This report will focus on the Etihad Airways company to analyze how the company functions in current conditions and describe how the company aligns the internal processes following the organization’s strategic plans, mission, and vision. Etihad Airways was launched in 2003, and now it is the second-largest national airline company in the United Arab Emirates. Furthermore, with headquarters located in Abu-Dhabi, the airline conducts more than 1000 flights per week.
Setting Targets: Mission, Vision, and Objectives
Description
Considering the organization’s mission, Etihad Airways has two specific directions. Firstly, the broader version of the company’s mission is to make a positive change to the world (Etihad, n.d.). Next, Etihad Airways strives to transform the travel industry by creativity and innovation; however, the company also points that it is the employees who really make the company” (Etihad Aviation Group, n.d.). Lastly, the vision statement explains that the airline seeks to reflect the best of “Arabian hospitality – cultured, considerate, warm and generous” (Etihad Airways, n.d., para. 2)
Analysis
The company’s missions and vision present a significant part of Etihad Airways’ plans for the future. Following McKinsey 7S model, Etihad Airways’ mission and vision provide foundation for shared values which determine the organization’s strategy, structure, staff, and skills. The first mission statement explains the company’s objectives concerning the society and environment: Etihad Airways is a pioneer organization that directs efforts and resources to improve the population’s quality of life. The next mission also defines the company’s attitude towards employees: without high-quality personnel, business would be impossible for the company, and therefore comfortable working conditions represent an essential objective of the organization’s functioning. Lastly, the company’s vision explains Etihad Airways’ objective of providing a source of positive cultural exchange with customers.
Opinion
The missions and vision of the company meet the standards of modern business by addressing the aspects of corporate responsibility. The SMART objective prioritized by the company is to reduce reliance on fossil fuels by the year 2030, following UAE’s economic plan (Etihad Airways, 2020). Thus, the company takes responsibility for protecting the environment and providing benefits to society through better working conditions for employees and high-quality, safe transportation services for the population.
Organization Analysis
Description
Despite significant challenges in the global travel industry due to COVID-19 restrictions, Etihad Airways company has continued delivering high-quality services in airline transportation branch by making operational adjustments to the primary strategy. Prioritizing sustainability as the core element of the company’s recovery strategy allowed Etihad Airways to reduce core operating losses (Etihad, 2022). A part of the reduction accounted for temporary salary reduction; however, there was no increase in employee resignation rates, which testifies to the highly developed internal organizational culture. The company maintained its financial stability by increasing cargo revenue to a record of 1.73 billion $US (Etihad, 2022). Thus, despite a significant decrease in the number of total passengers in 2021, the company maintained its revenues by focusing on cargo operations.
Analysis
The company achieved significant progress from highly effective management interventions in Etihad Airways’ operation strategy, which indicates the high ability of the organization to respond to risks and a substantial, informative basis for prompt decision-making. However, considering the external influence aspect in the DESTEP Model, the Etihad Airways company can be negatively affected by economic, technological, ecological, political, and legal factors. Furthermore, Etihad Airways has a smaller fleet and lower quantity of available destinations than direct competitor Emirates.
Table 1. Etihad Airways SWOT matrix.
Opinion
In this case, the analysis shows why a company must acknowledge its strengths and weaknesses (Table 1). Etihad Airways’ management interventions proved to be effective in reacting to industry crises. However, the management is not considering gaining substantial competitive advantages as a potential opportunity for the company’s development and growth. Compared to larger competitor airlines with bigger fleets, Etihad Airways is more flexible in innovative decision-making, representing the company’s strength.
Recommendations
- It is recommended for Etihad Airways to acknowledge its strength and focus on utilizing available opportunities to increase its competitiveness.
- Increased proportion of cargo transportation in the company provides more opportunities for business cooperation.
- Implementing additional security measures can present a competitive advantage over airlines like Emirates, where implementing such measures will require more time and resources.
Reaction to the Internal Analysis
From the internal analysis, it is apparent that in recent years, Etihad Airways successfully overcame the industry crisis caused by the COVID-19 pandemic while achieving positive financial results. The company received a good reputation among customers for the high quality of services. The leadership has a good understanding of the industry, allowing it to promptly assess and respond to risks. Furthermore, the company successfully acknowledged its responsibilities in reducing the environmental footprint and prioritizes sustainability as the core element of its strategy.
However, the company’s position can be perceived as unambitious as the company mainly focuses on the improvement of internal processes without considering the development of competitive advantages. With recent development in the world in global pandemics and exacerbation of world conflicts, it is understandable that the company prefers to focus on internal processes. However, the external limitations do not reduce the company’s capabilities in developing new approaches to business.
For example, many companies are revising their supply chains and changing carriers to more sustainable options to ensure that their products meet the requirements of modern consumers. As Etihad Airways plans to increase its sustainability, the company can improve its position in the market by specializing in sustainable transportation services. Thus, the company’s ambitions in the field of sustainability in switching to more sustainable options from fossil fuels can play an important role in improving the company’s poison in the market.
References
Etihad. (n.d.) About Etihad Airways. Web.
Etihad. (2022). Etihad Airways’ transformation continues to deliver results with 41% improvement on Pre-COVID performance. Web.
Etihad Airways. (n.d.) Flight crew jobs. Web.
Etihad Airways. (2020). Towards sustainable aviation: A perspective from the Etihad Aviation Group. Web.
Etihad Aviation Group. (n.d.) Etihad Aviation Group: Our people. Web.