looking for fast development of the airline
by investing both airline and Doha International Airport simultaneously.
Moreover, www.economist.com (2011) highlighted that UAE and Canada entered in to an
contract which is permitting both nations to more landing slots for civilian flights to its
government-owned airlines of Air Emirates and Eithad Airways. Though, both of these airlines
are belonging to the UAE governments and it is reality that airline organizations enter in to the
mutual agreements to acquire more and more business. Etihad Airways entered in to an
agreement with Virgin Blue Group of Airlines to improve the business as a strategy to expand
business. Besides that organization has around 24 agreements with Alitalia, All Nippon Airways
(ANA), Korea’s, Bangkok Airways, Brussels Airlines, India’s Jet, Airways, Sri Lankan Airlines,
Ukraine International and during 2010 year they have entered in another 8 agreements with
Air Malta, Alitalia, ANA, ASIANA, Hungary’s Malev, Greek carrier Olympic Air, Siberia and
Airlines (S7) and Virgin Blue as policy to improve business. More over, in 2010 mutual alliance
income contribute was around 13% of airline total passenger revenue
(www.etihadairways.com).
Furthermore, www.etihadairways.com higlighted that their is huge development in Abu Dhabi
in nere future witich impact to the etihad business. The nation is developing their engergy
sector and they have invested around USD 21 billion with Korean consortium to build four
nuclear power plants in the UAE and in cooperation with Etihad Airways Abu Dhabi Grand Prix.
40
Other main global events consist of Abu Dhabi Film Festival and FIFA Club World Cup. As a
result, to develop Abu Dhabi government is developing some museums and other sectors,
particularly targeting tourist industry. As a result, all these elements suggested Etihad Airways
in emerging market (Sull et al. nd).
2.5.3 Conclusion
The discussion above created platform to examine impact of Middle East economy for the
Etihad Airways. In modern world Middle East economy is growing quickly and its impact of the
international and local airline industry are vast owing to control authority of the international
fuel prices. In the above part, it examined growth of Middle East economy and emerging UAE
market particularly with respect to the Abu Dhabi. In addition, above discussion went in an
area of impact of emerging Abu Dhabi market for Etihad Airways. Besides, it was discussing
numerous empirical evidences about the government influence for the airline business,
particularly in the case of Etihad Airways. In the conclusion of this discussion it makes
appropriate theoretical and empirical background to know empirical and theoretical influence
to the researcher work.
2.6 Conclusion about Literature Review
Although researcher offered individual conclusion for each sections of the entire literature
review, it is significant to review vital information of the entire work to make improved
background for upcoming works of the research.
2.6.1 Theoretical Frame Work of the Research
Theory or Theoretical Frame
Work
Author of the Original
Work / Respective Research
Material Author
Relevance to the Research
Work
Porter Generic Theory of
competitive advantage
Porter (2004) on his book of
Competitive Advantage
Analyze the Etihad Airways
competitive strategy using
the model.Marketing Process of Kotler and Armstrong on Analyze marketing process of
41
Organisation their book of Principles of
Marketing 12th Edition
organization applicable for
Etihad Airways 4P General Marketing
Theory
Kotler and Armstrong on
their book of Principles of
Marketing 12th Edition
Application of 4P to the
Etihad Airways strategy
development process Ansoff’s Product-Market
Expansion Grid
Kotler and Armstrong on
their book of Principles of
Marketing 12th Edition
Analyze Etihad Airways
strategy of business
development using the
model PEST concept specifically
PandE impact on business
Used data published in
www.economist.com and
IMF
Analyze Middle East political
and economical impact on
Etihad Airways. Table 4
2.6.2 Empirical Evidences Found
Empirical Evidence Author of the Original Work Relevance to the Research
Work Fleet frequency and
destination development
Givoni and Rietveld (2009) Impact of growth of
destination and increase of
fleet frequency to the Etihad Labor Productivity Parast and Fini (2010) How labor cost impact to
organization development National and cultural
influence
Ahmed et al. (2010) National and cultural
influence of Etihad airways
development Cost management Lin and Chang (2008) How overall cost
management impact to
organization progressGovernment influence Doganis (2006) UAE government influences
on Etihad Airways strategy Table 5
42
2.6.3 Key Authors of the Research Work
Author of the Work Concept/s
Kotler and Armstrong on their book of
Principles of Marketing 12th Edition
4P General Marketing Theory, Ansoff’s
Product-Market Expansion Grid, Marketing
Process of OrganizationGivoni and Rietveld (2009) Fleet frequency and destination
development Hess (2007) Business growth
Doganis (2006) Government influence
Ahmed et al. (2010) National and cultural influence
Table 6
At the end of the entire discussion it was seen that there are numerous key authors adding
further value to the research, few theories and empirical evidence connected with the whole
research and those finding from literature improve quality of the work. From whole discussion
it has recognized various elements that impact to the achievements of airlines business for
instance,
o Organic growth through aircraft, target, and fleet frequencies progress
o Being in an rising market with government support
o Risk and Cost managing
o To attract consumers through application of appropriate marketing method.
So, these whole factors created improved platform for researcher to discuss Etihad Airways
plans followed in last 8 years to become booming Middle East airline.
43
CHAPTER 3
RESEARCH METHODOLOGY
3.1 Introduction
There are some evocative facts regarding to the research, but Bryman (2004) said “Research is
a methodical study to find out answers to a dilemma”. Researcher used a systematic approach
to find out the answers of the fundamental research question of this research. A reality
contains in every research that is it has an efficient technique to meet suitable solution for
questions of that research. Consequently, in the study, technique to facilitate study eager in to
do the research is considerably essential. Methodologies of a research is explained that how to
perform the research in an appropriate structure to reach end. Furthermore it is describing
that a method that researchers gather and evaluate data, attitude and approach of the
researcher, finally what are the probable research sampling techniques and so on.
During the next part will describe research values, approximation and appropriateness of that
approach and values researcher has adopted for the aforementioned research. Moreover,
segment will demonstrate the detail procedure of sampling, data compilation and intention
group, designing of questionnaire, dependability, legality and moral problems related among
the research (Saunders et al. 2009).
3.2 Research Philosophy and Approach
Saunders et al., (2009) explained that research philosophy is the method witch researcher
lookout the earth. Moreover, they have disagreed the significant matter is not the general
research philosophy for research other than the proper study philosophy supported on the
questions of the research. According to Saunders et al., (2009) the four main research
philosophies are positivism, realism, interpretivism and pragmatism, for this research the
researcher accepted pragmatism philosophy due to a number of reasons. An appropriate
approach is necessary and important for accomplish the research. Whether researcher apply
44
deductive approximation, in which researcher expands hypothesizes and suggestions and
designs research to check those premises and hypothesis, or inductive approach, in which
researcher gather information, from which researcher build up assumptions and theories
sustained on the evaluate data, is very important in the succeeding research (Saunders et al.
