Business Analysis and Valuation

Running head: BUSINESS ANALYSIS AND VALUATION
Business Analysis and Valuation
Name of the Student
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Author’s Note

1BUSINESS ANALYSIS AND VALUATION
Table of Contents
Introduction................................................................................................................................2
Five Forces Framework..............................................................................................................2
SWOT analysis...........................................................................................................................3
Corporate Strategy of Qantas and Changes in the Strategies.....................................................4
Two Accounting Policies...........................................................................................................4
Evaluation of Qantas’s Financial Performance..........................................................................5
Differences and Similarities in Findings....................................................................................6
Recommendation........................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................9

2BUSINESS ANALYSIS AND VALUATION
Introduction
It is necessary for the managers of the companies and the users to consider analysing
the financial performance along with its valuation as this obtained information helps them in
making the decision of whether they can invest in the company or not. The main aim of this
report is to take into consideration the analysis and valuation of the business of Qantas
Airways (Qantas). More specifically, this report considers the five forces analysis and
SWOT analysis of Qantas. After that, this report involves analysing the corporate strategy
and certain financial regulation of the company. After that, the report considers the analysis
of the financial performance of Qantas in order to provide the recommendation.
Five Forces Framework
The following discussion shows the competitive forces analysis of Qantas:
Bargaining Power of Buyers: Qantas has to face high bargaining power from the customers
due to the presence of many airline companies in this Australian airline sector. They provide
affordable travelling cost, luxury and others.
Bargaining Power of Suppliers: The presence of numerous suppliers can be seen in the
Australian airline industry providing the required materials to the airline companies. For this
reason, Qantas faces low bargaining power from their suppliers (E. Dobbs 2014).
Threat of New Entrants: When entering into the Australian airline industry, the new
companies are needed to make huge investments and have to comply with many regulations
from the government. Hence, this threat can be considered as low for Qantas.
Competition among Existing Competitors: The presence of certain large airline companies
can be seen in the Australian airline industry like Virgin Airline and others that provide tough

3BUSINESS ANALYSIS AND VALUATION
competition to Qantas. For this, this threat can be considered as high for Qantas (afr.com
2019).
Threat of Substitutes: Passengers can travel in the fastest possible manner through airlines as
it is the quickest way of travelling. For this, Qantas face low threat related to the substitute
products.
SWOT analysis
The SWOT analysis of the business of Qantas is discussed below:
Strengths Weaknesses
 Qantas has been witnessing stable as
well as continuous growth in every
business aspects which is a major
strength
 Qantas provides their passenger with
high-quality services when
compared to other airlines
 The cost cutting initiative of Qantas
is a major success for the company
 Introduction of Qantas
Transformation Program
(qantasnewsroom.com.au 2019)
 Qantas has not been able to register
high profitability in their
international flights and it is a major
weakness
 Qantas has to face problems
regarding the groups of unions
which is a major weakness
Opportunities Threats
 Increase in the national business
provides Qantas with new business
opportunities
 In the recent years, Australia has
witnessed reduction on the oil price
and this reduction provides Qantas
with the opportunity to increase their
profitability by reducing the costs.
 Since there are many large
companies operating in the
Australian airline industry, Qantas
has to face major competition from
them which is a continuous threat
for Qantas (smh.com.au 2019)
 Qantas is facing certain difficulties
while managing the large business
expenses and costs. This is another