Company analysis of Qatar Airways - Research Paper Example

? Company analysis of Qatar Airways Contents Qatar Airways: vision, mission ment, goals, and values 3 Identification of stakeholders 4 Claims ofstakeholders and response of the company to their claims 6 Suggestions for improvement of the firm’s strategy with regards to various stakeholder groups 7 Qatar Airways: Prioritization of the claims of various stakeholder groups 9 Analysis of the nature of competition in airways industry of Qatar: Porter’s Five Forces Model 10 Airways industry of Qatar: Outlook for competition over the next ten years focusing on potential new entry, demand, and buyers 12 References 14 Qatar Airways: vision, mission statement, goals, and values Qatar Airways is the state-owned airlines company of Qatar which is headquartered in Doha. The airlines company has a fleet of around 100 aircrafts and operates over a large network catering to more than 100 destinations all over the world. The destinations serviced by the Qatar Airways include Middle East, Central Asia, Europe, Africa, North America, South America, Oceania, Far East, etc. Qatar Airways have a crew of around 20000 people in which almost 14000 staffs are direct employees of the airlines company and the remaining 6000 staffs are employed in its subsidiaries. The airlines company is headed by its Chief Executive Officer Akbar Al Baker. Before the appointment with Akbar Al Baker, the Chief Executive Officer of the company, the airlines operated only four aircrafts in regional capacities. Since then Qatar Airways have achieved the status of one of the elite group of airline companies across the world. Qatar airways have a vision of being among the world’s elite group of airlines companies across the world providing excellent aviation services across the globe as per world class standards to the passengers who fly in their aircrafts and pass through their terminals. Qatar Airways have been able to achieve this as the group has been divided into major subsidiaries for efficient operation. Qatar Airways comprises of multiple divisions like Qatar Aircraft Catering Company, Duty Free of Qatar, Airways Holidays of Qatar, Qatar Distribution Company, Doha International Airport, United Media Int, Qatar Aviation Services and Qatar Executive. Qatar Airways has a mission statement of excelling in everything they do by offering unmatched services in terms of quality and satisfaction. Qatar Airways have achieved their goal of reaching the peak of airlines industry in the world with the help of implementing their core values of dedication towards providing service to their customers. The growth of Qatar Airways has been the outcome of providing excellent on-board services and products added with operational excellence of the company. Qatar Airways have able to acquire the confidence of its passengers as it was adjudged the airlines company for consecutive years in 2011 and 2012 in the prestigious industry audit by Skytrax. Under able leadership and strategic implementation of policies in line with the vision and mission statements, Qatar Airways have achieved an outstanding growth of 30% year after year in their operational routes. The unparallel services of Qatar Airways include the operation of most modern fleets in the world today, providing a five star ambience in travel. The company had launched an official website where it maintains transparency on the flight fare, planning of journeys and booking of online tickets to collection of baggage. Qatar Airways considers corporate social responsibility as an integral part of its business and has taken fuel research beyond the practices of industry (Qatar Airways, 2013). With this, the company has been able to give back to the societies and environment to which they cater. Qatar Airways has been working to reduce the effect of aviation on the global climate, local air quality, noise and no-renewable energy, waste and thereby contributed to protecting the global environment. Identification of stakeholders As Qatar Airways has expanded its operations and established a global presence, the stakeholders of the company have also increased. Qatar airways operating in the airlines industry has both internal as well as the external stakeholders. The internal stakeholders of Qatar Airways are the governing body comprising of the Chief Executive officer, the board of directors of the flagship company as well its subsidiaries, the shareholders and the employees of the organisation who are associated with deciding the framework of policies of the organisation and implementing the policies in order to achieve the short term and long term goals of the company. The internal stakeholders of Qatar Airways namely the governing body headed by the CEO, the shareholders and the employees have the responsibility to manage and carry out operations in line with the core values of the organisation which fulfils the vision and the mission statement of the company. The government of Qatar would be an internal stake holder as the company is a state-owned flagship airlines company. The external stakeholders of Qatar