Business Strategy of Qantas: Analysis and Recommendations

This report analyses the business strategy of Qantas through various tools such as porter’s five forces, VRIO matrix, and critical success factors. It also provides recommendations for better and smooth functioning of Qantas.

Running Head: BUSINESS STRATEGY 0
Qantas
Strategic management workshop

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Contents
Introduction...........................................................................................................................................3
Business strategy of Woolworths through porter’s five forces analysis................................................3
Critical success factors...........................................................................................................................4
Strategic capabilities..............................................................................................................................5
VRIO/ VRIN Matrix.............................................................................................................................5
SWOT analysis of Qantas...................................................................................................................7
Strategy of Qantas.............................................................................................................................8
Recommended business strategy for Qantas to adopt for future.........................................................9
Conclusion.............................................................................................................................................9
References...........................................................................................................................................11

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Introduction
Qantas is one of the biggest company in the aviation industry that provides its services over
the 1000 destinations all over the world. In 1920, it has launched its first aircraft. After the
first launch of its aircraft, it started growing and becoming a leading branch. It tends to
provide the best employment opportunities to more than 30,000 people all over the globe.
The main vision of Qantas is to provide the airline services at low cost (O’Neill, 2016).
Besides this, it also provides the facilities to middle class people through its new segment
“Jetstar.” Therefore, it operates in two different names: Qantas and Jet Star. In this report, the
discussion is carried on the business strategies of Qantas through various tools such as
porter’s five forces, VRIO matrix, and critical success factors. The discussion ends by
carrying out recommendations for better and smooth functioning of Qantas.
Business strategy of Qantas through porter’s five forces analysis
Several benefits and limitations are attached with the porter’s five forces. The main advantage is its
best applicability in analysing of the market structures. As compare to this, this model only assumes
the classic perfect market. In addition, various people use this model in such a way it was never
envisioned. People tend to apply Porter’s five forces to specific company rather than on the industry.
It is one of the most common mistakes.
1. Bargaining power of supplier- it is one of the major porter’s five forces that can help
in analysing the business strategy. Being, Airbus and Bombardier are the main suppliers in
the aviation industry. Taking into consideration the example of Qantas Airlines, it has approx.
250 aircrafts such as Airbus A330s, A380s, A320s, Bombardier Q400s, Bombardier dash 8s
and Boeing 767s, 747s, 717s & 737s. In this way, it is clear that bargaining power of
suppliers is high in aviation industry (Qantas Airways, 2016).
2. Bargaining power of buyers- it is true that airline industry has either buyers from
business side or the individual who are from middle class. In Qantas airways, bargaining
power of buyer is high as customers can easily switch to any new airway who is providing
better services in low cost. In recent time, passengers have various options from where they
can avail the airline services. In order to attract the large customer base for availing its
services, it has adopted the low cost strategy in order to increase its customer base.
3. Threat of substitute- the major and topmost substitute of airline is train, car, or bus.
However, airline industry provides the several benefits such as taking very less time to reach
on their respective locations (Graham, and Vowles, 2016). Besides this, it also provides the

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comfort and memorable journey to passengers that attract them to always avail these types of
services. The differentiation strategy and low cost strategy of Qantas helps the firm in
retaining and sustaining its customers for long time. In this way, Qantas has less threat of
substitute.
4. Competitive rivalry- It is true that Qantas is one of the major market leaders in
various countries. However, it also faces threat of substitute from various other competitors.
In the annual report 2009 of Qantas, it is founded that Qantas is operating Jet star for
competing with the Virgin Blue (Halpern, 2018). This company is providing the airline
services in low cost. In order to beat the competition, Qantas has adopted the differentiation
strategy. This helps the company in differentiating its services from the other competitors that
other firms are offering. It is one of the best porter’s generic strategies that firm has adopted
in order to beat competition. It has differentiated its firm in terms of product as well as price.
5. Threat of new entrant- due to several barriers in the airline industry, it is required by
the firm to initiate its business with huge cost. Besides this, there is high threat of competition
in the market. Large amount of investment is required that puts difficulty for competitors in
this sector (Sarina and Wright, 2015). Qantas can also create the barrier for new entrant by
adopting the pricing strategy. Besides this, alliance strategy can also be adopted by the
Qantas for building difficulty for the new entrants in order to enter into this sector. It is best
strategy that will help the Qantas to create its brand reputation and create positive feeling for
the customers.
Critical success factors
It helps in describing the major parts regarding the performance of Qantas. Some of the
critical success factors of Qantas airways are:
1. Non-stop flights- it is true that for the success of airways, flights should be non-stop in order
to delight customers. It is presented in the annual report of Qantas that Jet Star has started the
long haul flights. In this flight it covers various destinations such as Sydney to Bali,
Melbourne to Bangkok, Melbourne to Bali, Cairns to Tokyo, and Cairns to Osaka. Due to its
innovative features, it is one of the leading and best airline in several countries.
2. Strong management- Qantas has better control over the management in its organization. Due
to its better business strategies, it is serving the customers in better way. However, all the
management staff believes in providing innovative customer service all over the world. It is

