Business Strategy Analysis: Qatar Airways and American Airlines Report

This report provides a comparative analysis of the business strategies and strategic management approaches of Qatar Airways and American Airlines. The introduction defines strategic management and its importance in achieving competitive advantage, setting the stage for a detailed examination of both airlines. The Qatar Airways section highlights its growth, service quality, and expansion efforts, emphasizing its strategic partnerships, technological advancements, and government support. The American Airlines section discusses its market position, competitive landscape, and financial challenges, including labor costs and fuel prices. It examines the airline's pricing strategies, the impact of these strategies on different customer segments, and the importance of direct flights to major business cities. The report also identifies the strengths and weaknesses of both airlines, culminating in a conclusion that assesses their relative success in the airline industry. The report references various academic sources to support its analysis.

Running head: BUSINESS STRATEGY
Business Strategy
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Table of Contents
Introduction:....................................................................................................................................2
Qatar Airways and the strategic management:................................................................................2
American Airlines Strategic Management:.....................................................................................4
Conclusion:......................................................................................................................................7
References:......................................................................................................................................8

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Introduction:
Strategic management is basically related to the identification and the description of the
strategy which can be carried by the managers in order to achieve better performance and a level
of competitive advantage for the specific organisation. the organisation is said to have
competitive advantage in case the profitability is higher than the average amount of profitability
of other companies in its industry (Frynas and Mellahi 2015).
The decisions which a manager takes and which is decisive in understanding the
performance of a firm is referred to as the concept of strategic management. In this particular
report, the two airline industries which are chosen in order to be compared from a strategic
management perspective are the Qatar Airways and the American airlines. A detailed overview
is provided of both the airline companies which have been chosen. This is helpful in reaching a
befitting conclusion regarding the fact that which organisation is better. The strategic
management perspective is usually chosen because it helps in providing a broader perspective to
the employees of an organisation in order to understand the way in which the job fits into their
organisational plan (Richelieu 2014).
Qatar Airways and the strategic management:
The Qatar Airways is owned by the Qatar Airways which is one of the most famous 5-
star airlines which is operative on both the international as well as domestic destinations. The
airlines is responsible for providing the most reliable and the best service in terms of comfort to
the passengers in the industry. The services that are offered by the airline are excellent both in air
as well as on the ground. The main target of the airlines is the corporate, upper middle and

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middle classes. The latest expansion efforts of the Qatar Airways have been the re-iteration of
the commitment of the airline to a wide range of growth opportunities by the addition of service
to numerous points all across the world.
Qatar airways is the national carrier of Qatar and it is one of the hugest success stories in
the industry concerned. The operations of the Qatar Airways started more than two decades back
and the vision of making the airlines the best international airlines of the world was attained. The
airways matured as a leader in the global as well as regional aviation genres due to the excellent
service which was provided by the airlines (Ibrahim and Harrigan 2012).
The government along with the other political matters were responsible for influencing
the evolution of the Qatar Airways as a suitable success story. The national carrier had to deal
with the conflicts from the European airlines which used the winging tactics and there were fears
regarding the safety of the fleet. There were also a certain amount of indirect taxes which were
reported by the European airlines. at the time of the economic crisis, certain factors which were
likely to affect the Qatar Airways where the gross domestic product, the rise in the international
trade, the concept of globalisation and the changes in the GDP rates in the middle east (Gray
2013).
The social factors in this connection are also essential which are responsible for both the
business as well as that of the community. These are also adverse effects for the airways. The
Qatar Airways in considering the fact has been responsible for indicating that there might have
been a level of positive response towards the community by means of the reduction of the carbon
footprints in the environment as it is responsible for controlling the air traffic and the
minimisation of the carbon emissions (Merkert and Morrell 2012).

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The different strategic partnerships of the Qatar Airways along with notable companies
are indicative of a long tern crafting of an aviation base for the advances in technology. The
technological development in the airlines is responsible for positively impacting the areas which
are routing as well as the internet booking. Apart from this the technological alliance helps in
bettering the operations as well as in improvement of the operations of the airlines. The
development of the Global distribution system is responsible for playing an essential role in the
contribution of the service to the Qatar Airways (Doganis 2013).
The Qatar Airways enjoys many benefits like low taxes, the lower rental charges and the
helpful financial and managerial resources from the government concerned. The airways also
maintenance costs and privileges which involve that of brand loyalty from the residents of the
place. The Qatar airways also has its own niche market. The competitive market the airline has a
sustainable market penetration strategy and the airline needs to have an extremely secure future
(Airways 2016).
American Airlines Strategic Management:
The American airline was founded in the year 1930 and it is a subsidiary of the AMR
corporation. The airline operates in the countries like America, Europe and Asia. The
competitors of the American Airlines are the United Airlines, Delta Airlines and the Southwest
airlines.
The threat of new entrants in case of the airlines is low and there are very high costs of
investment. The bargaining power of the supplies is extremely high. The rivalry within the
industry is also high. In this connection it can be said that the threat of substitutes is low. The
bargaining power of the buyers is extremely high, therefore they have a wide choice to make.

