Marketing essay help online: Qantas airlines strategies 

Introduction- Qantas Airlines

            Australia’s largest airline, Qantas, connects to almost 1000 destinations across the world with its 30 airline partners. Since its inception in Queensland in 1920, Qantas has grown to become the leading brand in global aviation industry. It has some leading brands operating in regional, domestic and international  passenger and freight category along with in-flight catering and travel operations viz., Qantas, Jet star, Qantas Frequent flyer, Qantas freight, Qantas Link, Q- Catering, Qantas Holidays, Qantas Defense Services and Express Ground Handling. Qantas is suitably regarded as an “employer of choice” with its 35,000 people workforce from 90 nationalities speaking 55 languages (Qantas, 2012).

            History of Qantas Airlines dates back to 16 November 1920 when Lt Wilmot Hudson Fysh DFC and Lt and Paul McGinness DFC registered Queensland and Northern Territory Aerial Services (QANTAS) Limited in Brisbane. The company started with joy rides and air taxi flights and graduated to a mail and passenger service in 1922. The airline saw a rapid development after WWII and soon occupied international .destinations starting with the “kangaroo routes” of Sydney and London. In 1959, Qantas included first Boeing 707 in its fleet. The Airlines name was changed to Qantas Airways Ltd in 1967 and took over Australian Airlines in 1992.

Qantas Vision – Qantas vision is to create best premium and low fare airlines in Qantas and Jetstar (Qantas, 2012). The key contributors in achieving this long term vision is commitment to safety practices, effective fleet flying on an optimal route network, customer service excellence, operational efficiency and building strong brands viz. Qantas and Jetstar in the respective segments. Qantas is committed to high standards of ethics and integrity and adhering to all laws and regulation compliant practices.

• Qantas Mission- Qantas aspires to be one of the Australia’s great businesses and among the leading airline groups while delivering sustainable growth to the shareholders (Qantas, 2012). The organization has always prioritized safety along with right mix of brands for the right mix of customers. Extra ordinary customer service, loyalty programs ensuring customer engagement along with efficient sales and distribution have been the strong foundations of a long term success of the airline. Disciplined capital management has been a principle at the company.

Analyzing Qantas Airlines Environment

          Internal and external environment of an organization is fundamental is shaping its future and maintaining a competitive advantage in a dynamic market. This section elaborates the significant elements in internal and external environment of Qantas Airlines thereby understanding the factors responsible for its successes and challenges.

Internal Environment           

            Qantas Airlines has three main heads viz, commercial, customer & marketing and operations. Commercial group has mainline sales and distribution along with Qantaslink, Qantas freight and allied enterprises. Customer and marketing department takes care of product and services, marketing, cabin crew and in-flight services. Engineering, flight control and planning and control fall under the operations arm. Finance, people, IT, legal, risk and assurance, government and corporate affairs and shared services are some of the corporate groups which form a sound and reliable pillars for the Group. These departments formulate a value chain for Qantas that translates into sustained profits and increased customer loyalty. The value chain needs constant review and customization according to the changes in the external environment. Certain highlights in the internal environment of Qantas are listed below:-

• Qantas decided to ground its fleet globally on 29 October 2011, following a disagreement with the employee unions over the provisions of Fair Work Act. With over 70,000 passengers affected due to cancellation of 600 flights, the decision cost the airlines a loss of approx. $15 million per week (Qantas Corporate Communication, 29 Oct 2011).
• Working towards its commitment of prioritizing safety, Qantas introduced a Qantas Management System (QMS) which covered all aspects of safety, security and health. At Qantas, employees are expected to demonstrate a commitment towards safety by their actions and risk management. Considered to be the best practice model in the industry, QMS gives the organization a foray into the aspired safety parameters at the Qantas group (Qantas Annual Review, 2010).
• To confront the challenges of the industry in 2002-2004, Qantas introduced a sustainable future program which was aimed at reducing costs and provide operational efficiencies. The organization delivered $512 in efficiency initiatives in 2003-04 (Qantas AGM, 21 Oct 2004).
• In 2009, Qantas Freight Enterprises introduced Adaptalift Hyster’s ForkTrack management system with an aim to improve all aspects of fleet management, reducing avoidable damage and increase operational efficiency (Adaptalift, 22 Mar 2012). 

