The Etihad Airways was started in 2003 and it was on a goal to be one of the great international carriers and it has become successful in that. It is the national airline of the UAE and at present one among the most impressive and fastest emerging airlines in the globe. The airline functions near to 1000 flights per week serving 66 destinations across 44 nations from its home base in Abu Dhabi. Main areas served by the company are Europe, Asia, North America and the Middle East and major targets include London, Moscow, Mumbai, Damascus, New York, Toronto Kuwait, and Islamabad. Etihad Airways' fleet consists of 57 Airbus aircraft.

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2. ABSTRACT
The Etihad Airways was started in 2003 and it was on a goal to be one of the great
international carriers and it has become successful in that. It is the national airline of the UAE
and at present one among the most impressive and fastest emerging airlines in the globe. The
airline functions near to 1000 flights per week serving 66 destinations across 44 nations from
its home base in Abu Dhabi. Main areas served by the company are Europe, Asia, North
America and the Middle East and major targets include London, Moscow, Mumbai, Damascus,
New York, Toronto Kuwait, and Islamabad. Etihad Airways' fleet consists of 57 Airbus aircraft.
Its fast development has been the fastest in history of aviation and with more than 100 aircraft
orders in the pipeline there is more growth to come. It was certainly motivated by the runaway
success of Dubai’s Emirates which in several ways it is similar to. Sheikh Khalifa bin Zayed Al
Nahyan the Emir of Abu Dhabi leads the airline but day to day management is vested in
Australian James Hogan. Etihad’s progress has been amazing with the multi award winning
airline, a real risk to staid legacy carriers who are moving down market. Etihad also has a
widespread freight subsidiary called Eithad Crystal Cargo. The brand concept was included
entirely throughout all customer touch points – from ticketing to final destination. The loyalty
system provides flexible rewards for both business and leisure travellers, and a variety of
personal preferences varying from communications to in-flight preferences. Guest-centric
strategy of Etihad has been at the base of its growth and assures to guarantee sustained
distinction in this very competitive market.
2

3. TABLE OF CONTENTS
An investigative study into the Etihad Airways' Global growth strategies to achieve rapid growth in the
Airline industry. .........................................................................................................................................1
ABSTRACT...................................................................................................................................................2
TABLE OF CONTENTS..................................................................................................................................3
CHAPTER 1..................................................................................................................................................6
INTRODUCTION..........................................................................................................................................6
1.1. Introduction.....................................................................................................................................6
1.2. Background of the Research............................................................................................................7
1.2.1 Overview of the Airline Industry................................................................................................7
1.2.2 Overview of Etihad Airways.....................................................................................................10
1.2.4 Basis for Selection....................................................................................................................13
1.3. Research Problem..........................................................................................................................13
1.3.1 Research Questions.................................................................................................................14
1.3.2 Analysis of the Problem...........................................................................................................14
1.4 Aim of the Research.......................................................................................................................15
1.5 Objectives of the research..............................................................................................................16
1.6 Scope of the study..........................................................................................................................16
1.7 Limitations of the research.............................................................................................................17
1.8 Outline of the study........................................................................................................................18
1.9 Conclusion......................................................................................................................................19
CHAPTER 2................................................................................................................................................19
CRITICAL LITERATURE REVIEW.................................................................................................................19
2.1 Introduction....................................................................................................................................19
2.1.1 Benefits of critical literature review........................................................................................20
2.1.2 Literature Search Strategy and Sources...................................................................................20
2.1.3 Critical literature review structure including keywords...........................................................22
3

4. 2.1.4 Limitation of the Literature Review.........................................................................................23
2.2. Business growth and strategy........................................................................................................24
2.2.1 Introduction.............................................................................................................................24
2.2.2 An Overview of Business Growth Strategy..............................................................................24
2.2.3 Empirical and Theoretical Frame Work of Business Growth Strategies...................................25
2.2.4 Strategies of Etihad Airline......................................................................................................27
2.2.5 Conclusion...............................................................................................................................28
2.3 Globalization and Global market....................................................................................................29
2.3.1 Introduction.............................................................................................................................29
2.3.2 An Overview of Globalization..................................................................................................29
2.3.3 Global Market and Marketing Theories...................................................................................30
2.3.4 Conclusion...............................................................................................................................34
2.4 Airline Industry and Etihad Airways................................................................................................35
2.4.1 Introduction.............................................................................................................................35
2.4.2 Empirical Frame Work of Airline Industry and Etihad Airways................................................35
2.4.3 Conclusion...............................................................................................................................37
2.5 Middle East Economy.....................................................................................................................38
2.5.1 Introduction.............................................................................................................................38
2.5.2 Middle East Economy and Businesses.....................................................................................38
2.5.3 Conclusion...............................................................................................................................41
2.6 Conclusion about Literature Review...............................................................................................41
2.6.1 Theoretical Frame Work of the Research................................................................................41
2.6.2 Empirical Evidences Found......................................................................................................42
2.6.3 Key Authors of the Research Work..........................................................................................43
CHAPTER 3................................................................................................................................................44
RESEARCH METHODOLOGY......................................................................................................................44
3.1 Introduction....................................................................................................................................44
3.2 Research Philosophy and Approach...............................................................................................44
3.2.1 Importance of Pragmatism Philosophy....................................................................................45
3.2.2 Why Inductive Not Deductive?................................................................................................46
3.2.3 “Onion” Model Application.....................................................................................................47
4

5. 3.3 Research Study on Etihad...............................................................................................................49
3.3.1 Designing of Questionnaire.....................................................................................................49
3.3.2 Sample Selection Techniques..................................................................................................50
3.3.3 Data Collection........................................................................................................................51
3.3.4 Pilot Testing.............................................................................................................................51
3.3.5 Dependability and Validity ......................................................................................................52
3.3.6 Generalisability........................................................................................................................53
3.3.7 Process of Research Analysis...................................................................................................53
3.4 Alternative Method........................................................................................................................54
3.5 Issues about Ethics.........................................................................................................................54
3.6 Research Limitations.......................................................................................................................55
3.7 Conclusion......................................................................................................................................56
CHAPTER 4................................................................................................................................................57
DATA ANALYSIS AND FINDINGS................................................................................................................57
4.1 Introduction....................................................................................................................................57
4.2 Presentation and Analysis of Secondary Data................................................................................58
4.3 Findings from Secondary Data........................................................................................................61
4.4 Presentation and Analysis of Primary Data.....................................................................................63
4.5 Findings from Primary Data............................................................................................................75
4.6 Conclusion......................................................................................................................................78
CHAPTER 5................................................................................................................................................79
RECOMMENDATIONS AND CONCLUSION.................................................................................................79
5.1 Introduction....................................................................................................................................79
5.2 Conclusion .....................................................................................................................................79
5.2.1 Objective 01 - Critical Evaluation of Organizational Growth....................................................79
5.2.2 Objective 02 - Pursued Marketing Strategies..........................................................................80
5.2.3 Objective 03 - Pursued Organizational Strategies....................................................................81
5.2.4 Objective 04 - Influences Of UAE Government and Middle East Economy..............................82
5.2.5 Summary of Conclusion...........................................................................................................83
5.3 Recommendations..........................................................................................................................83
5

6. 5.4 Future Research..............................................................................................................................84
REFERENCES.............................................................................................................................................86
APPENDIX.................................................................................................................................................91
CHAPTER 1
INTRODUCTION
1.1. Introduction
The world economy is changing rapidly over the years and it has influence on all sectors of
industries. Due to these changes international airline industry and transportation industry turn
out to be competitive and profitable industries. In later twentieth century the world economy
process encompassed with radical changes which made changes in to the business and
consumers buying behaviours (Morrison, 2006). Tremendous development of the
globalization activities make more demand for the air transportation than ever and it guide to
increase of air traffic growth in the world. In 2010 world travel industry have the benefit of
some development after hard 2008-2009 period. In modern world, Middle East airline industry
is growing considerably and many new airline companies are challenging big airline companies
and it create a condition where profit margins become shrinking rather it was. In 2009 major
airlines of the industry incurred net loss of USD 9.9 billion and it was USD 16.8 billion in 2008.
Yet, with current economical growth after wrest economic crisis, industry is expected to make
USD 2.2 billion profit in year 2010 (James, 2010).
As recent Middle East airline Etihad Airways achievements are remarkable, some awards
including World’s Leading Airline at the World Travel Awards in 2009/2010 and many more
global and regional awards showed that organization is challenging established airlines in the
globe. Furthermore, in 2008 at Farnborough International Air Show Etihad proclaimed the
biggest aircraft order in commercial aviation history for up to 205 aircraft – 100 firm orders, 55
options and 50 purchase rights (Oxford Business Group, 2009). So, factors suggest that Etihad
is looking for high development in commercial airline industry. In 08 years of commercial
6

