Qantas Airline Analysis Report

The provided report is a comprehensive analysis of Qantas airline's operations. It employs SWOT (Strengths, Weaknesses, Opportunities, and Threats) and STEEPLE (Social, Technological, Economic, Environmental, Political, and Legal) analyses to identify internal and external factors influencing the company's functions. The report also delves into Qantas' core competencies and HR practices, highlighting the importance of ethical considerations in business operations. This analysis is essential for understanding Qantas Airline's performance and development strategies.

Business Strategic Plan

EXECUTIVE SUMMARY
Airline industry is a highly growing sector in the world at present, this study demonstrate
about the Qantas airline that operates airlines to almost every country in the world. There are
various inner capabilities of Qantas airways that helps it to sustain its position in the industry
such as Strong domestic and international presence, One of the largest and top airlines operating
in Australia etc. The report also presents understanding of Social factors, Technological changes,
Economic Factors, Environmental factors etc, that affects the Qantas airline to perform its
business activities.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
Profile and Position in the industry..................................................................................................1
PORTER'S FIVE FORCES ............................................................................................................2
Porter five forces analysis for Qantas airline .............................................................................3
NEW STRATEGY CONSIDERING EXTERNAL FORCES .......................................................5
CORE COMPETENCIES AND HR PRACTICES.........................................................................7
CONCLUSION ...............................................................................................................................7

INTRODUCTION
An Airline is a company that provides services related to air transport for traveling
passengers and freight. It is a competitive market that is expanding over time and improving its
importance in the global market. The present report is in context to Qantas airline, it is a second
oldest airlines in the world which was established in 1920 within Queensland. It is main business
is air transportation through two major airlines, Jetstar and Qantas. The company is major player
in airlines industry and already has high income and market share. This report will focus on
identifying position of Qantas in the industry along with the ways in which it maintains
competitive position in the market. The report will also focus on analyzing external forces
influencing the organization to develop a new business strategy.
PROFILE AND POSITION IN THE INDUSTRY
The Qantas airline already has a higher market share and profit ratio in the airline
industry, though it follows important strategy for developing its business more and more. The
main element of the company's strategy is the market share. The airline aims to have and
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Illustration 1: Qantas Airline
(Source:Qantas Airline, 2016)

maintain 65% of the domestic market share, Qantas managed to achieve its goal through job cuts
and rising cost. At present it has 69% of the market share. The position and profile of the
company can be determine better with the help of SWOT analysis tool as described below -
Strengths
1. One of the oldest airline operators in
the world.
2. Strong domestic and international
presence (Ridouane, Ellis and Kouramas,
2017).
3. One of the largest and top airlines
operating in Australia
4. More than 25000 employees
5. Government support
6. More than 80 domestic as well as
international destinations.
Weaknesses
1. Limited international presence of
Qantas Airways as compared to other
leading global airline companies.
2. Issues such as price fixing, incidents etc
have negatively influenced the image of
the company in past.
Opportunities
1. More international airlines or
destinations mainly in Asia.
2. Opportunity to become a leader in
Asian and Australian continent
3. Tie-ups with international airlines for a
united service offering to customers.
Threats
1. Rising labour prices can influence
business activities.
2. Increasing prices of fuel influence the
business operations.
3. Enhancing presence of other
international airlines can influence the
performance and probability of the
Qantas airline.
PORTER'S FIVE FORCES
Qantas Airways is one of the leading organisation in Australia within the transportation
sector. Along with time the company has overcome various challenges and redefined the
methods of performing its business operations within the transportation industry(Edkins, 2017).
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There are five forces that have a major impact on profitability of a business or organisation
within the industry in which it operates. These forces are known as Porter's five forces which are
described as below -
1. Threat of New Entrants
2. Bargaining Power of Suppliers
3. Bargaining Power of Buyers
4. Threat from Substitute Products
5. Rivalry among the existing players.
Porter five forces analysis for Qantas airline
1. Threat of new entrants – New organizations or entrants in air transportation industry
brings innovation, new methods of performing business activities and develop pressure
for Qantas airline through reducing cost, lower pricing strategy and offering new value
proposition to the customers. Qantas airline needs to manage all these challenges and
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Illustration 2: Porter's five forces model

