Polytechnic Institute Australia: Qantas Airlines Strategy Analysis

This report provides a comprehensive analysis of Qantas Airlines' performance and strategic planning, addressing the requirements of a management accounting assignment. The report begins by identifying the airline's critical success factors (CSFs), which include high market share, strong management, technological advancements, a skilled workforce, and a commitment to safety and customer service. Key Performance Indicators (KPIs) are then outlined, focusing on financial returns, operational efficiency, customer satisfaction, and customer acquisition. The core of the report involves the development of a strategy map, aligning with Qantas's long-term objectives of differentiation, cost leadership, strategic partnerships, and customer relationship management. Finally, a balanced scorecard is constructed, detailing performance measures, annual targets, and initiatives across financial, customer, internal processes, and learning & growth perspectives. The report demonstrates a clear understanding of strategic management accounting principles and their application within the airline industry, using Qantas as a case study.

Qantas Airlines

Critical Success Factors for Qantas Airlines
The factors responsible for creating competitive advantage by adding value
to the business corporations of Qantas
CSFs:
• High market share and good brand positioning
• Strong Management
• Various subsidiary lines operating to regional centers
• Technological advancements and innovative leverage of partners
• Connecting more than 1000 destinations internationally
• Partnership with over 25 airlines
• More than 30,000 skilled and competent workforce
• Service Promotions and in-flight services
• Sustainable returns to the stakeholders
• Premium full-service airlines
• Continuous Promotions and In-flight Services
• Effective Route System and non-stop flights
• Unrivalled domestic networks
• Safety at priority (Qantas, 2017)
• World’s leading integrated system
• Proactive engagement with the regulatory and industry bodies
• Group-wide business resilience framework
all these factors contribute to the survival and growth of the business firm in the
International Airlines industry

Key Performance Indicators
KPIs refer to the indicators signaling/indicating the high performances,
desired outcomes, and growth of the firm
KPIs are used for the measurable value to demonstrate on how the firm
effectively use for achieving the business objectives for evaluating the
success of the firm at reaching targets
The KPI are responsible for timely delivery, quality performance, and
low cost operations
KPIs for Qantas Airlines includes
High/maximum return on the investment to the shareholders and investors
High process yields
Low operation costs
Significant profits and revenues
High performing and competence workforce to give valuable performances
High customer satisfaction because of reliable, timely, and cost-effective
customer service delivery
high customer acquisition and retention rates (Qantas, 2011)
Increased online booking rates from the overseas customers

Strategy MapBusiness Strategy
Mission
To become the largest
Airlines services in
Australia
Vision
Create premium
and low fare
airlines services to
the customers
Differentiation
Cost Leadership
Strategy
Strategic
partnership with
global partners
and subsidiaries
Customer
Relationship Strategy
Goals
•$2 billion cost reduction by 2020
•Over than 50 aircrafts to be deferred or sold
•Reduction to $1 billion capital reduction
•Core Investment in the safety management
practices and customized service operations
(Garland, 2012).
Knowledge
sharing and
learning practices
Skills
development and
career
promotions
Reducing delays
through on-time
arrivals and
departures of Flights
Improving the
customer
satisfaction and
loyalty
Enhancing the
staff productivity
Create a learning
workplace through
training and
development programs
Increase the turn-
over rates
Safety standards
and frequent
shipping
Positive customer
feedbacks ad log-
term relationship
with them
Customer
Objectives
Internal Process
Objectives
Learning and growth
objectives
Financial Objectives
Increase
profitability and
revenues
Cost
reduction
Increasing the market
value, sales volumes,
and customer
acquisition rates

Strategic Alignment of Strategy Map with
Long-term Objectives
Strategy Long-term Objectives
1. Differentiation strategy Achieving the sustainable Competitive advantage
Operational excellence and customized-service operations
Sustainability of the business operations
2. Cost Leadership Strategy Increasing the sales revenues
Cost Reduction
Increasing the financial performance
3. Strategic Partnership Increasing the global business networks with subsidiaries
Increasing the area of Operations
Increasing market share by acquiring new customers
4. Customer Relationship
Strategy Establishing and maintain the long-term
Customer Relationships
Increasing Customer loyalty and Reliability
through reliable and timely airlines services
Safety Journey and Frequent shipping

Balance Scorecard
Simplified Strategy Map Performance
measures
Annual
Targets
Initiatives
Financial • Annual profits
• Sales revenues
• Cost reduction
• Market Value
• 20-25% p.a.
• 30-35% p.a.
• 15-20% p.a.
• 10-15% p.a.
• Resource
management
• Effective financial
plans and statistical
methods
• Analyzing the
financial statements
Customer • Customer
satisfaction
• Customer
acquisition and
retention
• Quality and value-
added services
• 20-25% increase
of the
international
customers
• More than 80%
positive customer
feedbacks
through satisfied
customers
• Effective customer
service delivery
• Customer loyalty
programs
• Quality
management
(Balance
Scorecard
Institute, 2018)
Internal
Processes
• On-time arrivals and
departure
• On-Ground Time
• Expected
performance
Outcomes
• More than 90%
• Over 90%
• Increase 10-15%
• Reducing flight
delays
• Improvement of
the processes
• Setting new
standards or
performance
measures
Learning
and Growth
• Strong
management
• Competent
workforce
• Trained staffs
• More than 90%
newly trained
employees
• 15-20%
increase in the
• Scheduled training
and development
programs
• Learning Culture
• Knowledge
High productive
workplace and
Improve staff
Turnover
Cost-effective
prices On-time flights
Increased
customer
acquisition
Increased
Revenues
Low
operating
costs
Increased
Profitability

Reference
• Balance Scorecard Institute (2018). Balance Scorecard
Basics. Retrieved From: https://
www.balancedscorecard.org/BSC-Basics/About-the-Balanced-
Scorecard
.
• Garland, J. (2012). Qantas and Strategy Planning. Retrieved
From: https://
prezi.com/rapwmu3cvlwx/qantas-and-strategic-planning/.
• Qantas (2017). The Company Profile and Success Factors.
Retrieved From: https://www.qantas.com/au/en.html.
• Qantas (2011). Qantas Airways Limited: Building a Stronger
Qantas. Retrieved From:
http://www.qantas.com.au/infodetail/about/investors/
• BuildingaStrongerQantasInvestorPresentation.pdf.