2009).
3.2.1 Importance of Pragmatism Philosophy
Pragmatism research philosophy is utilizing the researcher in this research. For the reason that,
ontology of the research is outside and research contain some views regarding to the research
questions. Additionally, based on the manifold outlooks researcher is trying to identify and
suggest finest obtainable response for the research (Saunders et al., 2009). In this research the
researcher is trying to evaluate the guidelines chased by Etihad Airways to turn into
competitive Middle East Airline. When using pragmatism philosophy research has get
sovereignty of use examination experience and biased meanings. Pragmatism philosophy
offers enormous possibility of amalgamate diverse attitude to construe information to achieve
preeminent accessible answer for the designed questions of the research (Johnson and
Christensen 2011).
No other research philosophies are giving possibility to reach suitable conclusion for the
designed research question when compared to pragmatism philosophy. Positivism, however
ontology external is autonomous of social conduct so organization likes Etihad who are in the
service area cannot remove societal manners when taking strategies. Philosophy itself may
have drawback to find out finest answers for the research questions because of the
researcher’s selection of the positivism as his research philosophy. Human thoughts are
disregard in the realism and it is extremely subjective so type of a public study this philosophy
may not correct.
Compared to the possibility of pragmatism philosophy for the above research axiology of the
pragmatism research philosophy will offer more opportunity to add researchers’ thoughts to
the research. For this reason, researcher envisages a few strategies in this research based on
45
the literature and his personal experiment of the secondary data and is going to assess
confirmation of those impressions. Hence, it is extremely imperative to give probability to the
researcher to attach his personal outlooks to the research and pragmatism philosophy is the
best alternative to include research values. As stated by the Saunders et al., (2009) value of the
researcher plays an important role in pragmatism philosophy during the period of result
interpretation. Moreover, this philosophy offers more flexible situation for collecting data
than other available research philosophies. So pragmatism philosophy has been selected for
this research (Stuhr, 2003).
3.2.2 Why Inductive Not Deductive?
Figure 7
As stated by Trochim (2006) deductive approach of research works from common to more
particular part of the research questions and several scholars describe this as top down
46
approach of the research. On the other hand, in inductive approach it is running with other
system approximately in that situation. It can be illustrated as "bottom up" approach of
research. In this inductive approach, based on the observation researcher can study more facts
and reach most suitable answers for the research questions (Teddlie and Tashakkori nd).
The purpose of this research is to gain close understanding about Etihad strategies pursued
and achieve more qualitative analysis. Other than that, for performing this research the author
intends more supple structure. In this research inductive is much more suitable than
deductive. Essentially, foregoing research is social since research which is dropping to business
management category. And researcher gathers some facts from the accessible sources to
enlarge conclusion for the details about the company strategies.
Qualitative data is the base for this research rather than quantitative data. Deductive
approach condition is demanding much more quantitative data rather qualitative data
therefore considering that aspect inductive approach is greatly fitting. Though, as an overall
outlook of the research it is inductive approach supported research which researcher going to
gather data and based on the data reach absolute conclusion. Etihad Airways is searching for
superior worldwide development in airline division. The organization has grown extensively in
a short period of time and is one among fast developing airline in the region. In such situation,
to recognize their strategies followed to achieve important development in the industry,
inductive approach is perfect (Saunders et al., 2009).
3.2.3 “Onion” Model Application
47
In view of Saunders et al. (2009) description, the researcher used research “Onion model” to
expand improved research frame. Pragmatism philosophy as research philosophy and
inductive approach as appropriate approach for the research is the explanation of the above
description. Considering much profound methodology of the research, the current research
policy is close to case study theory. Since, research frankly dealing with Etihad Airways and
examined experiential and hypothetical outline related with the selected research questions.
While this research committed to development strategies implemented by the airline and is
dealing with solitary establish company, the most suitable strategy was case study approach.
48
Figure 8
(Saunders et al. 2009)
3.3 Research Study on Etihad
Only limited data is available about Etihad Airways because it is a private company.
Furthermore, due to lack of experiential research formed condition anywhere comparisons of
data with other establish airlines and most of this data were learned through internet. In
addition, using survey method certain quantities of primary data are collected. Therefore
research has used both primary and secondary data to develop structural details. Hence, it is
appropriate with varied method of choice because background of this research methodology.
Only short time period was allocated to the research. Such a limited period did not permit the
researcher to investigate all information about Etihad Airlines and strategies they have
followed during last 8 years period. Hence, the research was falling to type of cross-sectional
considering time concern (Saunders et al., 2009).
3.3.1 Designing of Questionnaire
Brace (2008) explained that if anybody choose questionnaire as primary data gathering
method the questionnaire is the significant part in its accomplishment. Arrangements of
questions and gather information through that will not present correct proof or information
associated to the research question. Maybe it can deceive researcher through pointless and
irrelevant data, so eventually it will be a valuable valueless approach that researcher has
undertaken.
Both paper based and electronically based questionnaire has developed in this research.
Website was used to develop electronic questionnaire and similar set of questions transmitted
to the papers. Nevertheless, if the kinds of questions are vague, then it would have formed the
questionnaire too lengthy and hard to investigate. As a result and due to shortage of time
availability, the total questions in the questionnaire are close-ended and it makes short and
49
comparatively correct analysis. Researcher has worked the subsequent questionnaire design
procedure fallacies and modified from the work done. The simple illustrator of the
questionnaire can be found in the below figure (Hague and Morgan, 2004).
Figure 9
The literature point out that in airline industry, there are numerous aspects determine the
achievements such as in-flight facility, cargo managing, cost management, destination,
reservation management, risk management, pricing strategy, promotional strategy and many
other common aspects. 17 questions contained in the questionnaire and each of these
questions search the strategies practiced by the airlines to develop into a competitive airline
comparatively minute period of time. In Appendix 1, a print of questionnaire can be found
(Hague and Morgan, 2004).
3.3.2 Sample Selection Techniques
For finding answers for research questions researchers require valid data. In such conditions
there should be an appropriate sampling technique to assemble information which stands for
entire population as much as close because in most of the time it is virtually unfeasible to
50
acquire data from complete population (Smith, 2011). Conversely, this research has selected a
technique. It is virtually impossible to have statistical inferences in some research like case
study and market survey when approaching sample selection. This set force on research to
choose sample in several other method and in such chance researcher can apply non-
probability sampling techniques. Non-probability sampling technique has selected for selecting
sample in the above research. Further, convenient sampling method has adopted in the above
case to accumulate data because the researcher going to check strategies pursued by Etihad
Airways to become competitive airline. The sample selected for this research is the employees
working in Etihad Airways offices. The researcher conducted the survey by distributing
questionnaire to employees.
