MPM703 Business Strategy and Analysis Report: Flight Centre Group

This report provides a comprehensive business strategy and analysis of Flight Centre Travel Group, a leading retail travel outlet in Australia. It employs various strategic analysis methods, including PESTEL, Porter’s Five Forces, and Canvas Model, to assess the external environment and competitive landscape. The report further evaluates Flight Centre's strategic capabilities using VRIO framework and SWOT analysis, examining its strengths, weaknesses, opportunities, and threats. The influence of innovation and the relationship between strategy and culture within the organization are also discussed. Ultimately, the report aims to provide a holistic understanding of Flight Centre's strategic position and potential future directions. Desklib provides a platform to access this and many similar documents contributed by students.

qwertyuiopasdfghjklzxcvbnmqw
ertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiop
asdfghjklzxcvbnmqwertyuiopasd
fghjklzxcvbnmqwertyuiopasdfgh
jklzxcvbnmqwertyuiopasdfghjkl
zxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvb
nmqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqw
ertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiop
asdfghjklzxcvbnmqwertyuiopasd
fghjklzxcvbnmqwertyuiopasdfgh
jklzxcvbnmrtyuiopasdfghjklzxcv
Business Strategy and Analysis
Report
4/22/2018
Student Name

1 | P a g e Business Strategy and Analysis
Contents
Introduction...........................................................................................................................................2
Strategic Analysis...................................................................................................................................2
Methods.............................................................................................................................................2
External analysis................................................................................................................................2
PESTEL Analysis..........................................................................................................................2
Porter’s five forces.........................................................................................................................4
Canvas Model................................................................................................................................5
Influence of innovation..................................................................................................................7
Strategic capability............................................................................................................................7
VRIO.............................................................................................................................................7
SWOT Analysis.................................................................................................................................8
Strategy and culture...........................................................................................................................9
References...........................................................................................................................................12

2 | P a g e Business Strategy and Analysis
Introduction
Company Flight Center Travel Group is the largest retail travel outlet in Australia. The
company is providing a variety of services at cheap and low cost to the customers. The
company is giving the edge to its competitors. The company does not only offer the fantastic
deals on domestic hotels in Australia, Canada etc. but also to the worldwide hotels and
resorts. The company is also providing other services such as travel insurance to the public,
car rental, car hire, and cruises.
Strategic Analysis
Methods
The research has been done on the basis of secondary data. The data collected in the analysis
is extracted out from the business documents, online sites, and interviews. The method used
in the analysis is found to be relevant. The industry in this market is not so flourishing and
expanded. So to get the information is quite a cumbersome job. To done the evaluation
correct, the data is taken from the annual report also.
External analysis
PESTEL Analysis
Political factor
The political environment in Australia is stable and flexible. Flight centre can operate its
business easily there as there is less legislation. The trade barriers and regulations are also
less and they can provide service to the large consumer without any restriction.
Economic Factor
The macro and microenvironment factors such as interest rates, inflation, savings rate,
demand, supply and economic cycle are operated in the market. Flight centre has a
comparative advantage in terms of infrastructure as they are working in Australia, where all
has been developed. There is stability in the exchange rate stability in the market and less of
government interventions. In Australia market, the skilled and trained labor is also easily
available which lowers the cost of training for the company (Morris. and Metternich, 2016).
Social Factor

3 | P a g e Business Strategy and Analysis
The society and culture impact the working of the Flight center. If the business is operating is
business while following all the customs acceptable in the country then the business has more
chances to flourish in the market (Flourish and Oswald, 2016).
Technological Factor
Technology adopted by the Flight centre is found to be new and updated all the time and
customers are impressed by this. Transportation is the best industry too set an example in the
development of technology. Technology also affects the selling capacity of the company. If a
company is using new technologies then the customer is more prone to take the services.
Environmental Factor
Environmental factor includes the climatic change in the country and how it impacts the
organization. The aviation industry is the one which is highly affected by the climatic change
in the environment. But these factors cannot be changed so Flight centre has to face these
challenges (Vittek, Lališ, Stojić, and Plos, (2016).
Legal Factor
In every country, there are different legal frameworks is working and each and every
company has to follow those rules and regulations. In Australia, there is Anti-trust law in
consumer service which has to be followed by businesses. Flight Centre has to follow the
employment laws, health and safety laws and data protection law in the business.
From the above discussion, it is seen that the main driver of changing the future is the
economic factor. The economic factor is the one which affects the earning capacity of the
company, the profits, and losses of business depend on the economic cycles run in the
country. AS now there is a time of inflation, so flight centre is earning a handsome amount. If
the time period changes and the country suffer from the recession period, then there will be
less earning, less customer to the company. In the recession period, there are fewer chances
of people to travel around the world, so there are fewer customers too. Ultimately company
will have to face the downfall in the profits and earnings. So the economic factor is the most
crucial element in deciding the Flight centre future.

