Qantas 5 Forces

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Bargaining power of suppliers: Medium

The aircraft suppliers for Qantas are the only two largest aircraft manufacturers: Boeing and Airbus. Fuel will be supplied by companies like Shell and BP. For the IT sector, companies such as IBM and NCR handle the operations, automations and logistic systems. Hotels and catering service are also provided to the customers as well as crew members in different destination of its operations. Qantas need to maintain a fairly good communication with its suppliers to achieve the competitive edge.

Bargaining power of buyers: Medium to Decline

Buyers for Qantas consist of business travellers, leisure travellers, budget travellers, travel agents, holiday providers and many others. The expectations of the customer have grown over time as they demand value for every dollar spent. Technology developments also allow firms and individuals to forward integrate with ease and led to reduction in buyer power.

Threat of Substitutes: Low

The other forms of transportation like railway, buses, ships, personal transportation are the direct substitutes for persons who are not concerned about travelling fast and reaching destination on time. Indirect substitutes such as Tele conferencing, online chatting and VOIP will increase the power of substitutes as they save time and money for the customers who are flying.

Threat of Entrants: Low

Extremely high fixed initial costs along with high government regulatory requirements lift the entry threshed for the air transportation industry. High competition and the dominant powers of existing large players create high chances of retaliation.

Rivalries: Medium to High

Qantas observes sever competition from Virgin Australia domestically and a number of low cost airlines internationally such as China Southern Airline and Malaysia airline. Qantas must always revitalize its product offerings in order to be competitive and sustainable amongst other players.
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