Corporate Strategy Of Qantas Corporation

Economic factors: There are various economic factors such as interest rate, exchange rate, recession and employment rate. All these factors influence the success and growth of the firm. It is noted that various economic factors such as recession and inflation rate affect the Australian economy. Along with this, income level of people also decreased that has resulted into the lower demands for the air services. The lower demand of the products is reducing the revenue of the company in the international market (Homsombat, Lei and Fu, 2014).

Social factors: The social factors also influence the profitability and revenue of the firm. The social factors such as custom, values, beliefs, and traditions have also influenced the performance of Qantas to a greater level. The social factors have influenced the airlines such as Qantas which accounts for rendering premium class air travelling services.

Technological factors: The technological factors have a great impact on the airline industry in the sense that the entire process of the bookings of airline tickets is based on the online reservation systems. Further, the analysis of Qantas shows that technological factors are highly affected Qantas. With the help of technological factors, the company has been able to be strong and effective leader in the global market (Klettner, Clarke and Boersma, 2014).

Legal factors: The legal factors such as rules, regulations and norms highly affect the performance of Qantas. The carbon tax also affects the performance and efficiency of the firm. The carbon tax implies the legal formality that needs to be fulfilled by the airline in successfully and effectively performing its operations.

Micro environment

SWOT analysis is done by Qantas to analyze and evaluate the threats and opportunities of the market ( Chen and Muzi, 2013). It helps to gain competitive advantages in the marketplace. The SWOT analysis for Qantas is discussed below.

Strengths

• It is one of the biggest and well known brands in the world. It is also known as flagship Airline Corporation based in Australia.
• It is an effective leader in the airline industry with capturing around 65% of market share in Australia.
• The company provides on time quality air travelling services to the customers worldwide.
• Qantas Airways is one of the biggest and top airlines operating in the country.
• The company has around 80 international and domestic destinations across the world (Halpern and Graham, 2013).

Weaknesses

• Various issues such as pricing fixing and incidents etc hurt the global image of the company.
• Limited international presence of the firm as compared to the other growing airline companies.
• It has been noted that the management of the airline is not sufficient as it affect the position of the firm.

Opportunities

• It has the ability to tap the growth opportunities in the marketplace.
• Tie up with international airlines for a combined services rendering to the consumers.
• Opportunities for Qantas airways to become a leader in Asia.

Threats

• Rising fuel prices affects the operations and activities of the firm.
• Immense and high competition also affects the image of the firm.
• Rising labor prices can also influence the business activities and actions.

Competitive advantage through functional level strategy

There are various functional level strategies used by Qantas when operating and managing the business operations at international level. The main aim of the functional level strategy is to improve and enhance the effectiveness of the company’s activities and operations. The functional level strategies include efficiency, innovation, quality, and customer responsiveness. The functional level strategies lead to a competitive benefits and superior growth and profitability. The functional level strategies of Qantas through which the company has been able to gain competitive benefits have been discussed below.

Finance: The finance function plays an empirical role in allowing the company in successfully executing its strategy of international development and expansion. The company needs finance to buy new aircrafts from the market. Apart from aircrafts, the financial resource is also essential to perform alliances with other significant airlines in the marketplace. By using this strategy, the company has been able to overcome the competitors globally.

Human resource management: It is one of the significant strategies of Qantas to appoint talented and skilled employees within the organization. Since, expansion strategy of the company involves new destinations and new aircrafts, this will require additional workforce that have abilities, potentials and skills to effectively manage the services across the country. This can be done successfully through the effectiveness and efficiency of the human resource management functions of the company. It is noted that human resource management is known as a backbone of each and every company. No company can survive and grow its business operations without using a sustainable human resource management (Kew and Stredwick, 2016).

Marketing and sales: This is one of the leading and attractive strategies to increase and enhance the sale of the organization. Qantas requires support from the sales and marketing functions of the firm. Furthermore, the alliances with other airline also guide and assist the expansion of the network of the company which would need aggressive marketing strategies to promote and encourage its destination air travel services. Along with this, if the sales personnel put some extra efforts then the company can increases its sales and revenue. All these can be successfully attained through adequate and effective support from the marketing and sales function of the firm. Through marketing, Qantas can easily analyze and evaluate the plans and policies of the competitors to make a dynamic image in the minds of the consumers.

IT and R&D : The IT and research and development strategy plays a significant role for executing the tasks and functions effectively. The entire process of Qantas is dependent on the technology and R&D. The safety attributes are highly effective in case of the airline industry and latest technology playa a fundamental role in permitting for delivering better and effective air travel services (Forsyth, 2017). The research and development function helps in analyzing and identifying the best possible technology and resources that can be integrated to rendering best quality and safe travelling services in the international market. This strategy also helps to destroy the competitors worldwide. All these functional strategies helps in executing the tasks and duties and further it help in maximizing the progress of the firm (Homsombat, Lei and Fu, 2014).

Generic strategies of porter

The generic strategies are used by Qantas to operate and manage the business operations and activities properly. The porter generic strategies are discussed below.

