Strategic Management Report: Analyzing Qantas Airways' Performance

This report provides a comprehensive strategic management analysis of Qantas Airways, Australia's largest airline. It begins with an introduction to Qantas, its operations, and its significant role in the Australian economy. The report then delves into the industry's attractiveness, utilizing Porter's Five Forces model to assess competitive pressures. It examines Qantas's core competencies, resources, and capabilities, highlighting its competitive advantages through differentiation and cost leadership strategies. A SWOT analysis is presented, identifying the airline's strengths, weaknesses, opportunities, and threats. The report concludes with recommendations for Qantas to maintain and enhance its competitive position, including suggestions for human resource management, market share expansion, and addressing challenges related to fuel and labor costs. The analysis is supported by relevant academic sources, offering a robust understanding of Qantas's strategic landscape and its future prospects.

Running head: QANTAS AIRWAYS STRATEGIC MANAGEMENT
1
Qantas airways strategic management
Name:
Institution:

QANTAS AIRWAYS STRATEGIC MANAGEMENT 2
Introduction
The Qantas Airways are the largest airline in Australia. The airline began in business by
transporting mails and passengers. Currently, the company has its operations almost 140
destinations globally and largest employer in Australia with around 37,000 employees (Pearson
& Merkert, 2014). Human resource management operates in four areas: corporate, business
segment, development and learning and shared services. The market segment, the HR staff,
collaborates with other business segments to ensure delivery of the services that will assist in the
competitive advantage. At corporate level, the HRM handles staff’s remunerations, benefits,
development of the management and industrial relations of the company with its competitors.
Under, the development and learning, the HRM comes up with training programs to assist the
worker in delivering work efficiently. Finally, the human resource has duties in the firm and
under shared service (Hampson, Junor, & Gregson, 2012). The paper will discuss the industry
attractiveness, resources, capabilities, core competencies and competitive advantages of the
airline in great details, and come up with appropriate recommendation and conclusion.
Industry attractiveness
Currently, the aviation sector has been very competitive in many countries globally.
Concerning the Qantas, although it is the largest aircraft in the Australia with higher domestic
passengers, it is threaten by other emerging airlines worldwide (Hussain, Al Nasser, & Hussain,
2015). Michael Porter model will help understand more about the Qantas airliner structure.
Industry competitor
Qantas operates a virgin blue airline with low cost. However, looking at the cost
leadership strategy, it cannot help in the current competitive condition. It is because each

QANTAS AIRWAYS STRATEGIC MANAGEMENT 3
aviation airline focuses on the cost reduction, and services delivery and having an excellent
product that out does the competitor. And so, Qantas can concentrate on the differentiation
strategy to strengthen the company to deal with other the competitor.
Threat of the new entrant
For instance, the Tiger Airways plans to set up a new base in Victoria's Avalon airport.
For that reason, Qantas should know to create hurdles to a new competitor from global aviation
like using price tactic with the jet star airline as subsidiary (Bereznoy, 2015). Also, association
strategy crucial in building trouble Qantas’s competitors to create brand worth by diversity;
create superiority feeling of the Qantas customers.
Threats of the substituents
To save time, individuals use a plane as a means of transport between countries or
inaccessible places. Due to the alternatives such as automobiles, vessels and trains, the airline
should try to come up with diverse options and encourage travelling at a lower cost to influence
customers.
Bargaining power of suppliers
The two primary provider of the aviation industry is aircraft manufacturer and fuel
supplier. Qantas contracts the aircraft manufacturers such as Boeing, Bombardier and Airbus
(Piercy, 2009). Hence, the influence of the airliner engineering firm can be great to transact with
the Qantas airline. Another major supplier of the airline is the fuel which comes at higher cost.
Bargaining power of the buyers

QANTAS AIRWAYS STRATEGIC MANAGEMENT 4
Both locally and all over the world, bargaining influence of the consumers can be
extraordinary. Nationally, Qantas has a jet star which has several routes at comparatively low
cost. Tiger Airways Australia is alternative airline offering a reasonably little price carriage
(Piercy, 2009). Similarly, the bargaining control of the buyers in the global airline industry can
be substantial. Consequently, numerous airlines are operating at a lower cost, offering several
options and different promotion. So, Qantas should have a quality product at the lower price in
various channels such as websites and travel agency.
Core competencies
The core competencies consist of the production process, staff, customer relationship and
abilities of the acquaintance which assist in the company to reach its goals and objectives
(Pearson & Merkert, 2014). Similarly, strategic planning shows the possible method that the
organization can come about in future. Also, the company can go along the new core
competencies to create benefits and success. A strategic design like information and social
planning is the ways to define the senior management. For the case of the Qantas airline, the
organization‘s core competencies are exceptional airline with outstanding services (Park, 2007).
Qantas airline utilizes their core competencies to make the corporation have competitive
advantages. The Qantas airline employs their essential capabilities with Qantas and jet star
airline; which are reliable trademark.
Resources and capabilities
Possessions are intangible or physical assets that business implements into corporate
plans (Cui & Li, 2015). Although the market advances powers and limits, a firm’s reaction to
the resources capability and distribution development becomes a basis of competitive advantage.

