International Strategic Management: Assignment

Running head: International strategic management
International strategic management

International strategic management
Table of Contents
Introduction.................................................................................................................................................3
Macro environment.....................................................................................................................................3
Micro environment......................................................................................................................................4
Competitive advantage through functional level strategy............................................................................5
Generic strategies of porter..........................................................................................................................7
Diversification strategy...............................................................................................................................8
Recommendations.......................................................................................................................................9
Conclusion...................................................................................................................................................9
References.................................................................................................................................................11
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Introduction
The main aim of this task is to explain and outline the marketing strategies of the company.
Qantas Corporation has been selected in the paper. Qantas is recognized as the third airline
incorporated in the world. It is one of the attractive and leading airlines across the world. The
paper explains that how the company uses SWOT analysis and pestle analysis to beat the
rivalries in the international market. Here is the discussion about the functional and business
level strategies of the firm. Along with this, the paper outlines the significance of the
diversification strategy that is used by Qantas at the workplace. More detail of the task has been
detailed below.
The airline industry is a global market that is based on the transportation of goods and passengers
by air. The airline industry plays a significant role in tourism (Lucarelli, 2014). Qantas Airways
is an Australian airline company. It is the third oldest airline company across the world after
KLM and Avianca. The company was incorporated in 1920 and it started its international
passenger flights in May 1935. The Qantas name come from QANTAS. There are approx 29,596
employees employed in the company. In today’s modern world, the firm is increasing and
enhancing its profitability and revenue. The organization also owns Jetstar Airways that manages
and operates international services from Australia and domestic services within New Zealand
and Australia. The organization uses core values and competencies to maximize the growth and
success (Qantas, 2018).
Macro environment
This is a significant tool to analyze and evaluate the external environment performance and
efficiency of the company. It measures the ways in which the firm is influenced by external
circumstances that is faced by it. The pestle analysis for Qantas has been discussed below.
Political factors: There are various political factors existed in the marketplace that could affect
the business activities and operations of Qantas Company. The analysis indicates that Airline
Qantas is faced with governmental actions across the various regions. The airline is influenced
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by the political stability in the Middle East and also the political factor such as unrest in Bangkok
has influenced its operations in generating enough revenue from it.
Economic factors: There are various economic factors such as interest rate, exchange rate,
recession and employment rate. All these factors influence the success and growth of the firm. It
is noted that various economic factors such as recession and inflation rate affect the Australian
economy. Along with this, income level of people also decreased that has resulted into the lower
demands for the air services. The lower demand of the products is reducing the revenue of the
company in the international market (Homsombat, Lei and Fu, 2014).
Social factors: The social factors also influence the profitability and revenue of the firm. The
social factors such as custom, values, beliefs, and traditions have also influenced the
performance of Qantas to a greater level. The social factors have influenced the airlines such as
Qantas which accounts for rendering premium class air travelling services.
Technological factors: The technological factors have a great impact on the airline industry in
the sense that the entire process of the bookings of airline tickets is based on the online
reservation systems. Further, the analysis of Qantas shows that technological factors are highly
affected Qantas. With the help of technological factors, the company has been able to be strong
and effective leader in the global market (Klettner, Clarke and Boersma, 2014).
Legal factors: The legal factors such as rules, regulations and norms highly affect the
performance of Qantas. The carbon tax also affects the performance and efficiency of the firm.
The carbon tax implies the legal formality that needs to be fulfilled by the airline in successfully
and effectively performing its operations.
Micro environment
SWOT analysis is done by Qantas to analyze and evaluate the threats and opportunities of the
market ( Chen and Muzi, 2013). It helps to gain competitive advantages in the marketplace. The
SWOT analysis for Qantas is discussed below.
Strengths
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 It is one of the biggest and well known brands in the world. It is also known as flagship
Airline Corporation based in Australia.
 It is an effective leader in the airline industry with capturing around 65% of market share
in Australia.
 The company provides on time quality air travelling services to the customers worldwide.
 Qantas Airways is one of the biggest and top airlines operating in the country.
 The company has around 80 international and domestic destinations across the world
(Halpern and Graham, 2013).
Weaknesses
 Various issues such as pricing fixing and incidents etc hurt the global image of the
company.