3.3.3 Data Collection
Academic journals, scientific magazines, written material, electronic material, published books
and survey are used to complete the needs of the study used data from different sources.
Through Survey questionnaires primary data were collected for this study.
Researcher collected primary data through survey questionnaires because most of the
strategies followed by the organization were unpublished and there were restricted
experiential study about the Etihad Airlines. The survey questionnaire was distributed to 15
employees of Etihad Airways office with a requesting letter which described the purposes of
the survey and certifying that the responses they provided will be kept confidential and won’t
be misused or used for other purposes.
Every research require some secondary data for developing survey questionnaire (Davenport
nd), in this research it was based on literature review and empirical research evidence as a
foundation. This offered an opportunity for efficient and effective data collecting. With the
use of all the above mentioned resources and technique researcher gathered the data in order
to accomplish the demanded data of the dissertation.
3.3.4 Pilot Testing
51
It was described Chen (2005) that it is extremely essential for performing pre testing of the
questionnaire needed to the survey. Since, in some situation data sources may not clear about
what researcher is demanding therefore in such miscommunication may guide faulty
conclusion or worthless data collection. So in this dissertation work, through the pilot testing
process sends the survey questionnaire. Primarily the survey questionnaire was circulated
among some friends of the researcher and collected the feedback from them about the survey
questionnaire. Essentially in this pilot testing it was testing whether the respondents can
recognize questions, language used for questions, questionnaire series, and practicability of
providing replies for the questions. After pilot testing few of researcher’s friends
recommended certain alteration on the survey questionnaire. Based on their perceptive
submissions the researcher modified certain language issues, questionnaire series and few
other modifications which facilitated information providers to give finest answer for the
questions.
3.3.5 Dependability and Validity
Four main threats highlighted by Robson (2002) to reliability; that are subject or participant
fault, subject or participant partiality, observer mistakes, and observer partiality. Since
researcher developed survey questionnaire supported on the prior supposition according to
the findings of literature these four main threats influenced to this research. Therefore, there
was an ordinary tendency about the observer faults and observer partiality. For decreasing
these two major threats utilized pilot testing and the assistance from the local instructor. From
the work finished by German scholar Friederichsen (2009) stated that the status of consistence
can be changing between observers and the similar observer on number of changing
circumstances. Nevertheless, in the same time extra number of answers will diminish the
influence of faults to the sum total outcome. It is very complicated to manage personal
partiality from both researcher and information provider to reach conclusion. So, it is
practically impossible to have 100% dependable data therefore, information verification, pilot
testing, and local tutor consultation strategies have used by the researcher to boost the
52
dependability. Further, when selecting sources for information the researcher made sure that
they were correctly engaged by Etihad Airways.
Robson (2002) highlighted several important factors that affecting validation of the
information and validity of the research data is always extremely significant aspect. It should
have a clear gap between information received and its validation when applying the arguments
to the above research. In this dissertation, information gathered through questionnaires.
Researcher distributed the survey questionnaire to majority of the employees in the office to
improve the validity of the information.
Reliability and validity of this dissertation can be very conformably addressed based on the
previous literature and action taken by the researcher. In every research there has some
validity and reliability problems facing by the researcher, also in the above research work
impact of these two factors was another limitation (Friederichsen 2009; Robson 2002).
3.3.6 Generalisability
Generalisability of the research work is the ability to generalisation of findings. Etihad Airways
is an imminent Middle East airline. Therefore, the strategies pursued by the organization may
be capable to utilize other organization in the airline industry in future. The achievement of
Etihad Airways in a short period like 8 years and these achievements were impressive. Other
companies can use these strategies pursued by the Etihad Airways, who wishes to develop
their business. The authenticity of the original information is relatively low because of above
discussed reliability, validity and dependability of the primary data (MacNaughton, 2010).
3.3.7 Process of Research Analysis
For analyzing the responses of the survey questionnaire researcher used some descriptive
statistics and that are; percentages, form Microsoft Excel program and facility available with
the Microsoft Excel program such as Pivot table. This study gives primary importance on the
area of strategies pursued by the Etihad Airlines, using literature and empirical research facts
enlarge the survey questionnaire by understanding probable strategies they have made.
53
The key idea of the work described that, the basic testing was what are the strategies pursued
by the Etihad Airways to develop significantly during the short period likes 08 years and how
Etihad achieved significant growth in the Airline industry. All the questions in the survey
questionnaire focus on definite area that is the Airline industry. The main aim and discussion
throughout the work is the strategies pursued by the airlines. As a result, very limited number
of quantitative analysis and data connected with the work. Based on the theories, empirical
evidence from the earlier work, and literature from different academic works researcher
formulates some important assumption to produce survey questionnaire. While research
greatly depend o the qualitative data examination and it did not use any statistical data
analysis software or method like SPSS 11.0.
3.4 Alternative Method
The reality is that there must be further methods to do this research to recognize strategies
followed by the airline to turn into a competitive organization. Various methods can be used
to conduct this research. With the use of interview techniques someone can achieve improved
and more applicable information, which is targeting key employees of the organization it
certainly give closer conclusion to research questions. Besides that, if researcher can mail the
survey questionnaire to people who really answerable of each procedure the outcome would
closer to the genuine information.
Important base of this research is the experimental data and qualitative data analysis
techniques. The results would be much better with use of quantitative data analysis after
collecting quantitative information. As far as above research, there are numerous alternative
techniques that research can do to gather primary data as well as secondary data, for analyzing
data and also data presentation. However all of these factors depend on the two factors that
are availability of time and availability of resources.
3.5 Issues about Ethics
Ethical issues are highly vital to research and it resolves the victory of the research (Saunders
et al, 2009). Proper research ethics is necessary for reaching better and quality conclusion that
are reliable and valid. The purpose of arriving correct conclusion makes sure that researcher
54
pursued the proper ethical protocols and does not go away of the ethical dimension (Kimmel,
2007).
During the research period for the purpose of fulfilment with the research ethics researcher
has promised that the all data has been gathered, data or information has been referred, or
any other information took from books, journals previous works and any other sources were
correctly recognized. Moreover, for taking information from other sources researcher has
given credit to the original owners (Kimmel, 2007). Proper research ethics has followed by the
researcher during the process of primary data collection and make sure necessary level of
confidence on information provided. Further, at the time of primary data collection process
researcher ensured that the data gathered used only for the academic function and none of
the information has been assigned with another party. Moreover, all the resources utilized for
the research such as software is completely authorized and researcher ensured no plagiarize
software has been used for the research. Also, researcher ensures that the purpose of
collecting data is not to worry or pressure anyone or anything (Kimmel, 2007).
3.6 Research Limitations
In every research there will be some limitation during the research process, some limitation of
the work became more noticeable, and some of the significant limitations of this dissertation
are shortly discussed below.
