Analyzing Impact of Macro Environment on Qatar Airways

This report analyzes the impact of macro environment on Qatar Airways and its strategies. It includes a PESTEL analysis to assess the political, economic, social, technological, environmental, and legal factors affecting the airline. The report also applies Porter's five forces model to analyze the competitive forces within the industry. Additionally, it evaluates the internal environment and capabilities of Qatar Airways using SWOT analysis and VRIO analysis.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Application of framework to analyse impact and influence of macro environment on
organisation as well as its strategy...............................................................................................1
P2. Analysation of internal environment and capability of business by using appropriate
framework....................................................................................................................................4
TASK 2............................................................................................................................................6
P3. Application of Porters five forces model to analyse competitive forces of organisation......6
TASK 3............................................................................................................................................7
P4. Application of different theories, model and concept which helps to devise strategic
planning of business.....................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business strategy refers to course of action which helps to take decision related to
business in order to achieve business objectives (Allison, 2019). It is master plan of any
organisation which helps to build competitive position of business that helps to carry out
operation of business to attain desired goals of enterprise. For this project selected organisation is
Qatar Airways which is established in Qatar in the year 1993. Company is conducting their
operation in different destination like Asia, Africa, the Americans, Europe and Oceania. This
project report include micro and macro environment analysis that impact of organisation as well
as their strategies. It also include Porter's five forces model to evaluate competitive forces of
organisation along with application of model, theory and concept to understand interpretation of
strategic direction.
TASK 1
P1. Application of framework to analyse impact and influence of macro environment on
organisation as well as its strategy
PESTEL analysis is a framework that helps company to analyse impact of macro
environment factor on business (Arunruangsirilert and Chonglerttham, 2017). This type of
analysis include factors like political, economical, social, technological, environmental and legal.
PESTEL analysis of Qatar Airways to analyse impact of macro environment are as follows:
Political factors: Political factors are those which include interference of government in
business and their operation (Ateba and Prinsloo, 2019). These affect profitability and market
share of organisation. These are important factors of any business as it affect directly to a
business and include factors like government stability, government restriction trade laws and
regulation etc. Qatar Airways is an organisation which is under control by government as it
include national flagship of country. Operation of this company is controlled by government and
are expand new routes for their airways. It is operated in various countries and is considered in
top list in international airline companies. Government of Qatar plays very important role in
growth of this airline company has political system of Qatar government is really strong. But due
to situation of Covid-19 government of many country has put restriction on travel which affect
profit of company.
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Economical Factors: Economic factors are those factors which cost of operation of
business and include various factors like economic growth, inflation rate, exchange rate, interest
rate (Balaman, 2016). Qatar Airways is in good position in market and is in list of global leaders.
The company is conducted their operation in various countries which provide them opportunity
of huge profit that reflect sound position of enterprise. They provide food experience of
travelling to their customer and put efforts to enhance their customers experience. Company is
increasing their number of destination which increase their profit. But due to covid-19, company
need to bear huge loss as company has bought new air planes to attract more customer but due to
restriction of travelling, company need to bear loss.
Social factors: Social factors are those which include cultural aspect, growth rate, value ,
belief, age, preference. These factors affect demand of product and service offered by company.
Many social factors are influence business of Qatar Airways as company is operating in different
company. Population of country Qatar is not high but country has high per capital GDP which
reflect people living in Qatar has high purchasing power to spend on leisure and travelling
activities. Qatar Airways has their headquarter in Doha which is a beautiful and attractive place
for tourist which provide opportunity to bring more people to visit these. It is important for
country to analyse social changes as these can affect operation of organisation but due to global
pandemic, people afraid to go out which affect business of many airlines company.
Technological factors: Technological factors are those which include aspects like
automation, incentives, technological changes etc. which can create impact on cost as well as
quality of product and service of company (Barney, 2020). Airline company is a type of
company which need adoption of new technology as it helps to improve safety as well as
enhance customer experience. It is important for business to bring innovation in business to
satisfy diverse needs of their customer. Qatar Airways are adopting technology which helps them
in cost reduction, comfort and improve customer experience. This will helps company to brings
new customer base as well as improve their financial performance in market. Company has their
own websites snd app which helps customer to book ticket at any time.
Legal Factors: Legal factors are those which include various laws and regulation in
different country which is followed by organisation to avoid interference of government in
operation of enterprise. As regulation impose through US to ban laptop for customer affect
satisfaction level of customers. Due to law imposed by country, cost of organisation has increase
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related to quality level of service and safety of customers. Due to global pandemic, government
of different country has putting safety laws and all such rules are followed by Qatar Airways to
increase safety of their customers.