7. operation organization achievement shows that there should be some strategies, which they
have pursued to get fast development in short period of time. In this research it is going to
assess the strategies followed by the Etihad Airways to get fast development in the airline
industry. Researcher will analyze empirical and theoretic frame work connected with the case
study and will be gathering data to assess research aim. This study is in the theme of strategic
management in international business environment (Oxford Business Group, 2009).
1.2. Background of the Research
The global airline industry is likely to make profit after some of its hard times. Nowadays,
Middle East airlines are rising in the airline business. By means of the huge inflow of risk capital
their achievements are remarkable. Etihad which is a younger airline is progressing quickly and
it creates lot of research opportunities for researchers to examine Middle East Airline industry
(James, 2010).
1.2.1 Overview of the Airline Industry
The growth of transportation industry increased the process of globalization as pointed by
Morrison (2006). With the globalization airline industry turn out to be more profitable industry
as it was linking nations faster than before. North America region is the market leader followed
by the Europe and Asia –Pacific in the airline business. The following graph demonstrate the
development of airline passengers traffic by place and is suggesting that Middle East region is
rising for the airline industry in terms of passengers traffic (Oxford Business Group, 2009).
7

8. Figure 1
Growth of Airline Passenger Traffic by World Region
(Balobaba et al. 2009)
Airline industry is extremely unstable industry and very responsive for the market variation.
During the period of first Gulf War in 1991 and after 2001 September 11, terror attack in air
traffic has fallen all over the world drastically (Balobaba et al. 2009). Furthermore it took
many years to bring back the industry and the following world airline net profit graph
demonstrated the unpredictability of industry success.
8

9. Figure 2
World airline net profit 1987-2007
(Balobaba et al. 2009)
Due to economic crash in the globe in 2008 and 2009 years also incurred net loss on the whole
and in past few years dozens of new discount airlines have been started in emerging countries
and some are getting big success in the competitive airline industry (Adib nd). In the
meantime, Emirates as Middle East based airline has engraved out a place for itself as a main
long-haul airline and for that airline employ the policy of routes spanning over the globe
covering key hub in Middle East. Furthermore, according to World Travel and Tourism Council
(WTTC), 72.2 million workers were in the travel and tourisum industry in 2009, which was
anticipated to develop to 81.9 million employees in 2010. WTTC expecting to on that basis,
group assesses whole effect of the industry on global GDP at $5.47 trillion or 9.4% of global
GDP for 2009 furthermore this will develop by 4.4% annually between 2010 and 2020, on an
9

10. inflation-adjusted basis (Plunkett, 2008). In the meantime, growth of aircraft manufacturing
will make key alterations to the worldwide airline industry. The modern sophisticated aircraft,
Boeing’s 78 planed their product launch in early 2011and this craft offer enormous
developments to passenger comfort with very long international range. Besides that engine
allow developing fuel efficiency around 20% so these technical alterations will have important
improvements to the airline industry in near future. Furthermore, there will new direct routes
open, for instance there will be new fleets from Europe to emerging Africa and Southeast Asia
destinations. So, it is fact that global airline business is growing considerably and owing to its
unpredictability make challenging situation for the organization in the air transportation
business (Blanke, 2009).
1.2.2 Overview of Etihad Airways
Etihad Airways, established in July 2003 by the Royal (Amiri) Decree is the national airline of
the United Arab Emirates. Though, organization has taken another four months to begin their
commercial operation but Etihad manage to add at least one new route as it began. Following
fast development in today Etihad Airways is operating “fleet of 57 aircraft operates close to
1000 flights per week, serving an international network of 67 destinations in 45 countries”
(www.etihadairways.com, 2011). The organization which regarded as the fastest growing
airline in the airline industry and capital of the UAE, Abu Dhabi, is the airline hub. The Middle
East based airline organization is considering hospitality and culture and they are encouraging
city of Abu Dhabi as attractive business location in Middle East region. Organization has get
important success in the airline industry and awarded numerous international and regional
awards with World’s Leading Airline at the World Travel Awards in 2009 and 2010‟
(www.etihadairways.com, 2011). In comparison with other regional airline Etihad
development is remarkable and recent survey in 2010 benchmarked Etihad success in last
seven years with Middle East set up airlines of Qatar Airways and Emirates Airline. That it has
identified to attain development Etihad attain in last 07 years period, it has taken 18 years for
Emirates and 13 years for Qatar Airways.
10

11. Figure 3
Strategic Comparison
(Etihad Airways Business Review 2010)
As discussed in above, Etihad proclaimed the biggest aircraft order in the commercial aviation
history for up to 205 aircraft of 100 firm orders, 55 options and 50 purchase rights
(www.etihadairways.com, 2011). The Etihad is improving their aircraft, in Business Class,
Economy Class, and First Class cabins. Furthermore, organization is offering some value adding
service like some ground services for instance limousine pick-up in 19 targets, and high quality
lounges in Abu Dhabi, Frankfurt, Manchester, Dublin, and London.
1.2.3 Theoretical frame work associated of the research
Moreover, taking into account the research background it is important to examine theoretical
framework associated with the work, like examined above the total work is falls in category of
strategic management in universal business environment. As explained by the Morrison (2006)
in global business environment understanding of culture, environment and development of
11

12. right strategy in right time make the success. Etihad Airways, as the quick growing airline,
there should be some strategies which organization has developed; by recognizing those
important strategies followed by the organization add significance to researcher. Though,
taking into account strategy development this may have clear link with earlier academic
theories. So, in this research it is considering following theoretical framework for the intention
of critical assessment of strategies pursued by the Etihad airways.
Theory or Theoretical
Frame Work
Author of the Original Work /
Respective Research Material
Author
Relevance to the Research
Work
Porter Generic Theory of
competitive advantage
Porter (2004) - Competitive
Advantage
Analyze the Etihad Airways
competitive strategy using
the model.
Marketing Process of
Organization
Kotler and Armstrong
-Principles of Marketing 12th
Edition
Analyze marketing process of
organization applicable for
Etihad Airways
4P General Marketing
Theory
Kotler and Armstrong
-Principles of Marketing 12th
Edition
Application of 4P to the
Etihad Airways strategy
development process
Ansoff’s Product-Market
Expansion Grid
Kotler and Armstrong -
Principles of Marketing 12th
Edition
Analyze Etihad Airways
strategy of business
development using the
model
PEST concept specifically
PandE impact on business
Used data published in
www.economist.com and IMF
Analyze Middle East political
and economical impact on
Etihad Airways.
Table 1
As a result, growth of airline industry and major development of Etihad in the beginning stage
is an inspiration for this research. Furthermore, emerging Etihad Airways challenging establish
12

13. Middle East Airlines so it made improved platform to examine strategies followed by the
company.
1.2.4 Basis for Selection
Conducting the rational for selection it can generally classify in three diverse sections as
academic, industrial and personal, so in following it is offering suitable details for rational
under each of these sections.
 Academic: There is different academic research that has been done regarding the
airline industry by different researchers. As described above, Etihad as a beginner in the
industry its performance is surprising. Although its performance is excellent, there are
incomplete researches accessible about Etihad Airline. So, researcher believe that this
would add value to the academic world and people who study the Etihad Airways and
strategy progress will be benefited by studying this research in the future.
 Industrial: As Etihad is a surprising performer, crucial evaluation of their strategies
pursued to attain such type of competitive position will be benefited to the other
organizations who are in the industry and who plan to enter into the industry when
improving their strategies.
 Personal: Through this type of research I hope to use my knowledge that I have
procured from my studies. In addition, I am looking career in a section of business
consultation in management so this kind of research will improve my knowledge and
talents in analyzing business and their development jointly with strategic options
accessible.
1.3. Research Problem
The research firstly plans to crucial assessment of the growth strategies being followed by the
Etihad Airways. Here is a clear research problem, and a clear, sharp focus about the major
development of the airline. So, the central research problem is,
13

14. • What were the crucial strategies that were pursued by the Etihad Airways to become
quickly developing airlines in history of the airline industry?
1.3.1 Research Questions
On the basis of above central research question, researcher has made various research
questions to resolve all through this study, the following will elaborate those research
questions,
 What are the significant organic developments of the Etihad Airways
throughout the last four year time in parts of financial, operational, marketing,
and other development areas?
 What are the significant marketing strategies that were developed by Etihad to
become successful airline in a small period of time?
 What are the significant operational strategies that were developed by Etihad to
become successful airline in a small period of time?
 In which ways central government of United Arab Emirates and Middle East
economy influence for the crucial development of the Etihad Airways?
1.3.2 Analysis of the Problem
As discussed in the opening of the chapter, nowadays airline industry is going through major
changes and these alterations offer important opportunity for the airline companies. Currently,
Middle East airline industry is progressing considerably corresponding to the world air
transport industry development. Most of the beginners of Middle East airlines in the area are
challenging big airline companies and it makes circumstances where profit margins become
shrinking rather it was. Etihad, which was among the beginners of airline, is challenging
developed airlines in the area and outside the area. This research is crucially examining the
development strategies being followed by the Etihad Airways. In such situations evaluating of
organization development is vital to recognize strategies behind such a fast development. So,
14

