Business Environment for Qantas Airlines

This paper discusses the business environment for Qantas Airlines, including internal and external factors, using SWOT and PESTEL analysis. It also covers the company background and challenges faced by the airline industry.

Running head: BUSINESS ENVIRONMENT
Business Environment
Name of the Student
Name of the University
Author Note

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Executive Summary
The purpose of this paper is to discuss about the business environment for the chosen
organization. The organization chosen for this paper is the Qantas Airlines. It is one of the
biggest brands in the country. The background information of the company has been given with
some major details. Both the internal and external business environments have been discussed
here so it will be better to judge the business environment and utilize on the weaknesses. The
best uses of their strengths will have to be made to earn more profits. The company will have to
consider the opportunities and capitalize them. The PESTEL analysis has been made on the
chosen organization as well.

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Table of Contents
Introduction......................................................................................................................................3
Company background......................................................................................................................3
Business environment for Qantas....................................................................................................4
Internal environment....................................................................................................................4
Different main points...................................................................................................................4
Expanding the points...................................................................................................................5
Relating to the upper points.........................................................................................................5
External environment.......................................................................................................................6
Different main points...................................................................................................................6
Expanding the points...................................................................................................................7
Relating to upper points...............................................................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9
Appendices....................................................................................................................................11

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Introduction
The aim of the report is to depict the business environment of the firms as these
environments have a huge effect on the performance of the firms. iT has to be said in this context
that the firms need to assess the business environments before they can be able to take any
necessary step indeed. There are generally two kinds of business environments. These two kinds
of environments are internal environment and external environment. Both of these environments
are very important for the better performance of the companies indeed. The organization that will
be chosen for this paper will be Qantas Airlines. This organization is believed to be the leading
company in the Airlines industry in the country. The frameworks that will be used to define the
business environment for this paper are the SWOT analysis and PESTEL analysis. The
background information will be given in this analysis as well.
Company background
Qantas Airlines is the leading company in the airlines industry in Australia. They are the
largets airlines industry by their fleet size as well. The company was set up in the year 1920 in
Queensland. They are the largest airline both in terms of the international and domestic flights.
The main focus of the company is on the safety of the passengers and making sure that the
passengers can rely on the services they provide. The Qantas Airlines Company is considered as
one of the strongest brands in Australia (Qantas.com, 2018). The customer service of the
company is also very good and this is the reason for this airlines company to be the first choice
for all the travelers. The company has two complimentary airline brands named as Qantas and
Jetstar (Qantas.com, 2018). The engineering and maintenance works of the company is also very
important as well. In the following section, the internal and external business environment will
be discussed. The market size of the company is quite high as they operate in regional, domestic

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and international services. The number of the employees is around 30000 people (Qantas.com,
2018).
Business environment for Qantas
Internal environment
The framework that will be important to measure the internal environment of the
company will be the SWOT analysis framework.
Different main points
1. The Qantas Airlines is a very strong brand in the Airlines industry and they dominate the
industry. The market share of both Qantas and Jetstar is around 60% if combined. This is
why Qantas can be the global market leader in the airlines industry as well. The on-time
performance of the brand is one of the major reasons for their success indeed
(Qantas.com, 2018).
2. Qantas has been considered as a major contributor in the development of the Australian
economy and the GDP growth of the country (O’Neill, 2013). The operational excellence
is so good that Qantas has established themselves as one of the most reputed corporate
brands in Australia. They make partnerships with the major global companies so they can
provide the customers with the best services all through.
3. They have made collaborations with the Emirates Airlines so they can get an access to
the vast network of the later in Europe. This partnership with Emirates has been very
much valuable for the company in the recent times (O’Neill, 2013).

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Expanding the points
1. The dual brand strategy has helped the company to make target market segmentations in
an easier way indeed. Jetstar is the low-cost airline services and it values for money. The
Qantas is a premium airline service provider (Homsombat, Lei & Fu, 2014).
2. They manage their operations very switly to attain the customer satisfaction. The
industrial relations of the company have been going down because of the lowering of the
cist base in the companies. This is why the company will have to think upon this factor so
they can draw more stakeholders at their disposal (Kapferer, 2012).
3. The cost operations of the company have been rising so the company had to cut off the
number of their employees. If they cut down their manpower in the future it will ruin the
brand reputation of the company to a certain level indeed. The employees will find it to
be very difficult to retain their jobs in the company.
Relating to the upper points
1. A very big opportunity for the company to hold their position in the industry is the digital
marketing process (Kapferer, 2012). They should begin to aim at beginning a loyalty
program that should look to make the customers feel that the company is very much
dedicated towards them. The market research should be properly done so they can
provide the customers with all things that they want (Evanschitzky et al. 2012). The
customer loyalty programs of Qantas have always looked to make the most earnings for
the financial years. They have also made partnerships with Woolworths that has
relatively increase their market value.
2. The business transactions can be made easier in this case as well.They are much volatile
in the foreign exchange policies and fuels (Evanschitzky et al. 2012). The main operating

