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Case Studies Of Qantas Airlines | Financial Management

   

Added on  2020-02-24

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Executive summaryQantas airline is the largest airline in Australia and the flag carrier of the country. It is the third oldest airline in the world. The company was founded in the year 1920 and ithas achieved remarkable success and growth over the years. This paper analyzes the various case studies related to the company to identify the strategies that the company has used over the years. A SWOT analysis of the strategy is done in order to identify loopholes in the strategies and identify opportunities which can be exploited by the company. The financial statements of the airline for the year 2013 are critically analyzed. This helps to identify the performance of the company and the factors that resulted to these changes. The 2013 financial statements are analyzed in comparison with the 2016 financial statements in the final part of this report.IntroductionThis paper analyzes the various case studies of Qantas airlines to determine the various strategies used by the company that have made it so successful over the years.The paper also analyzes the strengths and weaknesses of these strategies to identify potential opportunities and loopholes which can be sealed in the strategies. The strategies of the company have changed over time due to the changing internal and external environment. These changes have helped the strategies to become relevant to today`s technological needs for the aviation industry as well as tough economic environment. An in depth analysis of the firm’s financial statements is done for the year 2013 and 2016. This information is compared to identify changes that have occurred over this period and the factors that instigated these changes.(A)Competitive forces are the forces that influence the strategies that a business organization uses in a competitive business environment. The five forces that shape strategy according to Michael porter`s five forces framework include potential of new entrants into the industry, threat of substitute products, bargaining power of suppliers, bargaining power of buyers and the level of industry rivalry. An analysis of Qantas case studies shows that the threat of new entrants onto the industry is low due to the high capital requirements in the industry. The aviation cost is characterized by high initial capital investments, high running costs and low returns on investments and this makes it very unlikely for new firms to join this industry(Aron, 2013).there are also many barriers to entry into the aviation industry. Big companies like Qantas enjoy the

advantage of large scale operations hence discouraging new entrants. The buyers havelittle bargaining power and therefore it is difficult for a buyers to dictate price since buyers act independently. The buyers’ sensitivity to price for this industry is not very high and the customers in this market have many alternatives. The suppliers for Qantas are very powerful. The suppliers in this case are the individuals and the companies which supply Qantas airlines with airplane engine parts, airplane spare parts and jet fuel. These suppliers are few in number and the airline has few substitutes and alternatives to choose from. The inputs required in this industry are nothighly differentiated hence narrowing the choice for airline companies. In the Qantas case, there exist many substitute products for customers. This means that a customer can choose to fly domestically or internationally with either of the many companies operating in Australia. The rivalry in the industry is very intense. There are many firms with huge financial resources and that spend a lot on advertising and marketing. Some of these companies are local and others are international. These companies influence the strategies applied by Qantas.(b)It is important to analyze the competitive strategy of Qantas airlines so as to identify gaps in the strategies which can be exploited to improve the performance of the company. The SWOT analysis will also enable the company to identify weaknesses aswell as threats so as corrective action can be taken. StrengthsQantas airline is able to enjoy low cost of fuel for its airlines due to the contracts it has signed with the various fuel suppliers. The agreement with skynrg enabled Qantassubsidiary jetstar to run low cost airlines. Skynrg supplies Qantas with biofuel which is used with jet fuel to power airplanes at a very low cost.Qantas airlines also focus on the customer needs and are able to offer consumers a unique customer experience which differentiates it from other airlines.The large market share enjoyed by the company gives Qantas a competitive advantageover rivals since it has huge financial and human resources at its disposal to help implement strategy.

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