15. the researcher crucially assess organic growth of the Etihad Airways in the last four year period
in regions of financial, operational, marketing, and other likely development areas (National
Airline of the UAE, 2009).
Secondly, after reading the background and crucial review of the literature researcher has
recognized that there are numerous significant marketing and operational strategies affecting
development of the airline business. Though, in order to assess which extend those aspects
linked with the quick development of Etihad Airways business, researcher going to assess
crucial operational strategies and marketing strategies followed by the Etihad Airways. As
discussed in the beginning session, Etihad’s developments are inspiring and by comparing to
the other Middle East airlines their performances were surprising. As a result, researcher
determined to recognize and assess those marketing and operational strategies followed by
the organization (National Airline of the UAE, 2009).
Etihad Airways belongs to UAE government and the impact of the government is not possible
to ignore. Under the topic of research background most of the matters connected with the
research problems are examined. Actually, most of the research on the problem was done
through analysis. So, here there is a real research problem, (crucial assessment of government
influences over development strategies) and an obvious, sharp focus (National Airline of the
UAE, 2009).
1.4 Aim of the Research
The research is primarily intending to look into the crucial assessment of strategies followed by
the Etihad Airways in recent history. In this study, researcher is viewing to evaluate Etihad
performance of the universal challenging airline industry. Moreover, reason behind their
considerable achievement in small period of time being awarded as World’s Leading Airline at
the World Travel Awards in 2009/2010, would crucially assess reason of this study. A major
part of the study allocated for empirical and theoretical framework connected with
organization development and assessed integration of those empirical evidence and
theoretical framework for the Etihad airways. As a review of the whole work used sources of
15

16. data as corporate information, existing material on corporate strategies associated to past and
current development, and human resources concerned in notifying or executing these policies.
1.5 Objectives of the research
In order to cope with the above central research aim the following main objectives will meet
the cause of the study,
 The research will crucially assess organic developments of the Etihad Airways in
the last four year period in parts of financial, operational, marketing, and other
development regions possible and important.
 The research will crucially assess marketing strategies followed by Etihad
Airways to attain major development in comparatively small period of time in
competitive and unstable world airline industry.
 The research will crucially assess operational strategies followed by Etihad
Airways to get major development in comparatively small period of time in
competitive and unstable universal airline industry.
 The research will crucially assess central government of United Arab Emirates
and Middle East economy’s influence for the major development of the Etihad
Airways (Andersson, 2005).
1.6 Scope of the study
The research discovers Etihad Airways’ developments in small period of time, together with
the vital regions of growth during last four periods, the operational and marketing strategies
pursued by the organization to gain such major growth, and how central government of UAE
and Middle East economy influenced organizational development. Data was collected from
both survey and available secondary information regarding the company and its development
(United Arab Emirates, 2006). The study is stimulated by the progress of world airline industry
and the gap of the information about Etihad Airways as a beginner with excellent performance.
The majority of the publication connected with well created airlines like British Airways,
16

17. Ryanair, Southwest Airline and lots of more developed airlines in North America and Europe
region. The survey can fill a void in the literature relating to the survey of emerging Middle
East airline performance of airlines like Etihad Airways, as there is less empirical study to date
on progress of Etihad Airways (United Arab Emirates, 2006).
1.7 Limitations of the research
All through the work researcher has recognized numerous key drawbacks connected with the
research study. Generally those limitations can be categorized in four main areas like
availability of time, collection of data, availability of data, and availability of resources (Levine,
2010).
Availability of Time: This study is a part of the MBA work and very restricted time is given from
the University. So it is practically not possible to analyze all the important strategies followed
by the Etihad. Though, to cope with strike time frame researcher has selected cross-sectional
time horizon to continue with the work. If researcher can expand obtainable time horizon then
the quality of the results and findings of the research will add more value to the academic and
commercial world (Levine, 2010).
Collection of Data: Since the researcher is an MBA student it is tough to collect data from
organization, as researcher not establishes himself as a researcher, organizations are reluctant
to give information. Moreover, workers are getting pay for their duties and hectic global
organizations are demanding more work from the worker so their time availability to give
information is very restricted. Besides that, researcher has sent his survey questions to the
general email address of every nation, so genuineness of the information and truthful
feedback is one more drawback of the work. Although researcher asks for information sample
size of 50, the response rate is low as 34% (Levine, 2010).
Although some offices like London Heathrow Etihad office rejects to provide information.
These are the main issues associated with the data collection limitations.
o Accessibility of Data: Etihad is a beginner in the market and it is a private owned
organization, so, obtainable information about the company is very restricted. Actually
17

18. there are no appropriate researches initiated about the Etihad’s strategies followed.
Furthermore, organization is in the Islamic religion believing area, so the accessible
financial information also link to Islamic Banking. This restriction affected worth of the
study.
o Accessibility of Resources: Researcher is an MBA student and the accessibility of
monetary support is restricted. So, it is hard to access some of the information without
meeting the necessary people. If research got chances to interview few key workers in
the Etihad Airways, the value and importance of the result will be further. Therefore,
the availability of financial resources for travelling and collecting information was
another restriction of the work.
1.8 Outline of the study
Chapter Name Brief Outline of the Study
Chapter 01- Introduction This section analyses the research background and the rational
for choosing the subject and in addition, work enhanced areas
of research aim, objectives, problems, problem analysis, and
drawback.
Chapter 02- Critical
Literature Review
This part analyze empirical and theoretical framework
connected with the research objectives. Furthermore, starting
of the chapter examines the significance and methodology of
literature review.
Chapter 03- Research
Methodology
This part analyses process of research and methodology
followed to perform study.
Chapter 04- Data
Analyzing and Findings
This part present the primary and secondary data collected
and evaluate the data to acquire information. Besides, in this
part recognized the key information connected to the research
objectives.
Chapter 05- Conclusion
and Recommendation
Analyze to what extend researcher meet his desired objectives
and suggest some strategies to Etihad based on the findings.
Chapter 06- Personal
Development
Researcher describes personal growth due to this dissertation
and area required to be improved.
18

19. Table 2
1.9 Conclusion
This section draws the basic outline of the study with stress of the study specifically on the
objectives. The episode described rational behind the choice of the work and research
objectives from this study. In later part of the section it crucially analyzed drawbacks
connected with the study and its affect on the entire work of the researcher. As a whole, the
chapter discussed in detail about the background of the research, motivation for work and
detailed explanation about findings going to be.
CHAPTER 2
CRITICAL LITERATURE REVIEW
2.1 Introduction
While considering research, crucial literature review is essential owing to numerous reasons
and this section of the work is nearly one third of total work the researcher is doing. In crucial
literature review, it is looking various angle of the original research question accompanied by
empirical work and various theories existing. It is totally important to have crucial assessment
of earlier work before carrying on with the new works to recognize and analyze what have
been done in the past history connected to the current research. Crucial literature review can
be explained as the vital abstract and assessment of current conditions of knowledge
associated to the particular subject matter with views and evaluation of the current
researcher. Though, structural and methodical decisive literature review verifies appropriate
19

20. background for the new research and offer appropriate foundation for new research (Saunders
et al, 2009; Walker and Butler nd).
2.1.1 Benefits of critical literature review
Saunders et al. (2009) pointed out various benefits of critical literature review for the research.
• Appropriately structured literature review offers a sound background to expand
research aims and research questions by crucially analysing empirical and theoretical
proof.
• Crucial literature review offer chances to the researcher to recognize existing
knowledge gap connected to research area and offer improved platform for upcoming
research.
• By carrying out crucial review, researcher is able to capture and gather strong proof
and associated knowledge for the research and it disregard work copying.
• Crucial review explore the data associated to the subject matter, research question
and it offer sound understanding of appropriate theoretical structure connected with
the research (Iatrou and Oretti 2007).
2.1.2 Literature Search Strategy and Sources
While crucially reviewing literature it is very important to know dimension and area that have
to discuss for the significant research. So, researcher must have clear boundaries and suitable
scope about the research literatures. In addition, while doing crucial review it is extremely
significant to have correct literature search plans to recognize and choose the most suitable
literatures and sources for literatures to add more value for research. Therefore, the following
section discusses significant approach for the thesis to choose literatures and assess most
suitable sources for the literatures (O'Connell and Williams nd).
20

