Porter`s Five Forces Model and SWOT Analysis of Qantas

Porter`s five forces model
This model helps to identify possible threat of substitutes, new entrants, bargaining power
that further help to make business strategies.
Threat of New entrants- threat of new entrants is comparatively low in Australian airline
industry. Therefore, when analysing the investment value, the huge sum is highly needed for
investment either in form of new establishments or investment in the existing airline. As new
companies need large investments to set infrastructure which requires a huge investment
(Boin, Coleman, Delfassy, and Palombo, 2017).
Bargaining power of suppliers- when comparing the power of suppliers, the bargaining power
of suppliers for Qantas is generally low because there are huge number of suppliers providing
same kind of products in the Australian airline industry (Whyte, and Lohmann, 2015).
Bargaining power of buyers- I, as an investor strongly look at the bargaining power of
suppliers which is high because as a customer always choose to enjoy low prices and cost
with more facilities (Investor.qantas.com. 2017). Therefore, customers choose to travel
through low cost travelling company with luxury services and facilities in it. This power will
be increasing with the increasing number of service providers (CAPA, 2016).
Threat of substitutes- the threat of substitution is generally low as airline industry already
existed and known for its fastest mode of travelling. Moreover, Qantas already enjoys the
subsidisation of many airlines such as Jetstar (Matusik, and Fitza, 2012).
Rivalry among the existing companies- competition among the current existing companies
have created threat for Qantas in the presence of various large companies in Australian airline
industry.
SWOT analysis
Strengths

Qantas enjoys a considerable value of existence, as the threat of competition is low. The
company is famous in providing the superior quality of services such as customised meals,
SMS check-in facility for domestic customers, revitalised food, and drinks. Apart from this,
the company has introduced transformation program that aim to provide superior services at
low cost. The main reason behind its success is its cost cutting strategies so as investor; it can
said that the company uses its resources effectively and efficiently.
Threat
The company suffers through issues and threats of several union groups. Although, Qantas is
a subsidised airline of many airlines including Jetstar airways. The company faces pressures
when it operates in international market, which becomes threat to its expansion. The
company also issues with its trade union groups and maintaining a balance profitability and
demand for direct flights from Australia to Europe.
Opportunities
High cost of other new and emerging airlines has increases the scope of business travellers
and Australia. It has created a platform of opportunities for the company. The fuel prices of
the company decreased in 2015 that resulted in making profits of around AUS$33 million.
Threats
Although, the entry of new entrants is relatively low but the existing competitors at the
national and international such as Virgin, British airways and emerging Jetstar too. After a
considerable time, most critical threat to Qantas is to manage the cost in effective and
efficient manner that has increased the price of services of this industry.