Internal and External Analysis of Qantas Airways Limited

Introduction 4 External Analysis of Qantas 4 PESTEL analysis 4 Porters Five forces 5 Success Factors of Qantas Airways 6 Internal analysis 6 Business strategy of Qantas Airways 7 Performance of Qantas Airways 8 Stakeholders of Qantas Australia 9 Nature of customer base 10 Future Strategy of Qantas 10 Conclusion 11 References 12 Appendices 14 Appendix A 14 Appendix B 15 Introduction Situation analysis refers to process within marketing plan that helps in analysing the internal and the external environment of an organization that helps in the identification of the capabilities of

Running head: SITUATION ANALYSIS OF QANTAS AIRWAYS
Situation Analysis of Qantas Airways
Name of the student
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1SITUATION ANALYSIS OF QANTAS AIRWAYS
Executive Summary
The primary purpose of this report is to discuss about the external along with the internal
analysis of Qantas Airways Limited. The report talks about the main success factors of the
airlines industry and the corporate strategy of the company. The report discusses about
performance of Qantas Airways and the factors that have increased performance of company.
The report elucidates on nature of customer base of company and the strategy that the
organization can partake in the future that can help in developing company.

2SITUATION ANALYSIS OF QANTAS AIRWAYS
Table of Contents
Introduction................................................................................................................................4
External Analysis of Qantas.......................................................................................................4
PESTEL analysis....................................................................................................................4
Porters Five forces..................................................................................................................5
Success Factors of Qantas Airways...........................................................................................6
Internal analysis.........................................................................................................................6
Business strategy of Qantas Airways.........................................................................................7
Performance of Qantas Airways................................................................................................8
Stakeholders of Qantas Australia...............................................................................................9
Nature of customer base...........................................................................................................10
Future Strategy of Qantas.........................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12
Appendices...............................................................................................................................14
Appendix A..........................................................................................................................14
Appendix B..........................................................................................................................15

3SITUATION ANALYSIS OF QANTAS AIRWAYS
Introduction
Situation analysis refers to process within marketing plan that helps in analysing the
internal and the external environment of an organization that helps in the identification of the
capabilities of a company. Situation analysis helps in defining competitor along with the
customer that helps a company in determining crucial steps that can be of help for business in
succeeding in marketplace. Qantas Airways is flag carrier within Australia which is largest
airline in relation to the fleet size and the international flights (Qantas.com 2020). It refers to
third oldest airline which was founded in the year 1920. The fleet size of the company is 132
and it flies to 85 destinations across the world that accounts for the immense popularity of the
airlines across the world. It has various subsidiaries like Qantas Link, Jetstar Airways, Qantas
Freight and the Qantas Holidays. This report throws light on the environmental and the
industrial analysis of the organization which is of great significance for the growth of the
organization. This report elaborates on the main success factors of the industry which have
provided the company with an edge above the competitors. This report talks about the
internal environment of the organisation and the competitive strategy of the company that can
aid in the growth of the business. This report elucidates on overall performance of the
organization in last two years and the factors that have made company successful. This report
elucidates on kind of consumer base of company and how the stakeholders would drive the
strategy of the company in future.
External Analysis of Qantas
PESTEL analysis
Political- Australia have liberal democratic system which is stable that can aid in the
development of Qantas Airways Limited. The country have full democracy that have ensured
the peaceful atmosphere in the country.

4SITUATION ANALYSIS OF QANTAS AIRWAYS
Economic- The economy of Australia have experienced the economic growth and it have the
highest growth rate among the developed world that would have positive effect on Qatar
Airways Limited (Ulubaşoğlu et al. 2019).
Social- The people in Australia suffers from the brunt of the unemployment along with the
poverty that have affected quality of life of the people. There exists gap in between the rich
and the poor people in the country that have deteriorated the conditions of living of the
people.
Technological- The technological development is taking place in Australia exponentially and
it bears a positive effect on growth of Qantas Airways (Raynes and Tsui 2019). It have
helped in the creation of the digital experiences that have aided in development of Qatar
Airways.
Environmental- Australia have strong national environment policies and the environmental
movement taking place in the country would have a negative impact on the growth of Qantas
Airways. There exist many non-governmental organisations in the country that would deter
the growth of Qatar Airways.
Legal- Australian government along with the territory governments helps in administering
the cause of the environmental protection. It is applied to all kinds of the business activities
that would have an effect on Qatar Airways.
Porters Five forces
Threat of New Entry- Threat of the new entry can be said to be low for Qantas Airways as
new companies would need a large amount of the investment in relation to infrastructure so
that they can enter the country (Baumann et al. 2017).
Threat of substitutes- Threat coming from substitutes is low as the mode of travelling with
the help of the airways is faster when compared to the road or the water transport.