21. The above research focuses on the part of airline industry and globalization impact to the
airline business and how organization responds for universal competition to become booming
company. Additionally, research concentrates on specific airline company, Etihad to know
likely strategies followed by them to become unbeaten universal player in the airline industry
with major affect of globalization, although this is a research devoted to affect of globalization
to the airline business growth. The researcher will be discussing certain literatures connected
to these areas and build up review structure can be seen in the next section. However, in this
part concentrates on literature search plans and sources (O'Connell and Williams nd).
The following literature review section is divided into three main areas to discuss in details.
Each of the part will contain between 1,300 to 1,500 words discussing literatures associated to
the subject matter and each of the part will discuss between 6 to 9 empirical and theoretical
literature given by different writers. As Saunders et al. (2009) described, this review will start
with more general scope connected to each part and narrow to most specific parts of the
research questions. It will offer short summary of the key ideas and at the end it will review
key writers’ ideas. In addition, discussion will reduce to particular area relating with the
research questions and empirical evidence and highlight the most vital theories and proof
connected to the research questions (Clark 2010).
To have proficient literature review it is important to define parameters of the literature going
to be. As a result, defined research parameters for literature are as follows
Parameter Narrow Scope Broader Scope
Langue Specifically Middle East Airline
industry
Airline industry in the World
Subject area Growth strategies, Etihad Airline,
Globalization impact to airline
business, Middle East economy,
Marketing strategies
Business growth, Airline
industry, Globalization impact
for business, World economy,
Business Strategy
Business Sector Airline Industry Service
21

22. Geographical Area United Arab Emirates, Qatar Middle East
Publication Period Last 5 years Last 15 years
Literature type Scientific journals, Refereed
journals and books, News papers
Journals and books
Table 3
Literature review strategy (Taneja, 2008)
In the following literature review, to be further efficient and value adding to the research it is
essential to choose most genuine sources which are available in near past. For the research it
will greatly depend on the repeat journals like The Economist both printed and web site, news
papers like The Times, Financial Times most possibly the web site versions, scientific magazines
published about the airline industry which is accessible in the British Library, and some of the
universities suggested books obtainable in the collage and personal library as sources (Taneja,
2008).
2.1.3 Critical literature review structure including keywords
• Business Growth and Strategy: In this part it will discuss common theories connected
with business development, development plans, and some of the key argument about
the strategies growth. Besides, in the part possibly it will add some of the empirical
evidence associated to the business development and strategy growth.
• Globalization: Elaborate discussion about globalization and its impact to the business
growth and mainly airline industry. In addition, in this part it discuss about the global
market and its openings specially airline business. Furthermore, key arguments about
international changes impact for the airline business sector together with empirical
evidence.
• Airline industry and Etihad Airways: The most significant part to the research questions
and deep discussion about airline industry particularly Etihad’s position as new
performer in the market. Any empirical research evidence, upcoming forecasts and
likely theories will discuss here so far as probable.
22

23. • Middle East Economy: A further important part in the entire research and here will be
discussing literature connected with current economic progress of Middle East nations,
ongoing matters and impact to the business sector more closely airline business, and
Islamic culture impact to the airline business as some empirical evidence showed that
airline business effect by the cultural and national believes.
• Key words: Business development, development plan, development opportunities,
Globalization, universal market, Airline Industry, Etihad Airways, Economic growth,
Middle East Economy, Islamic Religion Influence, Pricing model, consumer satisfaction,
reliability, security, Cost Management, Investment.
2.1.4 Limitation of the Literature Review
• Time: For the whole research time allocated is very less. In such small period of time
require reading literature, expanding proposal, building up questioner, data collection,
data analyzing and research presentation. Therefore, this is a big restriction for the
detail critical analysis. In addition, limited time obtainable for the administration with
supervisor and it will have an effect on quality of the work.
• Word Limit: For the whole research obtainable word limit is around 20,000 and this has
use for whole research presentation. So, this will be another restriction to present
more literature elaborately.
• Resource availability: Including of the supervisor time obtainable and finding most
suitable resources will be a further restriction. Additionally, as MBA student in small
period of time finding literature will consume cost and it is another resources
drawback.
(Murphy et al. 2010; Schmid 2006)
23

24. 2.2. Business growth and strategy
In this part of vital literature review it will be discussing empirical and theoretical framework
connected to business development and business strategy growth for improved corporate
future. This part will analyze structural argument associated to the business development
strategy in universal changing business environment and how it impacted to the Etihad
Airways (Building Brand Value and Influence in the Airline Industry nd).
2.2.1 Introduction
In the past, businesses growth strategy improvement has developed considerably. In today
businesses are looking development chances outside their main territory and whole globe
became one single market for the business (Morrison, 2006). Most of the literature has
developed in relation with academic practices and owing to fast business growth many new
thoughts, theories has developed considerably. Furthermore, owing to high competition and
too much demand, universities, research organization, individual business personalities and
students carried out big number of empirical researches about business progress. In this part,
critically analyze some of those previous works which are important to the core research
questions.
2.2.2 An Overview of Business Growth Strategy
Kumar (2010) refers that business growth means major development of turnover, profitability,
product or service and significant lessening of time taken for conveying client requirement and
inventory. Yet, this is not practically accepted in all circumstances as non profitable
organizations are not looking financial point of views as development perceptions. Even some
organizations are taking into consideration development in both organic and inorganic which
make them to more consumer satisfaction. Though, Kumar’s (2010) argument is satisfactory
while concern with financial development and shareholder value increase in profit oriented
organizations. Furthermore, taking into account service sector practically there is no inventory
and it’s basically service oriented by using people gathered talents. So, Kumar’s (2010)
24

25. description cannot accept entirely for universal theory however part of the argument is
adequate in many occasions.
Hess (2007) initiated idea for business development and he referred business development as
creating more consumers, launching new products, and enhancing operation efficiencies.
Therefore, taking into account Hess’s (2007) argument it is further suitable than Kumar’s
(2009) argument as Hess (2007) not narrow the business progress as financial progress as
Kumar (2009) said. Hess (2007) argued wider range focusing essential three elements of the
business which are clients, product and operation. So, taking into account Kumar and Hess
business growth definitions, Hess (2007) concept is satisfactory in various occasions than
Kumar (2009) as this can be applied in service sector, non-profits organization and profit
oriented manufacturing organization. So, the development parameters depend on the
organization objectives and aims (Ethihad Airways, 2010).
Mayer and Wit (2004) argued organization management repeatedly taking into account what
organization has to attain, mainly which representing the purpose of organization existing.
Additionally, they argue strategies are course of action for accomplishing organization’s
intention. So, taking into account above development and organization purpose there is a clear
link between organization purpose and progress. Based on the organization purpose they are
determining parameters for development. As a result, organization strategies are directly
focusing on attaining organization purpose. Hence, Mayer’s and Wit’s (2004) argument can
redefine organization strategies as course of action for attaining organization development
within the firm’s decided parameters (Meyer and Wit, 2004).
2.2.3 Empirical and Theoretical Frame Work of Business Growth Strategies
In Porter’s (2004) opinion competition is the core of the achievement or fall down of
organization. Therefore, competitive plans are important for the organization to do well in
competitive market. Porter has developed generic competitive strategies to gain
accomplishments in the market. According to Porter (2004), business can obtain competitive
advantages by three main policies of Cost Leadership, Differentiation and Focusing. However,
25

26. in some events, businesses were achieving successes by practicing mix strategies. In airline
industry budgetary airlines are a different section and rest of the airlines usually practicing mix
strategies of differentiation and cost leadership, but goal is brought probably worldwide clients
for big commercial airlines. In addition, depending on the empirical research made by Raynor
(2011) concerning the Southwest Airlines, he recognized disruptive policies of innovative
operation. Cost reduction did not convey considerable financial results till they procured high
fuel efficient aircraft. Furthermore, he argued cost effectiveness and competence is not the
only basis to make higher financial return. The reality they pointed out was to make
considerable financial return required, novel cost reduction policies combined with enabling
technologies. Hence, taking into consideration Porter’s (2004) argument, differentiation, cost
leadership and focusing are not only the competitive advantage aspects but also technology
playing considerable position in attaining competitive advantages amongst competitors
(National Airline of the UAE, 2009).
Lynch (2007) argued while developing corporate strategies, the nation’s economic activities,
social and cultural behaviour should not be overlooked and growth of strategies depending on
the environmental
viability. In addition,
taking into account
Lynch’s (2007)
arguments corporate
strategies are influencing
by the surroundings
where they are
privileging. Depending
on opportunities, threats
and resources
accessibility,
organizations are developing their long-standing strategies. Furthermore, Lynch points out
those emergent strategies consider logical and rational process of execution to attain higher
26
Figure 2.2: Porter Model (Sources (Porter, 2004))Figure 4

27. shareholder return. Further considerably attaining long-standing corporate purpose depends
on opportunities accessible in organization surroundings and abilities of taking the
opportunities (Building Brand Value and Influence in the Airline Industry nd; Lynch 2007).
Latest empirical research done by the Too and Too (2010) recognized fast variations of the
external business environment force. The business has to consider internal potentials and
resources accessibility as basis for developing competitive advantages. In addition, they
recognized in present scenario very little comprehension is done on internal abilities that are
suitable for infrastructure asset management. So, they highlighted it is very important to focus
on internal abilities while taking on new business strategies. Furthermore, in view of Too and
Too (2010) findings, it is totally vital to realize organization’s strength and weakness while
developing strategies. So, Lynch (2007) also described while developing strategies not only
opportunities and threat of the environment but also strengths and weakness of the firm have
to be considered (Too and Too, 2010).
2.2.4 Strategies of Etihad Airline
It is significant to examine all these strategy and development concepts discussed above and
Etihad’s performance with respect to those concepts. Going back to Kumar’s (2010) and Hess’s
(2007) argument of development, as profit seeking service Sector Company, Etihad is more
close to Hess’s (2007) arguments. The organization consider organic development and they
have been taking into account profit development, operational capacity development and
number of customer growth as organizations progress for last eight years. Particularly stressing
last three years operation, organization pointed out in 2010 that they have increased their
operation capacity in terms of number of aircraft by 9.6%, revenue by 28.2%, passenger
carrying by 13% and freight handling 20% (www.etihadairways.com ). As a result, there is
obvious relevence between arguments of Hess (2007) and Etihad’s view of business
development (Hess 2007).
While taking into account Porter’s (2004) competitive advantage theories, it is highly
questionable where Etihad is fitting. Organization is considering broad goal as competitive
27