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also using the cost effective tools and techniques that helps it in keeping its prices economical
(Grant, Butler, Orr and Murray, 2014).
3. Competent and skilled workforce- Qantas has various talented as well as skilled workforce in
its organization. From the reports, it is founded that Qantas has diversified and competent
workforce who all operate on the board. It is true that aviation industry requires the talented
and skilled workforce for their smooth and better functioning. By keeping this mind, Qantas
always recruit the persons having good communication skills as well as who have the
capabilities to take responsibility when anything is going wrong in the industry (Qantas
Airways, 2017).
4. Route system- it is one of the essential point for any airline industry. For ensuring this,
Qantas has taken the best system in its industry. It also undertake into consideration where to
fly and it sees how frequently reach to that destination. In recent time, Qantas is serving it
services in more than 40 countries with 186 destinations.
5. Regular promotions- It is true that in the aviation industry, service promotion is done to target
the loyal customers as well as emphasis more on the high revenue customers. The various
innovative services such as type of aircraft, choices of seats, easy accessible to tickets make
the Qantas, a premium airline from other airlines. For assuring all these services, it provides
useful training to the employees so that they can use the cardiac defibrillators as physician kit
during the time of emergency.
Strategic capabilities
VRIO/ VRIN Matrix
Resources Valuable Rare Inimitable
Comfortable seating
arrangements for
customers
Yes No No
Baggage Yes Yes No
Rights of customers
for billing
Yes Yes No
Low cost strategy Yes Yes No
International Yes Yes Yes

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presence
Flight entertainment Yes No No
Qantas airlines offer the services with more than 30 channels. Besides this, it also provides
the radio signals for the passengers. Whenever the flights have more than the 3 hours’ time, it
releases the news for it. It is also seen that every month, the flight entertainment are revised
and reviewed. It is one of the resources that is valued by the passengers who all are investing
their money. It just wanted to make the journey memorable for the passengers. This resource
is also rare in the aviation industry. It is one of the resources that is not inimitable as other
airlines also provide the same amenities in cheaper price (Bellin, 2016).Besides this, Qantas
is also known for convenient as well as comfortable seating plan for the passengers. BY
taking the help of Kiosks, passengers can also chose their seat a day before the flight. It helps
in making the flying experience more memorable for the passengers. This resource is not
inimitable as other airline industries do not able to provide the same service. The other
resource that is identifies for the Qantas airline is the international presence of its services. It
connects more than the 1000 destinations all over the world. It has done increment in the
international presence over the past few years. Besides this, it is also known for providing
premium services to the passengers (Callahan and Bowman, 2015).
It has also created the billing right for the employees of its airline. The bill includes various
things that can be done or that cannot be done. This billing right of customers helps in
making the customer secure as well as safe during the whole process of journey. The bill
usually consist of what is required to done if any mishappneing done during the journey. It is
a rare resource as other aviation industries also focuses on the customer service but no one of
them come close to the Qantas in terms of its services. It is true that almost all the airlines
check the baggage that passengers are carrying inside the flight (Belllin, 2016).This is done
just to increase the level of their revenue. Qantas airline does not do the same. Besides this, it
has adopted a tagline of “bags fly free.”
The last and essential resource that is being founded in the case of Qantas airline is its ,low
cost strategy. It has a brand with the name of “Jet Star” that is basically known for charging
the low fare airline. This resource is not inimitable as other airline industries are also offering
the services at low cost in the aviation industry.

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SWOT analysis of Qantas
It is true that SWOT analysis helps the company to get various business insights internally as well as
externally. However, in various complex issues, it is not application. For those issues, it is essential to
conduct deep analysis and research to make decisions.
1. Strengths
 Qantas has strong business strategies that make it unique from all other airlines.
 It has market presence all over the world and has a great brand reputation.
 The company focuses on giving better safety and premium class service facility to its
customers.
 Based on the award of skytrax, Qantas airline come under the top ten airlines for
getting the passenger’s choice awards.
 Better customer service is also seen as the main strength of Qantas airline. Qantas has
various unique programs for customers such as Qantas frequent flyer, customer loyalty
program.
 It also provides the training programs to its employees in order in order to serve the
passengers in best manner (Lawton, 2017).
 The security and safety measures are also the strength of Qantas. It is true that Qantas
comply with all the safety measures that are given by airline authority.
2. Weaknesses
 Qantas gives main emphasis on the safety.in its industry, the flight is on board for 24
hours. However, the strikes of engineers for holidays can negatively impact the functioning in
Qantas.
 Qantas is not able to control the make control over its staff many times. Due to this, it
is taken as that company does not provide the proper training to its staff.
 The cost of operation in Qantas is high to provide better service and create best
product compare to its competitors.
3. Opportunities
 It can use various innovative and world-class technology for its services and product
in order to provide easy convenience to its customers (Shaffner, Mills and Helms Mills,
2017).
 Technological advancement in the aviation industry can be seen as one of the major
opportunity.
 A 2D can be used for check in of passengers travelling domestic. It is new check in
service that can be used by Qantas airlines (Schofield, 2018).