5SITUATION ANALYSIS OF QANTAS AIRWAYS
Bargaining power of buyers- Bargaining power of the buyers can be said to be high owing
to the fact that there are large number of airlines company in Australia who offer the
premium class or the low cost service which can be threatening for Qantas Airways.
Bargaining power of suppliers- Bargaining power of suppliers can be said to be low owing
to the presence of various kinds of suppliers within the country like Flight Store, Concept
Aviation Supplies and Airport Equipment Australia.
Competitive rivalry- Competitive rivalry can be stated to be high for Qantas Airways on
account of the presence of many companies like Virgin Australia, Alliance Airlines, Tiger
Air Australia and Emirates that can pose stiff competition for Qantas Airways.
Success Factors of Qantas Airways
There are various kinds of factors that should be taken into consideration by the
airlines companies that can help them in making the profits. The functional organizational
structure can bode well for the airlines industry as it can help them in achieving the functional
excellence (Ma et al. 2019). The companies can enter into the strategic alliances that can help
the companies in earning the reputation in the market. It can help in the area of code sharing
along with the catering that can be of benefit for the aviation companies across the world. It
can pave the path for the cost savings that can help the business in building the competitive
advantage (Rothaermel 2016). Technology can be used by the airlines that can serve the
interests of the consumers and the workers. It can create the way for the reduction on the cost
that can prove to be useful for Qantas Airways. It can help in bringing about the process
innovations that can increase the efficiency of the work of the airlines company.
Internal analysis
Qantas Australia have all the resources which have aided company in getting a
superior positioning in the country. Resource- based- view is indicative of managerial

6SITUATION ANALYSIS OF QANTAS AIRWAYS
framework that can help in determining strategic resources which can be exploited by a firm
for achieving the competitive advantage. It helps in the identification of the capabilities along
with the competencies that can aid in delivering the competitive advantages for an
organization. The organization have the core competencies that have distinguished the firm
within the framework of the market place. It acts as a foundation for the competitiveness of
the company that have helped the company in accessing various kinds of markets (Ansoff et
al. 2018). Qantas Australia enjoy the good slots at the airports that have put the company in a
privileged position within the market. It proves to be of great benefit for the business
passengers that have positive effects on the company. The company have good relationship
with the strong airlines of the world like the American Airlines which have helped company
in getting ahead of competitors. Company makes use of the Frequent Flyer program which
have been helpful for company in building bond with customers (David and David 2016).
The company have achieved the high market share that have taken care of profitability of the
company in the market of Australia. Qantas makes use of the information technology in the
everyday operations that have helped the company in the management of the reservation
system. It have helped the company in avoiding the errors and building the customer loyalty.
The company operates its airport terminals and the catering business that have proved to be
advantageous for the company. Qantas Airways have related business like Qantas Freight
along with Qantas Holidays that have provided opportunity to the customers to enjoy the
holidays. The operational excellence of the company have made it well-branded and it have
helped the company in earning the international reputation.
Business strategy of Qantas Airways
Qantas Airways have the business strategy that have provided the company with a
dominant position within the market. Qantas launched the low-cost fleet that have made the
service convenient for the people. Jet Star have been able to target the leisure travellers by the

7SITUATION ANALYSIS OF QANTAS AIRWAYS
offering of ‘no frills’ services along with the low fares that have been advantageous for
company. Company have been instrumental in launching ‘Sustainable Future’ strategy that
have decreased the cost of the airlines. The company have reduced the IT cost by making
collaboration with the IBM that have served the interests of the company (Lasserre 2017).
The company have decreased the overseas accommodation cost and provides the away-from-
home allowances that have enabled the airlines in earning a great deal of revenue. Qantas
takes recourse to ‘Frequent Flyer Programs’ that have made the service of the company
differentiated and the members can accumulate the points in the event of flying with the
Qantas along with the One World Alliance. The members in the event of earning more points
can avail the extra services that proves to be convenient for the people who are travelling
with the popular airlines company (Meyer, Neck and Meeks 2017). The company have
deployed the resources that have helped in improving the efficiency of the airlines within
Australia. The company have maintained the relationship with IBM along with TESLA that
have enabled the company in getting access to latest technology at the low cost. The company
uses the 1300 telephone sales operation that enables the company in getting through to the
customers. Qantas takes recourse to the strategic alliances that have helped in strengthening
competitive power of company.
Performance of Qantas Airways
The company had been able to earn revenue of 16, 057 $ M in the year 2017 and it
earned 17060 $ M in the year 2018 that have strengthened the position of company within
Australia (Qantas.com 2020). The company have delivered the record profit in the financial
year 2018 and the strong results of the company have increased its reputation among the
other airlines companies of the world. The strong earnings within the framework of the group
means that the company have been able to abide by the financial framework. The company
have maintained a disciplined approach towards the net debt along with the capital