Airways include majorly the customers, suppliers and creditors. The customers, supplier and creditors of the company at large are not directly related to the operation and sustenance of Qatar Airways. Unlike the directors, managers, shareholders and employees of Qatar Airways, the external stakeholders or the customers, suppliers and creditors of Qatar Airways would not be directly affected with the performance of the company (Oxford Business Group, 2008). The customers of Qatar Airways would look to get unmatched level of services whenever they book tickets of Qatar Airways irrespective of profit and loss of the company. On the other hand the bonus of the managers and employees of the company would be reduced if Qatar Airways incurs a loss. Also the value of internal stakeholders including the government as it is a state-run company, who have invested in Qatar Airways, would diminish in absence of effective corporate governance. The suppliers or creditors would be interested only in repayment of the credits they have offered to Qatar airways. The supplier would constitute agencies that supplied accessories for manufacturing or maintenance of the aircrafts, development and sustenance of the Doha international airport. The creditors are external agencies who have offered credits in part or full for related payments of operation of Qatar Airways. Claims of stakeholders and response of the company to their claims Considering the claims of the internal stakeholders where the government forms a major stake in running its flagship company and spreading its unmatched level of services all over the world. Due to the presence of huge proven oil and gas reserves in the Middle East, the Qatar Airways is at an advantageous position of getting access to large amount of sources and alternative sources of energy required to run the airlines. The government would have the objective to earn as much revenue as possible by providing improved and world class services by leveraging on its fuel and energy capacities. The board of directors, managers and employees would also claim for higher wages and bonus and would be interested in maximisation of their wealth (Fojt, 2006). The company has responded well to the claims of the internal stakeholders by adopting strategic policies that fulfil the vision of the airline of reaching the pinnacle of the airlines industry. Excellent corporate governance and outstanding in-flight services and products have led to multi-fold growth of the Qatar Airways in the last decade. Thus increase in operations of Qatar Airways and attracting passengers through outstanding services to their satisfaction have increased their revenues, profitability and presence in the airline industry. The claims of external stakeholders like the customers, suppliers and creditors are not linked with the welfare and health of Qatar Airways in future. The customers’ claims are related to their interest in the prices of booking, the level of services provided and enjoying full return of the payments done by them. Qatar Airways has responded to this by maintaining one of the most modern fleet in the industry and providing for world class in-flight services, arranging for outstanding on-board products and excellent facilities in their terminal. These have helped them to attain the awards of the Best airlines for 2011 and 2012 in The Skytrax audit of industry practices. These awards have helped Qatar Airways to gain confidence of the customers and attain the loyalty of the customers which is a major capital for their growth. The suppliers and creditors claim to get their receivables in time in order to maintain a healthy and long term relationship with Qatar Airways. Qatar Airways have responded to their claim as they have a kept their current liabilities under control by leverage on the base of their current assets. Qatar Airways maintain a good current ratio for which they have been able to pay their suppliers and repay their creditors in the allowable time frame. The societies and their environment to which Qatar Airways cater their services also claim for a pollution free and protected environment. The company has responded well to such claims by carrying out fuel research going beyond the practices of the industry. Qatar Airways have been able to reduce the impact of aviation on the global climate. Suggestions for improvement of the firm’s strategy with regards to various stakeholder groups Considering the growth rate and expansion of Qatar Airways in its young history, the interest of the stakeholders should be given top priority by the company. The investors who have either invested or rendered their services or paying for their services are directly or indirectly related to the performance of the company, Thus the company should work at improving the strategic policies and implementation with regards to the various stakeholders. Consideration for improvements of the company’s strategy includes framing of commercial, social, political, economic and environmental agenda. The senior management should engage in world strategy summits to keep them aligned and updated to industry