This appendix contains the work of El Namaki from the book Strategy and Entrepreneurship in Arab Countries (El Namaki, M. S. 2008). Specifically, this appendix contain El Namaki’s work of conducting Porter’s Five Forces Model on Emirates Airlines operating in the Middle East, and we have loosely relied on this work to arrive at our version of Porter’s Five Forces Model on the route to Australia discussed earlier. Below is the exact quoted work of El Namaki from the book (El Namaki, M. S. 2008):
“Emirates’ strategies are a function of the environment where it operates and the product of intrinsic strategic thinking from within the carrier. The averment could be viewed in terms of Porter’s five forces, i.e. threat of entrants, power of suppliers, power of buyers, substitution effect, and rivalry:
• Threat of New Entrants. It seems, to all appearance, that the airline industry is a low entry barrier industry. Finance, the prime entry barrier, is readily available in the Middle East and technology and expertise are purchasable.
• Power of Suppliers. Boeing and Airbus are the two main suppliers of competition among them is probable, observable, but not abominable! Also, the likelihood of a supplier integrating vertically isn’t very likely.
• Power of Buyers. The bargaining power of airline industry buyers in the Middle East in quite low.
• Availability of Substitutes. Threat is really limited given the distances in the Middle East, and the fast pace is becoming a symbol of the area.
• Competitive Rivalry. The airline industry is generally highly competitive and highly competitive industries generally, again, earn low return because the cost of competition is high. This can spell disaster in low cycle times. The Middle East, however, provides, a different story thanks to governments’ readiness to cushion the shocks and help the flag carrier go on flag carrying!
So the environment carries the threat of new entrants and competitive rivalry but not...