Case strategic management analysis

Case analysis: Qantas External analysis What is industry? First of all, this report will give an introduction of Qantas Qantas founded in the Queensland outback in 1920, In present, Qantas has grown to be Australia's largest in both side: domestic and international airline Registered originally as the Queensland and Northern Snap Snap Aerial Services Limited (QANTAS), Qantas is widely regarded as the world's leading long distance airline and one of the strongest brands in Australia Qantas group has a main business is airline under the name Qantas and Jetstar, but there are other subsidiary businesses including other airlines, and businesses in specialist markets such as Q Catering Nowadays, Qantas has employees around 37,000 people and most of them based within Australia (Qantas 2014) Qantas has grown to be Australia's largest in both side: domestic and international airline The main business of Qantas is airline transportation, which Qantas has businesses in international and domestic airline In addition, Qantas also has other subsidiaries business that relate with airline business called Q Catering and Snap Frash Q Catering can be divided into two part are food and wine Qantas has grown to be Australia's largest in both side: domestic and international airline The main business of Qantas is airline transportation, which Qantas has businesses in international and domestic airline In addition, Qantas also has other subsidiaries business that relate with airline business called Q Catering and Snap Frash Q Catering can be divided into two part are food and wine มม มม General environment analysis (PESTLE)  Political – Legal After World War 2, Qantas was under control by labour government After that, in 1992, Australian government sold a share of Qantas business and corporate with British Airway (BA) under furtherance of Australian government, which it cause Qantas had 55 percent share In addition, some deregulations from federal government make Qantas face with violently competition and in competition, make Qantas share fall down to around 60 percent in the market  Economy International airline can make less of profit over the past 40 years because of many reasons For example, in 2008, collapse of Wall Street make profit negative at -4.7 percent In addition, earthquakes or volcanic also have an effect on flights, which the effect continue to profit Domestic airline also low margin, but still continue grow Financial crisis also has an effect with airline, it make them find new strategy that focus on price for survive in the market Airline industry also driven other business For example, Q catering a subsidiaries of Qantas help a wine industry because Q catering purchase wine for serve in their flight  Social In this case, a population in Asia and other continent increased, which it cause central of leader move from USA to others After low cost airline established, brand loyalty of people is decrease because people focus on price of airline ticket However, National pride of people also has an influence with decision to choose the airline Unions also have an effect with each airline in term of rights of employees For example, in 2008, maintenance engineer of Qantas strike for protect their rights In term of Qantas, they success in advertising in television for create awareness  Technology Technology is the important part in competition between airlines For example, each airline uses a check in system to attract customers In addition, international airline also attract customers by using Internet during travel Additionally, updating and ability of aircraft of each airline is necessary with decision of customer Therefore, airline bought new aircraft from major aero plan producer: Boeing and Airbus Both of them use different technology to produce the aircraft, which it cause both aero plan producer produce different style of airplane  Environment In 2012, environment of working airline was changed because established of unions Existing of unions make an environment of working better because unions protect a condition of work of employees Moreover, environment of working in airline change because of occurrence low cost flight Saving fuel is an important condition in competition of airline industry because airline industry also concern about saving fuel The Industry Environment  Rivalry Among Current Competitors: high In term of airline industry, there is violence competition between Qantas, Virgin Australia, and Tiger These three airlines have their own ability Qantas and Virgin Australia have similar resources such as good brand, excellent slot at airport, good staff, and new aircraft, but Tiger is different from each other Although Tiger has old aircraft, but their still has low price It make Tiger still be a strong competition in the market  Bargaining Power of Suppliers: medium There are two main producer of manufacture aeroplane are Boeing from USA and Airbus from EU Each producer has own style and ability Boeing can fly longer distance than Airbus, while Airbus can carry more people than Boeing Both of manufacturing mostly monopoly selling aircraft, but airline companies can decrease power of suppliers by signing contract of ordering aircraft for the future for decrease a risk of cost  Bargaining Power of Customer: medium In this case, airline companies always a promotion or operation in the same ways For example, when the Qantas created the low cost airline, Virgin also did that and changes a price ticket for equally because they need to be a same level in competition The effect from this created the bargaining power of customer because customers have no choice about price, so they will decide by technology and service of airlines This method can decrease risk and disadvantage from competitor  Threat of Substitute Products or Services: high Airline industry is not competing by product, but they compete by service Therefore, each airline companies used technology such as booking ticket online, or internet technology Airline companies also train staff for good serving for make an impression with customers, which every company always improves about these services In customer view, the services of airlines are mostly similar Therefore, these things are less of compensate in term of Threat of Substitute Products or Services  Threat of New Entrants: low Airline industry is less of new entrants, but airline companies have to careful expanding of airline from other continent into their area For example, Qantas accept that Thai, Emirate, Malaysia, Singapore, British, and Cathay Pacific