Img, Qantas Expansion to Vietnam

Topics: Qantas, Jetstar Airways, Airline Pages: 6 (1742 words) Published: August 15, 2013
Case Study: QANTAS (Jetstar Pacific)
Qantas Airline is considered to provide the longest distance travel in the world’s leading aviation. Qantas works alongside Jetstar, which is known as the lowest domestic and international fare provider in Australia and Singapore (Qantas Airways Limited 2013). Qantas has expanded its operations internationally to Vietnam through Jetstar Pacific by the joint venture strategic alliance (Trade Dealer 2012). In this case study it is essential to understand firstly that when operating in other country, external environment must be scanned, monitored and analysed in order to overview opportunities and threats (Hanson, Hitt, Ireland & Hoskisson, 2011). Secondly, it is substantial to overview the different cultural dimensions and how they differ between Australia and Vietnam. Thirdly, this difference will support the way HR functions vary across these cultures. Finally, recommendations to the CEO will be given based on the findings. Qantas’s subsidiary business Jetstar Pacific, have entered into the Vietnamese airline market as the lowest air fare provider by locating its headquarter in Ho Chi Minh City (largest city in Vietnam) and flying directly from Australia to Vietnam (AmCham Vietnam 2008). The reasons for going globally can be decided upon the reactive point of view. It is fair to say that Qantas’ joint venture with Vietnam Airlines emerges as the result of higher competition as well as customer demands (Quang, Heijden, & Rowley, 2010) meaning that the airline is responding to the external environment by implementing low-cost and direct flights from Australia to Vietnam (Singh, 2006). The external environment can be analysed through economic, demographic and legal-political segments. The economic segment refers to the attributes and control of the economy in which a firm competes (Ellinger & Wang, 2011). For example, Australia and Vietnam are part of the Asia- Pacific Economic Operations (APEC) which enhances development and free dialogue that allows better facilitation in trades and negotiations (Hanson et al., 2011). As result Vietnam’s GDP is increasing at such a rapid pace that is it considered to be the 35th largest economy by 2025 (Do & Quang, 2007) and therefore is able to move from a planned economic system in which the Government holds fixed prices (Jacques & Nguyen Cong, 2011) to a wholly market economy where prices are set by supply and demand (Le, Rowe & Truex, 2012). One of the contingencies behind it, is that Vietnam has one of the largest population in the world as well as a young age structure with high literacy rate compared to other Asian countries such as China (Gerard & Le, 2010) and therefore allows the economy to grow through demographics dividend which is defined by Nguyen (2009) as the population support ratio in which people is capable to be part of the labour force, produce output and implement innovation allowing the growth of investment and large rate of savings. The legal-political segment is defined as the field where firms are challenged to gain resources, attention and to be part of the laws and regulations across nations (Hanson et al., 2011). Jetstar Pacific is aware that Vietnam struggles with various issues such as corruption, lack of resources management and environmental decadence (Shultz, 2012), which for instance impacts stakeholders because they cannot truly rely on the system and anticipate outcomes (Do & Quang, 2007). Also, as a socialist government, decisions and negotiations are based on a distributive approach where Vietnamese laws tend to benefit its own interests rather than opting for an equal gain (Gerard & Le, 2010). All these decisions and different ways to manage issues, interfere with the ways cultures have developed and dealt with levels of isomorphism, being defined as the pressure within society to get people to comfort (Poulson & Campbell, 2010). For example, differences in cultural...


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