MAN302 Strategic Report: Analyzing Flight Centre's Offshore Strategy

This report provides a strategic analysis of Flight Centre's decision to move some of its activities offshore and expand into international markets. It evaluates external factors using PESTLE analysis, highlighting the impact of political, economic, social, technological, legal, and environmental factors on the company's strategy. The internal analysis utilizes a SWOT framework to identify Flight Centre's strengths, weaknesses, opportunities, and threats. Key stakeholders are identified, and the report discusses how the offshore shift affects them. The competitive advantages of the strategy, including cost savings and revenue increases, are explained, along with potential risks and other relevant issues such as security concerns and fluctuating fuel prices. The report concludes by emphasizing the importance of innovation and strategic partnerships for Flight Centre to maintain its competitive edge in the global market. Desklib offers this report and many other solved assignments for students.

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Contents
Introduction...........................................................................................................................................2
External analysis....................................................................................................................................2
Internal Analysis....................................................................................................................................3
Identification of stakeholders................................................................................................................4
Competitive advantage..........................................................................................................................5
Issue of the strategy...............................................................................................................................5
Other issues...........................................................................................................................................6
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

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Introduction
Strategic analysis is an important part that has to be considered while entering into other
country`s market. A process conducts research on internal and external environment and
finds out what competitive advantage it has. As a strategic analyst of Australian companies,
certain macro-economic factors are identified which is necessary to know before entering or
investing in other country. Flight centre is largest retail outlet in Australia headquartered in
Brisbane, Australia (Flight centre travel ltd. 2012).
External analysis
Pestle analysis
Political factors- This factor plays an important in deciding the factor, which has an impact
on long-term profitability of a particular country. Flight centre travel group ltd. operates in
customer services in many countries and it is exposed to many political environment and
political risks. In order to expand or invest in different country. It has to look for stability and
importance of customer services in country`s economy (Zakharova, 2017).
Economic factors- Flight centre travel use several other country`s economic factors such as
inflation, growth rate. Economic indicators considering consumer service industry that
includes its growth rate and consumer spending that forecast the growth rate trajectory. It is
important to find out whether flight centre travel group needs fund to raise capital from the
local market.
Social factors- Shared culture, beliefs and attitudes of population plays an important role in
how marketers in flight centre that understand the customers in the target market. It is
important to design the marketing strategies for customer services industry (Zakharova,
2017).

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Technological factors- flight centre should not only undertake automation but also consider
speed at which technology disturbs the industry. It has to consider what technological
concerns its competitors have adopted, what is actual rate of technological diffusion among
other competitors (Williams, 2016).
Legal factors- In many countries, legal framework is neither much boosting attract business
plans nor able to protect the intellectual property. Flight centre will also have to consider anti-
trust law for consumer service industry, discrimination law, consumer protection and other e-
commerce, health law, and data protection.
Environmental factors- Before entering new country or starting new business, it has to
evaluate environmental standards, which is required to regulate in market. For example- In
US, Texas, and florida have different liability laws and environmental laws (Williams, 2016).
Internal Analysis
SWOT Analysis
Strength- Automation of certain activities have brought consistency of quality to flight centre
products that has enabled to company to scale up and scale down as per the demand and
supply of market. Over the last years, Flight centre has invested in building strong portfolio.
The company has successful tracking the development of new products through product
innovation. It is successful in executing new projects and generate good returns on capital
invested through building new revenue streams (Bhattacharyya, and Salim, 2015).
Weakness- The profitability ratio and total contribution of Flight centre is below the industry
average. Moreover, Flight centre is spending above the industry average on R&D but it do
not compete with leading players. The company needs to invest in technology (Market
research, 2018).

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Opportunities- Taxation policy affect the way of executing business and open opportunity
players such as flight centre is limited to focus on profitability. Rising need of raw material
can pose threat to flight centre profitability.
Threat- supply of new products is not regular which leads to high and low switching in sales.
Environment regulations under the Paris agreement have become threat to existing product.
As company operates in numerous countries, it is exposed to currency fluctuation (Market
research, 2018).
Identification of stakeholders
Being a global travel business, Flight Centre is stakeholder to all communities including the
customers, shareholders, government authorities, trade unions, tenants, media, union, and
suppliers. In order to win customers, Flight centre has the responsibility to respect economic
wellbeing of the communities through its unique position that provides the ability to
positively influence the communities. If the company expands or shift the operation to
offshore, it will affect the stakeholders. This shift may give a higher proportion of risk
rewards. Employees may be benefited from greater job security (Coles, Fenclova, and Dinan,
2014). They may also be empowered when they give training sessions to emerging branch in
other countries. Moreover, it is important to ensure the capital improvement work or projects
is consulted with stakeholders who have a considerable power stake. Flight centre due to
nature provides complex facilities, which involves a wide range of stakeholders that have
different objective. It will also create employment in other country if it operates offshore with
proper training activities but on the other hand feedback received after the project can differ
and confuse. The company has to develop a structured approach to engage stakeholders in
complex projects to improve the design and tailored team (Hartman, and Boscoianu, 2015).