28. scope as, Etihad highlighted their dream and mandate as “The goal and overall ambition of
Etihad Airways is to be the best airline in the world” (www.etihadairways.com ). So, it is true
that organisation is looking for very big and broad market as competitive scope. Therefore
taking into account competitive benefit, organization is practicing mix strategy as there is no
budgetary airline like Ryan International Airlines or Southwest Airline and there are no proof
that organization trying to distinguish from other. In that sense, company is in a middle
position. Therefore, as conclusion Etihad is looking for broad market with mix strategy. Yet,
going back to Raynor (2011) finding Etihad is more bothered about technology and most of
their aircrafts are new product which has high fuel efficiency as in samples Etihad with modern
aircraft of 06, B777 aircrafts, 19 A330-200/300 aircrafts which are the most modern aircrafts in
the industry. Therefore, Etihad is considering technology as important factor for organization’s
achievement. In addition, growth of Abu Dhabi will have major impact to the Etihad
performance and its present strategies link with the Abu Dhabi and Middle East’s development
and this will discuss in later part of this chapter (Bamber, 2009).
2.2.5 Conclusion
To wind up the above discussion, business growth means considerable progresses of
organization abilities in areas of financial, operation, production and clients. Yet, growth view
of particular organization depends on the organization purpose of existing. As a result
strategies progress of improved corporate future will determine organization’s intention.
Additionally, while taking into account business development and growth strategies
competition cannot separate and in the competitive business environment to achieve
competitive advantages there are three main strategies of Cost Leadership, Differentiation and
Focusing initiated by Porter. Yet, later on empirical evidence recommend that only Porters
theoretical frame work will not be enough to get competitive advantage and it is essential to
join with enabling technologies. However, further empirical and theoretical evidence
recommend while developing corporate strategies that it is very important to examine
opportunities and threat in the environment and organization strength and weakness previous
to building any corporate strategic decision.
28

29. 2.3 Globalization and Global market
In this part of critical literature review, it will be discussing empirical and theoretical
framework connected to globalization and impact for business. This section will assess
structural argument connected to globalization and its impact to the businesses while doing
business in varying business environment.
2.3.1 Introduction
International trading is not emerging concept, it has been occurred over centuries between
nations and there were historical proof regarding the universal trading. Though, with the
recent boom of telecommunication and transport industries (Morrison, 2006), the idea of
global trading encompasses with radical variations and considerable progress. Furthermore, in
second half of the twentieth century interdependency of the countries has been increased
considerably and this has opened entrance for globalization idea to occur. This part crucially
analyzes some of literatures about globalization which are significant to the core research
questions (Doganis, 2010).
2.3.2 An Overview of Globalization
Beck (2003) described that no longer have any nation in the globe kept on without linking to
other nations and hence several economical, cultural and political systems from each other. He
describes that today globe is moving to new era of business, cultural and social together with
interdependency. As Beck (2003) described, today businesses are thinking entire globe as
single market for their product and service. Etihad is looking for a future of world’s best airline
and no longer has organization considered national geographical limitations. With respective
to the airline business, business model itself is a globalization business and they provide
transportation between nations (Beck, 2005).
Ali (2000) described that most international organization use their home country government
power to obtain concessions in international trading. Further described that most of the big
multinational corporation greatly attached with the governments and owing to globalization
29

30. political and cultural relationship went into the new era. In addition, fast growth of information
technology opened new market and marketing opportunities for business. In opinion of Ali
(2000) government influence and technological influences are key success elements in
international business. Understanding political environment and cultural variations make
enormous success to the international business. Etihad Airway is the national airline of the
United Arab Emirates and organization heavily getting the support from the local government.
So, global trading being a government invested organization will flow further advantages to the
organization. Basically, it is an enormous benefit with consideration to capital injects and
influences to the other nations government while increasing business. Furthermore, in the
airline industry technological factor cannot ignore and as Raynor (2011) described technology
is a vital element in business achievement and Etihad is quickly absorbing technically advanced
equipment and aircraft as strategy for achievement.
Parker (2005) described globalization is not internationalization; so organization cannot utilize
conventional boundary expanding actions. Actually, businesses have to consider further
changes and hyper globalists’ plans to acquire clients to the organization. Taking into
consideration airline industry, merely expansion goal no longer work out, rather than that
airlines require being cautious in other aspects for instance customer service, modern aircraft,
in-flight facilities and in-flight entertainments activities to obtain more business. Traditional
concepts of safety, ticket cost and more targets are no longer competitive factors in airline
business. Those are common circumstance or basic situation to perform the business and it will
not make organization changed from others. As Parker (2005) highlighted in airline business
there should be alterations and hyper globalists’ strategies to acquire market achievement
(Davidson, 2008).
2.3.3 Global Market and Marketing Theories
In business concepts, marketing cannot be ignored while making strategic decision.
Organization like Etihad achieved huge success in short period of time in the competitive
airline business. Marketing strategies are playing very important role in any business while
30

31. developing long-standing business strategy (Jain, 2012). Thus, considering Etihad Airways is
worth to evaluate global marketing strategies in relation to original marketing theories.
Kotler and Armstrong (2009) described that marketing is above any other business function
and it is how organisation dealing with the clients. Maybe simply they have been highlighted
managing beneficial clients relationship as marketing. In much deeper analysis marketing
defines your achievement in competitive business environment. Understanding client
requirement and reaction and providing them for a profit is the basic idea of marketing. As
Kotler and Armstrong (2009) described understanding client needs and market place is vital
while developing marketing strategies. In the situation of Etihad they are looking for global
market as market place and various demands of the clients, some are cost concern passengers,
some of them are eager about amenities offered by the Etihad during the trip, transportation
service, cargo services, luggage allowances, and various other demand. Thus while pursuing
strategies organisation have to know these clients necessity when following the strategies. In
addition, delivering superior value service is bringing client back to the organisation and Etihad
concern strategy of loyal program of consumers call “Etihad Guest” to widen gainful client
relationship (Kotler and Armstrong, 2009). This is an idea of repeat clients and this offers
chance of low marketing budget. Delivering good client experience will bring client back and
Etihad proven that rising “Etihad Guest” membership from 750,000 in 2009 to 1,000,000 in
2010 by 33%. Thus taking into account Kotler and Armstrong (2009) argument Etihad
developed strategies to widen gainful customer relationship. Below given diagram present
theoretical frame work of the Etihad marketing strategy.
31

32. Figure 5
A simple model of the marketing process (Kotler and Armstrong, 2009, p. 5)
Besides that, consider theoretical structure of the marketing strategy of 4P concept,
application is obligatory to assess market and organization viability of taking on market. In this
part it is analyzing 4P concept with respect to the Etihad Airways. The concept principally deals
with product, price, place and promotion. Consider product Etihad Airways can classify as air
transport provider, as most of the airlines are doing, Etihad Airways also offering variety of
product for instance Diamond First class, Pearl Business class and Coral Economy class as
product varieties for their clients. Depending on the client capacity and ability they have option
of services to choose from (www.etihadairways.com ). Etihad Airways is further concerned
about value of the service they offer and in-flight design of the aircraft to obtain more
attraction of the clients, and they are more concerned regarding the In-flight entertainment
activities as demanded by the clients. Superior service offering is one key motto of the
organization, improvement of diamond first class and pearl business class is superb product
development of the Etihad Airways. In 2011 Etihad Airways won two awards for “Middle East's
Leading Airline First Class - World Travel Awards Middle East 2011 and Middle East's Leading
Airline In-flight Entertainment - World Travel Awards Middle East 2011” proving these product
improvement activities were achievements (www.etihadairways.com ). As far as price concern
Etihad Airways strategy is different, there are no low cost or budgetary airline and no high
price charging airline. Organization is practicing strategy with concerning pricing strategy. In
32

