Overview of the organization
The purpose of the following report is to measure the cross-border strategies of the organizations on the global basis. The cross-border strategies are very important for the organizations since all the organizations under the ASX index would like to expand into the other countries.
The organizations will have to be very much responsible while taking up their strategies and implementing them properly. It has been observed that all the organizations face certain global pressures while dealing with the international competitors. The organizations will have to apply certain tactical and strategic frameworks that will be helpful for them to grow in the international ways indeed. The organization that has been chosen for this paper is the Qantas Airways i.e. one of the leading airline companies in the world (Qantas.com.au 2018).
Overview of the organization
Qantas Airways is the biggest organization in the airlines industry in Australia. The ASX code of the organization is QAN (Qantas.com.au 2018). The organization began its journey in the year 1920 in the month of November. They operate at 86 destinations all over the world with a fleet size of around 125 (Qantas.com.au 2018). The headquarters of the company is located at Sydney in Australia. The chairman of the company is Leigh Clifford and the company slogan is The Spirit of Australia (Qantas.com.au 2018).
Cross-border strategies for Qantas
It is very important for the organizations of the current times to expand into the other countries to increase their profits and gaining the competitive advantage over the other companies (Wagner and Hollenbeck 2014). It is very important for all the companies including Qantas as well. The management of the company will look to expand into the big countries like USA, UK, China, India, Germany and other counties so they can gain more profits indeed. According to the experts, they have to utilize on the various frameworks to get the competitive advantage. The company had made the proper market survey and found out that they had a good deal of opportunities in the various Asian countries like Japan and China (Campbell, Coff and Kryscynski 2012).
Institution-based view of the business strategy
The business strategies of the multinational organizations depend on several views. These are the market-based view, resource-based view and the institution-based view (Verbeke 2013). The focus of this section will be on the institution based views for taking up the influential business strategies. The operations of the Qantas Group had been completely privatized just after the Federal Government of Australia had sanctioned a A$400 million bid for the company. The merger of Qantas and the Australian Airlines paved the way for Qantas to become the largest airline company in Australia (Verbeke 2013). The growth of Qantas has continued after 1992 as well.
The Porter’s Diamond model can be taken as a very important framework in terms of the business strategy of the Qantas Airways. The national competitive advantage can be attained from the implementation of these strategies indeed. As stated by Wagner and Hollenbeck (2014) the four determinants of the Porter’s diamond model are strategies of the firms, their structures and the rivalries, country factor endowments, domestic demand conditions and related and supporting industries. The various issues will have to be highlighted in this context as well.
Cross-border strategies for Qantas
Country factor endowments
As per the experts, the various issues like the knowledge of the employees and the company infrastructure of the Qantas Airways have been very high indeed. The organizations would have to be very much strict in building the infrastructure in the proper ways indeed. The competition is indeed very high in the international market. So, the knowledge of the employees and their skills will have to be very high indeed. The knowledge resources for Qantas Airways are generally according to the industry standards (Verbeke 2013).
Related and supporting industries
The suppliers for the Qantas Airways have always been much in their respective industry. The countries in which they have planned to expand are filled with class suppliers. The suppliers in the international markets would be able to provide the best materials for different services and products provided by the organization like Qantas Airways (Bakan and Do?an 2012). This would surely cater to the innovation of the organization in the best ways indeed. According to the experts, the success of the Qantas Airways will definitely motivate the suppliers or the related organizations as well (Harrison, 2012).
Domestic demand conditions
There are a many reasons for the success of Qantas in the internal market. The market size of the company is very large and nature of the market is the price is greater than the equilibrium price. Qantas Airways will always like to optimize their economic benefits from their home demand conditions. The fare rates should be revised by Qantas so the middle class families in the countries can use their facilities as well. The branding of the company should be given the utmost importance to attract the customers towards them. The domestic demands of the Australian people have led them to increase the capacity of their seats to an entirely new level. The domestic capacity will have to be increased in this course as well. The competitor airlines companies for Qantas in the domestic section are the Virgin Australia Airlines, Tiger air Australia and Regional Express Airlines. They pose a serious threat to Qantas in the dometic airlines industry section..
Strategy, structure and rivalry
When the Qantas Airways will like to expand and make business in the international market, they will have to face a strong rivalry from the international airline companies like Fly Emirates, British Airways, Lufthansa and many more (Harrison, 2012). The different cultural factors of the employees like individualism and collectivism, the working culture, morale of the employees and other issues will surely play an integral role in this aspect as well. If Qantas Airways is looking to implement their internal strategies and push for the competitive advantage on a regular bais, they will surely be successful in their international quest as well (Solomon et al. 2014).
Porter’s Five Forces
Competitive rivalry
The competitive rivalry for Qantas Airways has been very high in the international market since the rivals as mentioned before will always like to increase their chances and operations for providing the best services to the customers. The growth of the companies like Singapore Airlines and British Airways has made the battle quite tough indeed. The lower cost strategies should be implemented for providing more support to the customers (Frankenberger, Badke-Schaub and Birkhofer 2012).
Institution-based view of the business strategy
Threat of new entrants
The threat of the new entrants is not very much since it will require a huge capital investment to enter into this market. Qantas has a very strong place in the international market. As it will be very problematic for the new entrants to get into the business with huge capital investments, the threats will be less (Albers et al. 2017).
Threat of substitutes
The threat for the substitutes is much for the Qantas Airways since the international companies are also providing good opportunities to the customers as well. The cheaper rates of foods and other services will attract the customers towards their rivals (Frankenberger, Badke-Schaub and Birkhofer 2012).