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Competitive advantage
Although there are several attributes in the functioning of flight centre such as geographically
diversified, brand awareness, strong sales growth, and high return on equity with low debt.
Most importantly, it serves its people well including its employees and customers. Therefore,
it can carry out the same at international level and win customer satisfaction. It works on
improving customer experiences for long term such as customers feel that the intrinsic value
of services it provide is equivalent to its price (Hopkins, 2015). Staff are apparently growing
about 10 percent per annum where majority of the staff is in sales. It shows that company
provides a professional training to its staff for everything whether it is to deal to the
customers or professional training to its pilots. The company also provides a right mix of
incentives to the staff. This increases business momentum as more staff is incentivised to sell
that would equate to increasing business growth. It choose the product that can serve the
customer experience. Excelled Travel consultant is an important factor that contribute to its
competitive advantage. It also added value to its suppliers by providing them with relevant
product to the right customer. Moreover, effective marketing strategy is closely related to
customer experiences (Biswakarma, Dey, and Ganguly, 2015).
Issue of the strategy
While considering the competitive advantage that flight centre already enjoys in the country
in it operates, it has to consider three level of strategies to have clear idea. At first, through
corporate level, it recognised the reason to expand which is the general aim. Further, as far as
specific tactics is concerned, it decides to focus on customer satisfaction. To accomplish this,
a functional strategies is formed that can contribute to improve and accomplish the corporate
strategy. Expert travel consultant and sales training of staff can lead to achievement of this
goal of maximum customer satisfaction (Free management books, 2018). This leads to
achieve cost saving because good services maximizes the satisfaction of customers. Although

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service organisations are undifferentiated from competing offering but they have to keep an
eye on what actually its competitor is charging. Customers generally see price as a indicator
of good services that helps the flight centre to increase the revenue. Although, risk always lie
with every business strategy especially when entering in other country (Flight Centre Travel
Group Limited, 2018).
Other issues
The company faces certain problems such as security issues and fluctuating fuel prices. The
success of Flight centre has to improve staffing policies, innovative customer services, and
caution with cash flow. The main issue with the company is that it does not focus on
innovation. Problem associated with flight centre is that they do not know who their
customers are. Earlier, it did not know who are the actual customers because earlier many
bookings were done directly with the suppliers. In this way there were unaware of what
specific skill it needs and how to match the right consultant with the appropriate customer.
About 40 percent of flight centre`s consultants in physical sector had with the organisation
less than a year and are unexperienced. Another challenge that it is suffering from the very
beginning is that it does not have support of technologies to better support them. Formulation
of proper strategy is necessary to stand apart from competitors and penetrate the international
market such as merging and collaborating with other big airline company while entering
globally. It will help them to access each other`s competitive advantages such as first mover
advantage in another country (Harrison, 2015).
Conclusion
From the above report, it can be concluded that Flight Centre is one of the largest travel
airline of Australia and operates in many countries. The PESTLE analysis shows how laws,
taxation policy, stable political environment, and regulation of other country affects while

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entering in other countries. SWOT analysis recommends that to overcome the weaknesses
and threats, it will have to impose on other travel agencies. The company should tie up with
other companies to expand instead of fighting and overcoming its competitors. As a strategic
analyst of Australian company, an consideration and analysis of factors have been undertaken
while entering into international market.
References
Bhattacharyya, U. and Salim, D. D. R., (2015) Modelling the Dynamic Air Transport
Aviation Fuel Demand in India. International Journal of Supply Chain Management, 4(2).
Biswakarma, S.K., Dey, I. and Ganguly, P., (2015) Relationship of low cost airlines and
budget hotels for tourism development in West Bengal. International Journal in Management
& Social Science, 3(5), pp.501-518.
Coles, T., Fenclova, E. and Dinan, C., (2014) Corporate social responsibility reporting among
European low-fares airlines: challenges for the examination and development of sustainable
mobilities. Journal of Sustainable Tourism, 22(1), pp.69-88.
Flight Centre Travel Group Limited, (2018) Economic Pillar. Available on:
http://www.fctgl.com/about-us/corporate-social-responsibility/responsible-travel/our-
charter/economic-pillar/ [Accessed on 02/12/18]
Flight centre travel ltd. (2012) 2012-Annual-Report.pdf. Available on:
http://www.fctgl.com/wp-content/uploads/2017/08/2012-Annual-Report.pdf [Accessed on
02/12/18]

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Free management books, (2018) The Three Levels of Strategy. Available on:
http://www.free-management-ebooks.com/news/three-levels-of-strategy/ [Accessed on
02/12/18]
Harrison, T. (2015) Flight centre shakes up strategy. Available on:
http://www.travelweekly.com.au/article/flight-centre-shakes-up-product-strategy/ [Accessed
on 02/12/18]
Hartman, N., and Boscoianu, M., (2015) Single European Sky-the transformation of the
aviation industry based on the dynamic capabilities. INCAS Bulletin, 7(1), p.97.
Hopkins, J. (2015) 5 reasons to buy Flight Centre Travel Group Ltd today. Available on:
https://www.fool.com.au/2015/06/09/5-reasons-to-buy-flight-centre-travel-group-ltd-today/
[Accessed on 02/12/18]
Market research, (2018) Flight Centre Travel Group Limited (FLT) - Financial and Strategic
SWOT Analysis Review. Available on: https://www.marketresearch.com/GlobalData-
v3648/Flight-Centre-Travel-Group-Limited-11337062/ [Accessed on 02/12/18]
Williams, A. (2016) Case Study: How Flight Centre leveraged data to boost customer
experience. Available on: https://www.cmo.com.au/article/599308/case-study-how-flight-
centre-leveraged-data-boost-customer-experience/ [Accessed on 02/12/18]
Zakharova, I.V., (2017) Regional aviation claster evolution factors
analysis. Economics, 24(1).