Qantas Airways

      Introduction:

Airline Industry is an industry that has been marred by uncertainties for a number of decades. The profits of this business have been described as volatile and unpredictable due to internal and external environmental forces affecting it. Aviation experts describe it as very cyclical in nature in terms of the economic swings it experiences. This is attributed to the wider gap in earnings that occur in low and peak seasons, as compared to the gap for other businesses. According to Alexander (2006) on comparison to other businesses outside the airline industry, the percentage difference in earnings per share during bad economic times and peak economic seasons is always more huge  in the airline firms than other businesses. Various aspects that have enabled the company to survive in business despite harsh economic times include its competitive strategies, strategic management policies, the external and the internal environments.

 Strategic Management and Strategic Competitiveness

Strategic Management is a concept that tackles the major initiatives undertaken by the top management of an organization. These initiatives as was postulated by Hoskisson and Hitt (2010) are those that are concerned with utilization of company resources so as to improve the performance and give them competitive advantage against other rival firms. It encompasses identifying the company objectives, mission, vision, policy formulation and strategic planning. Qantas Airways as the largest airline in Australia puts into practice a more structured strategic model of management since it is an expansive airline whose scope of operations enables it to cater for about 65% of the domestic market share in Australia. It is also the only airline in the world that has maintained continuity. The airline carries 18.7% of the flying passengers to and from Australia (Gupta & Srinivason, 2005).

Figure 1: Strategic Management.

Strategic Competitiveness on the other hand is a concept that a firm uses in its planning to help achieve its goals and objectives despite operating in a competitive environment. As was suggested by Leticia (1999), the company has to come up with a unique strategy or a set of ideas that will enable the firm create upon its implementation. It is these strategies that make the firm have a competitive advantage over its rivals. In the 21^st Century, business firms have been forced to have a proper understanding of their unique abilities so that they can exploit these to get a competitive advantage over their rivals. A proper understanding of the strengths and opportunities that a firm can exploit to improve its performance is also necessary. This would enable the firm use its competitive advantage to outsmart the conditions of a dynamic market and its competitive structure (Canzer, 2005).

Qantas Airways has had to make its services uniquely satisfactory to its clients. It has a variety of services meant to suit the clients’ preferences. They have the In-flight entertainment services to keep boredom at the periphery for its passengers. The cabin also offers services like First Class, Business Class, Premium Economic Class and the Economy Class (Alexander, 2006). It remains the only airline in Australia that is consistent in the quality of their services.

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External Environment

The External environment comprises those factors that are outside the organization but which have an influence on its performance. These factors include: population demographics, the economy, social factors, environmental factors, competitors, political factors and technological factors (Karani & Analoui, 2005). Qantas Airlines boast of having not had a fatality in recent times owing to its modern aircrafts. The vast number of aircrafts lost occurred due to shoot downs. However no lives have been lost through its aircrafts. The firm has had to deal with legal issues. For instance, in 2006, the company was forced to pay $21 million to settle a lawsuit that was filed against it by Melbourne Law firm’s Maurice Blackburn over fixing of cargo freight charges.  

Figure 2: External Environments of a firm

Internal Environment

These are factors and conditions within an organizational set up that play a role in its performance and general activities like the behavior of employees. These factors include the management style, organizational structure, organizational culture, its mission, vision and objectives (Canadian Council, 2002). Qantas Airlines faced a major challenge when its workers boycotted duties over a failed negotiation on salary increment in 2011. The workers strike was a big blow to the economy as well and the government had to intervene for the strike to be called off. The firm’s policy of sex discrimination has seen it lose many customers. The policy forbids male passengers from sitting next to unaccompanied juniors.

Business level Strategies

According to Hoskisson and Mitt (1999), these are strategies that a business can apply to enable it gain competitive advantage over other rival firms. They can also be applied by the firm to enhance its returns and expand capital base. The strategies give an outline on how the firm intends to provide above average customer satisfaction and exploit competencies in specific areas of strength.  These strategies include differentiation, cost leadership, integrated low cost strategy, globalization, diversification and application of modern technology (Kenniston, 2002). Qantas has been in partnership with other airlines including American Airlines, British Airways, Cathey Pacific among others (Sommerville, 2007).

Porter argues that this enables the firm reach out to many customers on the globe. It has also expanded its operations to new destinations like Africa, Asia, Europe and Oceania. It has also embarked on an intensive marketing strategy to penetrate new markets, advertising itself as “Qantas CityFlyer”. Strategic partnerships will be of importance in the future where possibilities of mergers exist to expand the market share.

Conclusion

Qantas Airways Limited still has huge prospects in the future being the largest Airline in Australia. It needs to expand its operations to new destinations to enable it get a huge chunk of the air travel passengers. The services also need to be diversified to carter for a wide range of tastes and preferences. The company must pay its staff well to avert any future industrial actions as was witnessed in 2011. This will also help a lot save the economy from unnecessary turmoil. Qantas Airways, just like other business enterprises has internal and external factors that determine its survival in the aviation industry. These factors affect the airline both positively and negatively depending on the prevailing circumstances. The success of Qatar will lie on the firm realizing its potential and uniqueness to gain competitive advantage over its competitors.

References:

Alexander, K.,2006.  (August 30). The State of the Airline Industry: Past, Present and the Future.

 The Washington Post, pp.5.

Canzer, B.,2005. E-Business: Strategic Thinking and Practice. New York: Cengage Learning.

Canadian Council for Small Business & Entrepreneurship., 2002. Internal and External

Exchange Relationships of Business Owners. Journal of Small Business and Entrepreneurship, 2(4), 9-15.

Gupta, V., Srinivason, R.,2005. Business Policy and Strategic Management. New Delhi:

 Prentice Hall of India Limited.

Hoskisson, E.,Hitt, M.,2010. Strategic Management: Competitiveness and Globalization

 Concepts. New York: Cengage Learning.

Karani, A.,Analoui, F.,2005. Strategic Management in Small and Medium Enterprises. New

 York: Cengage Learning.

Kenniston, S.,2002. Business Continuity Strategy for Your Company. Network World, 19(29)

pg 40-60.

Leticia, C.,1999. Impact of Internal and Environmental Factors on an International Institute

for Technical Cooperation on Food, Nutrition and Health. New York: Cornell University Press.

Sommerville, L.,2007. Hospitality Employee Management and Supervision: Concepts and

 Practices. New York: John Willey & Sons.