8SITUATION ANALYSIS OF QANTAS AIRWAYS
expenditure that have been instrumental in increasing the profits of the company (Trigeorgis
and Reuer 2017). It have made the company reward the shareholders. Company in the year
2018 was able to return $ 1 billion to the shareholders with the help of the dividends along
with the buybacks. There are certain reasons that have ensured the optimal performance of
the company within the framework of the competitive environment. The sensitivity of the
company to the changes taking place in the market demand have provided a superior position
to company. The company have understood the strategies of the competitors that have
ensured the success of the company in the market. Company have been successful in
delivering the high value proposition to the customers that have helped the company in
becoming popular in market. The annual report of the company have helped in providing the
sufficient details that have helped in understanding financial performance of company.
Stakeholders of Qantas Australia
The primary stakeholders of Qantas Australia are the consumers who avail the
valuable services of the airlines. Performance of the company can be said to be acceptable to
the stakeholders as the company have been successful in earning the return on the investment
that points forward to the success of strategies of the company (Morden 2016). The net
passenger revenue that have been earned in the year 2018 is 14715 $ M that tells the immense
popularity of the company among the people. Qantas Loyalty have been able to earn the
record result with the EBIT of $ 372 million that helps in indicating the success of the
company (Qantas.com 2020). ESC Framework talks about the fact that a company should be
transparent and the information of a company should be clear that can help a company in
earning the respect in the eyes of the people (Jannesson, Nilsson and Rapp 2016). Qantas
Airways takes into account the sustainability measures that have helped the company in
behaving in a sustainable manner before the people.

9SITUATION ANALYSIS OF QANTAS AIRWAYS
Nature of customer base
Qantas serves the customers in two segments- individual along with the business
customers. These two segments have the varying needs and the dual brand airlines of the
company have helped in targeting each segment in the successful manner. The household
customers seek the value for the money and Jetstar brand targets the cost-sensitive travellers
who want to avail the service at the low cost (Coccia 2017). Qantas makes use of Jetstar
airlines that have helped in positioning it as a lowest fare airlines company. It have enabled
the company in offering economic along with the competitive fares that have put the
company at a privileged position within the market (Nair and Sminia 2019). The company
would continue to remain popular among the household segment along with the business
customers in the future as it have taken recourse to the strategies that can make it popular
among these group of the people.
Future Strategy of Qantas
The stakeholders of Qantas would take recourse to the sustainable strategy that would
make the position of the company firm in the market. The company would commit to the
environmental sustainability that can help the company in winning the favours of the people
(Linder and Williander 2017). The environmental performance of the company in the future
would be able to drive the commercial benefit of the company that can ensure the continued
success of the company in the market (Inyang and Egor 2017). It would be able to help the
company in winning the accolades from the people and it would be able to deliver the real
results for the company. The company would lay focus on the environmental strategies that
can help company in reducing environmental impact. Company would lay stress on the aspect
of the emissions management which can help company in offsetting negative effects of
climate change (Evans et al. 2017). The company can take recourse to navigation technology

10SITUATION ANALYSIS OF QANTAS AIRWAYS
which is on the basis of GPS that can help the company in improving the operational
efficiency.
Conclusion
The stable political condition prevailing in Australia has fuelled the growth of Qatar
Airways Limited. Rapid economic growth is experienced by the country which bears a
positive effect on the company. Qantas Airways have to face high amount of the competition
due to existence of other companies in the market like Virgin Australia and Alliance Airlines.
The company have launched low-cost fleet that have proved to be a success factor for the
company. It have helped middle class people in availing services of the airlines. Jet Star have
targeted leisure travellers by providing ‘no frills’ service which have helped company in
gaining advantages. Company undertakes disciplined approach pertaining to capital
expenditure which have increased profits of company. An important trend in the present age
is sustainability and the company can strengthen the sustainability measures that can aid
company in earning greater amount of the revenue. Qantas serves the individual and that of
business customers who have the varying needs that have increased the reputation of
company in market. The company have been able to target these two segments of the
population that have put the company at a privileged position. The organization can take
recourse to environmental sustainability measures that can make it popular among people.
Qantas Airways Limited can make use of GPS navigation technology that can improve
efficiency of operations of company.

