Emirates and DHL

SERVICE MARKETING
9TH OCTOBER 2020

EMIRATES AND DHL
Services Marketing Final Project
Group Names
Saffa Majid
Fareeha Mahmood
Idwah Asim
Fahad Ahmed
Asfa Javaid Khan
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Contents
Introduction...........................................................................................................................................3
Economic Forces impacting Emirates...................................................................................................4
Economic forces impacting DHL..........................................................................................................5
SEC attributes........................................................................................................................................7
Positioning Strategy...............................................................................................................................7
Focus strategies used by firms...............................................................................................................9
Crucial risks faced by Emirates...........................................................................................................12
Crucial Risks faced by DHL................................................................................................................13
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Introductions
“Emirates connects the world to, and through, our global hub in Dubai. We operate modern,
efficient and comfortable aircraft, and our culturally diverse workforce delivers award-
winning services to our customers across six continents every day.”
Emirates Airline is considered a major airline in the Middle East. It operates approximately
2,200 flights weekly across Dubai and the United Arab Emirates (Doganis, 2002). Its
headquarters are conveniently located in Dubai where most of it’s flights are coordinated.
Emirates Airline is also known to operate one of the longest flights in the world. Emirates
Airline is part of the Emirates Group. The airline is owned by the Dubai government, one of
the countries within the United Arab Emirates group. The Emirates Airline was established in
1985 following the collapse of the Gulf Air. The firm faces several hurdles in the airline
market including the entry of new airlines which threaten to slice its market share into several
facets. The success of Dubai as an intercontinental hub, it has been facilitated by airline such
as Emirates. The center point of Dubai has become extremely important; because of it hardly
two points on the globe where it is not logical or possible to use Dubai and connecting point,
and it usually a good direct route. Emirates operates a mixed fleet of Airbus and Boeing
wide-body aircraft and is one of the few airlines to operate an all-wide-body aircraft fleet. As
of November 2017, Emirates is the largest Airbus A380 operator with 100 planes in service
and a further 42 in orders. Since their introduction, the Airbus A380 has become an integral
part of Emirates fleet, especially on long-haul high-traffic routes. Emirates is also the world's
largest Boeing 777 operator with over 130 planes in service. Emirates is part of the
transportation industry and it has a high level of contact with the customers. This basically
involves more of an experienced service rather than something on the back.
‘International express deliveries; global freight forwarding by air, sea, road and rail;
warehousing solutions from packaging, to repairs, to storage; mail deliveries worldwide; and
other customized logistic services – with everything DHL does, we help connect people and
improve their lives. With a global network in over 220 countries and territories across the
globe, DHL is the most international company in the world and can offer solutions for an
almost infinite number of logistics needs. When Adrian Dalsey, Larry Hillblom and Robert
Lynn founded DHL in 1969, they didn’t know they would revolutionize the world of
logistics. Today, DHL is the world’s leading logistics company. Our 380,000 people in over
220 countries and territories work every day to help you cross borders, reach new markets
and grow your business. Or simply send a letter to your loved ones. DHL is part of the
world’s leading postal and logistics company Deutsche Post DHL Group, and encompasses
the business units DHL Express, DHL Parcel, DHL eCommerce, DHL Global Forwarding,
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DHL Freight and DHL Supply Chain. DHL Founded by Adrian Dalsey, Larry Hillblom and
Robert Lynn 40yrs ago in San Francisco. DHL stand as one of the global market leaders of
the international express and logistics industry. DHL employs some 300,000 employees and
its international network links more than 220 countries and territories worldwide. DHL
services include air and ocean freight, it offers expertise in express, contract logistics
solutions, overland transport and international mail services. Their brand is known for
personal commitment, proactive solution and local strength. The company based their success
on excellent customer service. DHL is a Deutsche Post DHL brand. The group generated
revenues of more than 63 bn Euros in 2007. (www.dhl.com) Small, medium and large
organizations have an operations function. The objectives of most organizations entail
producing goods and/or services. For this to be possible, the strategy to manage the
procurement of assets, convert it into outputs and allocate it to the users has to be in place.
DHL is part of the delivery service industries. They have low customer involvement. They
just have to deliver their parcels on time which requires more technical and back end work.
Economic Forces impacting Emirates

