In general, the paper "Qantas’ s International Business Class Travel Business Plan" is a perfect example of a marketing case study. Over the years, Qantas Airline Ltd has experienced steady growth in the Airline market in Australia but due to increase in competition, the domestic airline market has shrunk. Therefore, reducing sales volume and profitability of the company, to garb above-trend management considers introducing Internal Business Class travel to expand its markets to cope up with the increasing competition, Indonesia being target market for the pilot project then to other countries. The company wishes to increase its average annual growth by 3% and above per year, which enables the company to maintain the stability of the shareholder wealth and maximize corporation profit, which is one of the major goals of the company stakeholders.
Domestic travel is the major product of the company and therefore, management wishes to expand its product diversity in order to maintain or increase company profitability. Indonesia proved to be an attractive market to introduce the company’ s product as a pilot. Its attractiveness composes of calm political climate, robust and stable economy that is constantly growing thus increase in disposable income of consumers, inhabitants also proved to support co-existence of both domestic and foreign Airline players.
In addition, the country has adopted online marketing in both local and foreign products and services sold in the country therefore, providing an avenue to make customers aware of our product and keep reminding them. Legal rules and regulation controlling the industry proved to be lenient and did encourage foreign companies to enter since it required few basic formalities and the relatively lower corporate tax rate of 30% in comparisons of other feasible markets. The company targets the comprehensive population both middle and lower class business people by designing products according to classes of different prices thus enabling a range of prices in which consumer can choose from considering his budget constraint.
Consequently, promotion should be intensive at early stages to inform potential customers on the availability of our services, convince them to buy and keep reminding them that our services are the only option. Sales representatives of our services in Indonesia will be chosen among the inhabitants to enhance the acceptability of the products and enable great penetration into the market, the sale representative should place their efforts in densely populated areas to increase the scope and reduce the cost of transportation. 1.0 SITUATION ANALYSIS Situational analysis is an important part of our feasibility study where we considered external forces that may affect the venture into the Indonesian market as a pilot project for International business class travel.
These factors include political factors, legal factors, cultural and social factors, technological factors, environmental factors, financial factors and competitors. 1.1 THE INTERNAL ENVIRONMENT Qantas Airline is currently pursuing its marketing plan in pursuit of a greater proportion of profits in the airline industry despite the rising competition in the industry due to the liberalization of airline services in Australia.
Liberalization of the airline market has not greatly affected Qantas piece of domestic market since it is still dominating 80% of the total domestic airline demand (Qantas Airline, 2014). Therefore, the concern is placed on the international sector in order to boost its sales to offset the decrease in its revenue due to rising prices of fuel.
The company launched a three-year transformation strategy in order to increase its profitability base despite the downturn that affects the industry due to rising cost of operation and inflation affecting incomes of its consumers (Qantas Airline, 2014). These program milestones can be realized in its first phase of implementation (2014/2015) where on cost reduction pillar, it has realized a reduction of $165Million which contributes significantly to the profitability of the company thus enabling them to concentrate on investments and improving customer service in order to remain the only airline option to our esteemed customers.
The second pillar is Right-sizing fleet and network in order to increase demand and at the same time meet the demand created due to increased carrying capacity of its mode of transports this was reflected by the increase in the sales of the company in 2014 half-year annual results (Qantas Airline, 2014). Working existing assets harder is the third pillar of transformation program in order to avoid underutilization of company’ s resources. Deferring growth plans and directing capital on emergent strategies is the key concern of the company in order to keep the company relevant in the industry and capitalize on emergent opportunities, company annual report shows that it has reduced its planned expenditure by $1.3billion.
Aligning capital expenditure to financial performance and Accelerating simplification are the pillars for the transformation program (Qantas Airline, 2014). The program has realized $204million during 2013/2014 with $900millionin the remaining period. On cost reduction, the Company was able to reduce cost by 3% per unit. Above results have, therefore, made Qantas on a better competitive hedge than other firms in the industry (Qantas Airline, 2014).
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