11SITUATION ANALYSIS OF QANTAS AIRWAYS
References
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting
strategic management. Springer.
Baumann, C., Bretherton, T., Sarina, T. and Taksa, L., 2017. Facing some ‘home’truths:
Brand backlash and the case of qantas. SAGE Publications: SAGE Business Cases Originals.
Coccia, M., 2017. Sources of technological innovation: Radical and incremental innovation
problem-driven to support competitive advantage of firms. Technology Analysis & Strategic
Management, 29(9), pp.1048-1061.
David, F. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson–Prentice Hall.
Evans, S., Vladimirova, D., Holgado, M., Van Fossen, K., Yang, M., Silva, E.A. and Barlow,
C.Y., 2017. Business model innovation for sustainability: Towards a unified perspective for
creation of sustainable business models. Business Strategy and the Environment, 26(5),
pp.597-608.
Inyang, B.J. and Egor, F.E., 2017. The relevance of strategic analysis and control in
managing corporate organizations to gain competitive advantage. The Business &
Management Review, 9(2), pp.253-253.
Jannesson, E., Nilsson, F. and Rapp, B., 2016. Strategy, control and competitive advantage.
SPRINGER-VERLAG BERLIN AN.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Linder, M. and Williander, M., 2017. Circular business model innovation: inherent
uncertainties. Business strategy and the environment, 26(2), pp.182-196.

12SITUATION ANALYSIS OF QANTAS AIRWAYS
Ma, W., Wang, Q., Yang, H. and Zhang, Y., 2019. An analysis of price competition and price
wars in Australia's domestic airline market. Transport Policy, 81, pp.163-172.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic
management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Morden, T., 2016. Principles of strategic management. Routledge.
Nair, A. and Sminia, H., 2019. Subsidiary strategy process: autonomy, distinctiveness,
competitive advantage and performance. British Academy of Management 2019.
Qantas.com (2020). Fly with Australia’s most popular airline | Qantas AU. [online]
Qantas.com. Available at: https://www.qantas.com/au/en.html [Accessed 6 Feb. 2020].
Raynes, C. and Tsui, K.W.H., 2019. Review of Airline-within-Airline strategy: Case studies
of the Singapore Airlines Group and Qantas Group. Case Studies on Transport Policy, 7(1),
pp.150-165.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.
Ulubaşoğlu, M.A., Rahman, M.H., Önder, Y.K., Chen, Y. and Rajabifard, A., 2019. Floods,
bushfires and sectoral economic output in Australia, 1978–2014. Economic record, 95(308),
pp.58-80.

13SITUATION ANALYSIS OF QANTAS AIRWAYS
Appendices
Appendix A
Political Economic
 Australia have liberal democratic
system which is stable that can aid in
the development of Qantas Airways
Limited.
 Australia have the highest growth
rate among the developed world that
would have positive effect on Qatar
Airways Limited
Social Technological
 The people in Australia suffers from
the brunt of the unemployment along
with the poverty that have affected
quality of life of the people.
 The technological development is
taking place in Australia
exponentially and it bears a positive
effect on growth of Qantas Airways
Environmental Legal
 Environmental movement taking
place in Australia would have a
negative impact on the growth of
Qantas Airways.
 Australian government helps in
administering the cause of the
environmental protection.
Figure: PESTEL Analysis of Qantas Airways
Source: Created by the author

14SITUATION ANALYSIS OF QANTAS AIRWAYS
Appendix B
Threat of New Entrants  New companies would need a large
amount of investment in relation to
infrastructure so that they can enter
the country
Threat of Substitutes  Threat coming from the substitutes
is low as the mode of travelling with
the help of the airways is faster
Bargaining power of buyers  Bargaining power of the buyers is
high owing to the fact that there are
large number of airlines company in
Australia
Bargaining power of suppliers  Bargaining power of suppliers is low
owing to the presence of various
kinds of suppliers like Flight Store,
Concept Aviation Supplies and
Airport Equipment Australia.
Competitive rivalry  Competitive rivalry is high for
Qantas Airway due to presence of
many companies like Virgin
Australia, Alliance Airlines, Tiger
Air Australia
Figure: Porters Five Forces of Qantas Airways

15SITUATION ANALYSIS OF QANTAS AIRWAYS
Source: Created by the author