Qantas Airlines Strategic Analysis: Past, Present And Future Strategies

Background of Qantas

The main object of this paper is to portray and discuss about the strategies of Qantas. The organization has been chosen as an example to perform the strategic analysis is Qantas airline. It is one of the biggest and well-known airlines in Australia who provides Quality air travel services to the clients in the global market. The paper takes into consideration various current and past strategies of Qantas airlines and the way in which the firm can uplift profitability and outcomes. Qantas background, mission, and vision also have been considered in the task. Along with this, proposed strategies such as cost, diversification and strategic control also have been presented in the task which helps to maximize the efficiency and effectiveness of the firm. At the end, some recommendations have been elaborated to make a strong image in near future. More detail of the paper has been elucidated below.

Qantas was incorporated in 1920, Qantas has grown to be Australia’s biggest and leading international and domestic airline (Qantas, 2018). It is one of the largest and leading long distance airline and one of the biggest airline brands in Australia. The company has built and developed a reputation and brand image in operational reliability, safety, customer services, and engineering and maintenance. The main business of Qantas is the transportation of customers utilizing two complementary airline brands such as Jetstar and Qantas. The company also operates and manages subsidiary businesses such as other airlines and businesses in specialist markets like as Q catering. The firm employs more than 30,000 workforce with around 93% of them based within Australia. Qantas airline brands operate and manage domestic, regional and international services internationally. The company works in a tough and complex environment where people are often predicted to attain the impossible, supported by trust, respect, loyalty and good leadership. Every member of the company enjoys the opportunity and provide support to follow their dreams in the international market (Linkedin, 2018).

The main objectives include ensuring safety and security in its business, right routes, right aircraft, excellent customer service, operational effectiveness, and efficiency. The long-term vision of the firm is to operate and manage as the best and biggest airline across the globe. Qantas is a market player or leader in the aviation industry which is highly and effectively to compete in the global market. It is further stated that the company is a member of the number one world alliance (Reeves & Deimler, 2009).

Current Strategies of Qantas

It has been found from the various studies that strategies play a vital and significant role in maximizing and enhancing profitability and outcomes. Without effective and unique strategies, the firm could not able to boost its revenue and results internationally (Cocks, 2009). It is stated that the company uses corporate and business level strategies to grow and survive business activities globally. Business level strategies and corporate level strategies based on how Qantas will deploy their resources and capabilities to compete in a specific market section or industry. The current strategies for Qantas have been discussed below.

Finance: The finance function plays a significant role in permitting Qantas in effectively and successfully implementing its strategy of international development and expansion. The financial resources are essential to perform alliances with major and unique airlines in the global market.

Human resource management: It is one of the biggest and unique corporate level strategies that used by Qantas while implementing business activities and operations globally. The skills and talented workforce can be hired through effective and unique HRM.

Marketing and sales: These strategies are needed to render air travel services to customers across the globe. Without marketing and sales team, the company cannot attain profitability and outcomes in the international market (Klettner, Clarke and Boersma, 2014).

Marketing mix: It is a well known strategy that is used by Qantas while introducing new services and products in the global market. The marketing mix covers product, price, place, physical evidence, promotion, process, and people. The marketing mix strategy further helps the firm to cope up and overcome the competitors globally. Premium pricing strategy is adopted by the firm to attain a competitive edge in the global market. Qantas also focuses on the promotion and advertisement strategy to build and enhance the financial position and brand image internationally. It uses various media channels such as online ads, TV, print and other loyalty programs to promote airline services in the market.

Differentiation strategy: One of the empirical approaches that initiated by the firm is differentiation. This strategy is used to distinguish its service from the rivals which are available in the global market. By using this strategy, Qantas is able to augment profitability and attract a wide range of passengers internationally (Roll, 2015).