create effective barriers to maintaining its competitive position. The airline manage
threats of new entrants through following ways -
 By offering innovative products and services , new products not only attract new
customers to the business but it also provide a reason to existing customers ton purchase
products or services of Qantas airways
 By developing economies of scale so that it can reduce the fixed cost per unit Spending money & focusing on research and development, new entrants are less likely to
enter into a dynamic industry where the top players such as Qantas regularly defines the
standards.
2. Bargaining power of Buyers – Buyers are generally very demanding, they need to buy
the best services or products available by paying the minimum price as possible. This
develop or put pressure on the profitability of Qantas Airline in the long run. The smaller
and more powerful a customer base Qantas Airline has the higher the bargaining power
of the customers and higher their potential to seek increasing offers and discounts. Below
are the ways in which the selected company manage the force of bargaining power of
buyers -
 By building a huge customer base, it will help the organisation in two ways. Firstly, it
will reduce the bargaining power of the buyers and secondly it will provide an
opportunity to streamline its production and sales process to Qantas Airline (Holloway,
2017). New products will also decrease the defection of existing customers of the organisation to
its competitors.
3. Bargaining power of suppliers – Each and every organisation in the Transportation
industry purchase their raw material form numerous suppliers. Suppliers in dominant
position can decrease the margins of earning on the market for Qantas Airline. Powerful
suppliers in transportation industry utilize their negotiating power to extract higher prices
from the companies in the sector. The impact of higher supplier bargaining power as a
whole is that it reduces the profitability of transportation. This force is managed by
Qantas Airline with the following ways -
 By developing efficient supply chain with numerous suppliers
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 Developing dedicated suppliers whose business depends on the organisation, one of the
lessons Qantas Airline can learn from Nike and Walmart is how these organizations
established third party producers whose business entirely depends upon them (Holloway,
2017). Therefore, developing a strong relationship with these third party manufacturers
have less bargaining power as compared to Nike and Walmart.
4. Threats of substitute products or services – When a new service or product meets a
similar customer demands in different manner, the profitability of industry gets affected.
For example Google drive and Dropbox are substitute to storage hardware drives. The
threat of a substitute product or service is very high if it offers value proposition that is
unique and different form the present services or products of the industry. Qantas
manages this force with the helps of the following strategies -
 By understanding the major needs of their customers rather than the products or services
they are buying.
 By being service oriented rather than just product oriented. By enhancing the switching cost for the customers.
5. Rivalry among the existing competitors – If the rivalry among existing organizations in
an industry is intense then it will drive down prices and reduce the overall profit of the
industry. Qantas Airline operates in a highly competitive industry, this competition does
take value on the overall long term profitability of the business.
 By developing a sustainable differentiation
 By creating a scale for competing in a better way.
NEW STRATEGY CONSIDERING EXTERNAL FORCES
There are various external forces or factors that affects each and every organization as
well as its functions. These factors can be analyzed using STEEPLE analysis tool, the different
macro or external factors affecting Qantas Airline are determined below -
1. Social factors – Airlines also create social values such as any other firm or business due
to the change in consumer trends and demands. In order to meet the changing demands of
customers, airlines are needed to incorporate significant changes. In present world
customers prefer airlines which are offering attractive services at low prices. In recent
years, there has been a huge decline in business class traveling which is a huge less loss
for the airline companies. In addition to this Automation is another factor influencing the
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airline sector as people use Skype features and other technologies rather than traveling.
Qantas airline can reduce its fares through cost cutting to attract and encourage people to
use its services.
2. Technological changes – The significance of technological factors can be determined
from the increased use of technology in the international global industry. Passengers now
prefer to access check-in and ticketing services through their handy devices rather than
booking manually. The airline industry also conducts marketing campaign on the social
