Management in a Global Business Environment - Qantas Airline

Management in a Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of an organisation.......................................................................................................3
Main analysis..............................................................................................................................3
Situational analysis:....................................................................................................................5
Solution of the critical challenges...............................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Global business environment is mainly refers to as overarching environment in which a
company operates. This concept includes a broad range of factors which can helps to influence
any business, including geographic location, politics, technology, culture and economic status of
an organisation (Nohria, 2017). In such kind of an environment, business faces major challenges
or issues such as lack of strategic funds, strategies as well as logistical support. In return, there
are certain kind of an opportunities or solutions which are required to gather perfect solution of
the given issues. This report will be cover on Qantas Airline, which is one of the leading
passenger carrier firm serves millions of the customer's. Currently, Qantas is facing certain
international issues such as cut down of 1000 employees job, which is the issue of critics for this
Australian firm. This is due to stiff competition from local firms such as Jet-star and virgin
Australia.
MAIN BODY
Overview of an organisation
Qantas is the flag carrier of the Australia and one of the largest airline by the fleet size,
long range flights and international destination. It is the third oldest airline after the KLM as well
as Avianca. Qantas is the founding member of the One-world, an airline alliance. Qantas is well
known for its quality of the services, on time arrival and departure along with its world class
business class offerings. Qantas had acquired the 65 percent of the market and use to carry 14.9
percent passenger who are travelling in or out of the Australia. Also, Qantas also provides led
services from New Zealand to other location.
Main analysis
International business environment is one of the multidimensional example, involves risk
related to the political, cultures differences, exchange risk, legal & taxation issues. Its a kind of
an environment, in which other firm operates, give competition to others and even expands its
business operation at a longer side (Doh and et. al., 2016). When any kind of expansion happen
at the global platform, management of the firm seek for better process of its functioning and try
to grow results of the expansion to led organisation to gather perfect solution in a given time
period. Global business such as Qantas is currently operating on the global platform and expand
its operation to different region or countries. In international context, firm is facing challenges

such as drastic change in a scenario of a product, change into the work practices etc., which can
be as a reason of stiff case or competition and expansion at a global platform. In the Airline
sector, competition is really stiff and critical, as lots of the new entrants are coming with low cost
campaign such as Air Asia Australia, Virgin Australia, jet-star etc. Also, this firm are belongs to
the local region, but they are from outside nation such as Air Asia of the Malaysia, jet-star of the
USA etc.
Why stiff competition, as all these have literally transformed people perception while
paying for travelling into the flight (Heisig and et. al., 2016). Expansion such as starting flight
operation from other nation and competition such as severe and stiff competition as because of
low cost operates into the region. If talks in terms of customer satisfaction or service, the major
advantage is belongs to the Qantas for long hours flights and serving customers out of the
expectation services. In the current time period, low cost carrier such as Air Asia, Malindo air
etc., of the Malaysia is giving stiff competition in terms of flight pricing and attracting range
affordability of the customer. In context of the Qantas, challenges faced by this leading airliner
are as under:
Permanent changes: Qantas has entered financially strong and with their fleet replacing
plan which was financed in the year 2013. Presently, 50 percent of the fleet of the Qantas is need
to be replaced by coming of the 3 years and its billion dollar deal. Also, A-320 series of the fleet
are become old and at-least 20 percent aircraft are to be replace by 2020. Plus, capacity is also
rising for the Qantas, hence this is a tougher situation to be overcome. Sources of the investment
is required to be arranges to bear expenses of continuation of the business operation. The process
of signing for investment is also one of the stiff challenges need to be overcomes in the given
point of time (Kumar and Pradhan, 2016). As, its a part of the expansion such as developing net
worth of the business and legal existence of the firm.
Reduction in the cost support: Due to rise in the competition, cost estimation has
become critical for the Qantas to maintain periodic profit for the financial year. Also rise in the
competition is responsible for investing more and as because of fluctuation in the international
aviation oil, profits of the Qantas is going down and has become difficult to have control. Also,
first class and business class service is mainly comprises of serving effective amenities,
otherwise, jet-star is also offering business class service which is seriously better and efficient.

