Community Development Issues - Case Study Example

Qantas Analysis Name: Course: Tutor: Institution: Date: Table of Contents Table of Contents 2 1.0 Part 1: Qantas Airlines Overview 3 1.1 Business Description 3 1.2 Company Overview 3 1.3 Financial Summary 6 2.0 Part 2: Marketing Analysis Research 12 2.1 Brand Analysis 12 2.2 Product Analysis 12 2.3 Customers’ Analysis 13 2.4 Competitors 15 2.5 Growth Strategy 16 3.0 Part 3: Management Paper 19 3.1 Two Managers Influence 19 3.2 Corporate Mission, Values and Culture 19 3.3 Corporate Social Responsibility 20 3.4 Employee Benefits 21 3.5 Employee Attributes 22 References 23 1.0 Part 1: Qantas Airlines Overview 1.1 Business Description Qantas Company is a reputable Australian based multinational airline company. The venture was introduced in the early 1920s in the Australian market under the original name Queensland and Northern Territory Airline services limited latter only to be recognized by the initials Qantas. The organization operates transportation services. The organization offers products specific to transportation services. On one hand, the organization offers local domestic, regional and international flights. As such, in this regard, it operates two key airlines namely the Qantas airlines and Jestar. In this regard, the company has over the years applied its product and organizational brand merits to expand its influence as well as increase its consumer base in the market. In this case, Qantas Company applies the quality brand perception of its Qantas airline to compete with other in the market (“Qantas”, 2014). Moreover, in order to focus on diverse market segments and niches in the airline industry, uses the cost approach of the Jestar airlines to attract an increased customer base for the airline. Moreover, besides the airline ventures, Qantas offers other specialist services and operates subsidiary business across the globe such as Q catering. In this regard, increased subsidiary organisational revenue streams for the venture thus improving its competitiveness both in the short and long run period (Plunkett, 2006. p.23). 1.2 Company Overview The Qantas Airline Company offers a wide range of products in the market. On one hand, the organisation offers products on transportation services for both cargo and passengers’. Moreover, it provides parking services for the passengers vehicles in its parking lot as well as other support product services such as in flight catering services as well as a traveller shop with multiple travel requirement products. The Qantas management is structured and relatively hierarchical. At the helm of the organizational management structure is the organizational CEO. In this regard, the CEO is charged with the strategic responsibilities and mandate of all the company businesses as well as subsidiaries. Therefore, the CEO oversees the operations of the various subsidiaries. In addition, the organisations are managed by a board of directors. The board managed under the organizational board charter has both executive and non executive directors. In this case, the directors collectively seek to enhance increased representative management of issues in the organization. Essentially, the organization applies the components of corporate governance in that it promotes transparency as well as accountability of the directors and the managers under the agency theory. In its management, the board is classified into various committees namely the audit committee, the nomination committee, remuneration committee and safety health and security committee respectively (“Qantas”, 2014). The establishment of this respective board of directors committees serves as critical aspects and issues through which the board issues should be managed. The organizational culture as Combe (2014, p.276) argued is based on its four critical values namely mutual, energetic, authentic and achieving. In this regard, the organization has established a culture of developing relationships with its consumers. In this case, instead of basing on the acquisition of new consumers, the company has developed a culture of retaining the existing consumers through satisfaction and loyalty base in the market. As such, it develops mutual relationships with its consumers and employees. Through this approach, the consumers are often rewarded and offered transactional and trade rewards for continues services purchase (“Qantas”, 2014). Moreover, in its culture, the organization has established strong human resource base that is largely energetic to support the consumers. Finally, the organization has a strong culture on performance. In this regard, the organisations base its valuation and achievements based on the performances on consumer relationships. The Qantas Company and especially the airline is regarded as one of the most attractive employers in Australia. In its employee’s base, a majority of over 80% of them are Australian. In this regard, the employees have benefits both while working as well as extended benefits upon retirement. One of the enjoyment benefits is the advancement of company credit cards to the middle and executive level managers. As such, the cards can be used to pay and cover for business related social meetings held by the managers on behalf of the organization. Additionally, active company employees acquire not only their benefits but also their partners’ benefits. In this case, such employees’ partners travel at discounted prices as well as their children. Finally, under employee benefits is rewards upon retirement in which the former employees travel on the airline at relatively reduced prices as long as they remain inactive and do not work or contract services with any rival airline to the company (“Qantas”, 2014). The accrual of these benefits increases the organisations