 Limited international presence of the firm as compared to the other growing airline
companies.
 It has been noted that the management of the airline is not sufficient as it affect the
position of the firm.
Opportunities
 It has the ability to tap the growth opportunities in the marketplace.
 Tie up with international airlines for a combined services rendering to the consumers.
 Opportunities for Qantas airways to become a leader in Asia.
Threats
 Rising fuel prices affects the operations and activities of the firm.
 Immense and high competition also affects the image of the firm.
 Rising labor prices can also influence the business activities and actions.
Competitive advantage through functional level strategy
There are various functional level strategies used by Qantas when operating and managing the
business operations at international level. The main aim of the functional level strategy is to
improve and enhance the effectiveness of the company’s activities and operations. The
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functional level strategies include efficiency, innovation, quality, and customer responsiveness.
The functional level strategies lead to a competitive benefits and superior growth and
profitability. The functional level strategies of Qantas through which the company has been able
to gain competitive benefits have been discussed below.
Finance: The finance function plays an empirical role in allowing the company in successfully
executing its strategy of international development and expansion. The company needs finance
to buy new aircrafts from the market. Apart from aircrafts, the financial resource is also essential
to perform alliances with other significant airlines in the marketplace. By using this strategy, the
company has been able to overcome the competitors globally.
Human resource management: It is one of the significant strategies of Qantas to appoint
talented and skilled employees within the organization. Since, expansion strategy of the company
involves new destinations and new aircrafts, this will require additional workforce that have
abilities, potentials and skills to effectively manage the services across the country. This can be
done successfully through the effectiveness and efficiency of the human resource management
functions of the company. It is noted that human resource management is known as a backbone
of each and every company. No company can survive and grow its business operations without
using a sustainable human resource management (Kew and Stredwick, 2016).
Marketing and sales: This is one of the leading and attractive strategies to increase and enhance
the sale of the organization. Qantas requires support from the sales and marketing functions of
the firm. Furthermore, the alliances with other airline also guide and assist the expansion of the
network of the company which would need aggressive marketing strategies to promote and
encourage its destination air travel services. Along with this, if the sales personnel put some
extra efforts then the company can increases its sales and revenue. All these can be successfully
attained through adequate and effective support from the marketing and sales function of the
firm. Through marketing, Qantas can easily analyze and evaluate the plans and policies of the
competitors to make a dynamic image in the minds of the consumers.
IT and R&D : The IT and research and development strategy plays a significant role for
executing the tasks and functions effectively. The entire process of Qantas is dependent on the
technology and R&D. The safety attributes are highly effective in case of the airline industry
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and latest technology playa a fundamental role in permitting for delivering better and effective
air travel services (Forsyth, 2017). The research and development function helps in analyzing
and identifying the best possible technology and resources that can be integrated to rendering
best quality and safe travelling services in the international market. This strategy also helps to
destroy the competitors worldwide. All these functional strategies helps in executing the tasks
and duties and further it help in maximizing the progress of the firm (Homsombat, Lei and Fu,
2014).
Generic strategies of porter
The generic strategies are used by Qantas to operate and manage the business operations and
activities properly. The porter generic strategies are discussed below.
Differentiation strategy: It has been noted that Qantas brand provide products and services at
premium prices. It helps in satisfying the demands and needs of the consumers. This strategy is
used by the company to differentiate its services from the competitors (Hussain, Syed and
Nadeem, 2017). The differentiation strategy renders unique and effective services to enhance the
value of the products and services. This will help to provide satisfaction to the consumers in the
international market. It is rewarded for its effectiveness and uniqueness with a premium price.
With the help of this strategy, Qantas can make strong financial position in the global market. By
using this strategy, the company has operated enormous flight to cover 173 destinations in more
than 42 countries (Costantino et al, 2016).
Cost leadership strategy: The cost leadership strategy can be initiated in the organization to
attain market share in the different market. In today’s modern world, there are many low cost
airways emerging worldwide (Dobni, Klassen and Sands, 2016). By using this strategy, the
company can offer the products and services in cheaper prices. Qantas uses this strategy to deal
and cope with main competitors in the market. With the effective cost leadership strategy, the
company can attract travelers who have not enough amounts to travel in the air. It has been noted
that cost leadership strategy helps in achieving the long term goals and objectives of the firm
(Sarina and Wright, 2015).
