Qantas Business - Applications of Culture, Infrastructure, Feedback, Safety, Forward Thinking - Example

Qantas Business Report Name: College: Course: Tutor: Date: Table of Contents Table of Contents 2 EXECUTIVE SUMMARY 2 APPLICATIONS OF CULTURE 4 CRITICAL APPROACHES 10 Discounted airline 10 Infrastructure 11 Feedback 11 Safety 12 Forward thinking 12 Market segmentation 12 Product 13 Prices 13 Promotion 14 Place 14 CONCLUSION 15 RECOMMENDATIONS 15 Qantas Business Report EXECUTIVE SUMMARY Originally known as Queensland and Northern Territory Aerial Services, Qantas is an Australian flying hauler, which was established in 1920 in Winton, Queensland by Fergus McMaster and Hudson Fysh McGinness (Qantas Airways Limited, 2013). Its original plane was the Avro 504K that flew overseas from May 1935 after commencing its journey from Darwin in the Northern Territory to Singapore. Qantas then started to operate its initial Boeing 707-138 in June 1959. The company is the major airline in Australia, the 2nd oldest global airline, as well as the oldest operating global airline. It is located in Mascot, New South Wales while its major hub is in Sydney Airport. Qantas handles 65 percent of the domestic market in Australia and 18 percent of domestic and global passengers. Currently, Qantas has about 32,500 staffs and provides services to around 180 destinations in about 45 nations. Qantas was privatized in 1995, prior to adopting management practices in order to surmount both external and internal influences (Small Beginnings, 2006). Though Qantas is mainly a commuter airline, it also deals with cargo as a basic part of its main business. Additionally, the company’s Chief Executive Officer, Alan Joyce, managed the airline, but his approaches nearly resulted to its collapse were it not for Emirate’s assistance. Qantas Airline Limited mission statement that states’, “restoring our reputation, confronting the crisis, operating sustainably and planning for the future” is intended to accomplish the company’s purpose of becoming the best airline globally. However, the airline must transform its culture by implementing strategies to adapt and survive in the irregular business environments. The company must also evaluate both the external and internal environments to ascertain the strengths, weaknesses, opportunities, and threats in the environment. Qantas must also comprehend the market conditions, match its strengths to the marketplace needs, and then develop approaches that adjust to the cutthroat landscape. Strategy development practices generate insights that build and improve sustainable and distinctive competitive benefits. Industry analysis, positioning of organization’s offering, competitors evaluation, existing strategies assessment, production of alternatives, organization’s capabilities assessment, and improvement of the existing strategy are some of the steps involved in the development of strategies. It is also important to focus on Qantas application of culture. This will be an eye opener on how the company manages its operations and how it handles some of the changes to survive in the airline industry. Critical approaches used by the company will form the second section of the study as it is important to discuss the business strategies that Qantas uses in its day to day operations. Thereafter, a conclusion will be necessary, as it will lead to objective recommendations concerning the different ways to operate efficiently to remain relevant in the airline business. APPLICATIONS OF CULTURE Qantas Airline relies on its flag hauler status to entice customers, which is one of its many problems. Travelers have expressed their displeasure by booking other airlines, such as Emirates, that offer better products and services. The company’s upper level has weak management ideas leading to its loss of customers. Qantas ordinary managers celebrate normal business resolutions as landmark accomplishments. Alan Joyce, Qantas CEO was criticized for managing the company wrongly. He created the bad condition of the company’s balance sheet and risked its future. Nevertheless, the airline admitted defeat when it begged Emirates to rescue it from the challenges. The only problem is that Emirates provides the best travelling products and services thus risking Qantas business. For the past decade, Qantas has assumed significant transformations to cope with external and internal issues, such as the September 11, 2001 terrorist attack that lead to declines in global travel demands (http://www.qantasyou.com/#home). For instance, Qantas reduced its global flying capacity by eleven percent. Fortunately, Ansett collapse stopped the internal competition in the Australian Aviation Industry and reduced the bidding charges for customer finances. Qantas had to transform to: a) Become more effective, profitable and be a competitive business by ensuring less competition in the internal markets. b) Pay levies and taxes by other Australian businesses. c) Make more profits and recompense shareholders’ dividends that augmented over the management years. The key facets that led to these changes included the fact that until 1995, the company was under the Australian