The Business Level and the Functional Level Strategy Adopted by Etihad Airlines

Etihad has been able to have sustained competitive advantage because of its differentiation strategy and core competencies. It pursues utmost customer satisfaction as it differentiation strategy and is trying to establish a “privileged” and hard to replicate position in the industry. Its core competencies include direct and indirect support the economic growth of the nation, which also gives it political support. Continuous up-gradation of its fleet is another area of its core competency. Strategic analysis using PESTEL and Five Forces analysis suggests that Etihad operates in an attractive industry but the buying power of consumers is high due to the high level of competition in the industry. However, because of its core strengths, the airline would be able to achieve its goals and mission. There is ample opportunity for growth and expansion and based on its differentiation strategy, Etihad would continue to grow. Etihad has the location advantage also but customer service is not difficult to replicate and hence, Etihad needs to pursue differentiation through the economic support of the emirate.
Sustainable competitive advantage can be created and maintained either through market position or through core competencies (Leavy, 2003). The positioning approach can be evaluated through PESTEL analysis and the generic strategies which would reveal two dimensions of positioning – the industry attractiveness and the competitive strength. The strategic choice should be on how to leverage advantage amidst the competitive environment. The strategic choice should fit with the goals and objectives to gain a competitive advantage (Allen &amp. Helms, 2006).
Porter asserts that there are three basic strategies and firms perform best by adopting one of them – cost leadership, differentiation and focus (Allen &amp. Helms, 2006). To become an industry leader, the company must be competitive.&nbsp. &nbsp.