attractiveness as an industrial employer in Europe thus offering it an increase management success as well as brand image in the labour market against its competitors such as the Virgin Australia airlines. Due to the changing global market structures organisations have resulted to the establishment and development of their human resource bases as part of their overall organizational structures and sustainable competitive edge. In this case, as enumerated in its organizational culture, the organization seeks employees who can establish consumer relationships. As such, the employees should posses’ good interrelationship as well as social skills. Moreover, in order to increase service quality and success, the organization seeks specialist employees with professional and academic qualifications in the various industry segments and sectors in the market. Therefore, the employees’ should posses’ high qualification traits. However, one employment bias by the organization is the need for a majority of its employees to be of the Australian cultural heritage background. As such, the employees should have this cultural background as an additional attribute and in order to increase their employment success probabilities. 1.3 Financial Summary A financial analysis of the Qantas airline involves an evaluation of its profit and loss account summary, share prices as well as balance sheet asset bases. Currently, the organization has a market capitalization of $ 3097 million as well as a net value on its equity shares of $2196 million. In this regard, the table below offers a tabulated summary of the respective components over the recent years. The summary offers a review on the progress and performance of the organization, thus offering a suitable benchmark base on which the organizational future success can be forecasted. Market Comparison Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio QAN 2.30 8.29 1.08 10.00 0.20 Market 0.94 15.3 1.25 1.71 1.54 Sector 1.08 15.1 1.46 1.74 0.90 A critical evaluation of the organisational earnings ratios as compared to the industry as well as sector earnings establishes that it is relatively higher. In this case, the organisational earnings are 2.30 way above the sector rates of 1.08. In this regard, the evaluation reveals that the organisation has a strategic advantage and merit over competitors in the market thus verifying its capability and success into the future. Valuation Measures   Market Cap (intraday)5: 3.10B Enterprise Value (Oct 6, 2014)3: 6.57B Trailing P/E (ttm, intraday): N/A Forward P/E (fye Jun 30, 2016)1: 10.11 PEG Ratio (5 yr expected)1: 3.53 Price/Sales (ttm): 0.20 Price/Book (mrq): 1.08 Enterprise Value/Revenue (ttm)3: 0.43 Enterprise Value/EBITDA (ttm)6: 7.45 Financial Highlights   Fiscal Year Fiscal Year Ends: 30 Jun Most Recent Quarter (mrq): Jun 30, 2014 Profitability Profit Margin (ttm): -18.52% Operating Margin (ttm): -3.11% Management Effectiveness Return on Assets (ttm): -1.60% Return on Equity (ttm): -65.31% Income Statement Revenue (ttm): 15.35B Revenue Per Share (ttm): 6.94 Qtrly Revenue Growth (yoy): -1.10% Gross Profit (ttm): 3.42B EBITDA (ttm)6: 881.00M Net Income Avl to Common (ttm): -2.84B Diluted EPS (ttm): -1.29 Qtrly Earnings Growth (yoy): N/A Balance Sheet Total Cash (mrq): 3.00B Total Cash Per Share (mrq): 1.37 Total Debt (mrq): 6.48B Total Debt/Equity (mrq): 226.20 Current Ratio (mrq): 0.66 Book Value Per Share (mrq): 1.31 Cash Flow Statement Operating Cash Flow (ttm): 1.07B Levered Free Cash Flow (ttm): 514.50M The above statistical analysis represents the organizational comparison with the market which demonstrates a high performance ratio as compared to the overall industry performance. On one hand, the balance sheet analysis establishes a positive ratio of 0.66 indicating that the organisation can meet its obligations. Summary table 2 Income statement Period Ending Jun 30, 2014 Mar 30, 2014 Dec 31, 2013 Sep 30, 2013 Total Revenue 3,725,000   3,725,000   3,952,000   3,952,000   Cost of Revenue 2,943,000   2,943,000   3,022,000   3,022,000   Gross Profit 782,000   782,000   930,000   930,000   Operating Expenses Research Development -   -   -   -   Selling General and Administrative -   -   -   -   Non Recurring -   -   -   -   Others -   -   -   -   Total Operating Expenses 3,911,000   3,911,000   4,005,000   4,005,000   Operating Income or Loss (186,000) (186,000) (53,000) (53,000) Income from Continuing Operations Total Other Income/Expenses Net -   -   -   -   Earnings Before Interest And Taxes (186,000) (186,000) (53,000) (53,000) Interest Expense (55,000) (55,000) (68,000) (68,000) Income Before Tax -   -   -   -   Income Tax Expense (532,000) (532,000) (35,000) (35,000) Minority Interest -   -   -   -   Net Income From Continuing Ops (1,304,000) (1,304,000) (118,000) (118,000) Non-recurring Events Discontinued Operations -   -   -   -   Extraordinary Items -   -   -   -   Effect Of Accounting Changes -   -   -   -   Other Items -   -   -   -   Net Income (1,304,000) (1,304,000) (118,000) (118,000) Preferred Stock And Other Adjustments -   -   -   -   In addition, an income statement profitability of $1.304 million indicates a relatively high profitability ratio in the market. This is an improvement from the December 2013 gains of $ 1.18 million. In this regard, the increasing values in the market profitability elucidate the venture as a viable market venture of attraction to investors into the future against peers in the industry. References Combe, C. (2014). Introduction to management, Oxford Publishers, London. Plunkett, J. W., 2006, Plunkett's airline, hotel and travel industry almanac: The only comprehensive guide to travel and hospitality companies and trends, Plunkett Research, Houston, Tex. Qantas, 2014, About Qantas, [Online] Available at [Accessed October 6, 2014]. Qantas, 2014, Customer Care, [Online] Available at < http://www.qantas.com.au/travel/airlines/customer-care/global/en> [Accessed October 6, 2014]. Qantas, 2014, Qantas CEO, [Online] Available at < http://www.qantas.com.au/travel/airlines/qantas-ceo/global/en> [Accessed October 6, 2014]. 