4 | P a g e Business Strategy and Analysis
Another factor which affects the working of Flight centre is the technological factor. Flight
centre is working in the industry in which updating the technology is a must. First and
foremost the connectivity provided to the customers at large. The multitasking feature
provided by the Flight centre influence the customers to have ticket booking there only.
Hyper-connectivity is offered by the Flight Centre, which increases the use of devices to
travelers while traveling. Flight centre is working on improving the security by focusing on
the cybersecurity. Flight centre is also offering a new innovation of Cloud solution in the
airlines. As airlines are growing there is a vast need to meet the customer's demand. Flight
centre is also facing challenges but is coming up with new technologies and updating to
remain competitive in the market and have sustainability in its business (Setiawan et. al,
2018).
Porter’s five forces
Porters have used the five forces to know the market attractiveness and industry needs.
Porter’s five forces talk about the rivalry among the competitors, bargaining power of
suppliers, bargaining power of customers, threats of new entrants and substitutes available in
the aviation industry. The main force affecting the Flight centre is the availability of the
substitutes and bargaining power of customers.
Competitors of Flight Centre include Ctrip, AmaWaterways, Untours and Blue Bay Travel.
Flight Centre Travel Group is the oldest company in the aviation sector. As these competitors
are selling the same type of services to the customer at lower or equivalent price so it will be
a force which induces the company to work more effectively and efficiently. There is intense
competition between these competitors in the industry. Each and every company follows
different techniques and strategy to remain competitive in the market (The National Law
Review, 2016).
Another force which majorly affects the workings of the flight centre is the bargaining power
of the customer. The customer is the person who is much demanding and wants to get the
product and service at the least cost. So it’s the job the company to satisfy its customer and
earn a profit as well from them. Customer negotiates a lot in booking the tickets from the
dealer. This factor of Porter's model affects the working of Flight centre (Narayanan and
Fahey, 2005).
Canvas Model
Key Partners Key Activities Value Proposition Customer Customer

5 | P a g e Business Strategy and Analysis
 Corporate travel
managers
 Activities
provider
 Business travel
partners
 Travel manager
 Investors/
venture
capitalists
 Engage
with
participant
s
 Designing
and
engineerin
g
 Innovation
 Manage
network
effects
 Customer
Experienc
e
 Customer
Support
 Enhance
technolog
y
 Cheapest price
 Amount of
choice
 Customer
service
 Useful travel
content
Relationships
 Trust
and
loyalty
 Easy and
feasible
Customer-
friendly and
self-service
 Direct
selling
 Brand
Awarene
ss
 Mobile
applicati
on for
services
 No
booking,
no pay
 Custome
r service
Segments
 Seat type
 Amenitie
s and
Facilities
 Star and
user
ratings
 Locations
Key
Resources
 Number of
flights
 Number of
locations
 User data
 User
experience
 Skilled
Channels
 Online site of
Flight centre
 Referrals
 Advertisement
s
 E-mail
marketing
 Social media
websites

6 | P a g e Business Strategy and Analysis
staff
 Global
network
 Creative
and
innovative
team
 Diversifie
d open
minded
people
 Brand
portfolio
 Dealers
Cost Structure
 Raw material
 Software Application developers
 Parts production
 Selling expenses
 Technology
 Maintenance cost
 Employee salary
 Taxes
 R&D expense
Minimum Viable
Product
 Translatic
service
 Hyper-
connectivity
Revenue Streams
 Insurance and financing
 Sale of spare parts
 Franchises and licensing
 Component
 Credit/debit cards
The first most critical success factor is value proposed by the flight centre. The company is
offering the cheapest price and lots of choice to their customers. Satisfied service given to the
customers is the prime aim of the company.
Another success factor for the company is the channels used by the company. Flight centre is
using the online site, advertisements and doing email marketing as well. Flight centre also
contacted customer through dealers and distributors.
Last critical success factor for Flight centre is found to be resources used by the company.
The company is using resources in such a manner that they are able to achieve the economies

7 | P a g e Business Strategy and Analysis
of scale in its business operations. The company is providing a vast variety of flights and
locations options to the customers.
Influence of innovation
Innovation done in the aviation industry affects the working of the employees (Digitalist,
2017). The employees are now more active and prone to work to satisfy their customer. In
this industry, innovation not only comes in the technology but also in the development of
human resources. Human resources are the mediator of the company, as they are linked to the
company and customers. And talking about the technological innovation, the aviation
industry has introduced the cloud solutions, improving security, Virtual reality, tracking
technology, biometrics, and sensor.
Strategic capability
VRIO
VRIO falls in the internal analysis of the company. This analysis talks about the resources and
capabilities a company has, regardless of what strategic model company is using.
Value
The value of a firm here indicates that the firm’s ability to exploit the resources of the
company in order to grab the external opportunities available in the market. Flight centre is
also grabbing the opportunities from the market like giving the flight booking at a large in low
cost so that the people can explore the world (Flights, 2018).
Rarity
Rarity talks about whether the resources of the company are utilized properly or not. Flight
centre is using the resources in the right way as there is having the profit trends in their annual
statements and customer are highly satisfied with the services given by them.
Imitability
Imitability means the company should make a product or service which our competitor cannot
copy easily and firm should have the advantage to make money from it. Flight Centre is giving
such leisure treatment and facility to the customers that are highly satisfied with the service
and flight centre services (Craft, 2018).
Organization
The organization is the element in which all the above workings are reflected and done. If the
above activities are done in a right way then the organization will enjoy the competitive