government tenure with a technical/classical organization structure. The company therefore upheld a: a) Stern hierarchical corporate culture. b) Clear responsibility and communication lines. c) Jobs divided into simpler tasks, through specialization and labor division. d) Strict procedures and rules. e) Impersonal employee performance evaluation to prevent bias and favoritism. f) Formal document maintenance. Additionally, Qantas operated under a repressive leadership where managers made all imperative decisions and directly influenced and controlled employees. Communication was one-way whereby leaders just gave orders to the workers. Such leadership style is known to result to lack of trust amongst the managers and employees (Michael et al, 2008). This approach is associated with Taylor’s views concerning the diverse techniques of motivating employees. The strategy has several limitations but can be successful in particular situations such as when an organization is in crises of dealing with many low-skilled employees. Qantas has a long command chain, inadequate monetary accountability to the government, as well as a top-down method of communication. Such limitations pushed it to change its management style to become profitable, effective and competitive. The company altered its management style because of the 1991 internal air regulation and the 1995 privatization policy. Major transformations were established, thus leading to the following: a) Establishment of new technology. b) Placement of the executives on performance contracts. c) Elimination of ineffective working practices. d) Participative strategy in employment to change relations. e) Heightened training and work teams development. f) Heightened communication and flexibility. Qantas is also prone to organizational and individual accidents. Individual accidents occur when a person commits flaws free from the company’s influences. For instance, a staff member may cause such an accident by falling off the steps. On the other hand, organizational accidents have several origins involving several people working at diverse echelons of the company (Gabrielle, 2006). They affect even the uninvolved people, environment, and assets. Additionally, organizational accidents arise from several contributing facets starting from various system levels. Currently, Qantas management processes are flexible and modified to counter social challenges, such as viral ailments’ introduction, terrorism reaction, and the changing consumer and market requirements. The results of these transformations led to an effective management configuration, permitting Qantas Airline to counter changes in the external and domestic business environment very efficiently. Qantas Airways developed its strategies based on the environment on which it operates. For instance, the company suffered after the terrorist attack in New York in 2001 resulting to reduced number of passengers. Another challenge includes the 2003 Iraq war, as well as other disease epidemics that resulted to low number of passengers. Grave competition from discounted couriers also affects the company’s operations. After identifying the negative effects, Qantas recognized that its strategies ought to be changed to endure these challenges. Qantas managed these changes in several different ways. One of the issues that demanded managers’ reaction and the adoption of change included the terrorist attack of September 2001 that led to a disastrous industry predicament. For example, about 200,000 employees were laid off in the global aviation industry. Secondly, Qantas lost about 11 percent of its global air traffic and its profits declined to 300 million dollars. Alternatively, the company benefited from Ansett’s collapse whereby its domestic market share increased from 55 percent to 80 percent. Qantas administration also took advantage of the collapse of its business rival by effectively moving planes, especially from the demoralized worldwide routes to the organization’s developed internal market and through plane leasing from abroad to enlarge its fleet of aircraft by fifteen percent. Qantas also benefited from technological advancements that included a) A 10 million dollars anti-terrorism network and travelers’ screening. b) A 300 million dollars in-flight entertainment network. c) Flight updates data through short messages service (SMS) to business passengers. Qantas management also realized that its expenses were increasing. It therefore reduced these expenses by: a) Laying off around 600 employees and purchasing more effective aircrafts. b) Lobbying the Australian administration for fortification. c) Outsourcing the maintenance of its international fleet. d) Terminal leasing and sale. e) Plane relocation from global to the developing internal market. Currently, Qantas administration displays elements of different contemporary management theories. For instance, the company employs the contingency theory whose management practices are flexible and used to counter social challenges like terrorist attacks, spread of diseases, and changing consumer needs and market. Political theory is also evident in Qantas management whereby