The response rate for the survey questionnaire was low in this research. While the researcher
produced survey questionnaire which take fewer time to accomplish and easy for respondents
to respond, still response rate was low. Further, information provided through the survey
questionnaire may give erroneous or fraudulent responses and it is with the short of
genuineness (Obitz, 2009).
Accuracy and level of sincerity is questionable because survey questionnaire was distributed to
employees of one of Etihad Airways office. Since Etihad is a government airline company there
may be restrictions for employees in revealing information to outsiders. Moreover, since
55
employees of only one office were included in the survey the accuracy of information can’t
also be completely ensured.
Due to restricted time, only limited responses were gathered and the span of the survey
questionnaire was limited to acquire extra responses within short period of time. Therefore,
some features could not test at the time of data collection process. With the help of longer
time period and extra question added to the survey questionnaire researcher can possibly
acquire most accurate result (Obitz, 2009).
The Etihad Airways have not published more details because it is a private company. Whether
Etihad is a public quoted company then get more details about the company through annual
reports, compliance reports, audit reports, and other investor related information. Also
financial information related to the Etihad is a limitation. There were very limited experimental
research and academic articles available about the Etihad because organization is immature
player of the airline industry. Therefore, it generates condition where accessing secondary
information complicated (Obitz, 2009).
3.7 Conclusion
A short conclusion of the above mentioned discussion of the research mainly designs
according to the pragmatism research philosophy and inductive approach. Moreover, it was a
cross sectional research due to restricted time convenience and case study strategy used to do
the research. Mixed method of data and data collection techniques used for the research.
Furthermore, questionnaire was used for data collection function and with the help of
Microsoft Excel software collected data are analyzed. Researcher has been used numerous
techniques for developing the reliability and validity which was detail discussed in the above
and research is competent enough to generalization. The major drawback of study was
collection of appropriate data and there were several limitation connected with the research
with related to collected information. During the research researcher tried to follow ethical
protocol.
56
CHAPTER 4
DATA ANALYSIS AND FINDINGS
4.1 Introduction
According to Winstanley (2009) presenting data is not similar as analyzing data. Collected data
through different sources wants to analyze to acquire valid information from that. Whether
researcher has collected primary data or secondary data it does not a subject but both primary
and secondary data need to study to get salient information. The primary expectation of this
research is to reach appropriate conclusion through pertinent and significant data (Saunders et
al, 2009). During this chapter of the dissertation researcher analyze the acquired data through
primary sources like survey questionnaire and secondary sources like organizational website.
This chapter will present and analyze not only secondary data but also primary data. However,
in this research firstly the researcher assesses secondary data collected from various already
published sources and secondly primary data through his own survey questionnaire.
In this segment of the research, the researcher has devoted to recognizing information from
inchoate data obtained from both primary and secondary sources. Sometimes most of the
collected data are in qualitative manner so researchers use Microsoft Excel spread sheets for
converting those qualitative responses into the quantitative format. This will give meaningful
information to the researcher. The research data have sturdy relationship with literature
described in the chapter 2 of this work and it has collected information which was highlighted
from the theories and experimental facts in the significant literature review. Literature Review
provided a forceful background for rest of data analysis division of the research (Winstanley,
2009).
57
This chapter is a combination of data presentation, data analysis and findings from the
analyzed data. For this reason, the researcher considers having to divide the whole chapter
into two separate chapters for data analyzing and findings. One chapter will give significant
understanding of the findings with raw data. This will reduce the reader time and create less
difficult to review data and findings, the link of raw data and analyze information with related
findings create clear-cut recognition of findings. Therefore, the dependence of the chapter will
analyze the data and present relevant findings with the data analysis (Winstanley, 2009).
4.2 Presentation and Analysis of Secondary Data
During the below segment of this chapter, secondary data for 4 years time period and those
data obtained from the official website of the Etihad Airways that is Etihad airways.com is
analyzed. Significant secondary data are acquired by the researcher from official website of the
Etihad Airways. Most of the collected information is closer to the quantitative information. In
addition to that to construe information, researcher used appropriate information that he has
collected in the literature review section or in the secondary sources.
Passenger Travel: The amount of passengers has increased during period of 2007-2010. Figure
4 represents or shows how the number of passengers or the passenger’s rate of has increase
over the period. Year on year information described that 2008 by 30%, 2009 by 5% and 2010
by 13% passenger travel has increased. However, as highlighted, in 2008-2009 period travel
industry went with the losses and airline passengers have decreased.
In such situation Etihad success is remarkable and it intricate that Etihad obtain development
in travellers. In downfall market getting further passengers verify that the organization
management and strategies competent enough to acquire important achievement in future
too.
58
Figure: 10
New Aircraft Purchase: Etihad Airways started their commercial business with 6 aircraft and by
the end of 2010 they had 57 aircraft. During the period of 2007, 2008, 2009 and 2010 they
added aircraft respectively 15, 10 and 11 05 to their total aircraft base. So, in each year this
organization is adding more aircraft in to their Airline operation. Etihad announced the largest
aircraft in 2008 at Farnborough International Air Show, order in commercial aviation history for
up to 205 aircraft – 100 firm orders, 55 options and 50 purchase rights. Thus, it shows the
organization has enlarged during the period in terms of number of aircraft. Moreover, it
describes that the strategy of Etihad is improving capability of the organization for higher
growth.
Innovative Destinations: With the help of secondary data, one can understand that in each
year Etihad is adding new destination to travel. They had only 35 destinations in the year 2006
and at the end of the 2010, 65 destinations were managed by the organization to fly. In period
of four years Etihad added another 30 destinations to their flying map and it was done in way,
09 destinations were added in the year 2007, during 2008 added 06 destinations, 08
destinations added in the year 2009, and during 2010 added other 07 destinations. So, these
data give apparent information about the organization strategy about the adding of
destination. Destination adding is considered as a business capability improvement by Etihad.
59
Thus, organization remain on in rising number of destination that they straight their flight to
fly.
Guest Members of Etihad: Etihad guest member is a loyalty program of the organization and
through this they bring replicate customers to the organization. Replicate customers improve
the organization’s productivity by falling marketing cost. In the case of Etihad the following
graph shows the data associated to the customer loyalty rising. Therefore, figures are
mitigating that the organization improved year on year consumer loyalty. They have only
275,000 Etihad Guest Members during 2007 but at the end of the 2010 year organization
supervise to accomplish
1 million loyal customer
bases. This fact
presents clear
finding of the customer’s
fulfilment and daily
organization enlarge the
consumer
contentment.
60
Code-share Partners: Organization entered in to diverse partnership agreements with some
other airline companies. Above segment of this study discussed Etihad having agreements with
several other airlines one of them is Virgin Airlines. Organization was adding more and more
partners during the period of 2007-2010 through mutual agreements.
