MAN306 Business Strategy Report: Analysis & Development of Qantas

This report provides a detailed analysis of Qantas' business strategies, examining its current approaches using models like value chain analysis, Porter's diamond model, and the balanced scorecard. It evaluates the effectiveness of these strategies in maintaining Qantas' competitive edge in the airline industry. Furthermore, the report proposes new strategies, including cost optimization and diversification, to enhance the company's performance over the next five years. Strategic control measures are also discussed to ensure the successful implementation of these proposed changes, aiming to improve Qantas' market position and profitability. The document concludes with recommendations for future strategic direction.

Running head: Business strategy
Business strategy
2018

Business strategy
Executive summary
Strategies are required to generate more profit and attract maximum workforce across the globe.
No company can grow and strive without using innovative strategies and approaches. Qantas
which is one of the leading airlines in Australia has been chosen in the task. The current
strategies such as value chain analysis, diamond model and balance scorecard model also are
depicted in the task. The current strategies help Qantas to be a leader in the competitive market.
With effective current strategies, the company could able to increase its market share and profit
margin. Apart from this, the paper also outlines diversification and cost strategies that help to
differentiate its services from the competitors to a large extent.
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Business strategy
Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Organization background............................................................................................................................4
Current strategies.........................................................................................................................................5
Analysis & reflection of current strategies..................................................................................................6
Value chain analysis................................................................................................................................6
Diamond model.......................................................................................................................................7
Balance scorecard....................................................................................................................................8
Proposed strategies....................................................................................................................................11
Cost.......................................................................................................................................................11
Diversification strategy..........................................................................................................................11
Strategic control....................................................................................................................................12
Conclusion.................................................................................................................................................13
References.................................................................................................................................................15
Bibliography...............................................................................................................................................18
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Business strategy
Introduction
The main object of this paper is to portray and discuss about the strategies of Qantas. The
organization has been chosen as an example to perform the strategic analysis is Qantas airline. It
is one of the biggest and well-known airlines in Australia who provides Quality air travel
services to the clients in the global market. The paper takes into consideration various current
and past strategies of Qantas airlines and the way in which the firm can uplift profitability and
outcomes. Qantas background, mission, and vision also have been considered in the task. Along
with this, proposed strategies such as cost, diversification and strategic control also have been
presented in the task which helps to maximize the efficiency and effectiveness of the firm. At the
end, some recommendations have been elaborated to make a strong image in near future. More
detail of the paper has been elucidated below.
Organization background
Qantas was incorporated in 1920, Qantas has grown to be Australia’s biggest and leading
international and domestic airline (Qantas, 2018). It is one of the largest and leading long
distance airline and one of the biggest airline brands in Australia. The company has built and
developed a reputation and brand image in operational reliability, safety, customer services, and
engineering and maintenance. The main business of Qantas is the transportation of customers
utilizing two complementary airline brands such as Jetstar and Qantas. The company also
operates and manages subsidiary businesses such as other airlines and businesses in specialist
markets like as Q catering. The firm employs more than 30,000 workforce with around 93% of
them based within Australia. Qantas airline brands operate and manage domestic, regional and
international services internationally. The company works in a tough and complex environment
where people are often predicted to attain the impossible, supported by trust, respect, loyalty and
good leadership. Every member of the company enjoys the opportunity and provide support to
follow their dreams in the international market (Linkedin, 2018).
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Business strategy
The main objectives include ensuring safety and security in its business, right routes, right
aircraft, excellent customer service, operational effectiveness, and efficiency. The long-term
vision of the firm is to operate and manage as the best and biggest airline across the globe.
Qantas is a market player or leader in the aviation industry which is highly and effectively to
compete in the global market. It is further stated that the company is a member of the number
one world alliance (Reeves & Deimler, 2009).
Current strategies
It has been found from the various studies that strategies play a vital and significant role in
maximizing and enhancing profitability and outcomes. Without effective and unique strategies,
the firm could not able to boost its revenue and results internationally (Cocks, 2009). It is stated
that the company uses corporate and business level strategies to grow and survive business
activities globally. Business level strategies and corporate level strategies based on how Qantas
will deploy their resources and capabilities to compete in a specific market section or industry.
The current strategies for Qantas have been discussed below.
Finance: The finance function plays a significant role in permitting Qantas in effectively and
successfully implementing its strategy of international development and expansion. The financial
resources are essential to perform alliances with major and unique airlines in the global market.
Human resource management: It is one of the biggest and unique corporate level strategies
that used by Qantas while implementing business activities and operations globally. The skills
and talented workforce can be hired through effective and unique HRM.
Marketing and sales: These strategies are needed to render air travel services to customers
across the globe. Without marketing and sales team, the company cannot attain profitability and
outcomes in the international market (Klettner, Clarke and Boersma, 2014).
Marketing mix: It is a well known strategy that is used by Qantas while introducing new
services and products in the global market. The marketing mix covers product, price, place,
physical evidence, promotion, process, and people. The marketing mix strategy further helps the
firm to cope up and overcome the competitors globally. Premium pricing strategy is adopted by
the firm to attain a competitive edge in the global market. Qantas also focuses on the promotion
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Business strategy
and advertisement strategy to build and enhance the financial position and brand image
internationally. It uses various media channels such as online ads, TV, print and other loyalty
programs to promote airline services in the market.
