In performing the development of strategies, the strategic managers are required to consider various internal as well as external environment factors because these factors have a direct impact on the performance of the organisation. In this strategic management assignment, the organisation selected in performing its strategic analysis is Qantas Airline. The airline is known as the flag line carrier of Australia and has been known as the most premium airline providing air travel services internationally.
Through successfully establishing services in both premium service and Low Cost Carrier LCC airlines they have mitigated risks of revenue loss, a value neutral benefit, and blocked competition through price competitiveness.
From a resources perspective, Qantas also derive value-neutral benefits through both their tangible and intangible resources. As an example in anticipating the effect of the low Australian dollar increasing international passenger travel, Qantas are redeploying aircraft from reductions in their domestic demand Qantas Airways Ltd, c ensuring continued high returns on capital invested Kaul, One key example is the attraction of its Loyalty products to external companies not only for the audience reach but also for the reputational association with Qantas.
Qantas also operates several other diversified business lines including — Q Catering, QantasLink, Engineering and its in-flight magazine. As the Qantas Group grows it is critical that each business segment remains strongly aligned with the corporate vision and core brand values continuing to develop stakeholder value and strong return on investment for the entire group, not just profit for the segment Kenny, Synergies must continue to be assessed and developed as each segment evolves to maximise value creation.
Opportunities have also been identified for Strategic choices qantas diversification into a vertically integrated travel insurance business. At present Qantas provide travel insurance options through third party insurers via their online booking service with Qantas receiving a small referral margin.
Analysis should be undertaken into the viability of leveraging the Qantas brand and unique customer touch point in the travel buying cycle and its Careful consideration should be given to the negative effectives of over diversification in order not to divert attention from organic growth focus on existing segments Kenny, However a moderately unrelated level of diversification often outperform highly related business units which is why travel insurance has been identified as a strategic fit with the appropriate due diligence.
Qantas Loyalty segment with its high profitability, stable revenue growth and One of the Loyalty subsidiaries that requires further examination is the Red Planet consumer analytics and consultancy business incorporating the acquisition of Taylor Fry.
While immediate synergies can be identified in the monetisation of the loyalty database and consumer transaction history, the choice of taking this to market via an internal consulting agency is questionable.
There is limited overlap in the resources, technical knowledge and operational capabilities Campbell et al. A more appropriate model to consider would be to license the Qantas data asset to experienced third party consulting firms, increasing the scale of return through recurrent licensing income and enabling diverse value creation without the increased overheads and capability development.
Reasons include growth, market expansion, eliminate competitive threats, operational synergies, or to diversify Gaughan, However while the apparent benefits are obvious more acquisitions have reduced shareholder value than created it through lack of effective corporate strategy Porter, In Qantas embarked on a merger with JetSet Travelworld Limited to pursue vertical expansion in the travel services market.
The Jetset venture has failed to achieve these returns after numerous ownership restructures and further mergers to incorporate greater market power and reach, which saw Qantas controlling share reduce from 58 to 28 percent.
The travel services group, now called Helloworld, continues to produce profit losses with declining revenue, having failed to capitalise on the benefits of vertical integration with Qantas and create additional value.
It is an interesting example of the establishment of core competence in corporate strategy as the initial structure failed to create sufficient value for either stakeholder. This focused Australia Post on their core capabilities in parcel delivery and in turn Qantas on air freight.
Red Planet was created in early as a subsidiary business to Qantas Loyalty analytical consulting services Qantas Airways Ltd, c.
The aim of the new business unit is to leverage Qantas frequent flyer and transaction data, empowering consumer insight with a view to becoming a leading digital media, analytics and research service business. Ultimately these mergers and acquisitions have created very limited value for Qantas to date consuming capital investment and distracting strategic focus.
However due to a lack of understanding of the industries it was getting into, poor due diligence and failure to realise the identified synergies through effective integration Kenny, these acquisitions have failed to create competitive advantage and generate above average returns Porter, within the Qantas Group.
The Red Planet diversification and Taylor Fry acquisition should be reviewed with a critical eye. There are serious questions here on the over diversification of the strategy, the highly unrelated nature of the line of business and the legitimate overlap in complementary capabilities.
The capabilities of a professional consulting firm are vastly different in structure, resource and competences and it is difficult to establish how this can be adequately overcome to provide material value creation.
In the freight business segment, Qantas should look to strengthen synergies in aircraft resources and logistics while pursuing further growth and market power through horizontal acquisition of compatible airline freight businesses. The economies of scope and costs efficiencies in further acquisitions are likely to see profitability grow substantially along with growing revenue streams.
Potential acquisition targets could include international targets to take advantage of aircraft capacity distribution overseas. Thorough assessment of acquisition targets should be undertaken identifying quantifiable synergies Jeffery S.
Finally the JetStar Group should consider a merger or acquisition to support its international strategy of expansion into the Asian regional airline markets Frazer, Expansion into the Asian market is also likely to mitigate some of the fluctuations in its dominant passenger airline income stream with varying regional cycles and fluctuations in international markets offsetting local cycles.
Now we are going to focus on the corporate level international strategy used by the company to venture the sale of goods and service out of the domestic market.
We are going to understand the benefits that drive Qantas to decides to establish an operation out of their border areas, and the trend and risk that Qantas evaluated to choose the correct corporate-level strategy. Establishing a majority shareholding in Jetstar Asia with base in Singapore, and gain competition in a market with many start-up airlines Whyte, R, Lohmann, G,p The benefits of expanding into the Asian market driven by the entry of market conditions where the demographic and market characteristics of the region have created competitive opportunities.
The Asian regional market represents a substantial population size with demographic of a large middle-class, increasing leisure activities and the absence of competitive transportation helps the continuous growth of the industry Lawton, T, At the same time, the market conditions in Asia are creating opportunity with the liberalisation of the bilateral services agreement improving the competitive conditions between airlines Fu, X.INTRODUCTION Objective This report has been commissioned to discuss the challenges faced by Qantas in and to evaluate the strategic choices made by the company from a theoretical and practical perspective in relation to HR Planning.
Strategic Management title page. If two or three authors, include all authors’ family names when you refer to the text. If writing the authors’ names in the brackets, use ‘&’ between the last and second last names in your in-text reference.
Qantas will take action to permanently reduce costs in all parts of the Qantas Group through to FY17, including fleet and network changes, productivity improvements, consolidation of business activities, new technology and procurement savings.
In respect to Qantas Airline, an evaluation of the relevant external environmental factors affecting its strategic choices and performance through PEST analysis is performed as follows: Political Factors: Political factors are the most crucial factors in terms of affect the performance of an industry.
Strategic Choices Qantas TUI UNIVERSITY Sherrie Holman Module 4: Case Assignment MGT Strategic Management October 4, Strategic Choices Executive Summary Business planning refers to a procedure through which both small and large companies determine actions that lead to the growth of revenue and increase the profits The two .
qantas annual review 03 1 Refer to the Review of Operations section in the Qantas Annual Report for definition and explanation of non-statutory measures.