Emirates Airline believes in maintaining a free market and has successfully stayed away from
mergers and alliances in order to remain competitive in its quest to provide excellent and
quality flight services. The company has also embraced technology which has further given it
a competitive edge against its competitors in the market. The United Arab Emirates owns the
Emirates Group and dictates the policies that are to govern the operations of their companies.
The management of Emirates Airlines has always been constant to look out with its rival
companies and their overall status as well as events internally and externally. Analysis of the
status of the strategies and approaches as well as resources of the business is very important
as it enables the company to determine how they will be able to sustain competitive
advantage in the years to come. The political environment has little or no effect on emirates
as the Government of the United Arab Emirates founded emirates Airlines. Emirates Airline
plays a major role in helping Dubai government achieve its objective of promoting the city as
a preferred tourist destination. Emirates Airline has been protected by the regulations and
policies formulated by the Dubai government and other countries where they are operating.
Since Dubai government is the sole owner of the industry the company has been able to
adhere to the policies given by each government to make sure the company will be able to
conduct business operations successfully and effectively. The company also formulates their
own protection strategies against any governmental restrictions and limitations. Furthermore,
any airline that has been created with government cash has an advantage over private sectors.
Indeed. oil money that is making this competitor so strong and the government of Dubai goes
out of its way to make sure Emirates is successful. Emirates airline is one of the world’s
largest and competitive industry in terms of airline. Emirates airline is said to have a stable
and successful economic stability. In spite of many dangers that they encounter in different
parts of the world, the management of emirates airline sees to it that they would be able to
surpass such struggles and strives to have a better economic condition. Unlike many other
airlines, Emirates Airlines is one of the few airlines, which hardly felt the economic and
aviation downturn of the last few years. This is due to the great marketing efforts to promote
Dubai as a tourist destination with attractive tax-free shopping. Dubai is known as the City of
Gold, known for its commerce and tourism in the Middle East. From shopping, to clean white
sand beaches, to the dozens of luxury hotels including the Burj Al Arab the world’s first
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seven star hotel. Emirates Airlines also promotes its hub in Dubai as the best geographically
positioned connecting point between Europe and Asia/Australia. Dubai is also known for its
trade, which attracts more cargo. This is why Emirates Airlines only operates wide body
aircraft to be able to accommodate the increasing international and regional growing cargo
market demand. The airline’s profits rose every year. Emirates Airlines has announced a
record net profit of US $429 million for the financial year 2003/20004. This represents a 73.5
percent improvement over last year’s net profit. The airline’s revenue also reached a best ever
$3.6 billion, which is up to 37 per cent from last year. Emirates Airlines carried 10.4 million
passengers during the financial year, an increase of almost two million passengers or 23 per
cent more than the year before, from this we can see that emirates airline is doing well.
Growth in 2020 is subject to major uncertainty due to the COVID-19 pandemic and low oil
prices. Travel restrictions are hitting tourism, and social distancing will contract domestic
consumption. Cognizant of these exposures, the authorities moved quickly to implement a
containment strategy, cancel sporting events, and tighten travel procedures. Given the UAE’s
status as a global logistics and reprocessing hub, a global slowdown and disruptions in supply
chains will weigh heavily on the UAE’s non-oil sector, which was already facing persistently
weak business sentiment and a prolonged real estate downturn. Mitigating the economic
fallout from COVID-19 is the UAE’s immediate challenge given its impact on sectors into
which the UAE had successfully diversified (through flight disruption, lower transit trade and
tourism). The shutdown of that vast network is a hammer-blow not just for the industry but
for people around the world. There’s a reason so many airlines are (like Emirates) state-
owned, or have special rights and duties to their home countries written into their
constitutions. They aren’t just a leisure service, they’re a piece of vital national and
international infrastructure that can provide an airlift service in an emergency. Emirates has
some serious weaknesses as it approaches this perfect storm. Dubai’s status as the preeminent
hub in the global network of transfer passengers, and its fleet of capacious twin-aisle jets, are
as much a product of the recent era of promiscuous globalization as Pan Am’s fleet of gas-
guzzling early-model 747s were a product of the era before the 1973 oil crisis. On an
immediate level, that means it lacks even the meager domestic aviation cashflows that rivals
in the U.S., China and elsewhere can fall back on. In the longer term, there’s the risk that
Covid-19 and the Trump-driven trade wars that preceded it raise drawbridges across the
world, leaving behind a dark mentality of xenophobia as gates are closed to outsiders. In that
grim future, Emirates’ Benetton catalog-tinged vision of a multicultural world-shaking hands
at Dubai airport looks as outdated as, well, shaking hands. Emirates still has some advantages
in facing the coming conflagration. Unlike Etihad and Qatar Airways, it has never reported a
loss in financial reports dating back to 1989. That’s a fairly extraordinary result for an airline
that’s been around for so long — although there’s still a week still to go on its current
financial year. Most importantly, though, the only shareholders it answers to are Dubai’s
ruling Al Maktoum family. For decades, they’ve regarded the carrier as a crucial element of
their oil-poor emirate’s strategy for a long-term economic future. With crude prices currently
south of $30 and Gulf monarchies edging alarmingly close to burning through their own
petrocash piles, that bet looks as sound as it’s ever been. If aviation is about to be crippled by
a virus-driven resurgence of nationalism, it’s the carriers most closely bound up with their
governments that stand the best chance of survival.
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Economic forces impacting DHL