Differentiation strategy: One of the empirical approaches that initiated by the firm is
differentiation. This strategy is used to distinguish its service from the rivals which are available
in the global market. By using this strategy, Qantas is able to augment profitability and attract a
wide range of passengers internationally (Roll, 2015).
Analysis & reflection of current strategies
Value chain analysis
The value chain analysis is a significant and most valuable strategic method or tool that indicates
about the various activities and strategies carried out by the company in order to render valuable
products and services to final customers across the globe. The activities are mainly divided into
primary activities and support activities. The primary activities at Qantas include inbound,
inbound logistics, operations, sales, marketing and services (Gregson et al, 2015). On the other
hand, the support activities include technology, procurement, infrastructure and human resources
(Rothaermel, 2015). In respect to Qantas, the company provides ample of air travel services to
the customers across the globe. The inbound logistics for Qantas is the travelers or passengers
that prefer to travel with the airline. Apart from this, the operational activity majorly includes
passenger security check, directing passengers to aircraft and movement of luggage to aircraft
facilities (Tretheway & Markhvida, 2014). It is noted that outbound activities or process are the
movement of customers from one destination to other destination or traveling services rendered
to their desired place or location. In performing and measuring these primary activities, the
support activities and strategies have a vital and significant role to play, as technology enables
and ensures the firm is permitting its customers to book airline tickets whereas its highly talented
and skilled staff and subordinates throughout their entire traveling approach and process. It is
noted that Qantas airline also makes a high investment in research and development activities
and approaches with a view to render innovative products and services to its customers around
the globe (Crain & Abraham, 2008).
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Business strategy
(Source: https://apessay.com/order/?rid=cc49f4f3231bb03f)
Diamond model
The porter diamond model for Qantas has been discussed below.
Factor conditions: These are the principles and rules of the organization’s capability to supply
attributes of research and development which allow to compete and struggle. Aspects are
production elements and infrastructure essential to risk and challenge against the competitors in
the industry. It also could be seen in Qantas aviation sector. The employment rate of Qantas
aviation has maximized in the global market (Pimpa, 2011).
Demand condition: Condition which specifies the attributes and aspects of domestic demand
designed the subsequent wide factors of domestic competitive advantage is called demand
conditions. This condition or situation explains about the attributes of customers in the domestic
market. Qantas airline is one of the largest and popular airlines in the global market as it is the
main hub in Australia. Due to the increased and improved pressure of economic crunch and
rivals made to sell this airline to the private sector. The overall demand maximized due to
attractive and luxurious facilities with low airline ticket fair (Lin and Sun, 2010).
Related and supporting industries: The supporting and related industries include distributors
and suppliers who provide cooperation and coordination to the company to provide support it in
the global competition. It is quite complex if the airline industry does not have access to
networks to reduce costs through effective supply chain management and manufacture raw
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Business strategy
material and factors with high and effective quality. Jet start airways and Virgin airline are global
airline suppliers. Thus, the company can take support from these airlines to gain competitive
benefits in the international market. With the guidance and assistance of the aviation sector may
upgrade and enhance its productivity and performance equal to the overseas rival company
(Prasad, 2011).
Firm strategy, structure, and rivalry: In today’s era, Qantas has grown and built a dynamic
image and goodwill in the competitive market. Qantas controls and manages its activities
domestically and internationally as well. It has been found that Qantas uses innovative and
effective strategies and strong structure to struggle with rivalries in the international market. It
also directs and assists in minimization in cost and education aviation strategies, could able to
beat the competitors globally (Prasad, 2011).
Change and government: The change and government play a major role in maximizing
outcomes and returns in the international market. Government helps in making rules, policies
and strategies for Qantas for making a good image and brand reputation internationally (Prasad,
2011).
Balance scorecard
A balanced scorecard may be defined as a performance metric which is used in strategic
management to identify and analyze the various internal functions of a business and their
external outcomes (Helmreich and Merritt, 2017). It is implemented and used to measure and
analyze the feedback and reviews to the organization. There are four perspectives of balanced
scorecard including customer perspective, financial perspective, internal business perspective
and learning and growth perspective.
Balance scorecard
Particular Target Measure Indicators Initiatives
Financial
perspective
 To promote risk
management
practices
 To support the
 Value of
shareholders
 Return on
 Maximize in
profitability
and returns
 Return on
 Differentiation and
cost leadership
strategy
 Improvement and
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Business strategy
attainment of
business
objectives and
fulfill the
corporate
governance
liabilities.
 To attain a
return on
investment
capital.
 To provide
unique and
attractive
traveler products
and services to
customers.