QANTAS AIRWAYS STRATEGIC MANAGEMENT 5
Thus, the capacity is how the company uses its resources to have a competitive advantage. For
instance, for the Qantas airline, it has a cheapest and groundbreaking approach to the price
cutting (Park, 2007). Additionally, it has simple processes and concentrates on the particular
market segment. The Qantas airline has resources such as human resources, financials assets,
intellectual capital and physical properties.
Competitive advantage
Michael Porter's model comprises of generic strategies consisting of cost leadership,
differentiate and focus strategy (Daft & Albers, 2013). The airline manages two brands; Qantas
and jet star airlines. Moreover, the company has other subsidiaries such has Qantas link, jet
connect; jet star Airways and Express Freighters Australia.
Differentiation strategy
Through the differentiation approaches, the enterprise can lift the worth of the products to
the commuters. In Qantas aviation firm, the safety and protection are primary consideration.
Qantas group operates over 330,000 flights per year (Rieple & Helm, 2008). Therefore, the
organization is confident about outstanding management on safety platforms which differentiate
it from other competitors. In addition, the Qantas international flights such as A380, A330 and
B747 have provision for in-flight entertainment. Also, the airline provides its members with over
130 lounges globally with necessary facilities. Qantas groups operate various trips which totals
to 173 terminals in 42 nation states. Thus, with grouping with other partner airways, it can
heighten the significance of the product and create good customer relationship (Dwyer &
Edwards, 2009).
Cost leadership strategy

QANTAS AIRWAYS STRATEGIC MANAGEMENT 6
Jet star centers on dropping cost of flights so as to capture market share with the main
brand in a different market segment (Pearson & Merkert, 2014). However, currently, there are
airlines which still offer low-cost. For the airline to deal with leading competitor, it has to form
partnership strategy so as offer lower prices than other fare airlines. Air Asia and jet star provide
unsurpassed reach in the Asia-pacific region, with a reduced cost and more routes than their
competitor and therefore this partnership alliance makes it maximize and enjoy economies of
scale (Frederick & Patil, 2009). Building on the same point, jet star recognizes the fast sale at a
lower price to create new promotion and attract more customers quickly (Frederick & Patil,
2009).
SWOT analysis
Strengths
Qantas has a power which helps to compete with other airline industry. Qantas has an
excellent marketing skill and perfect brand building exercises. It is through promotions and
marketing which makes the company a noticeable airline service provider. It is well known that
the enterprise is a long term partners of the cricket team and sponsor of formula one in Australia
(Frederick & Patil, 2009). Qantas has impressive and excellent safety records which are
attractive to the passenger. Safe assurance of the passengers enables them to travel using the
airline both domestically and internationally places. Additionally, Australia government provides
the company with numerous tax benefits which assist the air in acquiring necessary materials at
rational price. Moreover, Qantas enjoys the monopoly in the domestic market because it is the
only airline in the Australia territory.
Weakness

QANTAS AIRWAYS STRATEGIC MANAGEMENT 7
The airline operating and labor cost is very high which makes it difficult to cope (Cui &
Li, 2015). So, the airline has some large subsidiaries which make it challenging to deal with
complex and cost related hitches. On a regular basis, the airline experiences union disputes. The
airline feels the pressure of working out on the employee's demands; the workers raise their
demand from anywhere. Another issue is that there is a mixed fleet which makes the pilot train
properly to be able to operate them. Training makes the airline to incur an additional operating
cost.
Opportunities
For Qantas to create a new airline in Asia, need to establish a fundamental relation to
other countries government and also its people (Pearson & Merkert, 2014). Therefore, the airline
needs to capitalize on its strategies in the Asian market to make success like in the domestic
country. Due to technology contributing immensely to the globalization, the airline should utilize
on the E-commerce operation to extend service which will help to get more customers and offer
passengers with more options (Frederick & Patil, 2009). The Qantas has a significant market
share and well-established ground due to less interest by other airlines in the domestic territory.
Threats
The rise in labor cost has adverse effects on both short and long term difficulties. As
results of pressure from union, force company to raise the wages to its staff at less working
hours. It further led to lengthy discussions which affect the airline operation. All airlines have
problems with rising fuel costs (Cui & Li, 2015). Therefore, there will be effects on the activity,
and this causes the airlines to change its focal plans so as tackle changes. Furthermore, for the
government to save the small airline from the well-established airline from competition, the