33. airline industry mix pricing strategy is familiar and as worked done by Givoni and Rietveld
(2009), pricing is depending on the seasonal aspects and booking time. In addition, they
highlighted pricing as sensitive factor in the airline business with the growth of low cost airline
(Explorer Publishing nd).
Place is one of the important success element in airline business. Importance of the growth of
number of target highlighted by Givoni and Rietveld (2009) empirical research evidence and
this will be discussing in detail at afterwards in this chapter. Dogra and Ghuman (2008) said it
is basic matter in any organization how and in what way organization needs its service or
product accessible to the clients to have profitable exchange. So, it is very crucial to have
written channels and coverage of the product or service availability to get market success.
Particularly in the airline business, there is further need for having big number of accessing
points to the client to acquire more business. According to the Etihad website Etihad flies to 65
international destinations. Through its 28 codeshare partners, Etihad’s network spans a total of
157 cities on five continents as at 31st
December 2010” (www.etihadairways.com ). As a basic
strategy Etihad continues in improving its target to develop business and obtain more success
and also evaluating their business growth target is key factor that they are considering (Dogra
and Ghuman, 2008; Givoni and Rietveld, 2009).
Kotler and Armstrong (2009) described promotion as activities that communicate the qualities
of the product and influence target client to buy it. Though, today there are extra activities
relating under the promotion. Advertising, sales promotion, public relationship and brand
development are important activities of promotion. Etihad Airways is eager on promotional
activities heavily and were improving their brand as a policy to obtain more clients. Etihad is
offering sponsorship activities as brand development and promotional activity and give their
sponsorship “as a Diamond sponsor of the Abu Dhabi Golf Championships, as a lead sponsor of
the All-Ireland Senior Hurling Championships and As Shirt Sponsor of Manchester City Football
Club” (www.etihadairways.com ) to increase brand image of the organisation. Those are some
stragies they have followed to obtain considerable development in the airline business sectore.
33

34. Other than that to assess strategies followed by the organization, be able to make use of
Ansoff’s Product-Market Expansion Grid. Using the Ansoff grid, Kotler and Armstrong (2009)
described that the market growth is company development by recognizing and making new
markets. As per the case of Etihad, organization is diminishing in to group of market
development, as organization offers existing products to the new markets. Etihad Airways in
the business of air transportation and their product is transportation service to the clients who
would like to take a trip between nations. Organization did not alter any changes to the
product, however they continue in developing their market all over the world (United Nations
2007). So, as per the Ansoff’s Product-Market Expansion Grid, Etihad airways is in the group of
market development and for that organization is using concept of additional destination
progress and attaining more mordent aircraft in to their balance sheet. though, organization is
developing some other product also, mainly like most other airline Etihad is having own
holiday business unit, in that point of view organization has developed new product in to their
product portfolio. At last, they have some close connection with product development jointly
with market development (United Nations 2007).
2.3.4 Conclusion
To conclude the above discussion of globalization and marketing concepts globalization has
offered considerable openings for the business. Though, to acquire this business advantages
organizations have to build up good marketing plans. The Etihad Airways have attained major
development in last 8 years period. In order to attain that they have been used numerous
marketing concepts largely. Mainly, the general marketing concepts of 4Ps price, place,
promotion and product management was expellant according to the literature and the market
development and branding are further important strategies that organization has followed. So,
above overall literature offer good platform to assess organization strategies followed to attain
important increase in small period of time.
34

35. 2.4 Airline Industry and Etihad Airways
In this part of critical literature review, the discussion is about empirical and theoretical
framework associated to airline industry and Etihad Airways business. Section will assess
structural argument connected to globalization and its effect to the businesses while doing
airline business in varying environment of business.
2.4.1 Introduction
Like Oum and Yu (2001) described, international air transport industry plays important position
in the world economy by inspiring travelling and transportation between nations. The inflence
of the air transportation industry to the other business areas cannot disregard in any
situations. For the concept of globalization progress owing to major growth of transportation
industry and telecommunication industry but fast development of the globalization, the impact
of air transportation is vast. Large demand of the mobility, alteration of customer buying
behaviour, further demand of globalization enhances the air transport industry. Yet, today
overall inflence of the airline business to other business area for instance freight, hotel and
tourism is huge (Oum and Yu, 2001).
2.4.2 Empirical Frame Work of Airline Industry and Etihad Airways
Givoni and Rietveld (2009) argue while airline faced progress in demand, airlines have a
tendency to answer more frequencies than by rising aircraft size. So, they argued in their
research somewhat increase of demand for the aircraft airline increase the number of fleet for
each target. As a result, by increasing number of fleet for particular target will meet the
demand of the consumer. Further, Givoni and Rietveld (2009) explained more the target and
more the nations covered by the airline, growth rate of the company are high. While airlines
rising number of destination they are covering and frequencies of the fleet for each target,
airlines gain more income. This is because of demand verity of the passengers as passengers
are demanding more comfortable travel schedule than ever. Though, this will affect the airlines
in other ways like when functioning large number of fleets for one target it may not function
with full capacity of the aircraft. Although, aircraft travel with vacant passengers all through
35

36. the history Etihad functioning more number of fleet to more target as strategy to obtain
further business (Givoni and Rietveld, 2009).
Parast and Fini (2010) discover from their research in the airline industry that labour
productivity is the most important reason for airline profitability development and further they
have argued on-time performance has no relationship with profitability. The finding
recommended for the airline profitability growth depending on the gas price, average annual
maintenance cost, labour productivity and employee salary. Furthermore, with this recognition
managing cost of the operation will increase the profitability of the airlines.
Ahmed et al. (2010) recognized in their research that other than the personal experience
national loyalty is a key element while choosing airline to travel. Besides, they argue personal
experience, demographic variables and nation of origin as the key aspects for the client
perception on the airline. Considering these findings, Middle East countries are mainly
dominating by the Islamic religion and business and government decision are greatly
influenced from their religious believes. Therefore with this research it creates flat form for
argument of Islamic religion impact on the airline development in Middle East. These findings
have clear link with marketing ideas argued by the Kotler and Armstrong (2009), as they have
pointed out personal experiences of the customers bring repeat purchases to the organization.
In addition, Etihad is based on the Islamic religion nation and most of the clients who belong to
Islamic religion are faithful to their religion and they are more chosen to buy their own
community product. Etihad as airline recognize these concepts and they are offering some
benefits to the Islamic religion clients (Ahmed et al., 2010).
Lin and Chang (2008) described on their research that controlling cost and skill to manage risk
are key success elements in the airline business. These research findings will have a strong
connection with Parast and Fini’s (2010) finding on cost management on gas and labours. They
argue that in airline business risk and cost management play critical role and it has important
impact to the client perception on the airline selection. Furthermore, taking into account Lin
and Chang’s (2008) arguments the impact of cost and risk management in the airline industry
cannot be neglected. Owing to appropriate cost management, some of the airline got the
36

37. further competitive benefits in the airline business. Risk management is another important
element in the airline business (Lin and Chang, 2008).
Doganis (2006) recognized that government ownership of the airline offers important capital
support as organization required and about 70 global airlines, some are substantial size, are
still belonging to the national governments. Adding to his arguments, although government
support for the financial matter when it’s come to the management process state that
management influence offer significant disadvantage to the business. In the above scenario,
Etihad is government owned Airline Company and it is not public or private own organization.
Taking into account Etihad, it is managed by the board of directors who are outside United
Arab Emirates. So, the quality of the top management is competent enough to handle airline
business in beneficial mode and they have proven it in near past. However, the argument
offered by the Doganis (2006) cannot ignore with respective to the Etihad.
Doganis (2001) on his empirical research recognized that the airline profit and fuel price has
key association. Alteration of fuel price has important impact on the airlines profitability.
Doganis (2001) explained that variation of 50-60 US cents will have impact of 12-15% of airline
operation cost. Thus, organization has to handle risk of fuel price increase while developing
sustainable future. As a whole, Etihad airways is concerning on fuel price increase risk
management through fuel hedging agreements. Organization frequently increases fuel price
hedging activities and in 2010 they hedged 82% fuel as strategy to handle fuel price increase
risk. As a result, risk or volatility management is vital in airline industry. As Lin and Chang
(2008) argued risk management is necessary in the airline business and Etihad as organization
is able to handle their risk through hedging agreements (Doganis 2001; 2006).
2.4.3 Conclusion
As a winding up of the above discussion there are numerous aspects impact for the
development and sustainability of airline business. Different researchers and authors have
recognized numerous reasons that justify the development of the airline business.
Improvements of destination, increase of frequency of the fleet, labour productivity, cost
37