Europe is stable environment where no major political changes are expected. Full
liberalization of European postal market that will be finished by 2012 will bring more
competition especially on domestic level. However, there is a potential to merge or acquire
those companies operating in the local markets and increase market share. Big companies
operating on international level have an advantage of built global networks and modern
technology behind them. CEP is highly potential market and its growth is directly related to
the level of GDP. Global trade is on the rising level and together with industrialization has
made CEP services more important for majority of industries. Additionally, product life
cycles have been reduced, quality awareness among customer is growing and in order to
succeed companies are forced to maintain high quality standards. The global economic crises
caused decline in economy and it has affected the entire logistics sector. Volume of
shipments decreased and the recession slowed down the whole market. Even the big
corporations have to fight with decreased revenues and change their investment plans and
business strategies. Governments around Europe support investment plans by structural
reforms and programs that encourage investors to invest. During the big economic crisis in
30’s this did not happen and governments tended to act individually without multinational or
even global cooperation. Today’s economies learnt from those mistakes which help to lower
the implications, increase customer demand and support start of growth. Due to the crisis
companies changed their investment plans but did not stop them. Merges with smaller
companies, agreements and strategic acquisitions represent one way of increasing the
competitive advantage. Emerging markets represent big opportunity in long-term perspective.
There is potential for investment and development in emerging markets and it is expected that
industrialization will bring opportunities, the economy will growth and market for services
will accelerate. The crisis negatively affects profits of every company on one hand but on the
other hand big corporations with strong brand and position in the market have to exploit this
opportunity. Smaller companies do not have potential to expand because they are in bigger
risk of losing money or even bankruptcy if they fail. Big corporations are able to absorb that
risk much easier. Companies have started to reduce cost and people have started losing their
jobs. Restructuring of company structure is one of the way how to move forward. IT is core
element of every company that operates in logistics industry. Companies have to invest huge
amount of money to development and maintenance of their IT infrastructure. Recent trend
leaves development in Europe and transfers hosting and maintenance of the infrastructure to
Asia. "Connecting People, Improving Lives" is Deutsche Post DHL Group's mission and
guides always our effort to become exemplary corporate citizens. In this critical global health
crisis, our Logistics services and our worldwide network play a critical role, also in saving
lives– whether it is by sending emergency medical equipment and supplies to healthcare
workers; delivering necessity goods to private customers; or by finding solutions for
companies to continue their operations. Against the backdrop of the global Covid-19
outbreak, Deutsche Post DHL Group business operations are being continuously adapted to
mitigate potential impacts. As a globally operating company, epidemic and pandemic risk
scenarios are an integral part of the Group's continuous risk planning. The Group follows a
holistic management process that enables our business units to ensure the best possible
operations for our customers even in an emergency. The safety of our employees and
customers is paramount. In order to closely monitor and manage the Coronavirus outbreak, a
Deutsche Post DHL Group Coronavirus task force has been established, led by the Group’s
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CEO. The Group’s task force also coordinates with international organizations (such as the
WHO, CDC, ECDC and Robert Koch Institute) and provides the necessary information to all
employees and relevant operations. COVID-19 causes pullback on international business
outlook: Almost half (49%) of respondents said the coronavirus has resulted in them taking a
more conservative approach to their business’ global trade strategy. Only 15% are taking a
more aggressive approach, while 36% are staying the path on their international approach as
a result of coronavirus. It is no surprise that the majority are being conservative since
according to our survey, an overwhelming78% of respondents have had business revenues
decrease either slightly or significantly due to COVID-19.
SEC attributes
The SEC attributes or the Search product or services, Experience product or services and
credence product or services. Search products or services have attributes of the product or
service that the customers can evaluate before they purchase or consume the good or the
service are linked to the tangibility of the good and the credibility of the service. Experience
products or services attributes are that which can only be evaluated by the consumer after he
has purchased and consumed the service. The customer cannot pass judgement until and
unless they have consumed the product. This is different from search products or service as
the customers form an opinion after they have spent their money and consumed their product
so if they don't like it they will never change their opinion about it. Emirates reputation will
play an important role in this experience attribute as when a customer travels so does the
brand reputation with it. Credence products or services have attributes buyers cannot assess
before or after the purchase of the product or service. So this is affected by brand reputation,
brand name, what they hear about the brand from people around them.
The Search,Experience and Credence Attributes of Emirates are:

