MGT302A - Strategic Management: Qantas Airlines Five Forces Analysis

This report provides a strategic analysis of Qantas Airlines, the national flag carrier of Australia, using Porter's Five Forces model. It begins with an introduction to Qantas and its industry position, followed by a detailed explanation of Porter's Five Forces: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing competitors. The application of the model to Qantas is then discussed, with specific examples and insights into each force, including the impact of deregulation, supplier relationships with Boeing, Airbus, and others, the bargaining power of customers, and the competitive landscape. The report also examines the usefulness and limitations of the model, offering recommendations for Qantas's operating strategies, such as expeditionary marketing and a focus on customer experience. The analysis concludes with a summary of the key findings, emphasizing Qantas's strengths and challenges in the competitive airline industry.

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Running Head: STRATEGIC MANAGEMENT 0

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Table of Contents
Introduction......................................................................................................................................2
Porter’s five forces model................................................................................................................2
Application of model.......................................................................................................................2
New entrants threat......................................................................................................................2
Suppliers bargaining power.........................................................................................................3
Buyers bargaining power.............................................................................................................4
Threats of substitute.....................................................................................................................4
Rivalry.........................................................................................................................................4
Usefulness and limitations...............................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

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Introduction
The national flag carrier of Australia is Qantas airways. The nickname of the organization
is "The Flying Kangaroo" (Hoon, 2012). This organization is considered as the world’s
prominent long-distance airline. Qantas also knows as the strongest brand in Australia
(Arjomandi, 2019). I will discuss Porter's forces model to compare the competitors. I will
analyze the biggest competitors with the adaption of strategy. This essay will provide a deeper
insight into the decision of investment by analysis of financial performance. In this essay, I will
also cover the discussion about the application of the model with the limitation and usefulness.
Porter’s five forces model
Levers of profitability can be evaluated by the strategic management tool knows as a
porter five forces analysis. This organization has defined the ways of doing business in the
industry of transportation. Qantas has the stock market ticker and listed in the Australian security
exchange (Manteghi & Zohrabi, 2011). As a manager, my objective will be to comprehend the
five modest forces that influence profitability. The strength of these forces differs across the
business to business that means each business is different towards attractiveness and
profitability. The information analyzed using porter's five forces used by the strategic planners of
Qantas to make strategic decisions. A weaker force of factors means greater profitability and a
stronger force of factors means lower profitability.
Application of the model
New entrants threat
In transportation new competitors bring innovation. The way of doing the new things by
organizations will put pressure on this Qantas by lower pricing strategy, reducing costs, and

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providing new value proposals to the consumers. This organization has to shape effective
barriers to defense competitive control and to manage the challenges. By spending money on
development and research capacities can build by Qantas. In the industry of dynamic entrants are
lesser. By defining the regularity standards Qantas will considerably decrease the frame of
unexpected profits by the new firm thus disappoint new performers in the industry. There is a
large amount of investment required in the airline business, so it is tough to enter this sector. The
new entrants in Qantas airline are high after deregulation.
Suppliers bargaining power
Many organization in the industry of transportation purchase their raw material from
many dealers. In a dominant station, suppliers can cut the margins of Qantas. In the sector of
transportation, powerful dealers use the power of negotiating to abstract higher values from the
organizations in the field of transportation. Bombardier, Boeing, & Airbus are the main supplier
for Qantas. Suppliers bargaining power is high for Qantas as it has more than 250 aircraft
including Airbus, 767s, and A380s, etc. (Stalk, 2016). By the help of an effective supply chain
with many suppliers and experiments in the design of the product by different materials values
go up of raw material than organizations can move to another. Business depends on the firms for
developing dedicated suppliers.
Buyers bargaining power
Purchasers like to purchase the best minimum price products. This will put the pressure
on Qantas for the long term. The more powerful and smaller base of a customer for Qantas will
limit the higher purchasing power of customers. Generating a base of the customer at a large
level will reduce the purchasing power of the customers and will deliver the organization
streamline for the production and sales process. The bargaining power of purchaser of Qantas is

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high as passengers have many options to buy tickets from websites, travel agents, and from the
airlines based on service, price, and quality.
Threats of substitute
New services or product meets the same need of customers in different ways. The
industry will suffer the profitability. Services lie dropbox and Google drive is a substitute for
storage hardware drives. Competitors of Qantas are Malaysian airlines, united airlines, and
Cathay pacific. Oriented services than product-oriented are the main features of Qantas. The
need of the consumers can be understood by the buying behavior of the customers. Threats from
a substitute for Qantas can be lower or higher depending on customer liking. By accumulative,
the switching budget for the customers Qantas can increase the substitute services or products
(Dobbs, 2012).
Rivalry
Rivalry against the competitors is intense as it drives down prices and decreases the
profitability of the organization. This organization operates in the competitive transportation
industry. This organization has a scale for sustainable differentiation to compete better. This
organization has a collaboration to enhance the market size by competing for a small
marketplace. Digital innovation and data of customers are competitive advantages for Qantas to
keep up with the customer experience expectations of customers (Homsombat & Lei, 2014). This
organization operates with Jet Star to compete with other low fare airlines like virgin blue. This
organization has high rivalry depends on differentiation strategies to build a strong brand
(Nahrain, 2016).

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Usefulness and limitations
I will recommend the operating strategies to accomplish the best quartile total of
shareholder return related to ASA 100 and world airline peers. Qantas can get advantages by an
expeditionary marketing strategy to provide world-class services to customers. A style of unique
service shall be adopted by Qantas. The good infrastructure with the first-class experience of
flight will refer to competitive strategy. This will provide a convenient flight to all passengers.
This will increase the high cost of operations. This organization can revolve around six
deliberate pillars. This should be complemented by an approach to the management of capital.
This will maintain the earnings per share. This will devote a segment of group level, engagement
of employee, a net score of a promoter, transformation annual benefits, progress of innovation
across product, operations, and services (Pearson & Merkert, 2014). These all required high
capital investment for the long term. These will also put unforeseen circumstances.
Conclusion
In the essay, I have elaborated the Qantas by the brief summary of Porter’s five forces
model. I have described that Qantas likes a continuation of a hub and spoke travel. The number
of flights in low frequency as a customer likes to waste less time in traveling. This organization
is also known as a good organization compare to another organization and have very good
operating strategies compare to competitors.

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References
Arjomandi, A., 2019. Environmental Performance. The Journal of Economic Research, 41(08),
pp. 133-144.
Dobbs, E., 2012. A Industry Analysis. Journal of Competitive Analysis, 24(01), pp. 32-45.
Homsombat, W. & Lei, Z., 2014. Competitive Effects. Transportation Research Part E:
Logistics And Transportation Review, 63(09), pp. 01-16.
Hoon, T., 2012. Airlines. Springer Science and Business Media, 05(02), pp. 08-96.
Manteghi, N. & Zohrabi, A., 2011. Factors Analysis. Journal of Social and Behavioral Science,
15(11), pp. 2068-2073.
Nahrain, J., 2016. Rivalry of Airline. The Journal of Buiness Managment, 96(04), pp. 59-84.
Pearson, J. & Merkert, R., 2014. A Business Model Moving East. Journal of Air Transport
Management, 38(04), pp. 21-26.
Stalk, G., 2016. Suppliers. The Journal of Statistic Management, 68(03), pp. 79-97.