Strategic Benchmarking on Emirates

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this concrete situation, the benchmarking was crucial for Emirates to perceive what competitors were doing and to position into the right niche. In other words, regardless of not following competitors’ strategies, the information gathered from the benchmarking was unimaginable valuable.

From the previously examples, it can easily be concluded the potential of benchmarking. Although, this tool also presents some disadvantages. The pros and cons of strategic benchmarking will now be discussed.

The first advantage is that promotes the creation of new ideas. Observing the competitors’ behaviors, stimulate the creativity and the outside the box way of thinking. It is important for Emirates do be open minded, flexible and ready to adopt new ideas, especially in nowadays’ global context. This flexibility is the key feature to create value, not only by increasing the perceived value of services but also through the decrease of operational costs. Another advantage of benchmarking, as I previously mentioned in this report, is the valuable information that it creates. Both good and bad situations can be used as references. From good situations, such as the Virgin example, the company have the opportunity to share ideas and adopt them, in order to become more competitive. But even from bad situations benchmarking is worthwhile. Learning from the others’ mistakes allow the company to avoid the same situations as well as identify which factors were responsible for that failure.

On the opposite side, benchmarking presents some disadvantages, namely the difficulty of finding a company to benchmark, problems of different metrics and the risk of following a strategy that leads to failure. The first disadvantage gains special importance when the organization that is doing the benchmarking is already a successful company. For companies, such as Emirates, that already are the best, it is extremely challenging to find a target to benchmark. At some point, the leading companies stop relying on the benchmarking and start to depend only on their own developed best practices. Additionally, even if a company with better practices exists, that company needs to be available to share information.

The second disadvantage, problem of metrics, reflects the challenge that is to compare two organizations with different sizes, with two different strategies or even competing in two different markets. This difference in metrics, causes troubles in the strategy’s adaptation or even in the decision process of whether it is suitable to adopt such strategy.

Finally, the last disadvantage considers the risk of using an unsuccessful strategy. There are two examples that illustrate this situation. The first one was discussed in the first lecture. In the late 90s, an IT company created a software that would prevent the customer from the potential 2000’s digital breakdown. Without a rigorous analysis, the competitors followed that strategic, believing in a potential short-term profit. Turns out, none of the companies’ strategy was successful because no one wanted/needed that service. In the second example, the company chose not to engage in the strategy of the majority companies operating in the industry. That company is Emirates. The airline was aware of the strategies followed by the main incumbents and said “we don’t have to do what others do”. Turns out, that was the key to success.

It should be highlighted the importance of benchmarking in this globalized world. Organizations, in particular airlines, deal with plenty of different cultures on a daily basis. This tool makes it so much easy to explore different markets (with different cultures) without losing quality standards. Through benchmarking, there is no need to incur in the same mistakes that other organizations already incurred.

Concluding, it is undeniable that benchmarking is a brilliant tool, when organizations know how to use it. More and more, the key to success is how to gather, analyze and use information. Emirates case show us the advantages of using a tool such as strategic benchmarking, even if the final decision is not to use others’ ideas. Not engaging in a competitive strategy may be the key to overcome crisis and continue with a sustainable growth.