● Tangibles
● Assurance
● Reliability
● Responsiveness
● Empathy
● Image
● Technical quality
● Security
The Search,Experience and Credence Attributes of DHL are:

● Credibility
● Reliability
● Responsiveness
● Customer Communication
● Security
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Positioning Strategy
A positioning strategy is the point at which an organization picks a couple of significant
key territories to focus on and dominates in those zones. An association's positioning strategy
centers around how it will contend in the market. A viable positioning strategy thinks about
the qualities and shortcomings of the association, the necessities of the clients and market and
the positioning of contenders. The reason for a positioning procedure is that it permits an
organization to highlight explicit zones where they can surpass and beat their
opposition.Emirates positioning strategy is primarily benefit oriented and aims at offering
unique services. Emirates positioning is universal, innovative and offers good value for
money. Where business and first class passengers are concerned emirates positioning is one
of high quality, luxury and comfort on board. The motivation behind why Emirates focused
on this portion is that, initially, as referenced over, the ideal area is a remarkably favorable
position, which has not been possessed by its rivals. Likewise, this bit of leeway is difficult to
be put and duplicated. Besides, business class travelers are the most beneficial to Emirates
and are happy to pay for their lavish administrations as the cost is moderately inelastic for
them.DHL’s positioning strategy is based on consumers needs. They make a promise to the
customer “Excellence. Simply delivered” and brand values give us guidance. By transferring
them into real customer and employee experiences, they keep this promise. DHL positions
themselves at the best at delivery and that is what they promise their customers too that they
will receive nothing but excellence in their deliveries.
A positioning strategy is the point at which an organization picks a couple of significant key
territories to focus on and dominates in those zones. An association's positioning strategy
centers around how it will contend in the market. A viable positioning strategy thinks about
the qualities and shortcomings of the association, the necessities of the clients and market and
the positioning of contenders. The reason for a positioning procedure is that it permits an
organization to highlight explicit zones where they can surpass and beat their
opposition.Emirates positioning strategy is primarily benefit oriented and aims at offering
unique services. Emirates positioning is universal, innovative and offers good value for
money. Where business and first class passengers are concerned emirates positioning is one
of high quality, luxury and comfort on board.The motivation behind why Emirates focused
on this portion is that, initially, as referenced over, the ideal area is a remarkably favorable
position, which has not been possessed by its rivals. Likewise, this bit of leeway is difficult to
be put and duplicated. Besides, business class travelers are the most beneficial to Emirates
and are happy to pay for their lavish administrations as the cost is moderately inelastic for
them.DHL’s positioning strategy is based on consumers needs. They make a promise to the
customer “Excellence. Simply delivered” and brand values give us guidance. By transferring
them into real customer and employee experiences, they keep this promise. DHL positions
themselves at the best at delivery and that is what they promise their customers too that they
will receive nothing but excellence in their deliveries.
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This Diagram shows the positions the competitors and DHL have built of their brand in
consumers’ minds. USPS aims to seem more affordable to its consumers. It targets the
audience who are willing to compromise on low quality which slower speed as long as it’s
comparatively cheaper. UPS strategizes to be the placed moderately in between. Fedex has
chosen to be slightly to the expensive side offering some quality in return too. Whereas DHL
has positioned itself to the extremes of being expensive but also promising good quality and
fast service.
This map shows that Emirates prefers a

high pricing and positioning strategy.
They believe in class over anything.
They want to maintain the best quality
throughout the market at a high price.
Focus strategies used by firms