Environmental factors: Environment factors are those factors which include climate
change, weather etc. Qatar Airways is doing business in airways which is affect by climate
changes which has problem for airways company in all over world. Company who is following
all initiate for protection of environment is appreciated by people. Qatar Airways is organisation
which use modern technology which fleets pollution as well as less carbon emission. This step
make their stakeholder satisfied and happy. To build strong market position, company should
consider environment factors (Barros, Hernangómez and Martin-Cruz, 2016).
Stakeholder analysis
LEVEL OF
INTEREST
LEVEL OF
INTEREST
LEVEL OF POWER HIGH LOW
HIGH Management, Owners Government
LOW Staff members Customers
Stakeholder analysis refers to a system which is used to assess potential changes in
relevant parties who has interest in business (Cavicchi and Vagnoni, 2018). These stakeholders
are considered in preparing plan for project, policy or action plan. It include different quadrants
which reflect power and interest of stakeholders. Qatar Airways has different quadrants which
are as follows:
High Power and High Interest: This quadrant include stakeholders which has high
power to affect operation of business as well as high level of interest in business. This quadrant
include stakeholders like management and owner of Qatar Airways.
Low Power and Low interest: This quadrant include stakeholder like customer who has
low level of interest in business as they has many opportunity in market (Koseoglu, Law and
Dogan, 2018). They also has low level of power as cannot affect operation business.
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High power and Low interest: This quadrant include stakeholder like government and
they as high level of power to affect operation as well as profitability of business. These
stakeholder has low level of interest in business as they need to manage economy of country.
Low Power and High interest: This quadrant include stakeholders like staff members
which has high interest in business as they get their earning from organisation. Their main focus
is to contribute in success of company as it increase their salary. But they has low level of power
as they cannot affect operation of business.
P2. Analysation of internal environment and capability of business by using appropriate
framework
SWOT analysis is framework used by business to analyse internal capability of business
(Kunz, Siebert and Mütterlein, 2016). It identify strength and weakness of business as well as
opportunity and threat of business. SWOT analysis to identify factors which affect internal
capability of business are as follows:
Strength Weakness
Qatar Airways is providing premium services
to their customer which helps to satisfy their
customer and also enhance their experience.
Company has global reach which provide
opportunity for their operation and has high
profitability as well as growth. The
organisation is rum by government of Qatar
which provide them back support.
The company is rely for profit on international
customer base as population of Qatar is
relatively low. Company is not transparent
about their financial as well as operation
revelation.
Opportunity Threat
The company has opportunity for growth as
FIFA world cup id going to organise in Qatar.
Company is using and implementing advance
technology which helps them to enhance their
service. Development of financial centre in
Doha also provide opportunity to enterprise as
various businessman came to Doha using
Operation and profitability of company is
affected due to political uncertainty and
terrorism present in country (Leiblein, Reuer
and Zenger, 2018). There are strong
competition in market in air ways industry.
Political dispute also create threat for business
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travelling services. of Qatar Airways.
VRIO analysis: VRIO analysis refers to a tool which helps to assess resources and
competitive advantage of organisation. It include dimensions like value, rareness, imitability and
organisation (Mazouz, Rousseau and Pierre-André Hudon, 2016). This model is given by Jay B.
Barney to assess resources and capability of organisation. VRIO analysis is used by manager of
Qatar Airways to evaluate resources of organisation and internal capability of organisation to
meet business objectives which are as follows:
Resources Valuable Rare Imitable Organised
Technological
resources
✓ ✓ ✗ ✓
Leadership team ✓ ✓ ✗ ✓
High customer
rating
✓ ✓ ✓ ✓
Positive market
reputation
✓ ✓ ✓ ✓
Financial
resources
✓ ✓ ✓ ✓
Value: Value refers to capability of an organisation to exploit opportunity in market and
reduce threat with resources as well as capability of enterprise. Financial resources of Qatar
Airways is valuable as it helps them to invest in external opportunity arise in market place. The
company also have positive market image as they are following all rules and regulation imposed
by government. Company has effective leadership team as well as high rating fro customer as
they are providing high quality service.
Rare: Financial resources are rare of Qatar Airways as there are only few companies
which has strong financial position (Nerur, Rasheed and Pandey, 2016). The company has rare
technology resources which helps them to control pollution level in environment. Company has
positive market reputation as it is concerned with environment issues and has high customer
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rating for their rare services. The company has leadership team which is rare which carry out
operation of organisation effectively.
