MGT 406 blog

Emirates Holidays revenue soars 22 percent

2006-04-30T11:50:00.000-07:00

It seems that Emirates Holiday ( the largest wholesale tour operator in GCC) is performing well. EH reported 22% increase in revenue last year (435 million) compared to 118 million in previous year by serving huge base of customers up to 100,000 travellers. Therefore, there is a comparison of revenue in the last and this year; however, what is missing here is Emirates Holidays performance compared to other companies within the industry and compared to the performace of the industry. The 22% increase in revenue can be less than the average increase in the industry.

Johm Felix, the vice president of Emirates Holiday told Gulf News “ we had 22 percent growth last year,which is a great achivement, the regions developments did not impact our operations” and he also said “ High fuel costs have taken its tool on Emirates groups profitability”

There is a contradiction if we compare the two statements. Once he said that the region’s developments ( Non- market enviroment ) did not effect EH; and then he mentioned that EH was effected by raising oil prices. I think he missed the point that the developments in the region is one of the main reasons behind raising oil prices;therefore, the company was effected by this non- market issue.

Dubai is considered the top distination of the EH’s network since it accounts for 45000 t0 46000 of 100 000 travellers EH serve ( almost 50%). To me it is a threat rather than opprotunity. What if (god forbid) a bombing take place in Dubai? It means Emirates Holidays would be in trouble. The company should use Baron’s proactive approch which states that the firm and its managers should not only anticipate non-market issue but also act to affect which issues arise and how they will be framed.
EH has announced new projects which also most of them located in Dubai such as: 70 storey deluxe city and Emirates Marina. Therefore, the company should diversify and concentrate on other distinations too. However, I think the management is working on diversifications since it wants to enter US market and its other distination is experincing growth according to the article.

Emirates Holidays, attracts potential customers through its agents which are located in all over the world by releasing and distributing brochures to them. Through these brochures EH try to provide its travellers with detailed information about the wide range of holidays packages it offers ( Information and Insight).

Microsoft takes Google to court over ex-employee

2006-03-30T04:50:00.000-08:00

Microsoft is trying hard to stop its former head of Beijing research and development center, Dr Lee from continuing working for its rival company Google. Microsoft supported its action by mentioning that Dr Lee’s job with Google is nothing but a violation of the non- compete contract between Microsoft and Dr Lee. However, Google said that Microsoft is acting as if it owns Dr: Lee; It also assured that accepting Lee in Google is very normal procedure that takes place in labor market every day.

To analyze the situation, we have to first clarify the relationship between Microsoft and Google. Microsoft and Google are rivals and two of the leading companies in the industry. The product market scope they are competing over search and other web-based technologies and top software talent. If we narrow the product market scope of Google, as mentioned in the article, we can see that Google is planning to open a new facility in China to develop new technologies and attract new science researchers.

We all agree that executives are valuable strategic asset to their companies or otherwise they wouldn’t be paid unbelievable amount of money. This is the case in this battle between Microsoft and Google. Dr: Lee was a head of critical and growing market as china (the sleeping giant) where every company tries to enter it and benefit from the opportunities it offers. Moreover, Dr: Lee position allowed him to access very critical and confidential. This confidential information was strategies that Microsoft developed as competitive advantage strategies against its rivals. Dr: Lee also attended internal briefing at Microsoft which was entitled “the Google challenge” which they considered it very confidential. Therefore, Dr: Lee is aware of all Microsoft’s core strategies against its rivals and especially the company which he is going to work with (Google). Therefore, it is not considered fair game.

In my opinion Microsoft obeyed the rules of fair market play. Microsoft had the right to make the contract with Dr: Lee because his position was very critical to the company. Microsoft did not act as if it owns Dr: Lee because the contract was effective only for one year (the least period that any company needs to change its core strategies). Google, on the other hand, tried to steel Dr: Lee (Which was strategic asset to Microsoft) from Microsoft while he was working for Microsoft. Core employees in any company can also be their basis of differentiation that distinguishes between good and bad companies; therefore, taking away those valuable keys to success should be in very professional manners which do not apply to Google’s actions.

The article: Take advantage of information technology to stay competitive

2006-03-16T04:06:00.000-08:00

We have to all agree that information technology has played a core role in changing our lives to be more useful and efficient in all aspects of life. Information technology used not only in commercial and private sector but also in governmental sectors form schools to hospitals. Therefore, IT has become a strategic asset to all companies or governments that posses and pay close attention to it. When we notice that information technology has been ignored or being paid less attention than what it deserves in multi-billion business like Insurance industry, many question marks might be raised up.

As mentioned in the article in banking, banks all over the world have chosen IT as their core process to provide its customers with the best customers. Every bank has its own IT department through which they try to differentiate themselves through offering unique services that add value to the customers and the image of the bank. Through IT banks tremendously cut their cost by reducing its branches and offering all its application online. For instance, Me Bank does not exist physically (it is a web based bank); customers get application online; furthermore they can check their account and transfer money form one account to another. The customer can do all these while setting at home and without wasting fuel and worrying about work timing of the bank. Therefore, there is direct relationship dynamic between the banks and its customers which lead to customer loyalty and satisfaction.