leaders use influence and power to accomplish organizational goals and balance competing shareholders’ interests. Another theory evident in the company is the behavioral theory where the management emphasizes more on its HRM (human resource management). Qantas has experienced several external and internal challenges, but the administration has guaranteed change. The management reacted to such changes by adopting their novel business goals to turn into a more profitable, effective, and competitive business and transform its company structure by outsourcing a better company structure and through tactical alliances. However, Qantas management is also faced with another challenge where employees tend to resist change. Through outsourcing such as contracting outside business functions from other suppliers, Qantas became lucrative. For instance, in 2002, the airline splurged 14 million dollars to send some of its Boeing 767 convoys to Singapore for preservation after sending other three aircrafts in 2001. Despite the fact that Qantas was able to change its management practices, several challenges have hindered some of those changes. For instance, fiscal costs were a major concern for the company. The company spent approximately 13 billion dollars for more than 10 years on fresh and effective planes, improvements to its contemporary fleet, enhanced terminals, in-flight entertainment, and fit outs to uphold its international market position. To be effective, the airline pronounced that it would decrease its expenses between 2003 and 2004. The company also declared that it would delay to purchase some of its inventive planes it planned to buy. The other problem included payments redundancy issue. Qantas total expenses for its labor accounts were 30 percent. In order to decrease such outlay, the company pronounced that about 300 employees would be laid off, about 600 full-time jobs would become part-time, and attrition would mislay about 2000 jobs. Administrators should notify their employees prior to carrying out any considerable transformation at the workplaces. They should be trained on the new expertise and skills, especially after the introduction of new technology. However, Qantas staff training increased training costs and staffs’ retraining. In 2002, the airline managed to cope with the retraining process by running a three-week learning course in cultures and service proficiencies for its crewmembers prior to the launching of the new Australian airline. In 2003, the company established and applied novel security exercises for the cabin and in-flight crew. Qantas administration facilitates the change phase from its old management system to the existing organizational structure and system to ensure that employees do not resist those changes. The company is amongst the best airlines in the world and possesses a desirable air security record. Its mission statement plays a huge role in the planning procedure since it clarifies the importance of the business. The airline however, must clearly communicate to every interest group, customer, employee, and stakeholders. Changes in Qantas business settings can lead to modification of the tactical objectives that are employed as a foundation for strategic and operational activities. Leaders must revise the ethical and social responsibilities before changes take place to ensure that they are safe for the environment. Workers must be trained on how to utilize new technology that protects other people’s rights to benefit everyone involved in the company. Qantas had an unstable past, but its administrators did a good job of managing the changes reasonably and efficiently. The company became one of the best airlines in Australia because of its effective implementation of the changes. However, that extensive transformation resulted into more problems for the company, especially when upholding its productivity. However, the company benefited a lot from these changes because it needed them for its business, employees became inspired to transform, the changes continuously improved, and resources became available for such changes to take place. CRITICAL APPROACHES Qantas applies its business strategies to achieve its mission that stresses on a number of elements such as giving feedback, forward thinking, advanced infrastructure, safety and discounted airline. The company did not have any option but to develop new strategies, such as strong brand to encounter some of the market threats. Discounted airline The first strategy developed by Qantas included launching of a discounted airline to compete with Virgin Blue in the airline market. In 2004, Qantas launched the Jet Star and positioned itself as a major player in the global and domestic flights. The approach proved valuable, especially when overseas travels declined. As the key airline in Australia, the airline guarantees the local and overseas customers’ safety on all the routes. The two major factors in these strategies include meeting consumer satisfaction and preservation of increased performance standards. The company ensures that all its employees treat the customers’ fairly. The staffs make sure that passengers’ luggage is