8 | P a g e Business Strategy and Analysis
advantage in the market. Flight centre is earning high and achieved sustainability in its
business.
SWOT Analysis
Strengths
There are many competitors for travel agencies in Australia but Flight centre is the one who is
found to be the leader in this industry. Flight centre has a multi-channel distribution strategy and
company is providing the customized services to their customer so it makes the more demanding
brand in the travel industry. They also provide the car rentals, cruise rental, and rail rental
services to the customer, so the customer gets each and everything that they need for traveling
purpose (Cruises, 2018).
Weakness
All organizations have some weakness. Flight center weakness is that the websites of it are
available in the English language only and those who don’t know read and write English, they
would not be able to buy the flight tickets or any travel service from them (McManners, 2016).
Opportunity
Flight centre has an opportunity to explore its business anywhere in the globe. But expanding
business in the U.S. give more benefit to society and business too. US rural market lacks this
type of travel services and no business is ready to expand their business in that area. So it’s a
good opportunity for the fight centre to operate and expand its business there.
Threats
Flight centre is not the only Company who is providing unique travel services around the globe
at low cost to customers. In Australia, there are many other service providers who are providing
the same services at the low cost to the customer. There are other agencies which are trying to
enter the Australian market and cover the large share of the market (About us, 2018).
Strategy and culture
The relation between the culture and strategy in the Flight centre can be understood by using the
Cultural web. This web talks about the following:
Rituals and Routines

9 | P a g e Business Strategy and Analysis
Flight centre has a ritual that the air hostess greets their passenger when they are entering.
There is time to time meeting organized in the company with the employees and other
members.
Stories and myths
Stories and myths are the daily behavior and actions of people that the signal acceptance
behavior. Stories and myths determine the expectations of the management to be done in a
given situation.
Symbols
The visual representation of the company including logos, design and dress code followed in
the organization. Logo of Flight centre organization depicts that the workers are working with
full enthusiasm and energy as it is of black color and there is a sign of airplane in that which
depicts the fastness.
Power Structures
Power is the tool for decision making in the organization. In-flight centre, the power is divided
among all the level of management equally so that the fast decision making in the organization
can be done (Mehta, Rice, and Rao, 2016).

10 | P a g e Business Strategy and Analysis
Control System
Control system here refers to the processes which should be following in the organization. In-
flight centre, the top level management has organized the control, decisions, operations and
strategic directions.
Organizational Structure
Organizational structure is the reporting hierarchy followed in the organization. In Flight
Centre, all the authority relationship has been established between the employer and
employee so that there will be no confusion in reporting. There is the use of unity of
command in the organization (Jifri, 2016).

11 | P a g e Business Strategy and Analysis
References
About us. (2018) Flight Centre. Available on: https://www.flightcentre.com/about-us.
[Accessed on 22nd April 2018]
Craft. (2018) Flight Centre competitors. Available on:
https://craft.co/flight-centre/competitors.[Accessed on 22nd April 2018]
Cruises. (2018) Flight Centre. Available on: https://www.flightcentre.com/cruises.[Accessed
on 22nd April 2018]
Digitalist. (2017) Emerging Technology in the Airline industry. Available on:
http://www.digitalistmag.com/customer-experience/2017/08/14/emerging-technology-in-
airline-industry-05226935.[Accessed on 22nd April 2018]
Flights. (2018) Flight Centre. Available on: https://www.flightcentre.com/flights.[Accessed
on 22nd April 2018]
Flouris, T.G. and Oswald, S.L. (2016) Designing and executing strategy in aviation
management. London: Routledge.
Jifri, A.O.A. (2016) Dynamic capabilities" now we see them" in the airline industry.
Tuscaloosa: The University of Alabama.
McManners, P.J. (2016) Developing policy integrating sustainability: A case study into
aviation. Environmental Science & Policy, 57, pp.86-92.
Mehta, R., Rice, S. and Rao, N. (2016) Traveller Perceptions of Trust in Air Traffic
Controllers: A Cultural Comparison between India and the United States. International
Journal of Social Science Research, 4(1), pp.98-114.
Morris, A. and Metternicht, G. (2016) Assessing the effectiveness of WEEE management
policy in Australia. Journal of environmental management, 181, pp.218-230.
Narayanan, V.K., and Fahey, L. (2005) The relevance of the institutional underpinnings of
Porter's five forces framework to emerging economies: An epistemological analysis. Journal
of Management Studies, 42(1), pp.207-223.