Value chain analysis

The value chain analysis is a significant and most valuable strategic method or tool that indicates about the various activities and strategies carried out by the company in order to render valuable products and services to final customers across the globe. The activities are mainly divided into primary activities and support activities. The primary activities at Qantas include inbound, inbound logistics, operations, sales, marketing and services (Gregson et al, 2015). On the other hand, the support activities include technology, procurement, infrastructure and human resources (Rothaermel, 2015). In respect to Qantas, the company provides ample of air travel services to the customers across the globe. The inbound logistics for Qantas is the travelers or passengers that prefer to travel with the airline. Apart from this, the operational activity majorly includes passenger security check, directing passengers to aircraft and movement of luggage to aircraft facilities (Tretheway & Markhvida, 2014). It is noted that outbound activities or process are the movement of customers from one destination to other destination or traveling services rendered to their desired place or location. In performing and measuring these primary activities, the support activities and strategies have a vital and significant role to play, as technology enables and ensures the firm is permitting its customers to book airline tickets whereas its highly talented and skilled staff and subordinates throughout their entire traveling approach and process. It is noted that Qantas airline also makes a high investment in research and development activities and approaches with a view to render innovative products and services to its customers around the globe (Crain & Abraham, 2008).

Recommended Strategies for Qantas

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Diamond model

The porter diamond model for Qantas has been discussed below.

Factor conditions: These are the principles and rules of the organization’s capability to supply attributes of research and development which allow to compete and struggle. Aspects are production elements and infrastructure essential to risk and challenge against the competitors in the industry. It also could be seen in Qantas aviation sector. The employment rate of Qantas aviation has maximized in the global market (Pimpa, 2011).

Demand condition: Condition which specifies the attributes and aspects of domestic demand designed the subsequent wide factors of domestic competitive advantage is called demand conditions. This condition or situation explains about the attributes of customers in the domestic market. Qantas airline is one of the largest and popular airlines in the global market as it is the main hub in Australia. Due to the increased and improved pressure of economic crunch and rivals made to sell this airline to the private sector. The overall demand maximized due to attractive and luxurious facilities with low airline ticket fair (Lin and Sun, 2010).

Related and supporting industries: The supporting and related industries include distributors and suppliers who provide cooperation and coordination to the company to provide support it in the global competition. It is quite complex if the airline industry does not have access to networks to reduce costs through effective supply chain management and manufacture raw material and factors with high and effective quality. Jet start airways and Virgin airline are global airline suppliers. Thus, the company can take support from these airlines to gain competitive benefits in the international market. With the guidance and assistance of the aviation sector may upgrade and enhance its productivity and performance equal to the overseas rival company (Prasad, 2011).

Firm strategy, structure, and rivalry: In today’s era, Qantas has grown and built a dynamic image and goodwill in the competitive market. Qantas controls and manages its activities domestically and internationally as well. It has been found that Qantas uses innovative and effective strategies and strong structure to struggle with rivalries in the international market. It also directs and assists in minimization in cost and education aviation strategies, could able to beat the competitors globally (Prasad, 2011).

Change and government: The change and government play a major role in maximizing outcomes and returns in the international market. Government helps in making rules, policies and strategies for Qantas for making a good image and brand reputation internationally (Prasad, 2011).

Value Chain Analysis of Qantas

Balance scorecard

A balanced scorecard may be defined as a performance metric which is used in strategic management to identify and analyze the various internal functions of a business and their external outcomes (Helmreich and Merritt, 2017). It is implemented and used to measure and analyze the feedback and reviews to the organization. There are four perspectives of balanced scorecard including customer perspective, financial perspective, internal business perspective and learning and growth perspective.

Balance scorecard

Particular

Target

Measure

Indicators

Initiatives

Financial perspective

· To promote risk management practices

· To support the attainment of business objectives and fulfill the corporate governance liabilities.

· To attain a return on investment capital.

· To provide unique and attractive traveler products and services to customers.

· To maximize the profitability and revenue in the international market.

