Qantas Report

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TABLE OF CONTENTS

Contents

EXECUTIVE SUMMARY2

COMPANY BACKGROUND3

EXTERNAL ANALYSIS4

REMOTE ENVIRONMENT ANALYSIS5

INDUSTRY ANALYSIS7

COMPETITIVE ANALYSIS12

INTERNAL ANALYSIS13

STRATEGIC GAPS15

STRATEGIC OPTIONS AVAILABLE17

RECOMMENDED STRATEGY21

IMPLEMENTATION PLAN22

CONCLUSION23

REFERENCES24

APPENDIX 1 – Income Statement25

APPENDIX 2 – Balance Sheet26

EXECUTIVE SUMMARY

The passenger airline industry is very mature and competition has forced many airline companies to reduce prices in order to utilise capacity. A remote analysis and industry analysis was carried out showing that the industry’s growth and profitability will be low.

Qantas will have to make use of its strategic capabilities and compete in the market. Its vision is to be the leader in providing premium and low cost service through its Qantas and Jetstar brand respectively. However, competition from Virgin Blue, Singapore Airlines, Tiger Airways and Etihad Airways has limited the growth in Qantas’ market share in both the domestic and international markets.

A number of strategic options have been suggested such as being exclusively a low cost carrier, merge with a competitor or join more alliances. However these options are either internally inconsistent or externally inconsistent. Two other options which are both internally and externally consistent are to build on customer loyalty programs to increase revenues through partners and shift focus towards freighting services rather than passenger services. These options are not mutually exclusive and can thus be provided together simultaneously.

Implementation of these two options will be difficult however it will be successful if it is carried out with proper planning. Issues of structure, systems, skills shared values and communication of strategy should be addressed.

Once implemented properly Qantas will be able to grow and become more profitable in the long run.

COMPANY BACKGROUND

Qantas was founded in the Queensland outback in 1920. It was registered as Queensland and Northern Territory Aerial Services Limited (QANTAS). The company was listed on the Australian Stock Exchange in 1995.

Qantas’ main business is the transportation of passengers. In addition to its Qantas and Jetstar brand flying operations, the Qantas Group operates a diverse portfolio of airline-related businesses. These include Qantas Engineering, Airports, Catering, Qantas Freight, Flight Operations, Flight Planning and Control and Associated Businesses.

From the birth of air travel in Australia 88 years ago, to the introduction of the world's largest passenger aircraft - the Qantas A380 in 2008, Qantas has experienced continual growth and expansion. Today, Qantas is not only Australia’s iconic airline, but also a recognized global aviation leader in safety, premium long haul travel, customer service and innovation. In 2009, Qantas was voted the sixth best airline in the world by research consultancy firm Skytrax, despite of a slight drop from 2008 (third), 2007 (fifth), 2006 (second), and 2005 (second).

In 2008, a new management team was established with the appointment of Allen Joyce as the Chief Executive Officer and Managing Director. The new management team has staked out clearly defined vision for the Qantas Group as to operate both the world’s best premium airline and the world’s best low fares carrier. It aims to achieve this vision through the following strategic goals:

• Safety as the first priority: commit unwaveringly to the world’s best safety practices and reporting. • Right aircraft and right routes: undergo fleet renewal, delivering one of the world’s most effective fleets flying on an optimal route network. • Customer service excellence: consistent customer service excellence as the cornerstone of its business. • Operational efficiency: undertake major projects both internally and with suppliers to achieve simplicity and...
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