Fuel hedged: Etihad is entering fuel-hedging agreements with other company in each year and
they present this detail as a percentage of total fuel cost. In 2007 Etihad fuel hedged
percentage was 65% and 76% in the year 2008 and 66% during the year 2009 and finally in
2010 it was 82%. Therefore, organization enters in to fuel hedging activities as a risk
management action. These figures have clear connection with the performance of the
organization in conditions of revenue. Etihad enter in to more percentage of fuel hedged
activity revenue in each year and it was high. The following segment will describes the
revenue analysis of the organization.
Revenues: The revenue of Etihad has increased during 2007 to 2008 it was 66% and 2008 to
2009 it was reduced by 8% but when comparing to the year 2009, in 2010 revenue of the
organization increased by 28%. Therefore, except 2009 rest of the year’s revenue of the
company has improved considerably. Within 04 years period organization revenue was almost
double and it was USD 1.5 billion in 2007 and in 2010 it was USD 2.95 which was 97% enlarged.
4.3 Findings from Secondary Data
Analysis of secondary data spread over seven important areas such as passenger travel, new
aircraft purchase, new destinations, Etihad guest members, code-share partners, fuel hedged,
and revenues, it discussed in the above part of the research. There are numerous vital factors
to recognize by the researcher through analysis and most of these primary data prove the
growth of Etihad business over past few years. However, regard all these information collected
through secondary data analysis there are some conclusion intricate in the following.
Etihad Airways’ passengers increased 54.34% in the year 2010 with compare to the passengers
travel in 2007 year. Therefore, numbers substantiate that more and more passengers are
61
choosing Etihad Airways as their aircraft journey. In the short time period like 4 years Etihad
archived 54.34% of passenger travel or customer improved was important for the business
growth.
It is the actuality that this organization was adding more and more aircraft to the operation
and even they have publicized the biggest aircraft order in commercial aviation history for up
to 205 aircraft – 100 firm orders, 55 options and 50 purchase rights (2011).
Organization purchased 41 new aircrafts during the four years time period and organization
mange to fly 57 aircrafts throughout their destinations at the end of 2010. Etihad is taking into
consideration to adding more aircrafts for increasing their organization capabilities; this is the
findings from the secondary data. Therefore, it is clear that the strategy to growth pursued by
Etihad is purchasing new aircraft.
Only 44 destinations had Etihad in 2007 to fly but end of the 2010 they have managed to flies
of 65 destinations in 45 countries (Appendix 02 – Network Plane of Etihad from Etihad
website). Organization has increased 21 new destinations during 4 years period which was
47.72% growth in terms of number of destinations. Hence, they have being pursued strategy of
adding new destinations to their route map as a strategy of enlarged airline business.
Over the 4 year’s period Etihad was achieved significant growth in their loyalty program.
Ending of the year 2007 period organization had only 275K loyal members but they have
handle to raise that number in to 1 million loyal customer bases by 263% at the end of 2010
year. This number was remarkable and astonishing and it proves major part of the customers
who utilized Etihad was glad about their service.
Organization managed to enter 06 cord-share partnership agreements by the end of 2007 but
in the end of 2010 year it was 28. This success brought additional entrée of new markets to
develop their airline business.
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In 2011, explained “through its 28 code share partners, Etihad’s network spans a total of 157
cities on five continents”. Organization was taking into consideration because of the
improvement of cord-share partnership agreements they can improve their business.
Etihad is having fuel surveillance agreements and they considered it as a risk management
activity of the organization. The numbers validate that organization was severe about these
fuel hedged agreements. To safe instability of the revenue variation due to alteration of fuel
prices Etihad entered in to some hedged agreements and they were gathered this as their
approach for risk management.
Finally as an outcome of entire activities Etihad controlled to attain 96.66% profits
development over the period of 4 years. The truth is that during a short time period like 4
years organization has double their profits what it was.
4.4 Presentation and Analysis of Primary Data
The survey method was selected and questionnaire was distributed to 17 employees in Etihad
Airways office for the purpose of primary data collection. Some among the employees did not
participate in the survey. Only 15 employees returned the questionnaire duly filling it which
makes the response rate 88%. Survey questionnaire includes 17 questions and in that 17
question 01, 02, 03 and 04 related to personal information of the respondents. However,
question number 03 only for Etihad employees and make sure that only Etihad employees
were participating for the survey.
Some questions are connected to the 4Ps of the organization such as Questions number
05,06,07,11, and 12, while it was discussing marketing strategies of the organization.
Operational areas of the organization related questions are questions number 08, 09, 10, and
17 and especially it is connecting to the findings of the literature such as destination, fleet
frequency and number of aircrafts impact for development of the airline business. All the other
questions had tested any other diverse segments influence to the airline business such as
question number 13 deal with government impact, number 14 cultural influences, number 15
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impact of Middle East economy, and 16 was strategic alliance. The next part of the research
will show responses connected to the each questions and its analysis.
Question 05: Due to best price for the tickets customers are selecting the Etihad Airways. Do
you agree?
Responses: Because of their pricing strategy about 47% believed customers are selecting
Etihad and another 33% disagreed with pricing strategy and they replied did not have any
impact and 20% opted for neutral option.
Agree47%
Disagree20%
Neutral33%
Best price isthe reasonbehindgrowthofE had
AgreeDisagreeNeutral
Question 06: Core in-flight services provides by the Etihad airways such as luggage allowances,
foods and entertainments activities have impact on organization sales growth. Do you agree?
Responses: Near to 60% of customers consider Etihad because of the core of services and
other 20% are disagreed with this core service strategy and 20% responded neutral.
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Question 07:
Additional service provided by the Etihad airways such as low charges for additional luggage,
disability person service, child caring activities have impact on organisation sales growth. Do
you agree?
Responses: Among the total respondents 53% replied that additional services of Etihad had
positively impacted upon their growth and 20% respondents said that additional services do
not lead to Etihad’s growth. 27% responded that additional services may or may not influence
development of Etihad.
65
Question 8: Etihad provided sponsorship for varies sports such as golf, rugby and even football
team like Manchester City Football Club. These activities promote the brand name of Etihad
and its increased organisation growth. Do you agree?
Responses: whole outcome were neutral because uniformly customers believed that there was
influence on promotion, there was no impact or neutral to the question.
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Answer Frequency %Agree 6 33.33%Neutral 6 33.33%Disagree 6 33.33%Total Responses 18 100%
Question 09: Adding more routes had a clear impact to the increase of Etihad Airways profit.
Do you agree?
Responses: 53% of respondents are believed that adding of more routes improves the
profitability of Etihad and 27% respondents are did not believe adding more routes enhanced
Etihad profitability and 20% respondents opted for neutral option.
Question 10: Adding More Aircraft Had A Clear Impact To The Increase Of Etihad Airways
Profit. Do You Agree?