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 When globalization and use of internet was increased, it has the opportunity to
exchange as well as connect the information related to services and products.
 Due to rise in prices of fuel, it can use the various alternatives such as methanol, bio-
derived fuel, ethanol, liquid hydrogen, synthetic fuel, and liquid hydrogen.
4. Threats
 The major threat in the aviation industry is the rise in the oil prices. It is true that oil
prices are uncontrolled and dramatic. There are various alternatives available for the Qantas
airlines such as car, bus, and bullet trains (Andersen and Zaelke, 2017).
 Economic crisis are also major threat for the airline industry. It can also affect the
industry in long run, as at this time, people were likely to travel less with the aircraft and
travel more through other means such as bus or car.
 Environment problems that are caused by the aviation industry are also major threat
for the aviation industry. Some of the environmental problems that are caused by aircraft are
air pollution, noise pollution and volcanic explosions.
 Deregulation in the aviation industry can also put the adverse and negative impact on
the Qantas airlines (Costantino, Di Gravio, Nonino and Patriarca, 2016).
Strategy of Qantas
1. Competitive strategy- Qantas airlines has come into the existence at domestic as well
as global market level. It is true that companies are required to align its resources with the
business strategy. Based on the success factors of Qantas, the competitive strategy can be
seen about its skilled and talented workforce (Raynes and Tsui, 2018). All the employees of
Qantas are customer friendly. It provides the significance to offer excellent services to its
customers. The management staffs of Qantas also knows the importance of providing best
customer service. For assuring this, Qantas tends to recruit the best and skilled workforce. It
also put the right people at the right position and then providesthem training for better
working. The superior infrastructure can also see as the competitive strategy of Qantas. It
tends to provide the best flying experience to its customers and due to this, it was also
rewarded as providing the premium class service to its customers.
2. Low cost strategy- It is one of the best strategy that is adopted by Qantas. This
strategy helped the company in achieving the growth. In the year 2005, it has taken the
decision for its Jet Star that is also low cost. The decision was to fly this in Europe as well as

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Asia. Qantas has increased its cut-price strategy for offering the premium class services to the
customers. CEO of Qantas, Alan Joyce, stated that offering premium services in low price is
the best formula to succeed. For succeeding in the airline industry, it has also taken several
measures (Garcia, 2015).
Recommended business strategy for Qantas to adopt for future
It is true that Qantas is at a growth level but also it requires various changes in its airline
industry. The first recommendation to Qantas is that it should continuously continue using the
international expansion strategy. It will create many opportunities for the company to expand
its wings in other countries also (Dobni, Klassen and Sands, 2016).By doing this, it can earn
the growth in those countries where it is not serving through its strategy. Besides this, Qantas
can also put emphasis on using the fuel-efficient aircrafts that will assist in reducing the cost
in its operation. It is true that the cost of fuel is increasing day by day in the aircraft industry,
so it will serve as the cost advantage to the company in present as well as future. By doing
this, it can also provide the various extra benefits to its customers which can also serve as the
positive additional in the companies productivity and growth (Bereznoi, 2015).
The concept of change management is also recommended to the Qantas airlines. There are
various regular changes that occur in the outside environment such as changes in government
policy, expectations of customers, and changes in the needs of customers. Expeditionary
marketing can also help the Qantas in gaining several advantages from the strategy. Because
of this strategy, it can be possible that more operation cost can be occur. By adopting this
strategy, Qantas can move to some other market that will help in creating value for Qantas.
For supporting this strategy, it can also provide the training to employees in a proper manner
that will assist the company in getting various positive outcomes. It is also requiredto review
its networks and structures for reassigning the aircraft according to the performance
maximisation. By adopting this, it can reduce the risk that can occur due to high uncertainty
in fuel prices (Baxter, Srisaeng and Wild, 2018).
The use of efficient jets, development in retail model, and differentiation in product can help
the airline industry to grow continuously. Besides this, investors are also required to keep eye
on the industry to see how it is moving or progressing.

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Conclusion
In the limelight of above discussion, it can be concluded that Qantas is among the leading
aviation industry that connects over 1000 destinations all over the world. Qantas is known for
providing the best service by adopting effective business strategies in its firm. Due to the
fluctuations in the oil prices, it might face the threat. For ensuring effective results, it has
adopted several business strategies. By adopting competitive strategy, it is able to cope up
with the prevailing competition. Besides this, it is seen that the employees of Qantas are
customer friendly that serves as biggest advantage for the company. In addition to this,
Qantas has also adopted the low cost strategy that is the main basis for the success of Qantas.
Above all these strategies, it is recommended to the company to use some alternatives of fuel
such as bio-derived fuel, methanol, ethanol, synthetic fuel, liquid hydrogen and liquid
hydrogen. It is also recommended to the company for continuing with expeditionary
marketing that will help it in finding all the opportunities that are coming in the future.

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