safe from theft, and they guide their passengers in case they become stranded at the airport. Qantas identifies that its success depends on how it treats its passengers. However, to ensure that passengers are treated fairly and diligently, the company’s employees are properly trained and experienced. Recently, the airline has been able to pay its personnel better wages compared to several years ago. Qantas also motivates its employees as a way of increasing their performance through retirement benefits and on-job training. It also invests heavily to enhance skills for supervisors and managers to cover every need in the company. Infrastructure The third strategy for Qantas is advanced infrastructure. Airline companies desire to succeed in flights, but they must invest on the renewal of their aircrafts to ensure fuel effectiveness, freight capacity, range capability, reduced noise emanation, as well as travelers’ comfort and safety. Moreover, creation of advanced infrastructure also includes engineering because it is an important facet that enhances Qantas production, trustworthiness, and security reputation. Additionally, the company is also concerned about local and overseas passengers catering services to increase consumer satisfaction and loyalty. Additionally, Qantas has the best infrastructures, such as high-quality lunges and terminals that support its passengers. Feedback The fourth strategy includes giving feedback that encourages, provide opportunities, and safeguard the business environment, including assisting in things that would lead to catastrophe. Qantas is also known to sponsor and support sports events such as in the 2022 World Cup Football and Formula 1 competitions. Such feedback assists in identifying all the places that require renovation or improvements. Through feedback, the management makes decisions that impact on the company’s progress (Solis, 2011). For instance, the airline allows passengers to give feedback concerning their employees and the services provided to them during their air-travel. In 2011, the company realized that its competitors were taking almost the entire market share through feedback from the travelers. The employees are also allowed to provide feedback concerning Qantas ability to handle problems. This also plays a critical role in the company’s decision-making process. Safety The fifth strategy includes ensuring safety amongst all passengers, employees, and everybody in the airline. The approach is dubbed as ‘Safety First.’ Safety first plays a huge role at the company because of its need to become the best reporting and training facility in the world. Qantas concentrates mostly on performance, occupation safety and health, security, safety management, and flying safety. The airline invests a huge sum of money on supporting high operational performance and safety standards. Employees are trained on how to handle accident cases through risk management. Additionally, the Qantas OHS (Occupational Health Safety) group program offers valuable systems like the sound safety culture and the safe and healthy working surrounding, to prevent harm on everyone in the airline. Forward thinking The sixth strategy is forward thinking. The company has been able to undertake forward thinking through technology innovation to become the best airline business globally and the best provider of products and services. The organization also utilizes this approach as a section of its culture. Market segmentation Apart from the strategies mentioned above, Qantas ensures that it survives in the market through a marketing strategy called market segmentation. This process entails dividing the whole range of current or potential markets into discrete groups facilitating planning and analysis. This permits the company to meet its travelers’ needs, compete efficiently and accomplish its fiscal goals. It also ensures that it tunes the marketing to certain market groups in order to refine the product, set prices, determine the place of sale, and focus on better promotion for every segment of the market such as first class travelers and business (Solis, 2011). Qantas has complex market segmentation since every segment possess different and unique expectations and requirements, such as aspiration for stopovers, capacity to pay expectations and fare levels based on comfort and in-flight services. The company employs behavioral segmentation when selecting its target markets. Trip purpose is used to distinguish buyers such as business or non-business passengers. Qantas has formulated a market mix using the 4 P’s of marketing. Product The Australian airline industry has become very competitive making Qantas to focus on product planning. It designs its products to entice, maintain passengers from a certain market segment, and generate profits. Its generic services include a container or freight and seat per passenger. The company improves its essential products by possessing the top connecting airline on an ideal basis through the One World Alliance. Its comfort facets entail in-flight drinks and meals, seat width, entertainment, and lounges. Qantas also uses its FFS (Frequent Flyer Scheme) with over 100 