standards. The company should strive in adopting improved corporate governance. Ensuring implementation of core values like dedication towards service, transparency in operations, training and harnessing talent for future and strict monitoring of operations would contribute to sustain the position of pinnacle in the aviation industry that has been reached by Qatar Airways. The improvement in strategic implementation of the firm’s policies would help in maximization of wealth of the shareholders of Qatar Airways and would provide an improved workplace for the employees to excel in their services. Qatar Airways should look at keep the attrition rate low as compared to the industry in order to leverage on the rich talent pool acquired by Qatar Airways. The company must adopt the best accounting and auditing practices and ensure true financial disclosures that would be aimed at protecting the interest of the investors (Truxal, 2013). Qatar Airways should focus at improved support from the government in utilising the rich volume of proven reserves of oil and gas energy present in the region. Qatar Airways should aim at sustaining the levels of creativity, innovation, adaptability and use the experiences they obtain by interface with around one-hundred nationalities all over the world. Qatar Airways should aim at a greener working environment by carrying on its processes online wherever possible and should aim at protecting the global climate from the adverse effects of its operation as a corporate social responsibility. The customers would also benefit from online processes developed strategically by Qatar Airways. The company should take initiative in improving the navigations and features of their launched websites that would provide an extremely user friendly environment for their customer all over the globe. This would require understanding the requirements and priorities of the customers. The strategies of the firm should be aimed at creating long term relationships with the suppliers and creditors as well. This would create a stable business environment taking full use of the benefits of the relationship in terms of faith and commitment. Qatar Airways: Prioritization of the claims of various stakeholder groups The prioritization of stakeholders is an important step towards improvement in business operations and profitability of Qatar Airways. The claims of various stakeholder groups should be prioritized using an assessment that involves the parameters of influence and impact of the stakeholders groups in the business of Qatar Airways. The assessment of the influence and impact of the stakeholders should not carried out in an isolated fashion but should include responses and feedbacks form the all the levels of the organization starting from the assessment team members, directors, employees, customers, suppliers, shareholders, etc. The largest size of the stakeholder group is important to be evaluated by Qatar Airways followed by its impact on the business and accordingly highest priority should be given to the stakeholder group. The success of Qatar Airways can largely be attributed to the confidence shown by their customers in around 120 destinations all over the world in enjoying their unmatched level of services. The customers create a huge impact for the business in terms of earnings and revenues based on which other liabilities are serviced. Thus Qatar Airways should attach highest priority to their customers. For servicing the customers, the business should be able to maintain a rich talent pool of workers. Qatar Airways maintains a workforce of around 20000 people. The talent pool is created as a result of the training imparted to the workforce as well as harnessing them to develop into experienced professional in the airlines service sector. The entire management is committed to achieve the goal of the organization and has a severe influence on its success. Thus the internal stakeholders should get the next priority in Qatar Airways. Next priority should be given by Qatar Airways to their suppliers and creditors as strong and long term relationships built with them has helped to run the business in a smooth fashion. Qatar Airways has finally not forgotten to give back the benefits to the society and environment that have helped them to sustain and grow in the airline industry. Qatar Airways has gone beyond the industry standards to carry out fuel researches and protect the global environment from the adverse emissions and effect of their operations. Analysis of the nature of competition in airways industry of Qatar: Porter’s Five Forces Model An analysis of the nature of competition in the airways industry of Qatar has been done with the help of Porter’s Five Forces Model. Porter’s Five Forces Model includes the threat of substitute products, threat of new entrants, bargaining power of the customers and the suppliers, competitive rivalry within the industry which determines the competitive intensity of the Qatar airline industry and the attractive of the Qatar airline market. Qatar Airways is termed as a ‘Gulf Gulliver’ because it is the flagship