· Value of shareholders

· Return on assets

· Number of travelers who are traveling in the company

· Innovative and unique strategies

· Maximize in profitability and returns

· Return on equity

· Selling of airline products and services

· Return on assets

· Differentiation and cost leadership strategy

· Improvement and enhancement its airline services and products

· Provides services and airline products at reasonable prices

Customer perspective

· To attain the level of satisfaction of the customers

· Improvement and enhancement of customer loyalty and trust

· Improvement its airline products and services

· Collect customer reviews and feedback

· Maintaining a strong and unique customer base

· Provides good quality of services

· Market share

· Satisfaction and loyalty among the passengers

· With using customer-centric and innovative strategies

· Offer ample of attractive and unique services and products to the customers

· Business expansion and development internationally

Internal process

· To retain and enhance internal management

· To attract and retain talented and skilled employees

· To maintain a strong and unique supply chain and inventory management (Qantas, 2018).

· Retain maximum number of customers globally

· Quality of overall process

· Inventory level and supply chain management

· Maximize satisfaction level among the customers

· Employee turnover rate

· Availability of required stock (Qantas, 2018).

· Just-in-time inventory system

· Advantages to the workers

· Acquisition strategy or approach

Learning and growth

· Constantly improvement and innovation

· Development and expansion of human resources

· Efficiency and effectiveness of operations and activities

· Information flow

· Service delivery rules and standards

· Customer loyalty and satisfaction

· Employee motivation and trust

· High and heavy contribution of workers

· Innovative processes

· Implementation of new and innovative training programs and strategies

· Innovative and dynamic process

· Quality assurance and measures

The proposed strategies for Qantas airline have been discussed below.

Cost

After the various studies, it is noted that Qantas is a leading and growing international airline Company. It is stated that the company is targeting mainly business travelers in the competitive market. The company operates and manages generally in luxury services across the globe (Pearson and Merkert, 2014). Apart from this, it provides high tech facilities and services to customers around the world. It has been found that Qantas uses a premium pricing strategy to beat the rivalries internationally. The premium pricing strategy in its marketing mix covers advantages, costs, value addition in regards to quality and excellent service. With the facility of refunds or returns, the company has developed and created loyalty and trust among its key target audience internationally. For analyzing and capturing the entire target market, economy tickets too available which are relatively low priced. In today’s competitive world, the firm has maintained the status of safety and comfort as compared to its competitors globally. It is further elucidated that the company follows a penetration strategy by rendering low cost in the competitive market. In this way, cost strategy provides ample of benefits to the customers around the world (Li, Wang, and Cui, 2016).

Diversification strategy

Qantas Airways is the national airline of Australia. Along with this, it is a founding and unique member of the world alliance and manages an extensive international and domestic network within Australia. Qantas uses and manages the low level of a diversification strategy to differentiate its services from the rivalries globally (Lawton, Rajwani and O’Kane, 2011). A diversification strategy may be defined as a strategy that a company adopts for the development and expansion of its business. It has been found that Qantas airline is well known and popular for its convenient and comfortable seating plan for its passengers. Innovative and unique airline products and services are being launched by the company to stay in the competitive market. With an effective and dynamic diversification strategy, the company has created a consumer bill of rights for its workers. The company comes into existence in the international and domestic market as well. The firm has launched an addition to their diversified and unique business portfolio. The company assures health insurance for the company’s group members in the competitive market. The firm further assure is available to constant flyer group members of which they recently have 11 million in Australia, so if the business of the company is successful and unique, it would firmly position both Qantas Assure and Qantas airlines as effective and dynamic dominators in both health insurance and airline categories. There are three types of diversification strategies that being used by the company including market penetration, market development and product development strategy (Albers et al, 2017). These strategies help the firm to cope up with rivalries internationally. The firm uses a market penetration strategy to capture and attract a maximum number of customers in the global market. Market penetration strategy is one of the significant strategies that involve focusing and analyzing selling existing or current airline services and products into existing markets to attain maximum profit and market share. On the other hand, market development is also used or implemented by Qantas while expanding and growing business functions internationally. Market development is a known as growth strategy that analyzes and identifies new market segments for existing airline products and services. This strategy helps in targeting new customers in new areas and locations globally (Grant et al, 2014).