 External Environment

            Aviation industry, like all other industries, is affected by certain non-controllable factors that influence the operation and performance of an organization. Market economy, government regulations, customer demands, suppliers and intermediaries, competitors etc are some of the elements of external environment that largely govern the goals and achievements in the industry. Qantas has a specialist unit of risk, threat and resilience that continuously tracks the business and global environment and prepares the group for any external crisis. The risk and resilience dept also gauges any potential threats and alleviates them by contingency planning involving government and industry partners. External environment of Qantas Airways in the current market scenario is summarized below:-

• Highly volatile global financial markets and record high AUD.
• Economic slowdown in US and UK markets.
• Strong competition in the global aviation industry from the low cost and government subsidized airlines.
• Natural disasters and terrorism resulting in operational disruptions.
• Customers demands vis a vis the cost of travel.
• Growth potential in the Asian market.

Qantas – Competitive advantage

            Qantas operates in a highly dynamic global and domestic market. Since most of these factors are beyond the organization’s control, it needs to fortify its internal resources to overcome the unforeseen circumstances. Tangible and intangible resources of an organization play an important role in the structural soundness and operational efficiency. All physical resources such as plant, machinery and resources are the tangible resources while people, knowledge and technology are considered to be the intangible resources.The assessment of resources and capabilities of the organization highlight its competitive advantages and also underline the problem areas.

Human resources- Qantas is known for its employee-friendly policies. The management acknowledges the importance of people in a service industry that demands excellent customer services at all times. The company believes in recruiting the right people for the job and training the workforce for a personal and professional development of the workforce.

• Superior infrastructure and sustainable infrastructure – Qantas considers superior infrastructure fundamental for operational excellence. With best-in-class aircrafts and maintenance and engineering capabilities, Qanats has consistently over achieved the quality benchmarks on all parameters.
• Qantas and Jetstar brands- The organization has two complementary brands which enables it to changing market situations. Both the brands have created a niche in their respective markets and continue to add value to the existing brand image. The organization uses marketing and promotion aptly to leverage on the brand values Qantas and Jetstar.
• Social responsibility- Qantas is actively associated with socially productive ventures and community services. Qantas foundation is one such charitable trust that in involved in the areas of community, health, education, and environment.

 PESTEL Analysis of Qantas

            Pestel analyses provides a framework for identifying the various environmental forces that influence the organization. In this section, Pestel model is used to correlate the political, economic, social, technological, environmental and legal factors that influence Qantas and pose potential threats and opportunities for the organization.

• Political environment- The global aviation industry is highly prone to changes in the political environment as it directly affects the travel habits of the customers. Unstable political environment in a country will affect its trade relations with other countries and will, in turn, negatively affect the number of passengers travelling to and from that country. Government subsidies on fuel and stringent standards on emissions are some of the factors influencing the revenues of airlines in the current markets. A stable political environment encourages alliances with local partners which is extremely important in aviation industry. In the current market scenario, Asia is considered a very fast growing market and Qantas needs to find profitable avenues to use this market to its advantage.
• ·         Economic environment- World economy has become extremely volatile in the last few years. Economy has large influence on tourism and travel sector along with business and trades. Developing resilience to financial cycles and identifying investment opportunities is a major challenge for Qantas. Qantas has been paying dearly for the escalating fuel prices and the 18% hike in fuel prices since last year has cost the company has been a large contributor in the $450 million losses of Qantas International (Qantas, 23 August 2012). Constant monitoring of loss making routes, fleet renewal to avoid long term losses and profitable alliances are the strategies used by Qantas to mitigate the influence of adverse economic environments. Qfuture transformation program launched in 2009 is ensuring that the company is well equipped by optimizing engineering supply chains and aircraft utilization and scheduling.
• ·         Social environment- Qantas group operates in more than 46 countries flying almost 45 million passengers annually. This is a major challenge for the organization in terms of varied social and cultural preferences of the customers. Customized customer service along with high levels of employee engagement is essential to ensure brand loyalty in an industry strewn with lucrative alternatives.
• ·         Technological environment- State of the art innovative technology is imperative in aviation industry. Qantas has always been associated with pioneering innovative technology in its operations, aircrafts and services. Investments in technology for better customer experience such as advanced check-in, superior lounges and aircrafts, improved safety and better logistics are a part of long term strategic planning at Qantas. Escalating fuel prices and the need to cut down on carbon emissions also call for effective technology in aircrafts.
• ·         Environmental factors- The aviation industry has always been criticized for its environmentally damaging consequences. The growth of the industry in last couple of decades has raised some serious concerns about the effects of carbon emissions by the aircrafts, noise pollutions and large infrastructures on the ecosystem. Qantas’s long term strategies involve measuring and reporting its environment footprint and reduce the environmental impact of its business. For example-the begreen program of Qantas aims at identifying and managing risks and impacts of its business practices along with compliance with relevant laws and regulations.
• ·         Legal environment- The high importance of safety in aviation makes the legal environment very stringent for the players. Different countries have different legal norms for the aviation and the penalties are usually high. Qantas has shown commitment towards law adhering practices in all its business operations. It makes it mandatory for its employees at all levels to adhere Australian or local laws and regulations.