Differentiation strategy: It has been noted that Qantas brand provide products and services at premium prices. It helps in satisfying the demands and needs of the consumers. This strategy is used by the company to differentiate its services from the competitors (Hussain, Syed and Nadeem, 2017). The differentiation strategy renders unique and effective services to enhance the value of the products and services. This will help to provide satisfaction to the consumers in the international market. It is rewarded for its effectiveness and uniqueness with a premium price. With the help of this strategy, Qantas can make strong financial position in the global market. By using this strategy, the company has operated enormous flight to cover 173 destinations in more than 42 countries (Costantino et al, 2016).

Cost leadership strategy: The cost leadership strategy can be initiated in the organization to attain market share in the different market. In today’s modern world, there are many low cost airways emerging worldwide (Dobni, Klassen and Sands, 2016). By using this strategy, the company can offer the products and services in cheaper prices. Qantas uses this strategy to deal and cope with main competitors in the market. With the effective cost leadership strategy, the company can attract travelers who have not enough amounts to travel in the air. It has been noted that cost leadership strategy helps in achieving the long term goals and objectives of the firm (Sarina and Wright, 2015).

Focus strategy: It is one of the fundamental strategies for the company which is initiated by Qantas. By using this strategy, the organization has been able to select the target group segment in the industry to beat the competitors in the international market. With the help of this strategy, the company differentiates its services from the competitors. It has been noted that cost focus exploits the difference in cost behavior in some target market on the other hand; differentiation focus exploits the special needs and requirements of buyers in certain segments (Treitler, 2018).

Diversification strategy

It has been revealed that Qantas Corporation follows diversification strategy within the organization. The diversification strategy helps in overcoming the competitors in the marketplace (Alexeev and Tapon, 2013). The diversification is an effective and corporate strategy to enter in the new market or industry in which the company’s operations and activities do not operate, while also generating a new product and services in the market. By using this strategy, the company can tap and cover the entire market in the world. It makes easy the selling of the products and services in the international market. The diversification strategy is a good market penetration strategy as well for the company (Daft and Albers, 2013). Qantas is tackling and managing the industry with a completely fresh approach bringing a more loyalty, morality and rewards focused model to health insurance. Diversification strategy is one of the significant parts of the company that provides long term competitive advantages in the market. The powerful and strong diversification strategy of Qantas helps the airlines in generating huge returns and revenue as well as gives rivalries benefits over its competitors (Mules, 2013). It is observed that diversification and outsourcing strategy helps in attaining rivalries advantages and it also saves the operational cost of the firm (Gross and Lück, 2016). This strategy also increases the percentage of customer loyalty and morale that are associated with the airways. By using this strategy, the organization has become successful to initiate the services as per the choices and preferences of the consumers. It protects the rights and interest of the stakeholders and furthermore it reduces the risks and challenges of the market. By initiating the diversification strategy, Qantas eliminates the competitive and operational risks within the organization. Apart from this, integration strategy is also initiated by the firm to earn maximum outputs and returns in the marketplace (Pearson and Merkert, 2014).

Recommendations

There are some recommendations that can be offered to Qantas airways for overcoming the competitors in the marketplace. Some of the suggestions have been discussed below.

• The company should focus on the international strategies to flourish the business activities and operations.
• The transitional approach shall be used by the firm while expanding its business operations and actions in the overseas countries. This will help the company to capture the market of China and India. The company should also focus on the business level strategy and corporate level strategy to stand out against the competitors. It will also attract the passengers in the international market.
• Rising fuel prices is one of the significant issues for Qantas. As a result, the company loses its customers thus, the organization should find any alternatives to fuel which reasonable and not contribute in climate change.
• Along with this, Qantas should focus on the long term and as well as short term goals and objectives to stay in the competitive market. Improvement shall be done in business level strategy to meet the needs of the business partners. The company should manage the cost of fuel to accomplish the objectives and goals within the organization.
• Apart from this, Qantas should focus on the integration and diversification strategy to provide unique services to the consumers. It will also help to attract and retain the passengers globally (Orlady, 2017).
• Modification in generic strategies must be done by Qantas to eliminate the challenges and risks of the market. In this way, the organization can attain long term targets and goals in the international market. A sustainable human resource management shall be designed by the firm to make easy recruitment and selection process easy and effective (Collins, Malmgren and Sandberg, 2013).

Conclusion

On the above aforesaid information, it can be concluded that Qantas has been able to perform operations and actions effectively with the help of business and functional level strategies. The strong strategic management and corporate level strategies have provided support to Qantas to maintain greater revenue and outcomes in the marketplace. Various strategies such as corporate level strategy, functional level strategy and diversification strategy are used by Qantas. The company has built a reputation for excellence in safety, engineering and operational reliability. In this way, the company has been able to build and develop an effective goodwill in the global market. Effective promotional and advertisement strategies are used by the firm to attract the passengers. It is recommended that feedback and reviews must be collected by Qantas to improve the quality and features of the services. SWOT analysis and pestle analysis are done by Qantas to know and identify the opportunities and threats of the market.

References

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