2.0 Part 2: Marketing Analysis Research 2.1 Brand Analysis The Qantas airline and the entire Qantas Company at large has established a brand reputation in that it offers quality, reliable and cost effective air transportation services for both passengers and luggage as well as cargo flights. In this regard, the organization has established its market niches through the adoption of this quality and cost effectiveness brand image. However, as any other brand image, it faces a series of challenges. One of the pertinent challenges emerged in 2011, when the company flights were grounded on the basis if quality and suitability. This occurrence regrettably damaged the organizational brand image to a great extent. For instance, as Gardiner (2011) stated, a brand image valuation conducted by Brand finance, the organizational brand was valued at $1.1 million but it dropped by $100 million upon the flights grounding. In order to overcome and enhance brand image sustainability, the organization applies a series of approaches and strategies. One among them is advertising. In this case, increased advertisements increases brand familiarity. Moreover, the fact that the organization employs a majority of its workforce from the Australian market increase the overall organizational relevance and support thus building its image as a local supportive brand unlike its competitors such as Virgin Australia. 2.2 Product Analysis The organization offers its products mainly in terms of transportation services. In this case, it offers both categories of transportation that include cargo and passengers services. The organisational new product development process applies the team approach in the market. Therefore, through the teams, the organisation strategically develops new products to diversify its operations and strategic market competitiveness in the aviation industry. However, a current systems evaluation of the organisational products establishes that the organisational products are at the growth stage in the product lifecycle. In this regard, the organisational products are on the rise with increasing demand as well as forecasts into the future. This is based on growing economies performances as well as technology developments making aviation services affordable across the globe. In this case, the organization conducts businesses in the transportation of these products locally, regionally as well as internationally. Under its products despite the key function and role of transportation, the organization offers other noncore and supportive services to its airline consumers. For instance it has the Qantas shop. Under this shop, travellers acquire accessories and products they are most likely to use and need upon their arrival in the preferred destinations. Moreover, the Q catering services ensure that passengers not only have access to a quality foods cafeteria at the airport, but are also served with quality foods and beverages of their choice while on flights. This service product is especially elaborate in the international travels that span over long distances and most often take log flight hours thus necessitating meals. The offering of these diversified services as complementary services is a move aimed at increasing the overall satisfaction of the consumers with the offered services (Rothkopf, 2009, p.63). In particular, the Q catering services offer the organization a competitive edge over its main rival Virgin Australia airlines that offer no foods or beverages to its on flight consumers. 2.3 Customers’ Analysis A customer analysis in any organization incorporates the evaluation of the various and diverse consumer segments and niches served by the organisations. An evaluation of the Qantas airline establishes that the organizational consumer bases are both in the business to business (B2B) as well as business to consumer (B2C) models. On one hand, a B2B consumer base is especially under its cargo flights. This is a market on its growth stage as the organisation seeks to establish gains in increasing multinational organisations spread under globalisation. In order to reach out to the focused consumer base, the organisation applies a range of marketing channels and strategies such as marketing localisation, relationships developments as well as partnerships in the market. As such, Ryans (2013, p.33) argued that the organization takes up the third party contractual services of transporting and offering logistical services to multinational organizations seeking to distribute their products globally often through its subsidiaries. On the other hand, its B2C consumers are basically the average travellers who wish to take advantages of quality services delivery at substantially cost effective approaches. This is a relatively mature consumer base, that is at its peak due to the high number of competitors and stabilising market gains in the market. To target this consumer base, the organisation uses low pricing approach as well as increased advertisement and services diversification as its main marketing channels. In its consumer base market segmentation, Qantas airline applied approaches such as geographic segmentation, from which statistics demonstrate that the European consumers use the airline travel services more than any other region in the market. Moreover, under its demographic market consumer base segmentation, the organization classifies its consumer base in terms of their earnings and economic potentials. Therefore, it has three categories of its flights namely the first class, business class and the economic class respectively in order to cater for all the demographic market segments. 