platforms to attract more customers. Failing to adopt new technologies can leads to loss
of customers. In addition to this technology also refers to lighter aircraft that provides
fuel and speed economy. Increased advancement in technology can make airlines achieve
more profit through offering enhanced and safety services. Qantas airline should
introduced application for booking tickets in order to provide more easy to access air
traveling services to the people.
3. Economic Factors – These factors have a great impact on the airline industry, the
economic recession made the tourism industry to face a lower period. Both premium and
economy traveling observed declined. In addition to this airlines were also under a huge
pressure to meet up the rising prices of fuel. These factors becomes a barrier for airline
companies to generate profits. Qantas airlines can target markets with strong economies
and use technologies to cope with increasing rates of fuel such as lighter air-crafts (Kew
and Stredwick, 2017).
4. Environmental factors – Ecological elements also influence the airline industry the most
as compared to other industry. Fuel is a major expense of the industry and Airline
companies need to invest more in fuel-efficient aircraft and environmentally friendly.
Changes in weather and climate also influence on the airline industry as most of the
companies are now required to practice green flying process to protect environment
(SHTAL and et.al., 2018). This procedure consists huge finances, although airlines can not
compromise due to the reason that passengers are responsible for tier carbon footprints.
Qantas airline should focus on adopting green flying process as much as possible and also
ensure that their aircraft are creating low pollution.
5. Political – There are strict regulation for the aviation industry in most of the countries,
this is a main cause for the risks linked which can leads to accidents or deaths and other
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damages. Wars or insecurity factors that influence specific nations always negatively
influence airline industry. The Qantas airline should analyze and devise its policies
regularly with respect to its services offered in different countries.
6. Legal issues – The legal problems or issues also holds a great significance for analyzing
external forces in the business environment that affects Qantas airline and its business
operations. There are numerous rules and laws imposed for air safety and traffic as well
as security of passengers. There are various laws or regulations which needs airlines to
offer safe travel along with high quality services (SHTAL and et.al., 2018). Qantas airline
should consider each and every law that is applicable on its business activities or
operations in the aviation industry.
7. Ethical factors – There are lot of business ethics or code of conducts which are also
essential for airline companies to follow such as Employee policies, Group Policies, Anti
Bribery law compliance policy etc. The Qantas needs to improve its company regulation
to cope with this laws in order to perform business functions ethically.
CORE COMPETENCIES AND HR PRACTICES
Core Competencies
 Strong brand
 World's safest airline
 Strong performance in domestic market Wide range of airlines and destinations
HR PRACTICES
 Hiring most skilled and talented
employees at global level.
 Training programs related to
technology
 Rewards and recognition to the best
performers.
CONCLUSION
The above report summarized that Qantas airline is a leading company in aviation
industry with more than 80 destinations all around the world. The report identified various
internal and external factors influencing the functions of the company using SWOT and
STEEPLE analysis. The report also included description of core competencies and hr practices of
the company for effective functioning of the business operations.
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REFERENCES
Books and Journals
Edkins, G., & Airways, Q. (2017, November). 18" Captain, what the.. In Aviation Resource Management:
Proceedings of the Fourth Australian Aviation Psychology Symposium: v. 1: Proceedings of the Fourth
Australian Aviation Psychology Symposium (p. 18). Routledge.
Holloway, S. (2017). Straight and Level: Practical Airline Economics: Practical Airline Economics.
Routledge.
Kew, J., & Stredwick, J. (2017). Business environment: managing in a strategic context. Kogan Page
Publishers.
SHTAL, T. V., BURIAK, M. M., AMIRBEKULY, Y., UKUBASSOVA, G. S., KASKIN, T. T., &
TOIBOLDINOVA, Z. G. (2018). Methods of analysis of the external environment of business
activities. Revista ESPACIOS, 39(12).
Ridouane, E. H., Ellis, K. A., & Kouramas, K. (2017). Description of the Process Needed To Achieve EPN
Roadmap. In Energy Positive Neighborhoods and Smart Energy Districts (pp. 31-56).
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Qantas airline. 2016. [Online]. Available
through:<http://fernfortuniversity.com/term-papers/porter5/asx/2178-qantas-airways-
limited.php>
Porter's five forces. 2017. [Online]. Available
through:<https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html>
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