The company will be focusing even
more consistently on harnessing the
sustained potential for profitable long-term growth contained in its core logistics businesses.
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Furthermore, it will be stepping up the digital transformation of the Group that is already
underway in all business divisions.
5. CRITICAL EVALUATION OF DHL KEELLS’S STRATEGIES
According to (De Wit & Mayer, 2014), cooperation can be defined as “The act of
working
together with others, where two or more organizations’ goals are mutually beneficial”.
Companies that follow network level strategy, the demand for effective inter-
organizational
cooperation is very important. For example: Joint Ventures or partnerships.
However, under this level of strategic approach the companies should embedded themselves
in
a web of durable and effective collaborative relationships, emphasizing the value of
cooperative inter-organizational interactions for realizing their long term goals.
For example the JV between JKH and DHLE has been beneficial to both companies. In
1992,
DHLE wanted to tie up with a local party in order to capitalize their market presence in
the
country. With JKH being the one of the biggest business entities in the country, the
alliance
served them well in accessing their resources and penetrating cultural barriers. Currently
DHLE
and JKH are on a 50/50 profit sharing agreement where DHLE is uses JKH resources
such as
warehouse premises and delivery vehicles. They were also able to tap into the highly
skilled
human resources which were readily available. In return JKH was able to leverage on
DHLE
global presence in forming some of the complex logistics solutions that they required.
Also
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DHLE was able to act as a platform to gain more business and promote JK freight
forwarding
arm NDO Lanka. Main characteristics of the JV between DHLE and JKH are as follows.
• Cooperation
• Interdependence
• Networked environmental structure
• Close and structural inter organization relations
• Interaction outcomes are mainly positive or win/win
• Interaction based on trust and reciprocity
• Use of collaboration
• Relationship based collaborative arrangement
working
organizational
in
1992,
the
alliance
DHLE
such as
skilled
DHLE
Also
forwarding
• Cooperation
• Interdependence
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working
organizational
in
1992,
the
alliance
DHLE
such as
skilled
DHLE
Also
forwarding
• Cooperation
• Interdependence
working
organizational
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in
1992,
the
alliance
DHLE
such as
skilled
DHLE
Also
forwarding
• Cooperation
• Interdependence
• Use
working
organizational
in
1992,
the
alliance
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DHLE
such as
skilled
DHLE
Also
forwarding
working
organizational
in
1992,
the
alliance
DHLE
such as
skilled
DHLE
Also
forwarding
working
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organizational
in
1992,
the
alliance
DHLE
such as
skilled
DHLE
Also
forwarding
working
organizational
in
1992,
the
alliance
DHLE
such as
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skilled
DHLE
Also
forwarding
working
organizational
in
1992,
the
alliance
DHLE
such as
skilled
DHLE
Also
forwarding
working
organizational
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in
1992,
the
alliance
DHLE
such as
skilled
DHLE
Also
forwarding
Social forces affect customers’ needs and wants and it is important for the company to know
it and benefit from it. Therefore the role of Research & Development is very important.
Company has to respond to changes in society quickly not to loose market share and demand
for services. Customer satisfaction surveys, market surveys, employee surveys play important
role in building company’s brand and image in the market. Border lines have been removed
within EU and services are more accessible in the whole Europe. Emerging markets represent
an opportunity for companies to enter and establish their brand and image. Additionally, there
are also social costs for the society that companies have responsibility for. The affect on
environment is significant and companies’ role is to decrease those costs by working with
more efficient and environmentally friendly technology which is then balanced by larger
portfolio of environmental friendly oriented customers.
Focus is the third generic competitive strategy that encourages companies to concentrate their
resources on expanding the narrowly targeted segments. When companies adopt the focus
strategy, they serve particular market segments and base their competitive advantage on niche
marketing. Emirates Airlines adopts the focus strategy both in terms of low cost and offering
the best value. The low-cost focus strategy is adopted by serving the needs of a niche market
segment at the lowest possible price. While, best value focus strategy is adopted by
emphasizing over the taste, size and design of the product that could best match the
customers’ needs and requirements.
By focusing on product attributes, Emirates Airlines revises its branding strategies and brings
continuous changes in the product designing and packaging to satisfy the customers’
psychological expectations and maximize value for money. The broad aim of Emirates
Airlines when considering these strategies is to maximize the profitability and broaden
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market share to maintain relevancy and ensure long-term business growth. The effective
implementation of these strategies requires the firm to exert the intensive efforts, particularly