2.4 Competitors The global airline and travel industry is facing increased competition. In this regard, with increased airline infrastructures as well as technology development, a majority of airline companies have ventured onto the global market. However, each of the organisations retains significant market control dominance that reduced Qantas airline capability to venture and influence these markets. On the Asian market, the venture faces competition from the Fly emirates airline that predominantly controls the Asian market. On the other hand, in the European market it faces competition from other airlines such as the British airways that with UK government support has established large scale operations and high quality services provision. Finally, in the domestic Australian market, the organization face stiff competition from the Virgin Australia airlines, the organization especially with is rebranding to include the Australian name in its corporate name initially know as Virgin Atlantic airlines, sought to identify itself with the Australian market. Therefore, this negates the organization the ability to control the Australian market as the only local brand. These virtual competition levels raise market challenges for the organization increased profit margins and gains. This report offers an evaluation of the domestic market share of the organization and other competitors in the market As evidenced below, the organisation faces high competition from the Virgin Australia Airways on the domestic market. Therefore, in order to mitigate this challenge, the review argues that the organisation should use campaigns focusing on its employment CSR practices where a majority of the employees are Australian. As such it should seek support from the society to ensure that the employees and many more in the industry could be employed. This would offer the venture an added advantage over the peers in the industry. 2.5 Growth Strategy A growth strategy is one that an organization applies to increase its market influence and control in an industry despite the increased competition levels and competitors competitive edges. As such, such a strategy is one of developing and exploiting organizational strengths and exploiting their sustainable competitive edges to stimulate their expansion and growth. The Qantas airline company in its bid to expand has ventures its target in the European market. This argument can be evidenced by the organisational increased success in the international airline market in the early 2002 where the organisation exertion can be evidenced. In this case, the venture upon realizing that a majority of its consumers are from this geographic region, concentrated on developing its capital base and market influence in this region, rather than focusing on the entire market. Increased market concentration has offered the organization increased control of the market (“CAPA”, 2014). Moreover, it has branded itself as an Australian based corporation. Through this operational strategy, the organization has applied its social corporate program initiatives in the Australian market, such as large percentage employment of the market labour in its operations to gain control of the domestic industry. As such, this increased its overall inter-relativeness with the domestic market, subsequently forming a sustainable edge for growth as evidenced by its increased domestic travels in Australia over the years. In fact, it has the highest number of domestic flights on a weekly basis in the market. References CAPA, 2014, Qantas' pressing need to solve the Asian network dilemma, now its European restructure is in place, [Online] Available at < http://centreforaviation.com/analysis/qantas-pressing-need-to-solve-the-asian-network-dilemma-now-its-european-restructure-is-in-place-152263> [Accessed October 6, 2014]. Gardiner, S., 2011, Battle for the brand: has Qantas flown into a ditch? Traveler, [Online] Available at < http://www.traveller.com.au/battle-for-the-brand-has-qantas-flown-into-a-ditch-1mrjd > [Accessed October 6, 2014] Rothkopf, M. 2009, Innovation in commoditized service industries - an empirical case study, Lit, Berlin. Ryans, A. 2013, Beating low cost competition: How premium brands can respond to cut-price rivals. Hoboken, Wiley, N.J. 3.0 Part 3: Management Paper 3.1 Two Managers Influence In developing a practical evaluation of the organizational leadership as well as the exhibited leadership skills, this research evaluation sought data on the existing literature on its past CEOs. One of the evaluated leaders in the corporation is Alan Joyce. In this case, under the CEO s leadership the organization lost its control in the Australian market. In this case, the CEO due to the application of inappropriate market strategies lost to the Virgin Airlines competitor. This was based on the CEOs overreliance on the boards’ directives and advice rather than personal strategic decisions. Consequently, as the Qantas website (2014, “Qantas CEO”) reported, it was until the CEO violated the board and averted his risk avoidance leadership approach that the venture acquired a turnaround in 2013. An additional evaluation example is on the airline founder Mr. Wilton. The leader and the first group CEO exhibited innovation and creativity in his leadership. In this case, through his innovation, the organization established its services in Australia and inevitably spread across Europe to emerge latter as a global and multinational airline. Moreover, Mr. Wilton exhibited risk taking traits that is an imperative trait possession for any business leader to succeed as high rewarding ventures are often risky. 