Focus strategy: It is one of the fundamental strategies for the company which is initiated by
Qantas. By using this strategy, the organization has been able to select the target group segment
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in the industry to beat the competitors in the international market. With the help of this strategy,
the company differentiates its services from the competitors. It has been noted that cost focus
exploits the difference in cost behavior in some target market on the other hand; differentiation
focus exploits the special needs and requirements of buyers in certain segments (Treitler, 2018).
Diversification strategy
It has been revealed that Qantas Corporation follows diversification strategy within the
organization. The diversification strategy helps in overcoming the competitors in the marketplace
(Alexeev and Tapon, 2013). The diversification is an effective and corporate strategy to enter in
the new market or industry in which the company’s operations and activities do not operate,
while also generating a new product and services in the market. By using this strategy, the
company can tap and cover the entire market in the world. It makes easy the selling of the
products and services in the international market. The diversification strategy is a good market
penetration strategy as well for the company (Daft and Albers, 2013). Qantas is tackling and
managing the industry with a completely fresh approach bringing a more loyalty, morality and
rewards focused model to health insurance. Diversification strategy is one of the significant parts
of the company that provides long term competitive advantages in the market. The powerful and
strong diversification strategy of Qantas helps the airlines in generating huge returns and revenue
as well as gives rivalries benefits over its competitors (Mules, 2013). It is observed that
diversification and outsourcing strategy helps in attaining rivalries advantages and it also saves
the operational cost of the firm (Gross and Lück, 2016). This strategy also increases the
percentage of customer loyalty and morale that are associated with the airways. By using this
strategy, the organization has become successful to initiate the services as per the choices and
preferences of the consumers. It protects the rights and interest of the stakeholders and
furthermore it reduces the risks and challenges of the market. By initiating the diversification
strategy, Qantas eliminates the competitive and operational risks within the organization. Apart
from this, integration strategy is also initiated by the firm to earn maximum outputs and returns
in the marketplace (Pearson and Merkert, 2014).
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Recommendations
There are some recommendations that can be offered to Qantas airways for overcoming the
competitors in the marketplace. Some of the suggestions have been discussed below.
 The company should focus on the international strategies to flourish the business
activities and operations.
 The transitional approach shall be used by the firm while expanding its business
operations and actions in the overseas countries. This will help the company to capture
the market of China and India. The company should also focus on the business level
strategy and corporate level strategy to stand out against the competitors. It will also
attract the passengers in the international market.
 Rising fuel prices is one of the significant issues for Qantas. As a result, the company
loses its customers thus, the organization should find any alternatives to fuel which
reasonable and not contribute in climate change.
 Along with this, Qantas should focus on the long term and as well as short term goals and
objectives to stay in the competitive market. Improvement shall be done in business level
strategy to meet the needs of the business partners. The company should manage the cost
of fuel to accomplish the objectives and goals within the organization.
 Apart from this, Qantas should focus on the integration and diversification strategy to
provide unique services to the consumers. It will also help to attract and retain the
passengers globally (Orlady, 2017).
 Modification in generic strategies must be done by Qantas to eliminate the challenges and
risks of the market. In this way, the organization can attain long term targets and goals in
the international market. A sustainable human resource management shall be designed by
the firm to make easy recruitment and selection process easy and effective (Collins,
Malmgren and Sandberg, 2013).
Conclusion
On the above aforesaid information, it can be concluded that Qantas has been able to perform
operations and actions effectively with the help of business and functional level strategies. The
strong strategic management and corporate level strategies have provided support to Qantas to
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maintain greater revenue and outcomes in the marketplace. Various strategies such as corporate
level strategy, functional level strategy and diversification strategy are used by Qantas. The
company has built a reputation for excellence in safety, engineering and operational reliability.
In this way, the company has been able to build and develop an effective goodwill in the global
market. Effective promotional and advertisement strategies are used by the firm to attract the
passengers. It is recommended that feedback and reviews must be collected by Qantas to
improve the quality and features of the services. SWOT analysis and pestle analysis are done by
Qantas to know and identify the opportunities and threats of the market.
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References
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portfolios. JASSA, (4), p.14.
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