38. management are some of the important elements that determine success of the airline
business. Furthermore, managing fuel price risk is another success factor in the airline
business. Besides that literature shows that the involvements of central government offers
capital inject facilities but it may have drawback while consider to the management. Though,
on the whole there are numerous success factors that decide the airline growth.
2.5 Middle East Economy
In this part of crucial literature review it will be discussing empirical and theoretical framework
connected to globalization and impact for business. This section will analyse structural
argument associated to globalization and its impact to the businesses while doing business in
varying business environment.
2.5.1 Introduction
Nowadays the Middle East part of the globe is going through drastic changes and political
unbalanced condition. Libya war situation, unstable Iraq, Turmoil in Egypt and protest and
political crisis in other nations make situation where unstable. Though, in these region nations
have more control on the oil and natural gas prices over the globe. According to Richards and
Waterbury (2008) Middle East region societies ranged from the very poor nations, like Yemen
and the Sudan, to the very rich nations, like Saudi Arabia and Kuwait but culturally it is leading
by the Islamic religion culture. Therefore, in now Middle East impact for the world economy is
enormous; nations are rich with oil resources, which are directly effecting airline industry, and
the impact of labour market, which also main cost potion of the airline industry cannot avoid
at any situations (Richards and Waterbury, 2008).
2.5.2 Middle East Economy and Businesses
Highlighting numbers www.economist.com website point out in 2009 around USD 150 billion
value of fuel issued to the globe from Middle East and North Africa region and oil cost was just
over USD 60 per barrel. And today the price of the crude oil barrel is nearly double and if prices
keep on in the same rate regional fuel subsidies would rise to almost $300 billion this year.
38

39. That is almost 7.5% of the total GDP of the area and so, Middle East region’s skill of control
over fuel prices in the globe is very high and the fuel price is the main cost impact for the
airline business. Though, United Arab Emirates, where the Etihad belongs is rich with oil
resources and this is huge benefit for the Etihad Airways operation. Doganis (2001) confirmed
that the impact of the fuel prices instability and profit instability of the airline businesses has
negative correlation. Increase of the fuel prices will guide to decline of profitability of airline
business. Though, being a Middle East airline, Etihad got the sufficient chance of fuel price risk
management and it has proven that they handle fuel price through hedging agreement.
Moreover, International Monetary Fund (IMF) in their regional economic outlook of 2009
about Middle East and Central Asia described some attractive points about the Middle East
economy. According to them the 12 oil exporting nations in which six of them representing
Gulf Cooperation Council (GCC- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab
Emirates) and Algeria, Iran, Iraq, Libya, Sudan and Yemen direct the world fuel price and they
are accounting 65% of global oil reserves and 45% of natural gas reserves. In all of these
countries, 50% of GDP contribute by these oil and gas reserves. Besides, this represents 80% of
government revenue. So, those nations are wealthy with risk capital owing to inflow of cash
from oil and natural gas exporting. In fact UAE also belong to GCC which are exporting oil
heavily so the reality is government is prosperous with risk capital which can be invested in
business. Etihad is national airline of the UAE; so organisation has ability of collecting risk
capital without hassle.
Richards and Waterbury (2008) further argued about the emering Middle East economy.
According to them the area is wealthy with risk capital and nowadays they are concerning
more growth of industrial and service sector. They clarified that till 2020 from 2010, around
25% of world construction will be in this area and it is growing more rapidly. Although nations
are rich with capital investments and money, the economic distribution and social progress are
far more behind the developed nation’s level. Furthermore, Middle East countries, particularly
nations which are in oil exporting are considering more progress of service sector by offering
employment opportunities to staffs all over the globe. As a conclusion, Richards and
39

40. Waterbury (2008) said, this region is investing heavily in service sector and they are getting
employee from whole globe. The truth about the above argument is that the region is
developing quickly for the service sector.
Further, www.economist.com (2010) highlighted that Doha International Airport increasing
capacity to 20 million customer to 2012 and 40 million clients a few years after that. Hence, in
Middle East market it is truly emerging market for the airline industry and it is developing
considerably during last few years and they are hoping huge growth in near future. As far as
Doha International Airport is concerned it is the centre for Etihad Airways. The growth of Doha
International Airport has direct impact to the Etihad Airways business. As organization is
belonging to government of UAE, the government is looking for fast development of the airline
by investing both airline and Doha International Airport simultaneously.
Moreover, www.economist.com (2011) highlighted that UAE and Canada entered in to an
contract which is permitting both nations to more landing slots for civilian flights to its
government-owned airlines of Air Emirates and Eithad Airways. Though, both of these airlines
are belonging to the UAE governments and it is reality that airline organizations enter in to the
mutual agreements to acquire more and more business. Etihad Airways entered in to an
agreement with Virgin Blue Group of Airlines to improve the business as a strategy to expand
business. Besides that organization has around 24 agreements with Alitalia, All Nippon Airways
(ANA), Korea’s, Bangkok Airways, Brussels Airlines, India’s Jet, Airways, Sri Lankan Airlines,
Ukraine International and during 2010 year they have entered in another 8 agreements with
Air Malta, Alitalia, ANA, ASIANA, Hungary’s Malev, Greek carrier Olympic Air, Siberia and
Airlines (S7) and Virgin Blue as policy to improve business. More over, in 2010 mutual alliance
income contribute was around 13% of airline total passenger revenue
(www.etihadairways.com).
Furthermore, www.etihadairways.com higlighted that their is huge development in Abu Dhabi
in nere future witich impact to the etihad business. The nation is developing their engergy
sector and they have invested around USD 21 billion with Korean consortium to build four
nuclear power plants in the UAE and in cooperation with Etihad Airways Abu Dhabi Grand Prix.
40

41. Other main global events consist of Abu Dhabi Film Festival and FIFA Club World Cup. As a
result, to develop Abu Dhabi government is developing some museums and other sectors,
particularly targeting tourist industry. As a result, all these elements suggested Etihad Airways
in emerging market (Sull et al. nd).
2.5.3 Conclusion
The discussion above created platform to examine impact of Middle East economy for the
Etihad Airways. In modern world Middle East economy is growing quickly and its impact of the
international and local airline industry are vast owing to control authority of the international
fuel prices. In the above part, it examined growth of Middle East economy and emerging UAE
market particularly with respect to the Abu Dhabi. In addition, above discussion went in an
area of impact of emerging Abu Dhabi market for Etihad Airways. Besides, it was discussing
numerous empirical evidences about the government influence for the airline business,
particularly in the case of Etihad Airways. In the conclusion of this discussion it makes
appropriate theoretical and empirical background to know empirical and theoretical influence
to the researcher work.
2.6 Conclusion about Literature Review
Although researcher offered individual conclusion for each sections of the entire literature
review, it is significant to review vital information of the entire work to make improved
background for upcoming works of the research.
2.6.1 Theoretical Frame Work of the Research
Theory or Theoretical Frame
Work
Author of the Original
Work / Respective Research
Material Author
Relevance to the Research
Work
Porter Generic Theory of
competitive advantage
Porter (2004) on his book of
Competitive Advantage
Analyze the Etihad Airways
competitive strategy using
the model.
Marketing Process of Kotler and Armstrong on Analyze marketing process of
41

42. Organisation their book of Principles of
Marketing 12th
Edition
organization applicable for
Etihad Airways
4P General Marketing
Theory
Kotler and Armstrong on
their book of Principles of
Marketing 12th
Edition
Application of 4P to the
Etihad Airways strategy
development process
Ansoff’s Product-Market
Expansion Grid
Kotler and Armstrong on
their book of Principles of
Marketing 12th
Edition
Analyze Etihad Airways
strategy of business
development using the
model
PEST concept specifically
PandE impact on business
Used data published in
www.economist.com and
IMF
Analyze Middle East political
and economical impact on
Etihad Airways.
Table 4
2.6.2 Empirical Evidences Found
Empirical Evidence Author of the Original Work Relevance to the Research
Work
Fleet frequency and
destination development
Givoni and Rietveld (2009) Impact of growth of
destination and increase of
fleet frequency to the Etihad
Labor Productivity Parast and Fini (2010) How labor cost impact to
organization development
National and cultural
influence
Ahmed et al. (2010) National and cultural
influence of Etihad airways
development
Cost management Lin and Chang (2008) How overall cost
management impact to
organization progress
Government influence Doganis (2006) UAE government influences
on Etihad Airways strategy
Table 5
42

43. 2.6.3 Key Authors of the Research Work
Author of the Work Concept/s
Kotler and Armstrong on their book of
Principles of Marketing 12th
Edition
4P General Marketing Theory, Ansoff’s
Product-Market Expansion Grid, Marketing
Process of Organization
Givoni and Rietveld (2009) Fleet frequency and destination
development
Hess (2007) Business growth
Doganis (2006) Government influence
Ahmed et al. (2010) National and cultural influence
Table 6
At the end of the entire discussion it was seen that there are numerous key authors adding
further value to the research, few theories and empirical evidence connected with the whole
research and those finding from literature improve quality of the work. From whole discussion
it has recognized various elements that impact to the achievements of airlines business for
instance,
o Organic growth through aircraft, target, and fleet frequencies progress
o Being in an rising market with government support
o Risk and Cost managing
o To attract consumers through application of appropriate marketing method.
So, these whole factors created improved platform for researcher to discuss Etihad Airways
plans followed in last 8 years to become booming Middle East airline.
43

