Report on Business Analysis and Valuation

Running head: BUSINESS ANALYSIS & VALUATION
Business Analysis & Valuation
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2BUSINESS ANALYSIS & VALUATION
Executive Summary
A detailed investigation of the operations of the business concern Qantas indicates the fact
that it is one of the primary airline operators of Australia that offers superior services to their
passengers. Qantas has a substantial share of the Australian airline industry and its functions
are essentially based on both domestic as well as transnational circuits. Fundamentally, the
business concern Qantas accounts for approximately 65% of the sector’s current market share
and has strategic association with diverse other transnational airlines operating across the
world.
The current report analytically evaluates specific strategies, financial assertions of the firm
Qantas along with the way the business entity performs in the airline market of Australia. The
business concern encounters fierce competition from other players in the industry and face
challenges; however, the management of the firm develop strategies to neutralize the
identified issues.

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Table of Contents
a. Analysis of Porter’s Five Forces: Qantas...............................................................................3
b. SWOT Analysis.....................................................................................................................6
c. Corporate Strategy of Qantas in domestic and worldwide markets since 1992.....................9
d. Two different accounting policies of the firm Qantas in the airline industry......................10
e. Evaluation of financial performance of Qantas during 2013:..............................................13
f. Evaluation of financial performance of Qantas during 2015................................................13
g. Recommendations (Similarities and Differences in performance during 2013 and 2015). .14
References:...............................................................................................................................16
Appendix..................................................................................................................................18
Qantas Market share:............................................................................................................18
Qantas revenue segments:....................................................................................................18
Qantas Revenue before Tax:................................................................................................19
Ratio Analysis of Qantas 2013.............................................................................................20

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a. Analysis of Porter’s Five Forces: Qantas
Porter’s five forces analysis is taken into account for comprehending the overall performance
of the firm Qantas Airlines and various factors that might perhaps affect the same.
Bargaining Power of Purchasers: For the purchasers, it can be considered to be a win-win
condition when it comes to selection of the airline service. The selection is based on the
condition of offering premium class service, low cost and level of comfort among many
others (Entwistle 2015). According to Moutinho and Huarng (2015), in today’s days
purchasers have different alternatives to select from and the subsistence of diverse service
providers in the airline sector offers them with augmented bargaining as well as purchasing
power.
Bargaining Power of Suppliers:
As rightly mentioned by Bolton et al. (2015), suppliers functioning in the airline industry
have comparatively less bargaining power since there subsists a higher number of suppliers
delivering somewhat identical services. Again, in case of Qantas Airlines, supplier’s power is
low since there is existence of other big players in the airline industry namely Virgin Airlines
Threat of Substitutes-
Airline industry truly enjoy a lower level of threat of substitution since it is a very rapid way
of travelling to different long distances that is not always to travel through waterways and
roadways. Customers avail the specific airline service even for short distance routes in a bid
to save time and enjoy comfortable journey (Wagner and Eggert 2016).
Rivalry among subsisting business concerns-

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Analysis of reports reveals that the Australian Airlines Industry can witness a tussle between
specifically the airline service provider Qantas Airlines and the Virgin Airlines in the
regional market. In this case, both the corporations suffer losses in operations due to
existence of intense competition (Armstrong et al. 2015).
Threat of Entry of New Players-
In Australian airlines industry, the threat of entry of different new players is normally low.
This is so because new corporations have the need of huge investments as per the requisite
infrastructure for designing the structure of the airline corporation, which sometimes is tricky
(Armstrong et al. 2015).
Competitor Analysis:
The Australian airline segment experiences strong competition among different airline
service providers. The airline operators essentially contest with each another for acquiring
higher share of the market. A detailed market research reflects the fact that Virgin Airlines
can be considered to be one of the most important rivals of the company Qantas that operates
in the Australian airline market, apparent from the price cuts for different services for
attracting new customers and retaining the existing customers (Armstrong et al. 2015).
Analysis of the current company declarations, both the business firms Qantas as well as
Virgin is experiencing losses and in spite of that there is steep decline in the overall number
of passengers owing to issues such as competitiveness of the industry as well as terror attacks
in US and many others.
Nevertheless, there are several measures that essentially make the airline service provider
Qantas an clear choice for diverse travellers. For example, the flyer program of the company
that is exclusive to the company helps in gaining customer loyalty. Again, the management of

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Qantas has also declared that the firm’s frequent flyer program has nearly 7 million loyal
members and it is developing with time. As such, the specific purpose of this program started
by the company Qantas is to inspire travellers to select Qantas for their requirement of airline
service (Armstrong et al. 2015). Again, if they necessarily go on gaining higher number of
points, the management of the firm can utilize it for different alliance stores for up gradation
of the baggage weights and for acquiring admittance to particularly OneWorld agreement
lounge for foods, drinks along with other lucrative provisions. Again, Qantas also relates the
firm’s frequent flyer program with yet another Australian player that is Woolworths and
through collect points of Woolworths Everyday Rewards that necessarily offers competitive
advantage to the two corporations (Investor.qantas.com 2017).