are the dangerous competitors These airlines have equal abilities in competition of intern ational airline, which these airlines may attract main customers of other airlines มมม ม Competitor Analysis This report will use strategic group for analyze competitors In this case can divide strategic group into two groups  Domestic airline industry There are three main of competitors in domestic airline industry: Qantas, Jetstar, Virgin Australia, and Tiger Although Qantas plan to possess 65 percentages in domestic airline market, but Virgin Australia, and Tiger are efficient competitors in the market Virgin Australia aims to profit by food, aircraft, and uniform Although Tiger lack of efficient, with low price and new aircraft cause Tiger still be a strong competitors Moreover, Tiger in present (2012) begin to improve their quality Qantas and Jetstar come together because they are same origins Qantas and Jetstar have the most resources such as good brand, excellent slot at airport, new aircraft, and good staff, which it cause Qantas and Jetstar have an advantage in the domestic market than others  International airline industry There are many airline companies in International airline market, but strong competitors in the market are Qantas, Virgin Australia, Thai, Emirate, Malaysia, Singapore, British, and Cathay Pacific These airline have most similar in aircraft, staff, brand, website, and service Although each airline have good efficient, Singapore, Malaysia, and Cathay Pacific have advantage in term of low price in the market Competitions in these groups are focus on price and aircraft Every airline use an aeroplane form Boeing and Airbus because both of them are major producer that famous for confident of customers In term of price ticket, fuel, maintenance staff, and labor are the things that every international airline compete to reduce the cost  Direct and Indirect competitors analysis Direct competitors of domestic airlines are Qantas, Jetstar, Virgin Australia, and Tiger because they compete with each other in only one country (Australia) Indirect competitors have widely because there are many airlines, but they are not direct competitors because they have own their area However, they can attract customers from each other 5 Statement of Opportunities and Threats  Opportunities There are six opportunities that make Qantas have advantage than others Firstly, airlines can drive other business line For example, other airline in Australia order food and wine from Q Catering, which Q Catering is subsidiaries of Qantas It cause Qantas has more profit Secondly, increasing of population is increasing of opportunity to expand customers group Thirdly, Qantas has success in advertise in Television in Australia, which it mean Qantas success in create awareness for customer Fourthly, technology of checking in of Qantas can attract customers Fifthly, in term of ordering aircraft, Qantas plan to order aircraft by signing contract for the future, which it has an advantage for financial of Qantas Lastly, Airline industry is less of new entrants, whom it make Qantas not have planning for new strategies much  Threats There are five threats that Qantas has to concern Firstly, the deregulations from federal government make Qantas face with violently competition Secondly, collapse of Wall Street in 2008 has an effect with Qantas in bad way Thirdly, cost of fuel is the big threat for every airline and it is a problem that every airline tries to decrease Fourthly, Employees in the unions sometime cause tripping of operation Finally, Having strong competition between airlines In addition, customers are important factors that make violence competitions Internal analysis Identifying tangible and Intangible resources of the firm  Tangible Resources Qantas has many good resources in airline industry Firstly, Qantas has excellent slot at airport, which it means Qantas can support keeping luggage of customers or other things in plenty Secondly, Qantas always order new aircraft for attract customers Thirdly, Qantas has an efficient booking ticket system, which it make convenience for customers Fourthly, Qantas has subsidiaries about foods and beverages called Q Catering and Snap Fresh, which this can make profit for Qantas  Intangible Resources The first intangible of Qantas is safety because Qantas does not has any record about accident Secondly, Qantas has a good management because Qantas has good CEO (Alan Joyce) Thirdly, Qantas is like symbolic of Australia, Australian people has pride of this airline, which it cause a profit for them Fourthly, Qantas also has a good staff, which they through training from Qantas, which it was guaranteed from Skytrax for five consecutive years Finally, Qantas has a good promotion from corporate with Jetstar For example, Qantas create holiday travel business campaign, which it is vertically integrated between Qantas and Jetstar Identify capabilities of the firm In 2012, Qantas has operated in domestic and international airline In the first time, Qantas began the business in Queensland and Northern Territory, then expand to many areas of the world Qantas always update the aircraft For example, Qantas has 224 aircrafts in 2008 and increased to 308 aircraft in 2012 Moreover, Qantas always retires their old aircraft for decrease the cost Qantas create the subsidiaries for support their business, which divided into two catering called Q catering and Snap Fresh These subsidiaries provide food and drink for Qantas and other airline For Q Catering, they provide premium catering business class and Snap Fresh manufacture for frozen meat and other meals Q Catering has seven centers around Australia and sells food for other airlines, which include Qantas In addition, Q catering also provide wines for airlines around four million bottles from Australian wine industry Qantas has a good maintenance staff that intent in every detail of maintenance which it make Qantas be one of the safety airlines Qantas also has a good operate airport businesses such as baggage handling, passenger lounges, and check in system In addition, Qantas recieved a service award winner and live in the top six airline range in the world for five consecutive years, which mostly good operate came from Alan Joyce the CEO that have many experience in airline business because he had been the CEO of Jetstar before Core competency analysis There are four part of core competency analysis:  Valuable Both of domestic and international airlines mostly compete by price and other convenience such as technology, service, or new aircraft However, there is