BUSINESS MODEL 1 Essay Example

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Etihad Airways Business Model

The airways business model will be based on the pillars; Customer, Offers, Financial strength and Infrastructural focus.

Infrastructural focus

Etihad needs to put up a firm technological infrastructure to suit the current market competition. That means all the technological resources should be put in place. Moreover, to ensure an easier penetration into the competitive market. It requires to put up structures in lined to the outcome of the market research. An example is investing in flights to Singapore since it’s proving to be a desired destination for many people from the rest of the world.

The airways’ resources shall be globalized in terms of runways and airbuses. This will ensure a faster growth rate and thus fitting into the market competition (Teece, 2010).

Financial strength

To increase revenue. The company should lay a strategy to counter the existing major competitors. These includes Singapore Airways which is almost dominating the market. The company should lower its flight charges to attract more customers. This could allow an easy penetration into the marketplace.

In order for the airways to penetrate the already dominated market, it has to lower its flight costs and offer a high-quality service. This will increase the number of customers and thus more revenue. After penetrating the market. It can restructure its costs.

In the bid to sustain both a short term and long term relationships with customers, the company is going to capitalize on the value proposition to the customers. The company should keep an up-to-date customer rewarding plan which will build a long term relationship. These may include;

“Fly to win tickets for your family promotion”

“Buck our tickets online to earn our redeemable flight points”

“Get waivered tickets for the holiday on our website”

“Adjust your flight schedule at the comfort of your home”


Customer relationships is the backbone of every service delivering company. In order to capitalize on this critical factor, Etihad airways should organize courtesy/hospitality seminars and training for their air hostesses and attendants. The company customers should be segmented according to their tastes and preferences (Teece, 2010). This will help go far in ensuring the optimum satisfaction of the customers since each segment will be satisfied individually.

A sketch of the Etihad Business Model

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Management and patners

Infrastructural focus


Financial strength

By student’s Name: 8

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Marketing technology customer relationship promotions

Revenue resources segmentation value proposition

Pricing criteria ICT services

Etihad airways is operating in the unifying quadrant. This is clear from the fact that it’s all sectors are linked and work perfectly to have made the courier as the airways of the year 2016 (Erhun, Gonçalves, & Hopman, 2007). Moreover the standards of the company’s services are very high as indicated by the smoothly interlinked flow of customer services. The interdependency between departments and between services shows a clearly high integration level within the company. Moreover the courier works smoothly with its market surrounding. It is due to this smooth correlation that ensures that the company operates in the unifying quadrant.

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) includes the government, aircraft suppliers and airports The supply force(

(Market entry) the market entry is difficult and demands very high standards and costs

(Substitute competition) include trains and road vehicles

) demands high quality services and productsThe market force(

This mainly from other airlines e.g. Emirates, British and Air Arab airways

(Market competition)

A sketch of the operating model for Etihad Airways

Digital Masters Quadrant

Etihad airways grab the digital masters’ quadrant. This is owed to the evidence enlisted.

In 2013, the carrier signed an agreement with Taleris, an international technology company to install a system that detects repairs early enough to avoid delay of flights.

Etihad rolled out the sabre technology to improve the catering services within their courier. This gives the company an upper hand in the catering service improvement.

In the year 2915, Etihad and IBM signed a technology deal which is to be rolled out for the next ten years. The deal which is worth close to seven hundred million US dollars is set to enhance security, infrastructure, and general service delivery. This is a clear sign to show that the company has a really big vision as far as technology is concerned (Hedman, & Kalling, 2003). This is a clear sign to show that the company is escalating its taste to digitize its operations. This, in turn, has been seen reflecting positively towards a quantifiable business improvement.

The EAU national carrier which is based in India, a technologically enhanced country adopted technology from the moment it started. Recently, 2016, it partnered with MTT which is also among the best digital solution providers to the entire airline industry. The agreement hatched the use of a mobile app which as totally simplified the booking, checking and confirmation of flights using mobile phones. The company is obviously possessing a long-term digital culture thus fitting into the quadrant (Hedman, & Kalling, 2003).

Etihad airways started its operations in the year 2003, long after several game players which have been in the air for up to a decade before. Surprisingly, twelve years down the line, the carrier puts a record of having carried more than 17 million passengers. It has also expanded its geographical coverage to about 116 destinations in Asia, Africa, Australia, America, and Europe. The airline also boasts of close to 150 Boeing and airbus crafts. It is also in the progress of acquiring several others which are meant to double the operations of the airline. This could obviously be owed largely to the expert governance of James Hogan’s team (Erhun, Gonçalves, & Hopman, 2007).

The number of equity that the airline also own from almost all EAU airlines and other companies is also an indication of a frequently growing airline whose leadership is well structured and works properly.

Major management components of a “Playbook”

Quality service— Etihad has won several awards for offering the best highest quality services. For example winning several awards in 2009 amongst them offering the best business class and other services. In 2015 awarded Etihad the best first class airline in Africa and the Middle East. This indicates that the management capitalizes on quality as demanded by the immediate market.

Embracing technology— Etihad airways recently partnered with a global company on airline digital solutions. This was in the bid to introduce airline mobile services. The company’s seven hundred million dollar deal with IBM is also an additional boost in their haste to tap the advantages of technology. This is a big gain to the carrier since technology means efficient services, better safety, and security improvement.

Expansion— the ability of the company to conquer up to 116 destinations within a span of only twelve years is a big strategy to widen the customer coverage.

Advertisement— the company sponsors formula one’s Ferrari which has millions of fans. It also sponsors Chelsea and Manchester City football clubs which also attracts millions of viewers globally all year round. This was a very strategic advertisement means which adds up to the “playbook”

Generally, the company rightfully deserves to be in the digital master quadrant owing to the above mentioned traits amongst several others.


Erhun, F., Gonçalves, P., & Hopman, J. (2007). The art of managing new product transitions. MIT Sloan Management Review, 48(3), 73.

Hedman, J., & Kalling, T. (2003). The business model concept: theoretical underpinnings and empirical illustrations. European journal of information systems, 12(1), 49-59.

Teece, D. J. (2010). Business models, business strategy and innovation. Long range planning, 43(2), 172-194.