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cost of the company is largely dependent on the fuel costs. The fuel costs are increasing
daily so this has been a huge problem for them as well. They have opted to expand their
business but the problem faced by them in this issue is the different regulatory issues
indeed (Kim et al. 2013).
3. It has to be mentioned that the ticket booking costs for the company has been on the high
so the organization has to look into this potential threat as well. The Asian rival airline
companies will be looking to enter into the target market of Qantas and attract their
customers with lower ticket booking costs. The cheap fares by the different Asian
companies will be major threat for the company. (Kim et al. 2013).
External environment
Some of the most important things in discussing the external environment of the
company is about discussing the political, economic, social, technological, environmental and
legal factors. The PESTEL analysis will really be a very important framework to understand the
business environment indeed (Jurevicius, 2013).
Different main points
1. The political condition of Australia is quite stable so the company has been facing some
governmental issues in various areas of the country. It has been noticed that there is a
huge political unrest in the Middle East. This has impacted the external business
environment of Qantas.
2. The economic factor tells that the economic condition and the slow GDP growth of the
country has been the major influence in the economic performance of Qantas in the
recent years (Jurevicius, 2013). The per capita income of the people in the country has

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gone down and this has laid a tremendous impact on the lives of the people in Australia.
The impact of recession has been huge on the firms indeed. The annual revenue of the
company is going down as well. The social effects have been very much important for
highlighting the social factors as well (Yüksel, 2012).
3. It has been noted that the low cost fares for the services have been attracting more
customers in the current times (Hakansson, 2015). The latest technologies should be used
for the booking of the airline tickets. The reservation systems should be updated as well.
The use of the satellite technology in case of landing their flights has been one of their
biggest successes in their technological success (Armstrong et al. 2015).
Expanding the points
1. The PESTEL analysis has been an instrumental tool for measuring the external business
environment. According to the analysis of the external environment, it should be said that
the Qantas airline should make arrangements for coping up with the economic challenges
and making the company earn more money from different sources (Yüksel, 2012).
2. The company should always make use of the technology in the best ways to get the
positive results. The different environmental issues will also have to be kept in minds
since they have to use the fuel to fly their airplanes (Johnson, 2016).
3. The words of the common people or their customers should be kept in mind as well.
Other than that, they should use the ec0-friendly fuels so the air pollution can be reduced
in a large manner.

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Relating to upper points
1. The previous points can be summed up by saying that the external environment of the
company will have to be addressed and the challenging issues will have to be overcome
for the benefit of Qantas itself (Johnson, 2016).
2. The major challenges like the pollution issues and the inflation rates should have to be
managed properly.
3. They might have to cut down the operation costs for providing the customers with fewer
fares. Thus they can sustain their future in a better way indeed (Jobber & Ellis-Chadwick,
2012).
Conclusion
This paper can be concluded by saying that the Qantas Airline Company has got some
challenges to face in their business. These challenges and issues should be tackled well to make
the profits. The operation costs should be tackled by the management of the company. The
economic hardships will have to be overcome so the company can earn some benefits. Thus
Qantas Airlines will go on to be one of the largest airlines companies all over the world.

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References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Evanschitzky, H., Ramaseshan, B., Woisetschläger, D. M., Richelsen, V., Blut, M., & Backhaus,
C. (2012). Consequences of customer loyalty to the loyalty program and to the
company. Journal of the Academy of Marketing Science, 40(5), 625-638.
Hakansson, H. (Ed.). (2015). Industrial Technological Development (Routledge Revivals): A
Network Approach. Routledge.
Homsombat, W., Lei, Z., & Fu, X. (2014). Competitive effects of the airlines-within-airlines
strategy–Pricing and route entry patterns. Transportation Research Part E: Logistics and
Transportation Review, 63, 1-16.
Jobber, D., & Ellis-Chadwick, F. (2012). Principles and practice of marketing (No. 7th).
McGraw-Hill Higher Education.
Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education.
Jurevicius, O. (2013). Pest & pestel analysis. Strategic Management Insight, 13, 2013.
Kapferer, J. N. (2012). The new strategic brand management: Advanced insights and strategic
thinking. Kogan page publishers.
Kim, H. Y., Lee, J. Y., Choi, D., Wu, J., & Johnson, K. K. (2013). Perceived benefits of retail
loyalty programs: Their effects on program loyalty and customer loyalty. Journal of
Relationship Marketing, 12(2), 95-113.

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O’Neill, D. (2013). Gross domestic product. Degrowth: A Vocabulary for a New Era, 103-106.
Qantas.com (2018). Fly With One of Australia’s Most Popular Airlines | Qantas US. [online]
Qantas.com. Available at: https://www.qantas.com/us/en.html [Accessed 28 Jun. 2018].
Yüksel, İ. (2012). Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management, 7(24), 52.

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Appendices

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