Competitive Strategy for Qantas Airlines: Strategic Development Tools

This paper discusses the use of strategic development tools that support Qantas Airlines in planning competitive strategies so that it can deal with different factors that affect its performance. The paper will involve Pestle Analysis, SWOT Analysis, Porter's Generic Strategy, and Porter 5 force framework as the strategic development tools and their support to Qantas Airlines in attaining competitive advantage.

QANTAS AIRLINES
Competitive Strategy
Strategic Development Tools
8/13/2018

COMPETITIVE STRATEGY 1
Competitive Strategy
Competitive strategy guides a business to operate and stay in an industry and attain a
competitive advantage. If a business does not possess a competitive advantage, it will not be
able to identify a successful spot that could be used to manage a competitive advantage to
survive in any specific industry (Evans, 2017). This paper will discuss the use of strategic
development tools that support business in planning competitive strategies so that it can deal
with different factors that affect its performance. The paper will involve Pestle Analysis,
SWOT Analysis, Porter's Generic Strategy, and Porter 5 force framework as the strategic
development tools and their support to Qantas Airlines in attaining competitive advantage.
Overview of Qantas Airlines
Qantas Airways is the Australian flag carrier and the biggest airline in terms of fleet size,
international destinations, and international flights. It is one of the World’s oldest airlines
after Avianca and KLM have been established in 1920. The name of Qantas originates from
‘QANTAS”, an abbreviation for its real name, ‘Queensland and Northern Territory Aerial
Services,” and it is designated “The Flying Kangaroo.” (Qantas, 2018)
SWOT Analysis
SWOT Analysis is a structure utilized to measure the competitive position of the company by
recognizing its strengths, weaknesses, opportunities, and threats. Precisely, SWOT analysis is
an initial valuation model that evaluates the performance of the business and its potential
threats and opportunities (Hashemi and Samani, 2017).
Strength talks about the areas where a business excels and separates itself from its
competitors. Some of the strengths of Qantas Airlines are:
 Emerging worldwide existence through a partnership
 Tough dominance in the market of Australia
 Strong public and marketing relations
Weaknesses stop a business to perform with its maximum efforts. Some of the weaknesses of
Qantas Airlines are:

COMPETITIVE STRATEGY 2
 Gap in the increase of capacity and demand in the market
 Decreasing cost base will include layoffs and anxious industrial relations
 Decrease in non-core assets
Opportunities mean the positive external factors that a business can utilize to attain a
competitive advantage. Some opportunities of Qantas Airlines are:
 Qantas Airlines can make use of digital marketing and loyalty programs for increasing
market base
 Partnership with different international airlines for the joined service offering to
consumers
Threats are the factors that have power to destroy a business. Threats that are faced by
Qantas Airlines are:
 Increasing competition from Asian competitors
 Instability in fuel prices and foreign exchange
 Governing concerns affects business expansion (SWOT & PESTLE, 2018)
Source [(Shaw, 2017)]
Pestle analysis
Pestle Analysis is a tool, which is utilized by the marketers to evaluate and observe the
macro-environmental factors that influence the organization performance. The outcome of
this tool is utilized to recognize weaknesses and threats that are used in SWOT Analysis. The
letters of Pestle Analysis stands for Political, Economic, Social, Technological,
Environmental, and Legal (Rastogi and Trivedi, 2016).

COMPETITIVE STRATEGY 3
Political- Political Factors regulates the degree to which government and its policies may
influence an organization or a particular industry. The government has revealed its influences
in the Qantas airline, as it possesses 65% market share of the country by operating
international and domestic flights. The Government of Australia financially supports this
airline.
Economic- Economic factors influence the economy and performance of the country, which
has direct impact on the organizational profitability. Oil monetary values result in essential
influence on the industry of Airlines. Because of recent progress in the markets of oil air
houses have to make use of non-monetary approaches and techniques, which comprises
fudging or air hose alliances to upsurge the power of fuel buying.
Social- Social factors concentrate on the social environment and recognize developing trends.
Qantas has different type of consumers. The industry of airlines has reflected maximum
effect on the life of Australian. Brand identity is essential for this industry. Qantas possess
strong brand identity; therefore, they make use of the national symbol of Australia (Fern Fort
University, 2018).
Technology- Technological factors reflect the technological innovation rate and development
that can influence the industry or market. The whole procedure of ticket booking in the airline
industry is dependent on online reservation system. Moreover, Qantas Airlines has become
the chief company that has executed landing by using satellite technology that is dependent
on global landing system.
Legal- A business should know what is authorized and allowed in the regions they operate.
They should be updated about the alteration in legislation and the influence this might have
on the operations of the business. Qantas is upholding safety and health instructions for the
employees and customers.
Environment- Environmental factors are related to the effect of the nearby environment and
the influence of ecological features. Qantas Airline has the aim to attain decrease it its
pollution emission by 50% by2050.

COMPETITIVE STRATEGY 4
Source [(Johnson, 2018)]
Porter Five force framework
Porter’s five forces framework is an examination tool that comprises five forces of the
industry to define the strength of rivalry in the industry and its level of profitability. M. Porter
established the model in 1979 to know how five forces of competition are influencing an
industry (Magretta, 2012). The identified five forces are:
Bargaining Power of Consumers- This power in the industry of airlines is higher because
they there are numerous options to choose from like top class services of air-traveling, low-
cost services of air traveling and many more.
Bargaining Power of suppliers - This power in the industry of airlines is lower due to the
presence of various numbers of suppliers providing same type of services. In terms of Qantas
Airlines, it is lower due to other key airlines like Virgin Airlines, etc. (Fern Fort University,
2018)
Threat of Substitute- This threat in the industry is lower because the mode of air traveling is
quicker way of receiving services of traveling for longer distances, which is not possible from
water or road transport (Fern Fort University, 2018).
Competition among existing companies- This force is very crucial in the Australian airline
industry, as the present condition reflects that Qantas airline is competing with Virgin Airline
in the local market, and the rivalry is severe due to which these companies are dealing with
losses in their business operations.
Threat of New Entry- The threat of new player in the airline industry has been lower because
fresh companies need high infrastructure investment in order to set up the company of airline,
which will be hard to do (Fern Fort University, 2018).

COMPETITIVE STRATEGY 5
Source [(Edraw Soft, 2018)]
Porter Generic force
Porter generic strategies define how a business attains a competitive advantage in its selected
market scope. There are generally three types of generic strategies, i.e., lower cost,
differentiation, or focus (Amadeo, 2018). This model will help in analyzing the business
strategy of Qantas.
Differentiation means businesses offer effective benefits as compared to other players in the
industry. As per the brand of Qantas that offers premium price services to the consumers, it
makes use of the differentiation strategy of the model of Porter's three generic strategies. For
example- Qantas Club lounges offer all the necessary services to the members at around 130
lounges globally. Besides this, Qantas is the frontrunner in terms of safety in the aviation
industry. The group runs yearly around 330,000 flights. Cases that take place from time to
time cannot escape Qantas Company. Therefore, the business is self-assured about its
excellent safety programs and systems that are unique from other players in the industry
(Qantas Sustainability, 2008).
From the above analysis, it can be concluded that all the four strategic development tools are
framed to support different businesses operating in the competitive market with different
offerings. The analysis has reflected that the four tools i.e. SWOT analysis, Pestle analysis,
Porter 5 force framework, and Porter's generic strategy has helped Qantas Airlines in
analyzing those factors that play major role in influencing its business operations.

COMPETITIVE STRATEGY 6
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COMPETITIVE STRATEGY 7
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