one thing that cause Qantas can exploit is safety because Qantas does not have any recorded about accident in aviation  Rare Qantas is a good airline company in Australia, Qantas like soul of Australia Qantas had supporting every well from Australian people which this thing competitors of Qantas cannot imitators and this is not possessed by other companies  Costly to imitate Capabilities of Qantas that other firms cannot develop easily are Qantas has government be a shareholder whom it causes Qantas can be dominant in the domestic airline market Moreover, CEO of Qantas has an experience in airlines industry that it makes Qantas can survive in bad situation  Non-substitutable In this part, Qantas has a motivation for employees than other airlines For example, pilots of Qantas get high salary than other airlines especially in senior position (around 500000 USD) which the salary higher than prime minister Value chain analysis The value chain of Qantas in term of inbound logistics is fuel Qantas spend a lot of money with fuel Therefore Qantas attempt to reduce this cost by order new aircraft that have ability in saving fuel However, new aircrafts have high cost, which Qantas fix this problem by sign a contract for future In term of service Qantas has good staff in services and also have good maintenance staff that cause Qantas to be a safety airline In addition, Qantas also has supporting activities that create for making a profit and support their main For example, Q Catering is providing frozen food for airlines in Australia, which Q Catering is, subsidiaries of Qantas In term of technology, Qantas has a good check in and provide internet service for business class In addition, Qantas also has a good human resource in term of good salary 10 Identify weaknesses of the firm There are four weaknesses of Qantas Firstly, in domestic airline, customers have to buy the food and beverage, which it is not include in cost of ticket Secondly, although Qantas has been support from government, the price of ticket still higher than some airline companies in domestic and international airlines For example, in domestic, Qantas and Virgin Australia have a similar price while Tiger has the lowest in ticket price In international, there are many competitors in the market and in term of price, Singapore Airline, Malaysia Airline, and Cathay Pacific Airline have a lower price than Qantas Thirdly, Qantas has a problem about fuel cost, which Qantas has to pay the fuel around 4329 ASU It means Qantas has high cost of fuel 11 SWOT Analysis  Strengths Qantas has advantage in term of resources such as good brand, excellent slot at airport, new aircraft, and good staff than others Qantas has excellent slot at airport Qantas always order new aircraft for attract customers Qantas has an efficient booking ticket system Having subsidiaries for support main business Safety of aviation of Qantas Qantas has a good management because of CEO (Alan Joyce) Qantas is like symbolic of Australia Qantas has a good staff and promotion 10 Qantas has good operation in term of baggage handling, passenger lounges, and check in system 11 Qantas has been support by government 12 Good salary for pilots  Weaknesses In domestic airline, it excluding food and beverage for customers The price of ticket of Qantas still higher than some airline companies in domestic and international airlines Qantas has a problem about fuel cost  Opportunities Airlines can drive other business or industry Increasing of population is increasing of opportunity to expand customers group Qantas has success in advertise in Television in Australia, which it mean Qantas success in create awareness for customer Technology of checking in of Qantas can attract customers Ordering aircraft by sign contract for the future Airline industry is less of new entrants  Threats Deregulations from federal government Collapse of Wall Street in 2008 Cost of fuel Employees in the unions sometime cause tripping of operation Having strong competition between airlines 12 Identification of current strategies In the first time, Qantas operate their aviation in Queensland and Northern Territory, then expand to other continent It can be seen that Qantas serve in middle and high end, but when low cost trend come, Qantas has to access into low cost price to compete in domestic with Virgin Australia and Tiger There are strategies that Qantas use to attract the customers for increasing the profit Firstly, Qantas always retired an old aircraft and reduce the age of the flee for decrease the cost In addition, Qantas also use other method for decrease cost such as sign contract to purchase aircrafts for the future with aircraft producers Second is using subsidiaries support main business Qantas has Q Catering and Snap Fresh which provide food and beverage for Qantas and selling product to other airlines Qantas also use subsidiaries to access in low cost market in domestic airline market which it is Jetstar In addition, Qantas cooperate with Jetstar to create campaign that have both advantage for Qantas and Jetstar Thirdly, Qantas attempt to reduce the cost of operation by hire outsource for reduce the cost For example, Qantas hire outsource for flight attendants because Qantas pay for them lower than local employees Thirdly, Strategy that CEO of Qantas domestic (Lyell Strambi) use for competition with Virgin Australia are new aircraft, superior lounges, on-time performance, and frequent flyer program Fourthly, Qantas cooperate ten years alliance with Emirate airline, which they cooperate in term of sharing resources, but this strategy had objection from many people and finally Qantas have to change this strategy Lastly, Qantas expand their strategy to Asia For example, Qantas japan cooperate with partners JAL and Mitubishi, while Jetstar Pacific restructure with Vietnam Airlines Finally, Jetstar joint venture with China Eastern Airlines to transform to Jetstar Hong Kong References Qantas 2014, History, Our Company, viewed 17 September 2014, ... main customers of other airlines มมม ม Competitor Analysis This report will use strategic group for analyze competitors In this case can divide strategic group into two groups  Domestic airline... business because he had been the CEO of Jetstar before Core competency analysis There are four part of core competency analysis:  Valuable Both of domestic and international airlines mostly... aircraft for the future for decrease a risk of cost  Bargaining Power of Customer: medium In this case, airline companies always a promotion or operation in the same ways For example, when the Qantas