state-owned airlines company in Qatar and headquartered in its capital, Doha. Qatar Airways adopted aggressive measures of growth by expanding its network by 30% year after year. Thus Qatar Airways occupies a large market share in the Qatar airlines industry. Thus the airline industry if Qatar has space for competition from other players in acquiring the market capitalization through innovative and creative services. This is an attractive industry for the airlines companies and thus poses the threat of new entrants. Jet Blue Airways which is a New York based airline company has announced code share with Qatar Airways giving the customer the freedom to enjoy outstanding and combined services under a single ticket. Considering the position of Qatar Airways in the airlines industry in Qatar, the threat of new entrants is moderate. Since the airline industry is a services sector, the threat of substitute services may be considered here. Qatar Airways has gained a name for itself through unmatched level of services to a wide horizon of around 120 destinations all over the world. The Skytrax award of 2011 and 2012 has enabled Qatar Airways to gain the confidence and trust of their customers through world standard services. Thus alternative products or services have to use higher innovations and creativity in order to provide higher satisfaction levels to acquire the confidence and loyalty of the customers. Although the market is attractive, the threat of substitute products is low. Qatar airlines industry has low rivalry in the competitive scenario of the airlines market in Qatar. Qatar Airways is highly backed by the state and has expanded its operations over the years through dedicated service to their passengers. Qatar Airways has joined the One-world alliance with the leading airlines in the world. Qatar Airways has developed international network in the major business and leisure destinations of the world. The competitive rivalry in the airlines industry is low with Qatar Airways leading the operation in the airlines sector of Qatar. The airlines industry has now reached such a level that the customers have a handful of options for selecting the airlines service provider (Delfmann, 2005). Also online travel planning services, booking of ticket have increased the bargaining power of the customers. For customers all over the world, the bargaining power of customers of Qatar Airways would be high despite the fact that Qatar Airways have been able to acquire the confidence of their customer base. The domestic customers in absence of competitive market in the Qatar airlines market have low bargaining power. Some of the suppliers of Qatar airways also have the option to supply and provide credit to the other airlines companies operating globally. In the presence of long term sustainable relationship, the bargaining power of the suppliers would be moderate. Airways industry of Qatar: Outlook for competition over the next ten years focusing on potential new entry, demand, and buyers Looking at the scope of competition present in the Qatar airline market in the next ten years and future, the Qatar Airways has undertaken strategic plans to keep a strong hold on the airlines industry in Qatar and all over the world. Qatar Airways hold expansion plans in future with aircraft orders worth $30 billion. Looking to spread the brand name of Qatar Airways in the global market, the company is all set to become strategic partners to the football club FC Barcelona. The rising oil prices and the effects of global recession have reduced the profitability in the airline industry all over the world. The customers, however, have a variety of options to select the airlines company for travelling thereby attaining a high bargaining power. The demand is increasing over the year as travelling through the sky has become a normal lifestyle and would become more common in the next ten years. With a lot of buyer, the new entrants would have to focus on delivering innovative and excellent services to the passengers beyond their imagination to be a potential prospect in the next ten years. The new entrants of the Qatar airline market have a competitive edge of taking advantage of the oil and gas reserves in the gulf region in order to compete with the other airlines companies of the world in the scenario of crisis in major economies and hike in oil prices. Thus the airline industry of Qatar offer ample scope of competition thereby making the market more attractive for the potential new entrants to apply innovative services and fulfil the demand of their customers. References Delfmann, W. (2005). Strategic Management in the Aviation Industry. Great Britain: Ashgate Publishing, Ltd. Fojt, M. (2006). Strategic Direction: The Airline Industry. UK: Emerald Group Publishing. Oxford Business Group. (2008). The Report: Qatar 2008. UK: Oxford Business Group. Qatar Airways. (2013). THE QATAR AIRWAYS COMMUNITY. Retrieved From: http://www.qatarairways.com/global/en/qatar-airways-community.page. Truxal, S. (2013). Competition and Regulation in the Airline Industry: Puppets in Chaos. USA: Routledge. Read More