program partners and 2.6 million affiliates for customers’ retention, increased market share, and filling the seats. The FFS offers a huge database for particular passengers’ information, which provides added direct promotional opportunities. Prices Price plays a huge role in all marketing plans. It is a variable that can change swiftly and frequently as needed. The International Air Transport Association possesses a formula that regulates prices for all the airlines. Qantas price methods include the cost plus margin. The company determines its production cost and later adds a profit margin. It also matches the market and supply chain to determine most of its fares. Additionally, Qantas prices are based on competition by watching what the other airline companies, such as Virgin Blue are doing. Qantas also uses price penetration as an approach for its fresh discounted Asian Airline. Promotion Promotion involves the ability of the company to communicate its image, products and services to the customers. Some of the promotional strategies used by Qantas include advertising. Qantas employs advertising organizations to build media ads in billboards and travel organization posters, brochures, newspapers, magazines, televisions, and radios. The company prefers to use direct marketing as opposed to blanket or media advertising. Sales promotion is the second promotional strategy used by Qantas, mainly in suppressed demand periods. The third strategy entails publicity to improve its image through feature editorials, interviews, and press conferences. The company also sponsors several sport events such as netball, swimming, and rugby. It also supports ecological causes like clean-up Australia, charity organizations such as CARE Australia, World Vision, and Star Light Children’s Fund. The airline also sponsors cultural activities such as the New South Wales Art Gallery (http://www.qantasyou.com/#home ). Additionally, Qantas uses sale representatives who market its products and services to government divisions, businesses, and travel representatives. Place Qantas is involved in two major ways of sale, direct and indirect sales. Direct sale involves selling of products to the customer immediately. The airline uses its retail channels for its direct sales. The company has a system of completely individualized Qantas Travel Centres known as Qantas Holidays. It also uses telephone sale centres, ticket sales, and the internet to make sales. Qantas sells its products indirectly through intermediaries. CONCLUSION In conclusion, Qantas is an Australian based airline company that has experienced several problems because of its managerial decision making. Its culture has affected the company such that it has been losing its passengers to Emirates airline. However, the company bounced back after its biggest rival Ansett collapsed. Later, Qantas management realized that it had to make changes on how it operated. Some of the steps involved in the development of strategies include industry analysis; organization’s offering positioning, competitors’ evaluation, existing strategies assessment, production of alternatives, organization’s capabilities assessment, and improvement of the existing strategy. Qantas has also concentrated on some critical approaches such as through feedback, great employees, advanced infrastructure, strong brands, sustainable operations, safety precautions, caring consumers, and ecological responsibility. RECOMMENDATIONS Additionally, Qantas requires several recommendations to ensure that it does not collapse like its former rival, Ansett. First, Qantas must continue transforming to survive in the international market. Therefore, it must ensure that employees’ are motivated, fleet complexity must be reduced, its freight catering and travel departments are expanded, seek equally valuable joint ventures with other best-performing airlines, and divide its soaring business to support revenues and costs in certain markets. Secondly, the company’s management must institute approaches that entice customers from acquiring its airline services. The company should also increase its promotional techniques, such as newspapers, magazines, TV and radio adverts because they are major devices for informing people about its operations. Qantas should also ensure that its fleet of airplanes is regularly checked to avoid accidents and improve on its safety. References "Small Beginnings". Our Company. Qantas. Archived from the Original on 9 October 2006. Accessed on August 25, 2013 http://web.archive.org/web/20061009061143/http://www.qantas.com.au/info/about/history/details2 Gabrielle, O. (2006). The Corporate Culture Handbook: How to Plan, Implement and Measure a Successful Culture Change Programme. Raheny, Dublin: The Liffey Press Michael, P., et al. (2008). Organizational Communication Perspectives and Trends (4th Ed.). Thousand Oaks, California: Sage Publications. Qantas Airways Limited (2013). Qantas Airways Limited. Accessed on August 25, 2013 http://www.qantasyou.com/#home Solis, B. (2011). Engage: The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success in the New Web. New York: John Wiley & Sons, Inc. (201-202). Read More