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Another huge factor to be kept in mind in case of the discussion on American Airlines is that of
the high labour costs and also the rising prices for the jet fuel. There have not been any
significant changes being made either for the employees or the stakeholders. There has been a
loss of the company by 5.2 million between a span of 4-5years.
It is desired that the financial motives of the company be mended and there are certain
cost saving synergies for the company. The American airline costs are bound to decrease after
the reorganisation of bankruptcy. The company should help in the regaining of premium as well
as business revenue. There is also a reduction in the labour costs due to the age of the pilots. The
newer and better aircrafts need to be the most fuel efficient by the reduction of the expenses of
the fuel.
The American Airlines made crucial changes to the rates which were four in number. The
rate structure it moved to was that of a four tier rate. The airlines offered first class rates and
three types of coach fares. By means of this fare structure the American Airlines also eliminated
deep ticket discounts. The Americans also eliminated the negotiated discount contracts of several
large companies.
It has been observed that the travel agents are both positively as well as negatively
impacted by the airline operations. The small business customers are those who are positively
impacted by the changes in the fare. It was previously seen that the higher full fare prices were
responsible for the small business travel. Therefore the small businesses would either decide
against travel or they had the chance of incurring the cost on a Saturday night stay and also
purchase a reduced fare ticket. The reduction of the full coach fares would lead the small
businesses to purchase much more convenient flights. It can also be stated that the travellers

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overall have more amount of flexibility and are capable of taking more and more advantage of
the discounts on the advanced purchases. These leisure travellers have a chance of payment of
higher rates due to the non-offering of huge amount of discounts.
Price elasticity is quite high in case of this air travel as the elasticity of the business travel
is usually less than that of unity. In case of the American Airlines the price sensitive customers
are bound to be extremely dissatisfied by the new type of value pricing and they have the chance
of switching to new cost and better airlines. There is the requirement of high investment, funding
, planning as well as the advertisement. This is due to the implementation and communication of
the different services between the flight fares and valuing the differences. However, it has been
stated that the business travellers are bound to benefit from the concept of value pricing.
In case of the American airlines there is the presence of business strategies involving
those of direct flights to the major business cities of the world. The American airline is
responsible for the dominance in the field of the home transport network. After a certain point in
time in case a company is considered to be the best in a particular area, there are little chances of
the company losing chances either locally or internationally (Mallikarjun 2015).
The company’s weaknesses are considered to be the poor level of management in the
company, the lack of motivation of the workers, the absence of proper teamwork as well as the
appropriate scheme of services for the staff members in the company. There is the fear of
corruption and gaps in the cash flow of the company. The lack of motivation a well as the
appropriate scheme of services for the workers contributes to the concept of reluctance (Oum and
Yu 2012).

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The corruption in the company has been a major weakness which has been facing the
entire company which has been responsible for the collection of losses in the company. The
financial position of the company is also a weakness which has been possessing. It is desirable
the company improves on its services in order to compete with the international airlines. The
scheme of services need to be managed in order to ensure that the company solves all its external
problems and gets in a better position in order to face all the issues and emerge successful
(Rothaermel 2015).
Conclusion:
There have been certain areas of specification of the services of both the Qatar airways
and the American Airlines. Therefore it has been seen that the Qatar Airways has been
responsible for the provision of services to all the people. There have been a major percentage of
the people who consider the Qatar Airways to be the provider of the best services to the airline
industry. In comparison to the Qatar Airways the American airlines have not been able to ensure
the satisfaction level of the customers. The strategic management perspectives of the task point
to the fact that the Qatar Airways have been more successful in comparison to the American
Airlines. The American airlines need to ensure that they work on their weak points in order to
emerge successful as a dependable airline.

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References:
Airways, Q., 2016. Qatar Airways Group Annual Report Fiscal 2016. Retrieved from.
Burghouwt, G., 2016. Airline network development in Europe and its implications for airport
planning. Routledge.
Doganis, R., 2013. Flying off course: The economics of international airlines. Routledge.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Gray, M., 2013. Qatar: Politics and the challenges of development. Lynne Rienner Publishers
Inc.
Ibrahim, I. and Harrigan, F., 2012. Qatar’s economy: Past, present and future. QScience Connect,
(2012), p.9.
Mallikarjun, S., 2015. Efficiency of US airlines: a strategic operating model. Journal of Air
Transport Management, 43, pp.46-56.
Merkert, R. and Morrell, P.S., 2012. Mergers and acquisitions in aviation–Management and
economic perspectives on the size of airlines. Transportation Research Part E: Logistics and
Transportation Review, 48(4), pp.853-862.
O'Connell, J.F. and Bueno, O.E., 2016. A study into the hub performance Emirates, Etihad
Airways and Qatar Airways and their competitive position against the major European hubbing
airlines. Journal of Air Transport Management.

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Oum, T.H. and Yu, C., 2012. Winning airlines: Productivity and cost competitiveness of the
world’s major airlines. Springer Science & Business Media.
Richelieu, A., 2014. Strategic management of the brand in the world of sport. Journal of brand
strategy, 2(4), pp.403-415.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.