Responses: 60% of respondents agreed and consider that adding more aircrafts can increase
the profitability of Etihad whereas 26.67% disagree with this statement and added that they
did not believe adding more aircrafts increased Etihad profitability and 13.33% respondents
chose for neutral option.
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Question 11: Increasing fleet frequency for particular destination increased the profitability of
Etihad airways. Do you agree?
Responses: 73% among the respondents agreed with this question and they believe increasing
fleet frequency had increased income of Etihad and 13% do not believe that adding more
aircrafts increased Etihad profitability and the percentage of respondents chosen the neutral
option were 13%.
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Question 12: Etihad Airways provided different experience to the customers through Diamond
First Class, Pearl Business Class Flights – flat bed, Pearl Business Class – Seat and Coral
Economy Class. This product portfolio brought additional growth the airline. Do you agree?
Responses: 40% participants of the survey responded that customers are selecting Etihad
because of different experience and product differentiations. The respondents who did not
believe that additional service strategy enhanced profitability of Etihad were 27% among the
total respondents. 33% respondents chose to be neutral.
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Question 13: Cost management is curtailing for airline profit. From witch fuel is the biggest
cost element and fluctuations of fuel price create profit volatility. Etihad has entered in to
several hedging agreements to mange fuel fluctuation risk and it brought huge success to the
airline. Do you agree?
Responses: 33% of answered persons are believed entering more hedging agreements improve
Etihad income whereas 41% did not think entering more hedging agreements increase Etihad
profitability and 27% participants were neutral regarding this statement.
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Agree33%
Disagree40%
Neutral27%
Agree
Disagree
Neutral
Question-14 Does government policy influence Ethiad Airways?
Responses: 40% of respondents agreed with this statement that UAE government have
positive influences to the Etihad Airways. Among the respondents 27% did not believe
government influences have positive impact to the Etihad and 33% responded neutral.
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Question 14: Cultural influence is one of the major reason when passengers select airline for
travelling. Etihad is based on the Islamic cultural hospitality so it provided growth opportunity
among the Islamic passengers. Do you agree?
Responses: 33% of respondents believed that the cultural impact can make positive influences
on Etihad Airways and some percentage did not agree with that that was 40% of the
respondents and in neutral opinion were 27% among the participants.
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Question 15: Middle East market is developing significantly and most of the countries rich with
oil reserves. Being emerging Middle East market provided significant opportunity for Etihad
Airways to get success. Do you agree?
Responses: Middle East Market developments have positive impact to the Etihad Airways and
39% people are supported with it and next 33% did not agree with this opinion and they
disagreed and 28% was neutral.
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Question 16: Mutual agreements between airlines such as agreement between Etihad and
Virgin brought significant success to the Etihad Airways. Do you agree?
Responses: 33% of answered persons believed Strategic Alliances have made positive impact
to the Etihad Airways and another 27% did not believe Strategic Alliances have positive impact
to the Etihad and they disagree with this, next 40% was impartial towards this statement.
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Survey questionnaire results are the exact base of this study and it analyzed on the basis of the
context of the questions for each of the segments as examples questions number 05,06,07,11,
and 12 associated to the strategies used in the marketing, operational area related questions
are questions number 08, 09, 10, and 17, about enquiry of government impact was question
number 13 and cultural influences related question was question number 14, number 15
impact of Middle East economy, and lastly strategic alliance linked question was 16.
4.5 Findings from Primary Data
Describing information was acquired or founded from the above analyzed primary data and it
considered as findings from primary data of the study. As give details above question
05,06,07,11, and 12 related to the marketing strategies. Founded on the answers afforded for
the question number (QN) 05, 47% approved that customers selecting Etihad airways because
of their pricing strategy but around 20% disagreed with and they gives no consideration for
pricing strategy as well as they selecting Etihad for flying without any consideration, with the
same time around 33% of respondents are neutral position. Therefore Etihad employees as
stated that, organization pricing strategy impacted to the buyers for their buying decision and
they give attention in that strategy. Further, survey established with 60%, for the customer’s
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choice of selecting Etihad airways had an influence of core services such as baggage allowance,
providing of foods, and entertainments activities but the same time 20% said there are no
impact of core service for sales development and 20% on this time in the no opinion. This
response of employees about core services strategies said that it had a clear impact to the
organization development. The important assessment obtained or the survey identified from
the primary data is there is apparent impact of additional service to the Etihad sales
development and organizational growth such as services like additional luggage allowances,
disability person service, and child caring activities which was around 53% response rate.
Except around 20% of the employees disagree with this and around rest of 27% was neutral.
Therefore, reality is that additional services of Etihad provided to the customers had made a
positive impact on their sales growth. When considering outcome of the survey answers
product discriminates was another key achievement aspect for the Etihad and about 40%
employees of the organization believed customers selecting Etihad because of different
product experience offered by the organization and they have sustained due to differences of
product such as Diamond First Class, Pearl Business Class Flights – flat bed, Pearl Business Class
– Seat and Coral Economy Class had effect to the quick development of the organization.
When comparing all the findings from the primary data researcher gets an interesting one that
is, Etihad providing sponsorship to expanding the business and their rapid growth. For that
questions 33% agreed that it created development 33% said it did not had effect to the
organization growth and rest of 33% condition was on neutral. Therefore, from the above
discussion researcher cannot reach a better conclusion, because of the impact of promotional
activity and the impact on organization growth. The real outcome or the findings from the
above mentioned five research questions researcher can reach in to the conclusion and that is,
product and price of Etihad Airways is the important factors which decide their success during
last 08 years period.
Operational impacts on organization growth connected questions are Question numbers 08,
09, 10 and 17. As recognized in the secondary data analysis Etihad was increasing their
intention throughout the globe and this was growing extensively throughout the last four years
periods. During last few years Etihad has added many new routes to fly and the impact of
76
development of new routes to development of organization checked with the employees.
Increase of routes has positive impact to the growth of the organization and around 53%
employees accepted that. Moreover, Etihad profitability can increase with adding of more
aircrafts to the operation and 60% of employees are accepted that, so organization employees
agreed with adding more aircraft was another growth strategy pursued by the Etihad. In
addition to, 73% of employee confirmed that another reason for development of organization
was high fleet frequency for same destination. Employees of Etihad were accepted that the
growth strategy the organization was developing of more fleet frequency. However,
employees not supposed having more contracts for fuel hedging not had any effect to the
growth of the organization. However with relevant to this question about 27% employees
answers were neutral this may due to shortage of understanding of the hedging procedure and
40% was refusing the impact of hedging for profitability development.
Findings acquired from question number 13 and that was the influences of UAE government
have made helpful impact to the Etihad organization as well as about 40% of employee
confirmed that there was significant positive impact to the organization from the government.