QANTAS AIRWAYS STRATEGIC MANAGEMENT 8
government set a strict rule and increases the government regulations (Fu, Homsombat, & Oum,
2011).
Recommendation
Alan Joyce has to help the employees understand the importance of going global and also
create a feeling of mutual understanding among the employee; so that they give him 100%
desired results. Qantas management has to implement the human resource planning, try to reduce
it weakness and try to work with its workers. Qantas has to gain a potential market share because
Australia is turning into a business hub and international tourist destination center for the
oceanic. The market in Asia has a significant and number of countries such as India, Japan,
China, Korea and Singapore (Park, 2007). Since their competitor is less reliable and more
expensive, the airlines can provide the special conditions which will attract more customers from
their rivals. The airline should know how to tackle the issues of the fuels and labor cost to
achieve its goals. The organization should become aware of the regulations protecting small
rivals so that the government does not intimidate the airline. Finally, the Allan Joyce can give
bonus and benefits to motivate the employees to perform at their optimal level.
Conclusions
Undoubtedly, Qantas has approved that is customer-driven organization due to its
innovative and unique approach supported by the Australia government. There is a strong bond
between the airline and customer because of the services offered at business and economy class.
Qantas recognitions come as result of the various sponsoring sports which is lucrative and
profitable. Additionally, the Qantas employs the strategy of the following limited amount of
destination. Hence, fewer destinations make it provide better services in the world so far.

QANTAS AIRWAYS STRATEGIC MANAGEMENT 9
Although it could be difficult for the Allan Joyce to maintain and form a continuous relationship
with unions, it will help to create a new beginning in the airline history.
References

QANTAS AIRWAYS STRATEGIC MANAGEMENT 10
Bereznoy, A. (2015). Changing Competitive Landscape Through Business Model Innovation:
the New Imperative for Corporate Market Strategy. Journal of the Knowledge Economy,
1-22.
Cui, Q., & Li, Y. (2015). Evaluating energy efficiency for airlines: An application of VFB-DEA.
Journal of Air Transport Management, 44, 34-41.
Daft, J., & Albers, S. (2013). A conceptual framework for measuring airline business model
convergence. Journal of Air Transport Management, 28., 47-54.
Dwyer, L., & Edwards, D. (2009). Tourism product and service innovation to avoid ‘strategic
drift’. . International Journal of Tourism Research, 11(4), 321-335.
Frederick, H., & Patil, S. (2009). The dynamics of brand equity, co-branding and sponsorship in
professional sports. International Journal of Sport Management and Marketing, 7(1-2),
44-57.
Fu, X., Homsombat, W., & Oum, T. (2011). Airport–airline vertical relationships, their effects
and regulatory policy implications. Journal of Air Transport Management, 17(6), 347-
353.
Hampson, I., Junor, A., & Gregson, S. (2012). Missing in action: aircraft maintenance and the
recent ‘HRM in the airlines’ literature. The International Journal of Human Resource
Management, 23(12), 2561-2575.
Hussain, R., Al Nasser, A., & Hussain, Y. (2015.). Service quality and customer satisfaction of a
UAE-based airline: An empirical investigation. Journal of Air Transport Management,
42, 167-175.

QANTAS AIRWAYS STRATEGIC MANAGEMENT 11
Park, J. (2007). Passenger perceptions of service quality: Korean and Australian case studies.
Park, J. W. (2007). Passenger perceptions of service Journal of Air Transport
Management, 13(4), 238-242.
Pearson, J., & Merkert, R. (2014). Airlines-within-airlines: A business model moving East.
Journal of Air Transport Management, 38, 21-26.
Piercy, N. (2009). Strategic relationships between boundary-spanning functions: Aligning
customer relationship management with supplier relationship management. Industrial
Marketing Management, 38(8), 857-864.
Rieple, A., & Helm, C. (2008). Outsourcing for competitive advantage: An examination of seven
legacy airlines. Journal of Air Transport Management, 14(5), 280-285.

QANTAS AIRWAYS STRATEGIC MANAGEMENT 12