Due to less support in context of the cost, Qantas airline is forced to takes decision for rising of
the prices of the international flights by 7 percent to balance cost for the profits of the firm.
Stiff competition: In the Australia, which is one of the popular tourist hub is eligible to
attract tourism onto the major zone. In response to this, different low cost airways are coming to
the Australia to the operates their business operation. Air Asia, Malindo air of the Malaysia is the
best example of low cost carrier to give stiff competition to the Qantas airways. Due to the FDI
policy and free entry and exit in an aviation sector is expansion invitation for other firm to enter
to the market of Australia (Quarshie and et. al., 2016). Air Asia due to expansion taking
advantage of the attracting middle income level customers and in return, they are serving less
food service, as for lowering down cost of flight per passenger. Australia departure is mainly
comes from Northern America, during which Qantas is mainly operates and fleet size. Due to
this, profit is fixed for that region along with less competition in that region to departure of the
Australia. Hence, stiff competition must have strategies to overcome in given period of time.
Restriction of the FAA: FAA stands for federal aviation authority which is responsible to
control operation of the aviation industry along with taking decisions to maintain operation to an
optimised manner or ways. In 2016, Qantas was restricted to enter African region, except of the
South African airlines. Africa is one of most important market for Qantas such as Kenya,
Ethiopia, Morocco etc., from where people or student are interested to go to Australia for studies
or employment purpose. Core purpose of the FAA is to protect air space of any nation and also
have regulatory control to protect airline not to enter any restrictive air space. Hence, due to the
illegal entry of the Qantas in the African airspace in the year 2016, FAA denied Qantas to enter
to this major market.
Brief summary: After analysis of all challenges, its surely findings that Qantas is missing
the potential market to gain business operation or business profitability. Also, they have African
region as the potential option to expand its business operation at a greater period of time. Due to
the stiff competition, Qantas has till now lost its potential customer due to the low cost carrier of
the Malaysia (Uchihira and et. al., 2016). Thus, right and instant solution is required to find the
perfect solution of this issue.
For this, situational analysis assessment is taken into the care to gather right solution of
the problem. For this, SWOT analysis in context of the global business environment is need to be
know weaknesses to be overcomes, threats to be taken care and opportunities to be grab.

Situational analysis:
This will carry out the discussion of the SWOT analysis for the Qantas to know their
potential and weaknesses to be overcomes. Hence, discussion for the SWOT analysis are as
follows:
Strength Weaknesses
Flourishing track evidence of group action of
the complimentary firms through mergers &
acquisition (Kasemsap, 2016). Extremely
proficient manpower direct with the prosperous
training and learning programs. Qantas utilises
devoted customer relationship management
department which is capable to accomplish
advanced level of customer satisfaction.
Organization composition is only matched with
existing business framework which is reality
limiting of an expansion in adjoining product
segments. Lack of focus in the AI or advanced
ticket booking as well as technology used in
the flight are major weakness for the Qantas to
operates in the global business environment.
Opportunities Threats
Economic up-tick and gain to the customer
payment, post years of the financial condition
and laggard development rate in the industry,
will be opportunity for Qantas Airline Limited
to getting fresh customers and add on its
market share. Meeting with the FAA to try to
convince for entering into the African airspace
which is seen as the potential market to grab to
gather high profits (Lindholm and et. al.,
2017). Use of an advance tech product in the
flight is an option for Qantas to grow its brand
value on the global level.
Improving wage level exceptionally
movements like $15 per hour and risen prices
of the China would lead to grave pressure on
profits of Qantas airlines Limited. Firm
profitability had been increased stiff players in
an airline industry in the last 3 years which has
put descending pressure on not only profits,
but on entire also sales.
Solution of the critical challenges
In the previous assessment, some of the critical challenges such as stiff competition from
low cost airlines, reduction of the profits and expiry of the fleet size in the 2021 are some of the

critical concern of which, instant solution is necessary to be undertaken to ascertain the correct
solution of the problem.
Qantas should focusing on improving and making world services, so as to create positive
force for customer to experience ultimate customer flight services to tackle low cost business for
this firm (Kasemsap, 2017). Qantas is suggested to be replace 20 percent of its fleet size by 2020
to avoid any kind of the incident and extra pumping of the funding in its maintenance.

CONCLUSION
From the above report, it is concluded that, global business environment is one of the
necessary concept for business who operates at the global platform selling differentiation product
or services to customer of a great value. In this kind of an environment, firm generally looks for
expansion of the business operation along with working with its competitor. Role of the business
environment is to rise business operation of any firm along with taking care of the operation. It is
also concluded that, purpose of the business environment is to led make out right structure of the
operation.

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