Moreover, same percentage that is 33% of employees was in neutral condition about the
impact of government for organization development. Therefore, more employees were
agreed and believed that the impact of government was crucial of the development of Etihad.
The outcome of the survey discovered that effect of Islamic culture did not have impact to the
development of the organization. According to the employees of the Etihad they are operating
Islamic hospitality service to their passengers it does not have clear impact to the organization
growth. About 40% of employees do not consider that the growth of the organization is due to
Islamic cultural influence and only 33% employees recognized with cultural influence to the
organization growth.
Majority of the answered employees are consider being emerging Middle East market offered
momentous development opportunity to the Etihad Airways. 40% of employees were
confirmed that being Middle East airline it was significance to grow the business but rest 27%
employees were refused this thought. Finally study was checked impact of the strategic
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cooperation had positive influence to the organization growth and which was 33%. Because of
the shortage of awareness of the internal process of the organization 40% of the employees
were neutral for this question.
4.6 Conclusion
As a conclusion from the above analyzed data and findings of the gathered data, researcher
has analyzed collected data in qualitative manner. Though, for this aim researcher used not
only primary data but also secondary data and the data are collected from both survey
questionnaire and Etihad published data. This data analyzing and findings section of this
dissertation did only the qualitative data analysis and explicated findings of the analyzed data.
Moreover, with the help of these findings and literature researcher will response the research
questions in the chapter 06. The key aim of this study was identify the important information
associated to the strategies pursued by the Etihad for the rapid growth of in the airline
industry.
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CHAPTER 5
RECOMMENDATIONS AND CONCLUSION
5.1 Introduction
This chapter will discuss about in which degree researcher meet the research objectives. In this
research there is link between research objectives and the research questions therefore when
the researcher meets the research objective he will get the answer of the research question.
“A Critical Evaluation of the Global Growth Strategies Pursued by Etihad Airways to Obtain
Rapid Growth in the Airline Industry” this is the aim or the research theme of the dissertation.
Researcher has utilized primary and secondary data for generating or attaining the final
conclusion. In the following section of the research will evaluate the relevancy of literature and
findings of data analysis, how going to reach set of research objectives. This chapter also
includes recommendations so in the later part of the chapter will provide some important
recommendation to the Etihad Airways based on the research findings. In addition to the
conclusion and recommendation in the end of this chapter will discuss probable future
research opportunities to accomplish the knowledge gaps.
5.2 Conclusion
The key aim of this conclusion part is to give appropriate answer for the research question or
the research objectives so under the final conclusion of the research work it intricate research
objectives with findings. Thus, through this section researcher will evaluates all the objectives
jointly with findings. Researcher concluded independently the dissertation because he did a
direct evaluation each of the objectives and relevant findings.
5.2.1 Objective 01 - Critical Evaluation of Organizational Growth
According to Hess (2007) in the literature review section of the dissertation growth of the
business as creating more customers, launching new products and increasing operation
effectiveness. This research has one foremost aim that was analyzing organizational growth of
Etihad during last 04 years period. Secondary data proves that the organization attained
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momentous augmentation during last 04 years period. On the basis of analyzed data findings
Etihad manage to increase their number of customers by 54.34% with respected to the 2007 in
2010. Through this short time period like four years organization was purchasing 41 new
aircrafts and in end of 2010 organization control to fly 57 aircrafts. In addition to, in these 04
years period organization has enlarged 21 new destinations which was 47.72% growth in terms
of number of destinations with evaluate to the 2007 in 2010. Organization had only 275K loyal
members in the end of the 2007 but at the end of the 2010 they have manage to enlarge that
number in to 1 million loyal customer bases by 263%. Organization managed to enter 28 cord-
share partnership contracts by the end of 2010 and this was 06 in end of 2007 year. Profit
increase is a precious one because over the period of 04 years Etihad managed to achieve
96.66% profits enhance from 2007 to 2010. All the above points are reached a conclusion that
is during this short time period Etihad achieved an outstanding and significant organizational
growth in the operational areas, financial section and customer improvement. Etihad Airways
has been growth significantly because of the parameters of Hess (2007).
5.2.2 Objective 02 - Pursued Marketing Strategies
Taking into consideration of analyzed primary data of the research there are numerous
marketing strategies can recognize. On the basis of 4P concepts of the marketing, for
organizational growth of Etihad pricing strategy have made a positive impact and which was
proved by 47% of employees of the organization. According to the employees of Etihad, pricing
strategy of this organization influenced to the buyers for their buying decision. Moreover, 60%
survey participants opines that customer’s decision in choosing Etihad airways is influenced by
core services such as luggage allowances, foods, and entertainments activities of the Etihad. As
a result, based on the replies of employees core services strategies had clear impact to the
organizational development. In the meantime survey recognized there is clear impact of
supplementary service to the Etihad sales expansion such as services like additional luggage
allowances, disability person service, and child loving activities which was around 53%
response rate. Another key success factor of Etihad is the product differentiates. About 40%
employees of the organization agreed customers selecting Etihad because of different product
80
experience provided by the organization. Though, outcome of the survey substantiate that
there is no major impact on promotional activities done by the Etihad for their development.
As stated by Kotler and Armstrong (2009) clarification and this identification were similar. This
research has evidently recognized the following strategies organization gathered as marketing
strategies to acquire momentous development. To acquired considerable development in the
airline industry Etihad gathered customer motivated pricing strategy as explain by the Kotler
and Armstrong (2009).
Every service of Etihad satisfies customer expectation because Etihad has managed to provide
service demand by the air travel passengers. Also organization manages to add value adding
service to the consumers and accurate product demanded by the customer at reasonable price
was the other marketing strategy pursued by the Etihad. Kotler and Armstrong (2009)
arguments are main base of this research.
The main strategies gathered by Etihad are the product differentiates and development of new
product. These strategies are considered as growth strategies pursued by the Etihad. Ansoff’s
explained that Product-Market Expansion Grid development of new product is a strategy to
success.
Taking into consideration whole marketing strategies gathered by the Etihad to get
momentous victory, are exact product with value adding service to the customers, correct
price which is challenging by the customers, growth of new product to the customers which
facilitate them to have diverse experiences and demarcation of product according to the
customers. Above discussed four strategies can recognize as marketing strategies of the Etihad
which got considerable achievement to the organization.
5.2.3 Objective 03 - Pursued Organizational Strategies
Researcher can recognize some operational strategies pursued by the Etihad Airways during
last 08 years on the basis of primary data and secondary data analysis findings. Operational
strategies of Etihad are they increased their destination, fleet frequency and number of
aircrafts. This recognition was similar as identification of Givoni and Rietveld (2009) on their
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research about airline operational development. With the help of primary data and secondary
data proved that organization developing their number of destination and fleet frequency as
strategies of origination growth. Moreover, the major development strategy that organization
has pursued is mutual agreement and it was proved the primary and secondary data through
strategic alliance. Another strategy pursued by Etihad is the fuel hedging and this information
was provided by the secondary data of the research. Nevertheless, primary data was not
assisted these hedging agreements as coat management tool. Furthermore, work done by Lin
and Chang (2008) was comparable to the recognition of secondary data findings connected to
the fuel hedging.