when management considers them as a source of competitive advantage. Adoption of this
strategy requires Emirates Airlines to lower the prices and use different marketing and
promotional strategies to push the sales in the existing customer market. The organization
offers various price discounts and deals, frequently runs the promotional campaigns and
offers the product in new attractive packages to achieve sales growth target while staying in
the same market. Aggressive marketing tactics are required when using this strategy in a
competitive consumer market.
Emirates Airlines’s strategic objective associated with market penetration strategy is to
increase sales by lowering the prices through cost leadership. A correlation between low cost
and low price leadership is assumed in this case. Another way to achieve this growth
objective is to integrate the innovation for setting clear differentiation basis. It helps Emirates
Airlines in expanding the customer base despite the market becomes saturated. However, it is
also important to note that market penetration becomes increasingly costly when a market
reaches its saturation point. In that case, investment in different marketing and promotional
activities brings a low return, which encourages the company to consider other intensive
growth strategies.
The adoption of market penetration as a primary intensive growth strategy is linked with
Emirates Airlines’s ability to differentiate its offerings besides attaining the cost leadership.
The combination of cost and differentiation of generic strategies supports this intensive
growth strategy. During the initial growth time period, market penetration strategy played an
important role in making the Emirates Airlines successful in its home market. Later,
recognition at the national level was used to target new markets all over the world. The brand
awareness gained through high market penetration was also used as a tool to offer new
products to existing and new consumer markets.
Although Emirates Airlines is among the biggest global industry players, market penetration
is still the primary intensive growth strategy as the company is currently present in numerous
consumer markets with further growth potential. Since its introduction, Emirates Airlines has
considerably extended its product line, and its product array has become too broad. It allows
the company to hedge the risks as it can compensate the losses incurred from one product line
with the gains received from others. Currently, the organization has more than Competitor
product brands being served all over the world. Product development is an important tool to
attract more customers.
The strategic objective linked with using this intensive growth strategy is to increase the
research and development investments for innovation and new product development.
Emirates Airlines’s ability to use the differentiation generic growth strategy supports the
product development process and enhances an organization's ability to offer novel or new
products to achieve growth in existing consumer markets.
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Cost leadership strategy used by Emirates Airlines also supports this intensive growth
strategy as it allows the organization to minimize the costs and use existing infrastructure to
launch new products. Although the company can use the same resources to extend the
product lines, successful new product development requires Emirates Airlines to emphasize
research and development and use new technologies required to pursue this strategy.
In terms of new product development, three main approaches are available to Emirates
Airlines.
First is to offer new products that share a close association with current product lines.
Second, to offer new products that resonate the purchase behavior of current customers.
The third strategy is to develop new products that refresh or reinvent current products.
Emirates Airlines manages to successfully introduce new products through on-going
assessment of customers' needs. The Emirates Airlines's portfolio diversification is supported
by its cost leadership generic growth strategy as cost minimization ability, and existing
infrastructure makes it possible for the organization to explore new product opportunities in
new markets.
The strategic objective linked with diversification intensive growth strategy is to expand the
portfolio through effective acquisition strategies. Due to risk factors, the company focuses on
the related diversification and avoids risky experiences into unknown regions. Rather, the
company utilizes the brand awareness and strength to launch related products in the global
drink industry. However, some examples of Emirates Airlines’s unrelated diversification are
offering merchandise from fridges, shirts, glasses to pens.
The related diversification strategy is applied by acquiring profitable businesses after
analyzing market trends and changing customer expectations. For example, in response to the
growing criticism by environment protection groups, the company attempted to offset the loss
from declining sales by investing in green business practices and making business partners
with the positive brand image.
Strategically wise application of the related diversification growth strategy enhances business
sustainability and helps the organization achieve long-term growth objectives despite high
market turbulence. A well-managed product portfolio with related diversification also offers
risk hedging ability as declining trends in some product areas can be balanced by emerging
trends in related product areas.
Crucial risks faced by Emirates