Imitable: Qatar Airways has imitable financial resources which is earned by company
through their service. The company has high customer rating which dues to their service like
offering foods and other premium services. The company has positive market reputation which is
earned by company by following rules and regulation of government, showing concern for
environment issues.
Organised: Qatar Airways has well organised financial resources as company has
capability to invest their financial resources in order to get high return on investment. The
company also has well organised leadership team which get maximum contribution from efforts
of employees. Organisation also has high customer rating along with strong market position as it
is run and organised by government of Qatar.
TASK 2
P3. Application of Porters five forces model to analyse competitive forces of organisation
Porters five forces model refers to a model which is used to analyse competition in
market (Thorén and Vendel, 2019). It include five forces which helps to assess intensiveness of
competition. Manager of Qatar Airways are using Porter's five forces model to analyse
competition within industry which include rivalry inside industry, threat from substitute, buying
power of customer, threat from new entry and power of supplier. These factors help them to
formulate strategies which are as follows:
Barrier to entry: This factor helps to assess ability of people to enter into market which
is depend on investment level, attractiveness of industry. Business of airlines require high capital
as in this there are high cost required in leasing as well as in purchasing aircraft. There are high
cost associated with employees, security, customer service. There are existing player with high
customer base as well as brand value which make impossible to enter new firms. As Qatar
Airways has low threat from this factors as new firm cannot enter in this industry.
Threat of substitute: This factor include power of customer to find relative product
(Venkateswaran and Ojha, 2017). As Qatar Airways has many companies which result in high
threat from substitute services as there are other airways in this industry. Substitute airways of
Qatar Airways include British, KLM, Etihad, Emirate and many more.
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Buying power: These are factors which influence business to reduce their prices. If there
are high competition in market, than customer has power to influence organisation to down their
prices but if there are less competition than customer has less power to fluctuate price of
organisation. There are huge competition in industry of airways as many market player are
present which provide airways service in market. This factor result in high buying power for
customer. Due to this, companies need to low down their prices to attract customer.
Rivalry: This factors is used to assess number of market player present in industry and
also measure their strength. When there are high competition in industry, Qatar Airways need to
cut off their prices to attract customers. It competition in industry is relatively than there are high
chances of success as well as high market share in industry. There is high competition in airways
industry as there are many player presented in this industry which provide various services like
in flight channels, better menus. Companies are using extensive marketing tool to attract their
customer base.
Supplier power: This factor include assessment of power of supplier to increase price of
their supplies. If supplier has high power that means if there are few supplier than there are more
chances to increase prices for their suppliers. If there are more supplier in industry, than supplier
has low power to increase prices of their offering. Qatar Airways is doing their business in
Airways which is affected through supplier as supplier has power to reduce quality of goods as
well as services. They also has power to fluctuate price of material supplied by them. In airlines
business, there are limited number of supplier thus they has high power to control on market.
There are high demand of product provided by manufacturer in market.
TASK 3
P4. Application of different theories, model and concept which helps to devise strategic planning
of business
Porters generic strategies: Porters generic strategies are introduced by Michael Porter in
the year 1985. These strategies helps an enterprise to get competitive advantage to give effective
performance in market (Zhen and Yaghoubi, 2016). It include three strategy which can be
adopted by Qatar Airways which are as follows:
 Cost and price leadership strategy: Cost leadership strategies are those which are
adopted by organisation to gain competitive advantage in market place. It helps business
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to increase their sales and increase market share in terms of competitors. An enterprise
can done this by reducing cost of their operation or by offering relatively low process in
market. This strategy is emphasis to become cost leader in market or industry. To adopt
his strategy Qatar Airways need to reduce their cost but it is alone is not sufficient,
company need to cut off their prices.
 Differentiation strategy: Differentiation strategy refers to produce different product
which is attractive enough from those of competitors. Differentiation is done in
functionality, features, durability, brand image which result in increase value of
customers. To adopt differentiation Qatar Airways need to conduct research and bring
innovation in market. Organisation also need to develop high quality product and service.
Enterprise also need to develop effective sales as well as marketing strategy to
communicate benefit of differentiation offered by business in their product and service.
In large organisation differentiation strategy is adopted by enterprise to introduce new
product and service.
 Focus Strategy: In focus strategy, an organisation focus on niche market by
understanding market dynamics and needs of customer. It helps to develop low cost and
unique product in market pace as it helps to serve customer in a unique way which helps
to build brand loyalty in customer. This will result in reduce market attractiveness of
competitors. It is important for Qatar Airways to select a marketing strategy which helps
enterprise to focus in particular area. Main object of this strategy is to provide something
extra to their customers.