 To maximize the
profitability and
revenue in the
international
market.
assets
 Number of
travelers who
are traveling
in the
company
 Innovative
and unique
strategies
equity
 Selling of
airline
products and
services
 Return on
assets
enhancement its
airline services and
products
 Provides services a
airline products at
reasonable prices
Customer
perspective
 To attain the
level of
satisfaction of
the customers
 Improvement
and
enhancement of
customer loyalty
 Collect
customer
reviews and
feedback
 Maintaining a
strong and
unique
customer base
 Market share
 Satisfaction
and loyalty
among the
passengers
 With using custom
centric and innovat
strategies
 Offer ample of
attractive and uniq
services and produ
to the customers
 Business expansion
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Business strategy
and trust
 Improvement its
airline products
and services
 Provides
good quality
of services
and development
internationally
Internal
process
 To retain and
enhance internal
management
 To attract and
retain talented
and skilled
employees
 To maintain a
strong and
unique supply
chain and
inventory
management
(Qantas, 2018).
 Retain
maximum
number of
customers
globally
 Quality of
overall
process
 Inventory
level and
supply chain
management
 Maximize
satisfaction
level among
the customers
 Employee
turnover rate
 Availability
of required
stock (Qantas,
2018).
 Just-in-time invent
system
 Advantages to the
workers
 Acquisition strateg
or approach
Learning
and growth
 Constantly
improvement
and innovation
 Development
and expansion of
human resources
 Efficiency
and
effectiveness
of operations
and activities
 Information
flow
 Service
delivery rules
and standards
 Customer
loyalty and
satisfaction
 Employee
motivation
and trust
 High and
heavy
contribution
of workers
 Innovative process
 Implementation of
new and innovative
training programs a
strategies
 Innovative and
dynamic process
 Quality assurance a
measures
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Business strategy
Proposed strategies
The proposed strategies for Qantas airline have been discussed below.
Cost
After the various studies, it is noted that Qantas is a leading and growing international airline
Company. It is stated that the company is targeting mainly business travelers in the competitive
market. The company operates and manages generally in luxury services across the globe
(Pearson and Merkert, 2014). Apart from this, it provides high tech facilities and services to
customers around the world. It has been found that Qantas uses a premium pricing strategy to
beat the rivalries internationally. The premium pricing strategy in its marketing mix covers
advantages, costs, value addition in regards to quality and excellent service. With the facility of
refunds or returns, the company has developed and created loyalty and trust among its key target
audience internationally. For analyzing and capturing the entire target market, economy tickets
too available which are relatively low priced. In today’s competitive world, the firm has
maintained the status of safety and comfort as compared to its competitors globally. It is further
elucidated that the company follows a penetration strategy by rendering low cost in the
competitive market. In this way, cost strategy provides ample of benefits to the customers around
the world (Li, Wang, and Cui, 2016).
Diversification strategy
Qantas Airways is the national airline of Australia. Along with this, it is a founding and unique
member of the world alliance and manages an extensive international and domestic network
within Australia. Qantas uses and manages the low level of a diversification strategy to
differentiate its services from the rivalries globally (Lawton, Rajwani and O'Kane, 2011). A
diversification strategy may be defined as a strategy that a company adopts for the development
and expansion of its business. It has been found that Qantas airline is well known and popular for
its convenient and comfortable seating plan for its passengers. Innovative and unique airline
products and services are being launched by the company to stay in the competitive market. With
an effective and dynamic diversification strategy, the company has created a consumer bill of
rights for its workers. The company comes into existence in the international and domestic
market as well. The firm has launched an addition to their diversified and unique business
portfolio. The company assures health insurance for the company’s group members in the
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Business strategy
competitive market. The firm further assure is available to constant flyer group members of
which they recently have 11 million in Australia, so if the business of the company is successful
and unique, it would firmly position both Qantas Assure and Qantas airlines as effective and
dynamic dominators in both health insurance and airline categories. There are three types of
diversification strategies that being used by the company including market penetration, market
development and product development strategy (Albers et al, 2017). These strategies help the
firm to cope up with rivalries internationally. The firm uses a market penetration strategy to
capture and attract a maximum number of customers in the global market. Market penetration
strategy is one of the significant strategies that involve focusing and analyzing selling existing or
current airline services and products into existing markets to attain maximum profit and market
share. On the other hand, market development is also used or implemented by Qantas while
expanding and growing business functions internationally. Market development is a known as
growth strategy that analyzes and identifies new market segments for existing airline products
and services. This strategy helps in targeting new customers in new areas and locations globally
(Grant et al, 2014).
Strategic control
It is stated that changes in the global economy and shifts in the geopolitical balance of power
have great and wider impact on Qantas development and expansion. Various strategies and
approaches are being used by the company while expanding the business activities globally. The
firm is committed to providing safety and security to the workers at the workplace while
performing tasks and duties within the organization (Perrott, 2015). Along with this, it acts with
integrity, honesty, and ethical rules and standards. It is further liable to safeguard Qantas group
brands, property, reputation, information, and assets (Homsombat, Lei and Fu, 2014). It
proactively and effectively manages risks, challenges, and issues within the organization. The
firm further committed to complying with all applicable regulations, laws, rules and conducting
business with the highest level of integrity and ethics. The international aviation industry is quite
complex as it is executing. The company’s strategy and finance team drive competitive benefits
through financial and human services and responding to change and uncertainty to maintain
effective and dynamic leadership position (Qantas, 2018).
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