Rohit Pandey Emirates Case Study Answers

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emirates case tudy hub and spoke
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  Read the case on “Emirates: Connecting the Unconnected” and explain:1.   The concept of Economies of Scale & Scope.2.   o! this has created competiti e ad antages partiall# shaped $# the location !here a firm is  $orn%.   o! a firm can enhance its srcinal competiti e ad antage $# caref'll# choosing ne! locations% Ans 1-Economies of scale and scope in case of emirates arise due to various factorsa)Extent of market-Since emirates is based on the hub and spoke model withDubai being the hub. Dubais proximit! to population centres with one third of world population living within four hour range of the cit! and two thirds of the world population living within eight hour range of the cit!.   his kind of location allows it to have signi#cant cost savings arising due to greater geographic densit! of customers. b)Economics of densit!-Economics of densit! occur because of spreading of $ight speci#c #xed costs or it is economies of scale along a given route . he cube %s&uare rule states that if volume of vessel increases b! a givenproportion the surface area increases b! less than this proportion. 'n the case of emirates use of planes with large load factors like A(* allowed it to achieve lower cost per revenue passenger mile because capacit! was expanded without comparable increase in costs. +or example in airports such as ,ondon eathrow with allocation of #ve dail! landing and departure slots a(* was used to maximie passenger tra/c.c)0urchasing power- 'ts abilit! to in$uence oeing b! guaranteeing demand for new aircraft allowed it to get extended range aircraft to cater to entire set of new cities. Due to its purchasing power it was better positioned to be able to get oeing 222 and a(* aircraft before its competitors due to it receiving industr! discounts for bulk orders. his also allowed oeing which kept three kinds of aircraft to ramp up suppl! to relativel! untested routes .3henever it wanted to increase capacit! it replaced a((* for a 222-((* E4 freeing the a((* for a new destination. his route management where it kept adding new services to existing routes which was possible due to availabilit! of aircraft helped it disperse #xed costs forexisting operations.d)Advertising- emirates sponsored sports teams of sports most popular in the countries the! wanted to target .'t thus en5o!s lower advertising costs due to higher advertising reach .Ans 6- he economies of scale and scope coupled with location where #rm is born i.e Dubai confers certain comparative advantages to emirates-1.Dubais location in the Arabian 0eninsula between Europe7 8ceania7 Asia and Africa placed it at the nexus of global transit routes.  6.8ne third of the worlds population lives within 9 hour $ight of the cit! andtwo thirds of the world population lives within  hour $ight of the cit!. his left emirates based in Dubai better placed to tap untapped 4':S markets.(.4elative distance from congested airspace allowed it to connect $ights at an! time of the da! allowing for 69 hour operations.9.4elativel! ;ood weather <although plagued with occasional fog and general heat) as compared to European counterparts where rain and snowstorms caused dela!s in American and European airspaces.=.+avourable weather conditions such as 5et streams when taken advantage of b! +lex racks an in air routing s!stem helped reduce over (** tons of fuel on emirates dial! $ights.Ans (-   he new locations need to be such that it provides the compan! with a #rst mover advantage and identif! new network potential to feed into the hub s!stem 7 thereb! allowing it to operate in environments where there are #xed demand for international travel and thereb! capture stead! growth.   o continue tapping undeserved markets7 Emirates needs to continue to focus on market research and emerging markets. 't has to emphasis on aggregating demand from various macroeconomic trends and gain from structural changes arising from shifts in $ows of exports and imports between countries. 'n order to help improve the congestion arising from high footprints at Dubai airport7 it needs to #nd strategic wa!s to expand and develop a newairport base for smooth service.
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