Achieving Sustainable competitive advantage Organization Capability Profile (OCP) and Strategic Advantage Profile (SAP) Strategic capabilities and core competences are critical to developing competitive advantage for every company. Capabilities are defined as complex bundles of skills and accumulated knowledge that enables firms to coordinate activities and make use of their assets (Day, 1990). An organization needs to have a wide range of capabilities in several areas in order to create profitable value which results in strategic advantage. They are the outcome of organization's activities leading to rewards in terms of economic parameters, such as profit of shareholder value and/or non financial parameters, such as market share or reputation. Hence, the value of human capital in developing and using capabilities and, finally, core competencies cannot be overstated. Different firms need different capabilities and all firms will not involve the same capabilities. (Benedetto et al, 2003). For example a big company would have better financial capability strength compared to a small company and similarly would differ in responding to changes too. Hence the strategists should be able to identify the strengths of their functional capabilities which lead an organization to its competitive advantage (Harrison, 1996). The core functional capability factors of any organizations are:

The Strategic Advantage profile will therefore help examine the organizations strategic capabilities. The above analysis on flydubais capability factors is interpreted using a rating scale of -5 (Weaknesses), 0 (Normal) and +5 (Strength) which has helped us identified the strong and weak capabilities.

Analysis of the capability factors of flydubai

Capability FactorWeaknesses

-5 Normal

0 Strength

+5

Financial Capability Factors(a) Sources of Funds(b) Usage of Funds(c) Management of funds +5

+5

+5

Marketing Capability Factors(a) Product related(b) Price related(c) Promotion related(d) Integrated and Systematic 0

0

+5

+5

Operations capability factors(a) Production system(b) Operations and control system(c) R&D system 0+5

+5

Personnel Capability factors(a) Personnel system(b) Organizational and employee characteristics(c) Industrial relations 0+3

+5

Information management capability factors(a) Acquisition and retention of information(b) Retrieval and usage of information(c) Processing and usage of information(d) Transmission and dissemination of information(e) Integrative, systematic and supportive -2+4

+4

+4

+3

General Management Capability factors(a) Genera management system(b) Factors related to general managers(c) External relations(d) Organizational climate -2+4

+4

+3

Organization Capability Profile

The Organization Capability Profile defines the resources, abilities and knowledge that helps a firm to offer quality goods/services to its customers. It therefore helps analyze the nature of impact which helps determine the areas an organization have competitive strength or weakness and can accordingly improve on those areas. In short, alliance of both strategic planning and generic capabilities is essential for high performance. (Regan et al, 2004)Capability FactorNature of ImpactCompetitive Strengths or weaknesses

Finance SHAPE \* MERGEFORMAT

Competitive strength is its capital structure which is fully owned by the government and shares the same shareholder like Emirates.

Have good relations with other banks which have high confidence in us.

Since the company is owned by government it doesnt face difficulty in laws and regulations as it is booming through the process of liberalization.

Marketing SHAPE \* MERGEFORMAT

It offers value for money products at an affordable price but at the same time they are expensive for additional services like excess baggage and date change fees.

Limited promotional techniques.

First low cost airline of its kind which has explored different business avenues.

Operations SHAPE \* MERGEFORMAT

Good production system as it has added state of the art device to run its flights and operations.

Good R & D system which provides digital news update with the help of touch screen.

Expansion of terminal 2

Disadvantage is the on- time delivery from its supplier Boeing which can affect the companys profits and reputation.

Personnel SHAPE \* MERGEFORMAT

Highly qualified personnel to ensure the reliable carrier service.

High goodwill of company since it shares the same shareholders as Emirates which has a brand image in the global market.

Employee satisfaction is fair due to unusual working hours and difficulty in getting leave approvals.

Information SHAPE \* MERGEFORMAT

Has good availability of computerized information system with good coverage.

The weakness which is identified is in terms of its IT staff where they are not able to deal with employees issues at the same time when the request for a problem is sent due to limited staff in IT department. The cases are resolved from IT on the basis of priority which leads to loss of time for the employees and affects their productivity.

Lack of understanding between the top management and IT due to issues not being resolved at the same time.

General Management SHAPE \* MERGEFORMAT

The companys mission and vision are well identified to achieve the strategic objectives.

No doubt flydubai has assembled a highly professional and experienced management team who are responsible for the strategic direction. However the drawback here is the managers need to think from the employees perspective in terms of granting leave approvals since staff is limited and work load is more.

Their flight inaugurations play an important role in the development of external relations between two nations since they are expanding their destinations rapidly.

Based on flydubais OCP, below are the opportunities identified:Based on flydubais OCP, below are the gaps identified and recommendations provided:

More geographical development since flydubai is constantly working on increasing more destinations to its portfolio.

