The paper "Strategic Management of Qantas Airlines " is a perfect example of a management case study. Qantas is Australian’ s National Airline where Alan Joyce is the current CEO, has taken over since 2012. Though the entity is still profitable, the company is facing some challenges that have negatively impacted on the outcomes. The challenges range from a number of internal factors such challenges in managing various employee needs and requirements and service quality to other external factors such as high competition and high supply prizes that increase production costs among others.
Facing these challenges, the company’ s performance has increasingly been on a decline since 2008, gradually dropping in its global ranking from position three to position fifteen in 2011. Notably, the setbacks are not only domestic but also on a larger scale, affecting the international performance of the entity. As such, there is a need for a quick and urgent solution to these challenges through strategic planning, with the aims of reviving outcome and improving profitability on both local and international markets. 1.2 Objectives The main objectives of this report are to conduct a detailed analysis of the internal and external environments affecting the operations and operational outcomes of Qantas.
This analysis would be effective in understanding the factors that negatively implicate on performance leading to reduced profitability and poor market performance. Using this analysis, the report aims at suggesting recommendations with the sole aims of making Qantas gain competitive advantage and promote its customer loyalty for increased profitability on both the Australian local and international markets. 1.3 Scope and Limitation The report is limited to the airline industry within which Qantas operates.
As such, the sole focus will be on the forces that impact an airline’ s performance in this industry with specific concern on how these factors have impacted on Qantas. However, notable variations in customer preference and customer loyalty based on various constant changes in the aviation industry, for example in flight prices, are potential limitations on the sustainability of the recommendations made in this report. Consequently, it is imperative to frequently monitor the customers’ trend and make adjustments to the recommended strategies with the aims of tackling customer needs for increased competitive advantage. 2.0 Analysis 2.1 External Analysis 2.1.1 Step 1: The Industry Qantas operates in the airline Industry.
The industry is characterized by high competitive rivalry, having some industrial participants. The competition is not only locally in the Australian market but expansively on the international market too. Additionally, profitability in the industry is determined by the strategies in place to attract customer preferences and loyalty. However, with changing strategies now and then, maintaining high customer preferences and loyalty is difficult. As such, the industry demands frequent strategic planning measures in order to improve their operational outcome. 2.1.2 Step 2: General Environment Analysis Economic The Australian Dollar has, for the past ten years, increased by over 100%.
The resulting impact of this increase is a rise in commodity prices. This impact is felt in the aviation industry by raising production costs, increasing employee demands on salary and wages and increasing customer preferences for cheaper flight prices. Additionally, according to IATA reports, only three of the past nine years have recorded positive margins in profitability with an increase in oil prices causing reductions in these margins. Since the trend is unpredictable and bound to go on for a long period, a new opportunity is provided for cheap local and international flights in order to attract customer preferences and strategic planning in reducing production costs while improving service quality for competitive advantage.
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