Qatar Airways is adopting cost leadership strategy as there are various competitors in
market and company can attract them by providing attractive offer with cut off prices for their
services. This will helps to create distinct position in market by offering relatively low price for
their offering and also to get more profit.
Bowman's Strategy Clock: Bowman's strategy clock refers to a graphical representation
for positioning of product based on dimension of value and price. It include various strategy
which are as follows:
 Low Price and low value: By adopting this strategy, manager of Qatar Airways offer
low value product at low price in market which helps to build strategic positioning in
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market. For this strategy customer of organisation also get low value for product and
service of product which result in decrease brand loyalty.
 Low price: Manager of Qatar Airways can adopt this strategy as it include offering low
price for a product with low cost option in market. Business needs to manufacture on
large scale to adopt this strategy to get advantage of cost efficiency.
 Hybrid: By adopting this strategy, organisation need to adopt both low price offering as
well as differentiation in market place. This will helps Qatar Airways in getting effective
positioning for their product in market place.
 Differentiation: By adopting differentiation strategy, Qatar Airways get high perceived
values for their offering. This strategy helps to build brand equity with helps to face
competition in market.
 Focused differentiation: Focused strategy can provide benefit to Qatar Airways to get
high perceived values at reasonable price. Large organisation adopt this strategy as it
helps in increasing brand equity for their offering in market.
 Risky high margins: This strategy will allow managers of Qatar Airways to set high
prices for their offering which result in high value of offering of organisation's product.
This strategy is depended on brand equity which helps to increase sales of company.
 Monopoly pricing: Monopoly strategy s successful in market which is less concerned for
price and value. By adopting this strategy, Qatar Airways can get benefit of offering price
with low perceived value. Loss of market share: Adoption of this strategy in Qatar Airways include low perceived
value for their offering and allow to charge high price. It helps to get large market share
to company by attracting customer through offering quality services.
Strategic marketing plan
Qatar Airways is a multinational company which is providing airways services in
different country. Company is established in the year 1993 in Doha, Qatar. Strategic marketing
plan of company are as follows:
Mission statement: Mission statement of Qatar Airways emphasised on attaining
excellence in which field they are serving.
Objectives: Objective of Qatar Airways is to become top service provider in carrier and
cargo in order to get global reach for their offering.
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STP approach: STP approach refers to a tool which helps to identify segmentation, targeting
and positioning of firm. STP analysis of Qatar Airways are as follows:
 Segmentation: Qatar Airways are emphasis on comfort and reliability for their
customers.
 Target market: Target customer of company is corporate, upper middle class and
middle class.
 Positioning: Company has build positioning of premium service provider in international
airline.
Marketing Mix: Marketing mix include factors including product, price, place and promotion.
Marketing MIX of Qatar Airways are as follows:
 Product: Qatar Airways are offering different cabin service to their customer including
first class, business class and economic class.
 Price: Company is charging price for their ticket and are offering competitive pric e in
market with quality service.
 Place: Organisation is offering their services in global market including various
destination.
 Promotion: Company is adopting sponsorship marketing to promote their product in
market like they has promoted in events including FIFA, FC Barcelona etc.
Implementation: Implementation of strategic plan in Qatar Airways is done through
manager of company as it will helps organisation to get satisfactory result for activities
conducted by them.
Control: Managers of Qatar Airways can use controlling techniques in order to control
result of strategic plan to avoid deviation. For this they can use tools like key performance
indicator and benchmarking.
CONCLUSION
From above mentioned project report it can be concluded that business strategy refers to
master plan which helps an organisation to grow. It is clear plans, goals as well as action plan
that helps to highlight ways in which business carry out their enterprise. It include course of
action taken by business in order to attain business objectives. Organisation include various tools
to assess their macro environment factors which affect capability of business. These tools are
PESTEL analysis and stakeholder analysis. PESTEL analysis is a tool which assess external
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factors that affect business include factors like technological, political, social, economical, legal
and environmental. Stakeholders analysis is a type of analysis which assess interest and power of
stakeholder in business. Stakeholder include customer, government, owners and employees of
enterprise. Business use tool like VRIO analysis and SWOT analysis to assess internal factors
and capability of organisation. VRIO analysis include value, rare, imitability and organisation
whereas SWOT analysis include strength, weakness, opportunity and threat. Business also use
porter five forces model to assess competition within industry. Organisation also use various
models as well as theories for strategic planning.
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