Expansion of Terminal 2 is a huge opportunity in terms of its airport capacity which is important for the growth of any aviation industry.

High goodwill of company has led to attracting more customers

Delay in delivery of aircrafts since they have a very limited choice of suppliers which can lead to loss of revenue, customer dissatisfaction & impact route extensions. Hence they should try looking for other suppliers like Air Bus

Delay in resolving IT related issues due to limited staff in IT department. Hence they should hire more staff so that employees concerns are resolved and doesnt result in loss of productivity.

Lack of managers understanding towards employees leads to employee dissatisfaction and low morale which in turn affects their productivity. Hence they should hire more staff to have a good control on work load to ensure employee benefits are not sacrificed.

Fly Dubais Value creation and Sustainable Competitive AdvantageFirms capabilitiesAre the capabilities valuable?Are the capabilities rare?Are the capabilities costly to imitate?Are the capabilities organized for usage?Are the capabilities strengths or weakness?

Finance capabilitiesYesYesNoYesStrength and distinctive competence

Marketing capabilitiesYesNoNoYesStrength

Operations capabilitiesYesYesYesYesStrength and sustainable distinctive competence

Personnel Capabilities YesNoNoYesStrength

Information management capabilities NoNoNoYesStrength

General Management CapabilityYesNoNoYesStrength

Appendix 3 Organizational capabilities of Fly Dubai

OCP Fly Dubai

Capability FactorsFunctions related to capability factors

Finance capability factors relates to the availability (where a company receives its sources of finance), usages (how the funds are utilized ) and management of funds (how well the funds are managed for investment purposes)The Company acquires sustenance from a variety of sources to ensure that the companys revenues are stable and adequate for goals and mission of the organization. These include availability, usage and management of funds.

In terms of sources of funds the capital structure of Fly Dubai is very satisfactory due to it being fully owned by government and shares the same shareholders like Emirates since the capital is provided by the government. The organization has the capability to raise capital in the market but no need has arisen so far. The financial affair of the corporation is controlled by our treasury department who monitors the overall requirements of cash flow and fund transfers to meet the overall objectives. Further on also helps to enhance the capital structure and manage the long term capital cost. The company shares a very healthy financing pattern as discussed above due to it being fully capitalized by the government which also results in a healthy reserves and surplus position.

In terms of usage of funds ample no of investment opportunities are available due to Fly Dubais expansion which drives investment and economic growth between UAE and Fly Dubai destinations including Russia. Fly Dubais fresh and current air links will play an important role in not only increasing investment opportunities in both the countries but will also open up grounds for partnerships, including oil & gas, mass media, manufacturing and general trading which will help Russia to reach out to audience worldwide. As compared to other airlines our company pays rich dividends to its shareholders and maintains a very cordial, strong and healthy relationship (Sheikh Ahmed Bin Saeed Al Maktoum chairman and chief executive Emirates Airlines and Fly Dubai) as the company has already achieved its first full year of profitability for the financial year 2012.

In terms of management of funds the company has a very strong and effective accounting system which provides well-timed and precise analysis of financial, budget reports as well as financial developments indicating the overall proficiency and effectiveness using the KPI and benchmarking approach which helps in achieving the overall organizational goals. Their financial ratios indicate the companys strong cash flow since it is owned by government and there is no difficulty at all in managing the funds. The company also takes into consideration the inflation rate which has been beneficial as the companys cost in crude oil will reduce with an expectation of fall in UAEs inflation rate. It also benefits from taxes since the currency of UAE has been stable and it has been pegged to USD which has been the strongest currency in the world. Moreover they have a lot of upcoming projects including the expansion of terminal 2, launching of business class, and new aircrafts in the pipeline.

Marketing capability factors - relates to the product (offering wide variety of products to customers), pricing (value that will purchase a set quantity of a product or service), promotion (various channels/medium required for promotion of a product/service), and distribution of products or services (performance of the marketing department in terms of the companys image compared to the competitors)

These factors relate to the price, product, place and promotion of the goods and services. A very important aspect in analyzing the business includes analyzing the market in several ways which will help the company identify their areas of weakness and develop further ways for improvement.The product factor includes examining those products and services which Fly Dubai offers to its customers. It offers value for money products at a very affordable price and therefore is dedicated in providing high quality on inflight products which offer an amazing menu with an extensive range of duty free items which satisfies overall market requirements. Fly Dubai also adopts a differentiation strategy from its other competitors by adding extra flights to the famous destinations that have a great response from their target market. Moreover they offer a great airline service and technology for all classes and have also won appreciation for their excellent service quality.