Based on the analysis of its internal and external environments, the opportunities and threats for Qantas Airways can be summarized as follows:-

Opportunities-

• Cashing on brand Value and customer loyalty.
• Vast potential in emerging markets in Asia, Middle East.
• Latest alliances such as the one world alliance and code-share flight with Emirates.
• Liberal bilateral agreements.
• Access to a vast untapped market by way of alliances and partnerships.
• Price advantage in low cost segment.

  Threats-

• Escalating fuel prices affecting the revenues.
• Increasing operational, procurement and up gradation costs.
• Competition to Jetstar by competitive low cost airlines in domestic (Virgin Blue) and global market (Singapore Airlines and Air New Zealand).
• Volatile industrial relations and workforce issues.
• Economic instability and currency fluctuations.
• Threat of natural calamities and anti-social elements.

Strategies for the future

                Qantas group announced a profit before tax of A$95 million in the year ending 30 June 2012. Except for Qantas International, all other groups showed consistent growth. The following three major incidents for last year had affected the revenues of the group (Qantas, 23 Aug 2012):

1. Fuel bill increased of $4.3 billion, 18% higher than the preceding year.

2. Industrial dispute resulting in grounding the fleet cost the company $194 million.

3. Costs of $398 million incurred in transformation of Qantas International and addressing its       legacy cost base.

            Despite the underperformance of Qantas International, natural disasters and operational disruptions, the group showed a strong outcome in a complex and challenging environment. Qantas deploys many strategies in its various departments viz, finance, marketing, employee relations and sales and distribution to respond to the changes in internal and external environments. Some of the important strategies along with some recommendations are discussed below:

• Growth of emerging markets in Asia pacific – Boeing has forecasted an increase of 6.7% in air traffic in Asia Pacific region in the next 20 years with India and China being the fastest growing aviation markets (BBC News, 13 Feb 2012).  With a foresight to tap the potential of the growing market, Qantas has entered into strategic partnerships in the region. Qantas has made an alliance with Dubai’s Emirates with an aim to cut costs on international routes. Dubai will replace Singapore as the Qantas hub for its European flights (CNBC, 5 Sept 2012). Qantas also plans to use the new oneworld alliance with the Sri Lankan airlines to capture the Indian subcontinent (John Walton, 13 Jun 2012).

Recommendations- Qantas’s needs a more aggressive and customized approach to capture Asian market. The market known for its socio-cultural diversity needs a tailor made airline experience. This may seem daunting to the new entrants but the pay off in terms of revenues is promising.

• Workforce management- Airline industry is largely dependent on its people at all levels. Qantas takes pride in training and development of its employees. However, it has had some sour experiences with regards to its employees. In a latest strategic move, the airline has decided to slash 2800 jobs from its maintenance and catering departments with an aim to cut costs by $300 million (Andrew Heasley, 9 Aug 2012).

Recommendations- Qantas employs people from diverse cultures in its workforce and trains them to adapt to the Qantas culture. However, a more localized approach in the front line work culture is the need of the hour. Customer service is reaching new heights in the contemporary markets and Qantas needs more efforts towards customer engagement.

• Transforming Qantas International- In the recent years, Qantas International’s financial and operational performance is unsustainable in spite of significant capital infusion. Transforming Qantas International into a profit making business is the utmost priority for the group.

Recommendations- There are certain shortcomings in the business structurally which need to be overcome using the competitive advantages. Capital and technology influx along with cost optimization at maximum levels is needed to revive the business and convert it to a flagship brand of the group.

Rationale

          Qantas has been in the business for 90 years and has been acclaimed for its successes and milestones. However, the rules of the businesses are being rewritten by the extreme changes in contemporary market environment. While Qantas can boast of its legacy in the business, it certainly needs well-structured mechanism to confront the challenges in the current scenario. The growth of the Qantas group, despite certain drawbacks, looks very promising and the organization seems to be on the correct path of being market leader in the international aviation industry.

If you want Marketing management Assignment Help study samples to help you write professional custom essay’s and essay writing help.

Receive assured help from our talented and expert writers! Did you buy assignment and assignment writing services from our experts in a very affordable price.

To get more information, please contact us or visit www.myassignmenthelp.Com