There are multiple factors which affect the aviation sector. For Emirates these are the risks.
As the supply chain struggles to keep up with demand due to the ramp-up in production,
volatility in the geopolitical and economic environment is increasing, and a growing labour
shortage is lurking in the background. These types of risks will affect the very core of the
aviation industry and present new issues for the players within the aviation industry. Their
strategic initiatives will be tested, their financial position could be threatened, their global
operations will be pressured, and they will need to adapt to new compliance requirements in
the different markets in which they operate. Most airlines have a global footprint and are,
thus, vulnerable to external factors, such as political tension and economic conjunctures. In
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the case of the commercial aviation sector, political stability and sustained economic growth
are, according to Ernst & Young, major underlying factors driving long-term growth in air
traffic. Although the global economy has risen from the ashes of the financial crisis in 2007-
2008, and the economic outlook is reasonable, uncertainty remains. The US-China trade
dispute is causing instability in markets around the world, and economies have started to
show signs of a potential slow-down in —including China, the world’s largest economy that
recently reduced its GDP growth target. To meet the demand, the entire supply chain must
ramp up their efforts and investments, ensuring timely deliveries while, at the same time,
maintaining high quality and keeping costs somewhat controlled; a challenging task that
could leave many suppliers financially vulnerable. With such a vast network of suppliers,
small mistakes and delays can cause a chain reaction and, as a result, budgets and schedules
could spin out of control. There’s also a risk that companies will have disputes with suppliers
or subcontractors related to work specifications, quality of supply or customers concerns. The
major OEMs in the industry are typically involved in multimillion-dollar contracts and have
huge backlogs with tight deadlines. Failure to deliver on major programs can lead to
significant negative implications affecting the financial performance as well as brand value.
The commercial aerospace industry has to comply with a long list of requirements for aircraft
design, maintenance, pilot training activities and safety regulations. These regulations are
critical for operators and passenger safety and hold the products and services of the OEMs
and suppliers to the highest standard. One of the problems that the aviation industry is facing
is its incapacity to be truly agile in terms of new business paradigms. The demand from
passengers is evolving constantly, pushing the aviation industry to adopt new work processes
and technologies, but, due to the conservative nature of the industry, it’s proving to be a hard
race to win.
Crucial Risks faced by DHL