The price factor of the low cost model consists of everything what a customer would need while travelling which is the seat price, inclusive of all taxes & hand baggage. The passengers also have an option to pay for the additional services such as extra baggage, extra leg room, inflight entertainment and meals served on board. However the date change fees and excess baggage is proven to be expensive compared to other airlines.The place factor includes their operations which are run from their main location which is in Dubai. Despite of them being profitable they still have a scope for expansion within UAE and GCC countries. As we all know Dubai has been known for its business hub and Fly Dubai can exploit this opportunity to have a strategic advantage over its competitors.The promotion factor of Fly Dubai used various methods to manage the expectations of the customers related to its experience. Flydubai tries to introduce innovative advertising techniques but they dont develop a large marketing campaign since they are a low cost airline which can be a disadvantage for them in order to reach out to its potential customers since it mostly relies on word of mouth.

The Integrated & Systematic factors include flydubai ensuring that the product is the brand itself. The foundations for their brand values are honest and uncomplicated. Flydubai CEO says flydubai tries to make travel a little less complex, a little less stressful and a little less expensive. It has a very effective marketing management system where they have asked Splendid which is a User Centered Design methodology to design and build a complete new online experience for web and mobile including an evolution of the flydubai digital brand.

Operations capability factors- relate to the production of products or services (various methods used to produce products/services from different resources), operations and control system (designed to confirm that the daily activities are in line with the planned objectives), R&D system (developing new products or processes which is beneficial for the companys future growth).

In terms of its production system, their work systems are fully integrated with all the departments that support efficiency and productivity. The company has a good production system as it has added state-of-the-art device to run its flights & operations. Moreover it has also added destinations quickly in order to receive remarkable results in short time which will help in capacity expansion. The time when flydubai started its operations there was recession-hit Dubai in 2009. The company took it as a challenge and brought up-to-date systems, processes and highly qualified personnel to ensure the dependable carrier service.

In terms of its operations & control systems, they spend good amounts of their financial plan on further development of human resources which results in a high service quality and helps improve customer satisfaction. Moreover they do have a fair reliable supplier Boeing which is fuel efficient, cost effective, provide logical and technical support, and repair manufacturing defects. The only disadvantage is the on-time delivery which is not very effective.

In terms of its R & D, it has built collaborations with DTI solutions & Newspaper direct which provides passengers digital news updates on all local and international flights through a touch screen facility. Hence the technology partnership has benefited the organization since this is a value added feature which leads to customer satisfaction. It however doesnt possess any patent rights.

Personnel capability factors - relate to the existence and use of human resources and skills and the factors relate to personnel system (the type of candidates decided by the Human resource department on the basis of their experience), organizational and employee characteristics (determine the relationship between organization structure and employee characteristics), industrial relations (employment relations between employer and employee).

In terms of its personnel system, it has high qualified personnel to ensure the companys operations run smoothly. The HR carefully selects the candidates on basis of their experience which best suits the job vacancy.

In terms of its organizational and employee characteristics, the company offers benefits such as increments, bonuses on the basis of their hard work and overall profits generated for the company.

In terms of its industrial relations, employee working conditions are fair since the company is a low cost airline which has limited staff which results in more work, putting in more working hours and not getting leave approvals which results in low morale &demotivation for the employees.

Information Management capability factors - relate to the design and management of the flow of information from outside into, and within an organization for the purpose of decision making and factors relate to acquisition and retention of information, processing and synthesis of information (conglomerate all the ideas into a complex whole), retrieval and usage of information (information need from a pool of resources of information), transmission and dissemination (two way communication without any delay and how much is the real time response allowed), and Integrative, systematic and supportive factors (understanding between top management and IT and if efficient IT professionals are available in the organization).

In terms of acquisition and retention of information, processing &synthesis information, retrieval and usage of information and transmission and dissemination of information they have good availability and widespread use of the information system since people do online booking. All the members have an optimistic approach in sharing information with others.

In terms of integrative, systematic and supportive, it has identified weakness in terms of having limited staff working in the IT department where they are unable to address employee queries in a timely fashion which leads to loss in time & productivity. These further result in issues between top management and IT due to queries not being handled on time.

General management capability factors - relate to the integration, coordination and direction of the functional capabilities towards common goals. Factors related to the general management system (overall capability of how liable is the general management system in terms of day to day activities), general managers, external relationships and organizational climate.

In terms of general management system, it has clearly identified its mission and vision which are well aligned with the organizations objectives. The company offers good benefits for top managers for accomplishing these objectives.In terms of factors related to general managers, the drawback is the understanding between the employee and the manager since in certain areas employee expectations are not met especially in terms of getting their leaves approved and also the distribution of work needs to be more fair and done on an equal basis.

In terms of external relations, as the company keeps increasing its destinations, this factor plays a very important role in developing and managing its public/external relations well. Since it shares the same shareholder like Emirates it holds a strong advantage with respect to its public image compared to its competitors.