Essays on Australian Airline Industry- Qantas Airlines Case Study

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The paper "Australian Airline Industry- Qantas Airlines" is a good example of a marketing case study. The Australian airline industry was established in the year 1920 (Blee, 2010). During this time on the west coast was the Western Australian Airways and on the east coast, we had the Australian Aircraft and Engineering Company (Blee, 2010). The Australian airline industry is linked with various benefits including the facilitation of global economic growth, international trade, international investment, and tourism. With time and with the employment of present advanced technology, the airline industry has been capable of taking advantage of the high frequency, short-haul and gained a competitive advantage over other forms of travel including railroad travel and buses in Australia (Blee, 2010).

In the year 1921, the QANTAS (Queensland and Northern Territory Aerial Services) was established (Qantas, 2011). QANTAS is based in Sydney and it has its main hub at the Sydney Airport. It is apparent this airline is the largest in Australia and it is commonly referred to as the flag carrier of the country. In addition, worldwide, Queensland and Northern Territory Aerial Services is the oldest operating airline.

According to Skytrax, a research consultancy firm, presently the QANTAS airline, is perceived as a four-star airline. Skytrax voted QANTAS airline as the eighth-best airline in the industry in 2011. According to studies, this was a drop from the previous years. The airline was able to retain its share of the market in the Australian domestic market share of about 65% (Qantas, 2011). However, Queensland and Northern Territory Aerial Services struggle to maintain its competitive advantage by competing with other carriers in its international operations (Qantas, 2011).

This report seeks to analyze the airline industry, the microenvironment in which the company operates and the company’ s internal environment. Industry/environment analysis Industry analysis- Porters five forces framework The porter’ s five forces are used to analyze the firms’ competitive structure. The probability of businesses making profits depends on these forces (Porter, 2008). The threat of new entrants This is the degree to which entry barriers to the business exists (Porter, 2008). It is apparent that entering the airline industry is not a simple task. This is contributed by the high costs of entering into the industry and high government regulations (Porter, 2008.

It is evident that starting an airline company is not similar to buying a bus and putting it on the highway. Due to this reason, QANTAS is in a better position (Qantas, 2011). However, it is recommended that it employs efficient strategies to ensure that it competes effectively with the existing rivals. Power of buyers In case the bargaining power of the buyers in a specific industry is high, they have the capacity of forcing the prices down and this may impact the company negatively as it may lessen its returns (Porter, 2008).

On the other hand, low buyer power means that the company has the ability to formulate pricing strategies that will favour such a company in terms of increasing profits (Porter, 2008). Typically, customers in the airline industry have low bargaining power. This is due to the fact that there are many buyers in the industry and that there exist homogenous products, a large volume of customers and high switching costs. This is an advantage to the QANTAS airline as they can still maintain its customers despite the price (Qantas, 2011).

References

Blee, J. 2010. Aviation in Australia. Sydney: ReadHowYouWant.com.

David, R. 2010. Strategic management: concepts and cases. Upper Saddle River: Pearson Prentice-Hall.

Porter, M. E. 2008. The Five Competitive Forces that Shape Strategy. Harvard Business Review, pp. 86-104.

Prathibha V. and Antonio, K. 2010. Change Management for Effective Quality Improvement. A Primer American Journal of Medical Quality, vol. 25, pp. 268 - 273.

Qantas, 2011. Airways official 4-Star Ranking | SKYTRAX Airlinequality.com. Accessed on October 31, 2011 http://www.airlinequality.com/Airlines/QF.html

Qantas, 2011. Investor Briefing: Building a Stronger Qantas. Accessed on October 31, 2011,

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