44. CHAPTER 3
RESEARCH METHODOLOGY
3.1 Introduction
There are some evocative facts regarding to the research, but Bryman (2004) said “Research is
a methodical study to find out answers to a dilemma”. Researcher used a systematic approach
to find out the answers of the fundamental research question of this research. A reality
contains in every research that is it has an efficient technique to meet suitable solution for
questions of that research. Consequently, in the study, technique to facilitate study eager in to
do the research is considerably essential. Methodologies of a research is explained that how to
perform the research in an appropriate structure to reach end. Furthermore it is describing
that a method that researchers gather and evaluate data, attitude and approach of the
researcher, finally what are the probable research sampling techniques and so on.
During the next part will describe research values, approximation and appropriateness of that
approach and values researcher has adopted for the aforementioned research. Moreover,
segment will demonstrate the detail procedure of sampling, data compilation and intention
group, designing of questionnaire, dependability, legality and moral problems related among
the research (Saunders et al. 2009).
3.2 Research Philosophy and Approach
Saunders et al., (2009) explained that research philosophy is the method witch researcher
lookout the earth. Moreover, they have disagreed the significant matter is not the general
research philosophy for research other than the proper study philosophy supported on the
questions of the research. According to Saunders et al., (2009) the four main research
philosophies are positivism, realism, interpretivism and pragmatism, for this research the
researcher accepted pragmatism philosophy due to a number of reasons. An appropriate
approach is necessary and important for accomplish the research. Whether researcher apply
44

45. deductive approximation, in which researcher expands hypothesizes and suggestions and
designs research to check those premises and hypothesis, or inductive approach, in which
researcher gather information, from which researcher build up assumptions and theories
sustained on the evaluate data, is very important in the succeeding research (Saunders et al.
2009).
3.2.1 Importance of Pragmatism Philosophy
Pragmatism research philosophy is utilizing the researcher in this research. For the reason that,
ontology of the research is outside and research contain some views regarding to the research
questions. Additionally, based on the manifold outlooks researcher is trying to identify and
suggest finest obtainable response for the research (Saunders et al., 2009). In this research the
researcher is trying to evaluate the guidelines chased by Etihad Airways to turn into
competitive Middle East Airline. When using pragmatism philosophy research has get
sovereignty of use examination experience and biased meanings. Pragmatism philosophy
offers enormous possibility of amalgamate diverse attitude to construe information to achieve
preeminent accessible answer for the designed questions of the research (Johnson and
Christensen 2011).
No other research philosophies are giving possibility to reach suitable conclusion for the
designed research question when compared to pragmatism philosophy. Positivism, however
ontology external is autonomous of social conduct so organization likes Etihad who are in the
service area cannot remove societal manners when taking strategies. Philosophy itself may
have drawback to find out finest answers for the research questions because of the
researcher’s selection of the positivism as his research philosophy. Human thoughts are
disregard in the realism and it is extremely subjective so type of a public study this philosophy
may not correct.
Compared to the possibility of pragmatism philosophy for the above research axiology of the
pragmatism research philosophy will offer more opportunity to add researchers’ thoughts to
the research. For this reason, researcher envisages a few strategies in this research based on
45

46. the literature and his personal experiment of the secondary data and is going to assess
confirmation of those impressions. Hence, it is extremely imperative to give probability to the
researcher to attach his personal outlooks to the research and pragmatism philosophy is the
best alternative to include research values. As stated by the Saunders et al., (2009) value of the
researcher plays an important role in pragmatism philosophy during the period of result
interpretation. Moreover, this philosophy offers more flexible situation for collecting data
than other available research philosophies. So pragmatism philosophy has been selected for
this research (Stuhr, 2003).
3.2.2 Why Inductive Not Deductive?
Figure 7
As stated by Trochim (2006) deductive approach of research works from common to more
particular part of the research questions and several scholars describe this as top down
46

47. approach of the research. On the other hand, in inductive approach it is running with other
system approximately in that situation. It can be illustrated as "bottom up" approach of
research. In this inductive approach, based on the observation researcher can study more facts
and reach most suitable answers for the research questions (Teddlie and Tashakkori nd).
The purpose of this research is to gain close understanding about Etihad strategies pursued
and achieve more qualitative analysis. Other than that, for performing this research the author
intends more supple structure. In this research inductive is much more suitable than
deductive. Essentially, foregoing research is social since research which is dropping to business
management category. And researcher gathers some facts from the accessible sources to
enlarge conclusion for the details about the company strategies.
Qualitative data is the base for this research rather than quantitative data. Deductive
approach condition is demanding much more quantitative data rather qualitative data
therefore considering that aspect inductive approach is greatly fitting. Though, as an overall
outlook of the research it is inductive approach supported research which researcher going to
gather data and based on the data reach absolute conclusion. Etihad Airways is searching for
superior worldwide development in airline division. The organization has grown extensively in
a short period of time and is one among fast developing airline in the region. In such situation,
to recognize their strategies followed to achieve important development in the industry,
inductive approach is perfect (Saunders et al., 2009).
3.2.3 “Onion” Model Application
47

48. In view of Saunders et al. (2009) description, the researcher used research “Onion model” to
expand improved research frame. Pragmatism philosophy as research philosophy and
inductive approach as appropriate approach for the research is the explanation of the above
description. Considering much profound methodology of the research, the current research
policy is close to case study theory. Since, research frankly dealing with Etihad Airways and
examined experiential and hypothetical outline related with the selected research questions.
While this research committed to development strategies implemented by the airline and is
dealing with solitary establish company, the most suitable strategy was case study approach.
48

49. Figure 8
(Saunders et al. 2009)
3.3 Research Study on Etihad
Only limited data is available about Etihad Airways because it is a private company.
Furthermore, due to lack of experiential research formed condition anywhere comparisons of
data with other establish airlines and most of this data were learned through internet. In
addition, using survey method certain quantities of primary data are collected. Therefore
research has used both primary and secondary data to develop structural details. Hence, it is
appropriate with varied method of choice because background of this research methodology.
Only short time period was allocated to the research. Such a limited period did not permit the
researcher to investigate all information about Etihad Airlines and strategies they have
followed during last 8 years period. Hence, the research was falling to type of cross-sectional
considering time concern (Saunders et al., 2009).
3.3.1 Designing of Questionnaire
Brace (2008) explained that if anybody choose questionnaire as primary data gathering
method the questionnaire is the significant part in its accomplishment. Arrangements of
questions and gather information through that will not present correct proof or information
associated to the research question. Maybe it can deceive researcher through pointless and
irrelevant data, so eventually it will be a valuable valueless approach that researcher has
undertaken.
Both paper based and electronically based questionnaire has developed in this research.
Website was used to develop electronic questionnaire and similar set of questions transmitted
to the papers. Nevertheless, if the kinds of questions are vague, then it would have formed the
questionnaire too lengthy and hard to investigate. As a result and due to shortage of time
availability, the total questions in the questionnaire are close-ended and it makes short and
49

50. comparatively correct analysis. Researcher has worked the subsequent questionnaire design
procedure fallacies and modified from the work done. The simple illustrator of the
questionnaire can be found in the below figure (Hague and Morgan, 2004).
Figure 9
The literature point out that in airline industry, there are numerous aspects determine the
achievements such as in-flight facility, cargo managing, cost management, destination,
reservation management, risk management, pricing strategy, promotional strategy and many
other common aspects. 17 questions contained in the questionnaire and each of these
questions search the strategies practiced by the airlines to develop into a competitive airline
comparatively minute period of time. In Appendix 1, a print of questionnaire can be found
(Hague and Morgan, 2004).
3.3.2 Sample Selection Techniques
For finding answers for research questions researchers require valid data. In such conditions
there should be an appropriate sampling technique to assemble information which stands for
entire population as much as close because in most of the time it is virtually unfeasible to
50

51. acquire data from complete population (Smith, 2011). Conversely, this research has selected a
technique. It is virtually impossible to have statistical inferences in some research like case
study and market survey when approaching sample selection. This set force on research to
choose sample in several other method and in such chance researcher can apply non-
probability sampling techniques. Non-probability sampling technique has selected for selecting
sample in the above research. Further, convenient sampling method has adopted in the above
case to accumulate data because the researcher going to check strategies pursued by Etihad
Airways to become competitive airline. The sample selected for this research is the employees
working in Etihad Airways offices. The researcher conducted the survey by distributing
questionnaire to employees.
3.3.3 Data Collection
Academic journals, scientific magazines, written material, electronic material, published books
and survey are used to complete the needs of the study used data from different sources.
Through Survey questionnaires primary data were collected for this study.
Researcher collected primary data through survey questionnaires because most of the
strategies followed by the organization were unpublished and there were restricted
experiential study about the Etihad Airlines. The survey questionnaire was distributed to 15
employees of Etihad Airways office with a requesting letter which described the purposes of
the survey and certifying that the responses they provided will be kept confidential and won’t
be misused or used for other purposes.
Every research require some secondary data for developing survey questionnaire (Davenport
nd), in this research it was based on literature review and empirical research evidence as a
foundation. This offered an opportunity for efficient and effective data collecting. With the
use of all the above mentioned resources and technique researcher gathered the data in order
to accomplish the demanded data of the dissertation.
3.3.4 Pilot Testing
51