Porter Diamond Model for Qantas

Strategic control

It is stated that changes in the global economy and shifts in the geopolitical balance of power have great and wider impact on Qantas development and expansion. Various strategies and approaches are being used by the company while expanding the business activities globally. The firm is committed to providing safety and security to the workers at the workplace while performing tasks and duties within the organization (Perrott, 2015). Along with this, it acts with integrity, honesty, and ethical rules and standards. It is further liable to safeguard Qantas group brands, property, reputation, information, and assets (Homsombat, Lei and Fu, 2014). It proactively and effectively manages risks, challenges, and issues within the organization. The firm further committed to complying with all applicable regulations, laws, rules and conducting business with the highest level of integrity and ethics. The international aviation industry is quite complex as it is executing. The company’s strategy and finance team drive competitive benefits through financial and human services and responding to change and uncertainty to maintain effective and dynamic leadership position (Qantas, 2018).

The strategy and finance professionals are proud to render sustained competitive benefits through effective and efficient financial services. In an international environment where situations change constantly and sometimes unexpectedly, a high and strong level of financial control and responsibility is vital and significant to maintaining Qantas leadership position (Perrott, 2015). The experts at Qantas render a wide array of professional services and business support to ensure the innovative operating segments, top management, and the board to make the best and effective tactical and strategic decisions to utilize the Qantas group’s sustained productivity and performance (Qantas, 2018). A strategic policy such as whistleblower policy is also implemented to protect employee’s recognition within the organization. To manage control and enhance the performance of the workers, rewards and recognition are given to them in a large extent. The main motive is to ensure that all the employees are appropriately rewarded and remunerated for their performance and productivity. It is portrayed that Qantas is committed to boosting and fostering a favorable culture in which diversity is valued and to rendering a workplace and environment that are free from harassment, bullying, and discrimination (Qantas, 2018).

Qantas is further committed to embedding risk management approaches and practices such as business resilience capacity within the business to provide support the attainment of business goals and objectives and to fulfill the corporate governance liabilities (Wu, 2016). Safety is a major concern for the company thus Qantas is dedicated to constant improvement and enhancement in the prevention of illness, accidents, injuries and incidents through effective and unique safety management systems, effective safety culture and quality processes (Daft & Albers, 2013). Corruption and crime have vital negative impacts on customers, brand, assets, and people. The firm is committed to the management, operations, and control of corruption and crime including fraud and misconduct. Innovative and unique strategies are made to handle and prevent the crime and criminal activities within the organization (Qantas, 2018).

Balanced Scorecard for Qantas

Conclusion

To conclude, it is highly important that Qantas airline focuses and monitors on boosting their competencies and capabilities by using innovative strategies and approaches internationally. It is stated that Qantas is a leading airline Company who is maximizing and enhancing outcomes and profitability. The above study indicates that various strategies are used by the company while expanding and flourishing the business globally. Qantas evaluates and manages operations and boosts various strategies to determine and analyze those prospective areas where the firm should be competitive or attained success in the past. In today’s globalization world, the company uses innovative strategies such as corporate level strategies, business-level strategies, diamond model, value chain analysis and balance scorecard strategy. All these strategies further help to increase the sale of Qantas in the international market. Some of the strategies are proposed by the company including cost leadership and diversification strategy. It is recommended that Qantas airlines should focus on the differentiation strategy to improve its market position and competitive position as well. This may help the firm build and enhance better strategies that are highly useful and effective for the organization. It is further suggested that Qantas must use global marketing strategies to compete and strive at the international platform. The company should focus on the SWOT analysis, pestle analysis, and porter five forces analysis to eliminate and reduce the challenges, issues and concerns in the international market. The firm further should enhance and improve the HRM to train and empower the workers at the workplace. In addition, Ansoff matrix must be used to improve and enhance the product development and differentiation at the workplace

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