Taking into consideration the whole operational strategies pursued by the Etihad Airways to
acquire important achievement was,
Destination number was increased and this growth was supported by Ansoff’s Product-Market
Expansion Grid as growth of new market with existing product.
One of the organizational growth strategies is the improved fleet frequency and this was same
as recognition work done by Givoni and Rietveld (2009).
Operational cost of Etihad can save with the help of persuading purchasing of new aircrafts as
a strategy and that are greatly technological advance strategy.
Another key factor for success was the strategic alliance with further airlines.
Through Fuel hedging agreement as a strategy for fuel price fluctuation risk organization can
reduce operational cost and this is similar to the work done by Lin and Chang (2008).
5.2.4 Objective 04 - Influences Of UAE Government and Middle East Economy
The analyzed primary and secondary data prove that impact of the UAE government have clear
influence to the growth of the Etihad. Employees of this organization always agreed with this
and they said the impact of the Middle East economy development have clear impact to the
organization growth. Accorded by the findings of the research is that the importance of the
82
Political and Economical factor over the business growth. If Etihad is a government airline
when they get more support from the UAE government in conditions of financial and other
facilities. Literature recognized UAE government optimistically influences with the
development of Etihad Airways and there were some proof that government talking to other
countries such as Canada to get more business.
As a reason political influences Etihad achieved significant growth in airline industry because
of these political influences. Furthermore, both primary and secondary information equally
proved that the development of Middle East market have comprehensible affirmative
influence to growth of the Etihad Airways.
5.2.5 Summary of Conclusion
With the help of analyzed data and findings from the research researcher can give a summary
that is Etihad has developed appreciably over the short period of time and organization
pursued some marketing and operational strategies to acquire victory. As regarding marketing
strategies pricing, product and value adding services are important elements. Main operational
strategies pursued by this organization are fleet frequency, increase of destination, strategic
alliances, adding new aircrafts, and fuel hedging and cost management.
5.3 Recommendations
Based on the analyzed data about Etihad Airways researcher can provide several
recommendations in the end of this study. As recognized in the data analysis employees of the
Etihad are not getting actual advantages from the promotional activities. 33% percentage of
employees answered their attitude and each employee replied for the question as agree,
disagree and neutral. Etihad provides sponsorship for leading football club like Manchester
City so it is superior to judge efficiency of the brand development activities. If these activities
not return real business advantages to Etihad, it is enhanced to manage with cost concern
manner. Review of usefulness of the promotional campaign is our recommendation to the
Etihad and this may lead to the rapid growth of the business through the globe.
83
Cost management is significant reason for success in the airline business and it is similar to the
work done by Lin and Chang (2008) and Parast and Fini (2010). In the case of Etihad employee
understanding about the cost management was very low. About 40% employees do not think
that cost management is very important element. However the same time secondary data
about Etihad proved that it is vital and it has conveyed development to the company.
Therefore, this condition confirms that the awareness about cost management is important
within the employees is low level so; it is better to develop the awareness level of cost
management among employees for handling more effective operation.
According to Ahmed et al. (2010) from his experimental research proof recognize the
nationwide and cultural impact to passenger selection decision of airlines before they travel. In
this case of Etihad demonstrated there is no momentous impact of cultural or national
pressures for passenger’s decision. Almost 40% employees disapprove this idea and data
proved the importance of culture is fewer. Finally research confirms the significant issues are
core service and supplementary service when choosing airline. Arabic hospitality concepts are
the base of Etihad and this may convey individuality for the organization. However, it is value
to analyze the importance of join cultural approach based on the destination.
5.4 Future Research
The above mentioned research happen numerous latest concepts for researchers, several of
the primary information disclaimed with the help of gathered secondary information. This
may due to probable drawback which was explained in chapter 01 and 03. Though, on the
basis of oppose information if any researcher needs to expand research that will include more
importance to both academic and commercial world.
Although current experimental research of Ahmed et al. (2010) recommended cultural
influence is main motivation for selection of airline this work rejected to agree that findings.
Therefore, new researcher can increase research in the area of cultural influence of airline
development or impact of Islamic culture on Middle East Airline industry. Survey refuse
sponsorships activity and this suggested that this activity brings genuine business benefits to
the Etihad. When developing any new research by researcher he can develop usefulness of
84
Etihad branding strategies as research concept. The reality is that in this research there are
more possible scopes for new research such as SWOT analysis, PEST analysis or effectiveness of
cost management in Etihad Airways.
85
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APPENDIX
91
Question 01: Do you agree that price is the significant factor for the growth of Etihad?
Agree Disagree Neutral
Question- 2: Do you agree that core service make an impact on the growth of Etihad
airways?
Agree Disagree Neutral
Question 03: The other vital services such as extra baggage allowance for reasonable price,
good service for disabled person, and child caring facilities have an effect on the growth of
Etihad. Do you agree?
Agree Disagree Neutral
Question 04: Do you agree that, the diverse product portfolio such as Diamond First Class,
Pearl Business Class etc. had impact on the growth of Etihad?
Agree Disagree Neutral
Question 05: Do you agree that the brand image Etihad is enhanced by sponsoring football
like Manchester City?
Agree Disagree Neutral
Question 06: Do you agree that adding new destinations have an effect on the growth of
Etihad profit?
Agree Disagree Neutral
92
Question 07: The growth of Etihad is due to adding new aircrafts. Do you agree?
Agree Disagree Neutral
Question 8: Do you the think that the profitability of Etihad is maximized by enhancing fleet
frequency?
Agree Disagree Neutral
Question 9: Do you think that Etihad’s entering into number of fuel protection agreement for
managing the fuel fluctuation has brought the great success towards the organisation?
Agree Disagree Neutral
Question 10: The government of UAE had great impact on the success of Etihad. Do you
agree?
Agree Disagree Neutral
Question 11 : Do you agree that, the impact of culture is one amongst the significant reason
for choosing Etihad for travel. Etihad is operated on the basis of Islamic cultural hospitality
and hence it gave growth opportunity amogst lslamic travellers.
Agree Disagree Neutral
93
Question 12: Majority of the Middle East market is Oil rich and showing a significant growth
due to this. Do you agree that the developing economy of middle east brought success
towards Etihad?
Agree Disagree Neutral
Question 13 : Do you agree that code share partnership with diverse airline in the industry
has greatly influced the growth of Etihad airways?
Agree Disagree Neutral
94