Because of the COVID situation DHL issued an announcement of what supply chain risks
they faced. They listed their problems as:
1. Lockdowns cause labor and supply shortages in factories
2. Regulatory uncertainty slows the restart of factory operations
3. Public health requirements impact industrial operations
4. Suppliers invoking force majeure clauses on the rise
5. Provincial border checks exacerbate trucking shortage
6. Closed borders delay movement from and to Vietnam and Hong Kong
7. Labor shortage causes congestion at airports and seaports
8. Blank sailings reduce ocean freight capacity out of China
9. Limited air and rail cargo capacity to increase prices
10. Ripple effects felt across supply chains overseas
A number of risks arise primarily from the fact that the Group provides some of its
services in a regulated market. Many of the postal services rendered by Deutsche Post AG
and its subsidiaries (particularly the Post - eCommerce - Parcel division) are subject to
sector-specific regulation by the Bundesnetzagentur (German federal network agency),
pursuant to the Postgesetz (PostG – German Postal Act). The Bundesnetzagentur
approves or reviews prices, formulates the terms of downstream access and has special
supervisory powers to combat market abuse. he overall risk of all these currency effects is
20
SERVICE MARKETING
9TH OCTOBER 2020
EMIRATES AND DHL
currently deemed to be of low relevance for the Group. As a logistics group, our biggest
commodity price risks result from changes in fuel prices (kerosene, diesel and marine
diesel). In the DHL divisions, most of these risks are passed on to customers via operating
measures (fuel surcharges). The key control parameters for liquidity management are the
centrally available liquidity reserves. Deutsche Post DHL Group had central liquidity
reserves of €4.2 billion as at the reporting date, consisting of central financial investments
amounting to €2.2 billion plus a syndicated credit line of €2 billion. The Group’s liquidity
is therefore sound in the short and medium terms. Moreover, the Group enjoys open
access to the capital markets on account of its good ratings within the industry, and is
well positioned to secure long-term capital requirements. Risks arising from the current
corporate strategy, which extends over a long-term period, are considered to be of low
relevance for the Group in the period under review. The extent to which we succeed in
aligning our internal processes to meet customer needs whilst simultaneously lowering
costs correlates with potential positive deviations from the current projections. We are
steadily improving internal processes with the help of our First-choice initiatives. This
improves customer satisfaction whilst reducing our costs. Our earnings projection already
incorporates expected cost savings. Security is also an important risk which the company
has to look into.
21

Emirates and DHL

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SERVICE MARKETING

9TH OCTOBER 2020

Services Marketing Final Project

Asfa Javaid Khan

Economic Forces impacting Emirates

Economic forces impacting DHL

The Search,Experience and Credence Attributes of Emirates are:

The Search,Experience and Credence Attributes of DHL are:

This map shows that Emirates prefers a

Focus strategies used by firms

5. CRITICAL EVALUATION OF DHL KEELLS’S STRATEGIES

• Relationship based collaborative arrangement

Crucial risks faced by Emirates

Crucial Risks faced by DHL

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