Therefore, in a competitive market such as insurance market, each company should try to posse’s competitive advantage against others through basis of differentiation. Therefore, I think the best way of differentiation is through investing more money in improving its IT department and provide the customers with unique and efficient products and services. I call it investing money rather than spending or wasting money when it comes to information technology because the return that the company would get exceeds the spending. Information technology will cut administration and processing cost. For instance, the writer mentioned that general insurance companies spend nearly 3 billion for processing and administrative costs. Furthermore, companies can provide their customers with information and support online to increase interactivity as a customer interface.

A Respond to the article ( The New School )

2006-02-15T23:58:00.000-08:00

A Respond to the article (The New School)

Job market is the most competitive market since the supply way exceeds the demand. Knowing that 10.2 million in population this year competed for three million jobs only has started controversial issues. As a result, the bargaining power of buyers (employers) has increased; moreover, the rivalries among existing employees increased in order protect themselves from potential entrants (new grads). Therefore, most of new graduates are going for MBA after getting their undergraduate degree as a basis of differentiation to distinguish them and be unique. However, this is not always the right choice as Lee mentioned in the article because having an MBA could be a valuable resource but it is not a rare resource for its holder. The job market is full of MBA’s who are desperate to get a job. Barriers of entry that most entrants face as mentioned by Lee is the filtration technique that most employers use to choose the right applicant which are: How well could the MBA holder perform a job? Was the applicant desperate to get a job?, and Was the MBA received from top tier schools ?.

Since every student who is attending school for MBA is seeking to get a better job in the future which is the main reason behind doing MBA, Universities have obligations toward their students to help them getting jobs in their fields. Therefore, many innovative programs have been offered by prime universities to distinguish themselves from other universities. For instance, students in Fuqua school of Business have witnessed a big %56 increased in job opportunities through its valuable Hire Up management center which was formed to help student searching and getting jobs. Babson College has temporary competitive advantage by having very valuable and rare program such as : customized in house MBA programs for employees of Intel Corporation, and distance based program ( fast track) for potential student who are currently having full time job and cant attend university. In American University Of Sharjah, Internship is compulsory for students in order to graduate which a very good preparation for student to gain experience before entering the real business world. Furthermore, AUS has formed CASS office that helps graduates getting jobs by sending their CV’s to companies who are interested in having new student in a particular field.

Respond to the article ( Effect of Boycott Patchy)

2006-02-08T04:47:00.000-08:00

Boycotting Danish product in Saudi Arabia and other Gulf countries had affected both Danish companies and local market in Gulf. The effect of bargaining power of the buyer is very strong since Saudi and Gulf countries purchase large volume of Danish products. The threat that boycott could spread to other Arabic and Islamic countries as mentioned in the article by the director of Arla Foods , Hansen, is very likely to take place because all Muslims around the world have deep respect and love for the Profit Mohamed ( peace be upon him ). Another reason behind the buyer power is that most of the products are standard; therefore, customers face few switching costs. Consequently, the boycott definitely affected Danish economy; moreover, the negative impact would be much more in the long run if no apology have made and boycott continued to take place. In the local market in boycotting countries, the withdrawal of Danish products which in most cases were dominating their market, has made room for new potential entrants to enter the market and to fill the gab that Danish product left in case the boycott last for longer period. Meanwhile, the rivalry in Foods segment decreased and profit increased (Shifting Rivalry). Companies with substitute’s products should be experiencing more sales after boycott.

Hypermarkets and supermarkets fulfilled and supported costumers buy agreeing on boycott even though Danish products accounted around 5 percent of their sales in supermarkets and definitely more in hypermarkets. In UAE, Spines and Choitram had to join small grocery stores in boycotting Danish products to assure good relationships with their customers. In the article, we can notice good relationship dynamic between the seller and the buyer, for instance, the manager director of Flagship Supermarket mentioned that they have got very positive feedback from their customers for their decision of boycotting Danish products.

SADAFCO did a very good job by using information and insight and relationship dynamic as elements of customer interface to clarify to its customers that SADAFCO is pure Saudi company and that it doesn’t deal in any way with Danish product or raw materials.

Responed to Teh Real Cost of Google's Sellout to China

2006-02-01T04:40:00.000-08:00

In the article (The Real Cost of Google’s Sellout to China), we can notice how one company can respond differently to same issue in two different market to reach its goals. Google faced government policy in both United States and China. In United States, Google refused a Department of Justice demand to allow surveillance test of Google’s users. Following its motto “don’t be evil”, Google defended the privacy of its users in the United States because every American has the right to privacy and to keep its customer happy. If we view Google as the supplier and US government as the buyer, we can notice bargaining power of the supplier (Google). Google is the dominant company in the marketplace in the US. People are used to Google’s search engine and it is hard for them to switch (switching cost). Furthermore USA is a democratic country which gives Google the right to retaliate against the government if for example try to block its sites, and gives the US citizens the right to privacy. However, in China, the government power in this situation for the following reasons: 1) The Chinese market is a growing market and Google competing with its rivals for the market share. 2) The Chinese government is a republican government and it can be successful in its threat to slow Google’s search engine and keep it away from competition in the market. The Strategy that Google used is that the end justifies the means strategy.

test post

2006-01-22T00:28:00.001-08:00

Test Post for MGT 406 at AUS

test post

2006-01-22T00:28:00.000-08:00

Test Post for MGT 406 at AUS