Buying power of suppliers
The supplier power is very high always for Qantas since the major suppliers always provide the quality raw materials for the growth of the company. The innovative aspects of the suppliers will lead the organizations to get the competitive advantage indeed (Dobbs 2014).
Buying power of purchasers
The bargaining power of the consumers is also very high as well. The consumers will always look to count on the service providers who will give them the proper value for their money. The consumers will compare the quality of the flight services and then select the best one. This is why Qantas must give the customers the proper value for their money in the international market (Dobbs 2014).
Five dimensions of culture
As per Hofstede, the five dimensions of culture are the Power Distance Index, Individualism vs Collectivism, Masculinity vs Femininity, Uncertainty Avoidance Index and Pragmatic vs Normative. The Individualism and Collectivism aspects have been very much important for the Australian organization like Qantas. In the quest for the global business expansion, this factor will be very important since the country culture varies from one country to another (Albers et al. 2017).
The European and American countries have high IDV scores and the countries in Asia do not have very high IDV scores as well. The management of Qantas will look to keep up the harmony among the people in the organizations in the best ways. They will motivate their employees to work within the spheres of the different cultures. They will enjoy the challenges in different cultures to improve their capabilities (Frankenberger, Badke-Schaub and Birkhofer 2012).
Business ethics
Business ethics is also very important for Qantas to be the leading organization in the Airlines industry. The employees are not allowed to speak up anything about the inside talks of the company (Qantas.com.au 2018). They are also not allowed to take the bribes as well. The employees have the responsibility of ensuring the best all the accounting records are at place. Any confidential information about the Qantas group shall not be disclosed by any of the employees. The individual conflicts among the employees should be sorted out properly so the better working environment could be presented (Dobbs 2014). The passengers should be provided with all the facilities so the passengers can be satisfied.
Porter’s Five Forces
Strategic response to business challenges
There are many challenges in front of Qantas in the way of expanding their business on the global basis. They have to look after their pricing methods properly so these factors can be managed. The high costs have been a major challenge for the group indeed. This is only the way to increase their revenues (Dobbs 2014). Probably, they will have to increase their CSR activities for this matter as well. One important factor is they will have to There are some HRM issues in the organizations that could be mitigated by the selection and recruitment of the proper people. The talented employees will surely cater to the growth of the company in the other countries as well (Tanwar 2013).
Differentiation strategy
One important aspect in this scenario is to determine the quality of the products and services by the Qantas Airways through the implementation of the generic strategies. The three most important generic strategies are cost leadership strategy, focus strategy and differentiation strategy (Tanwar 2013). This strategy will work better for the purpose and the target market the company serves on the international basis. Qantas Airways will look to segregate their market for the benefit of their customers. They will look to target a certain group of people who want luxury while travelling with a good amount of income (Albers et al. 2017).
They provide the services to the customers through their low-cost carriers named JetStar. This will also work for them as an added advantage as well. The ethical frameworks and regulations are required to be met by the company as well (McDaniel and Gates 2013). The Qantas Group will like to offer the best quality products to their customers through the differentiation strategies (Albers et al. 2017). The quality of the services and the sophistication will also be a part of the customer satisfaction and loyalty for Qantas.
Foreign Direct Investment (FDI) strategies for the company
One of the most important and successful strategies in this aspect will be the foreign direct investment strategies to expand into new countries (Moran 2012). However, it has been acclaimed that the company Qantas Airways will open the doors for the owning more stakes in the company. They will remain to be an Australian firm by the ownership structure. The investments from the different foreign companies are always welcomed by Qantas. The logistics and supply chain services will thus be increased. The domestic ownership of the company will continue to be their most important aspect in the ownership instead (Burhan and Rahmanti 2012).
Large scale industries
Qantas Airways is considered to be one of the biggest companies in the large scale industry. They will have to utilize all the opportunities in the local market. The company is very much decentralized and they are self-sufficient in the national basis (Belz and Peattie 2012). The local opportunities are huge in the local and global markets in which the Qantas Airways would like to explore. The expansion of the company into the international markets will require them to understand the target audience and the demographics of the country. The national annual income of the target country will also have to be analyzed as well. The knowledge of the employees in different units will have to be developed (Hutt and Speh 2012).
Conclusion
As per the above discussion, the conclusion to the paper can be drawn in the following manner. Qantas will have to develop their strategies in order to gain the success and sustainability in the international market. They will have to abide by the certain legal and ethical frameworks as well. The differentiation strategy will be very much appropriate for them to implement in the international market. They must prepare their analysis of the local and global environment. The sustainability in the international markets will be their first and foremost priority. Apart from that it has also been found that the Qantas Airways might adopt the differentiation strategy to provide the best facilities and services to their customers.
References
Albers, S., Baum, H., Auerbach, S. and Delfmann, W., 2017. Strategic management in the aviation industry. Routledge.
Bakan, I. and Do?an, ?.F., 2012. Competitiveness of the industries based on the porter’s diamond model: An empirical study. International Journal of Research and Reviews in Applied Sciences, 11(3), pp.441-455.
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Moran, T., 2012. Foreign direct investment. The Wiley?Blackwell Encyclopedia of Globalization, pp.1-9.
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Solomon, M.R., Dahl, D.W., White, K., Zaichkowsky, J.L. and Polegato, R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). London: Pearson.
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Teeratansirikool, L., Siengthai, S., Badir, Y. and Charoenngam, C., 2013. Competitive strategies and firm performance: the mediating role of performance measurement. International Journal of Productivity and Performance Management, 62(2), pp.168-184.
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Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing competitive advantage. Routledge.
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