3.2 Corporate Mission, Values and Culture Qantas Airline has a strong and committal mission and vision statement. In this case, the organization argues that it strives to be “The World Best Premium Airline and The World’s Best Low Fare Carrier”. As such, this vision statement is an exhibit of the organizational commitment on two fronts namely quality and costs. Therefore, its mission statement is basically hedged and concerned with the provision of quality airline services at substantially and relatively low pricing costs. In this regard, the organisation delivers its mission through a range of operational activities in the market. As such, the organisation has adopted a market diversification through which the venture serves both the B2B and B2C markets. Moreover, the various classifications of travel flights services in the market offers to increase affordability of the services while retaining the overall services quality. Moreover, in order to attain the vision statement as well as successfully execute its mission, the organization is based on a culture of relationships. In this regard, the organization has developed a culture of establishing relationships with its consumers. As such, through the relationships overall satisfaction and loyalty among the consumers is enhanced (‘Qantas, 2014, “Customer Relationships”). Therefore, instead of developing a marketing and advertising culture that a majority of the competitors apply, the organization seeks to use its relationship culture. As such, through the relationships and the subsequently increased loyalty levels. Relationships are an imperative aspect and nature through which the consumers are offered not only the core services but also non-core services to enhance their supplementation and eventual increased satisfaction rates. The organization has established a market culture of retaining its consumers rather than sourcing for new ones on a repeated basis. This has facilitated strategic management application in the organizational operational system. 3.3 Corporate Social Responsibility Just like peer airlines in the global market, the organization is faced by a wide range of operational challenges such as environmental pollution as well as need to benefit the society from the established operational gains. One of the organizational highest CRS projects in the Australian market is the prioritization of the labour market for employment over foreigners. Moreover, the organization established the Qantas credit union. The organization supports social initiatives. In this case, besides offering support to various groups, after every 2 years, the organization establishes relationships and alliance with a community based organization where it supports its operations as well as financing its activities to enhance improved societal benefits. Moreover, with respect to environment and environmental conservation, Beeton (2006, p.197) stated that the organization is committed to reducing pollution through efficient utilization of resources. This is due to the increased overall concerns and considerations arguing that the air travel industry leads to increased environmental pollution. This is especially on the use of the jet fuels as well as the air pollution caused by the aeroplanes emissions. Consequently, this increased overall industry environmental sensitivity with environmental groups advocating for corrective measures such as the use of renewable jet fuels as well as efficiency in engine fuel consumption to reduce on carbon emissions. To this effect, the organisation has developed environmental conservation programs. For instance, the Brisbane office recycles printer cartridges through Planet Ark. Moreover, the venture introduced the e-statements approach through which instead of printing statements to the members, the organization offers and provides them with e-statements to reduce on paper use. Similarly, in an effort to reduce paper use, the membership application forms are only printed on a need basis, specifically where applicants require printed copies only. 3.4 Employee Benefits Organizational employee benefits are the privileges and advantages that employees enjoy by serving their employers both while serving and even after service. A particular reference to the Qantas airline company establishes that employees enjoy a wide range of benefits. One of the key benefits to the employees is the partners benefit package. In this case, the partners enjoy discounted travel costs when using the airline flights. The organization operates in a wide series of international and local destinations. Therefore, this offers the organizational employees the opportunity to grow and expand their careers in through increased integration. As such, this increases the possibility for the organizational employees to develop not only their professional skills but also the social skills through diversification of perspectives and the opportunities for relating with diverse market cultures (Pride, Hughes and Kapoor, 2012, p.315). 3.5 Employee Attributes Finally, an organizational management approach analysis, reviews on the impeccable qualities and characteristics of employees recruited by the Qantas organization. One of the qualities that potential organizational employees need to possess high professional qualifications. In this regard, the employees should possess the required skills to enhance their employment chances. Moreover, professional qualification is an imperative and important virtue to employees’ attractiveness. In this regard, as established by the organizational relationship culture, it bases its management success on building and establishing relationships. Therefore, in order to increase the relationship success rates, the employees are required to possess cultural openness and accommodative cultures (Riley, 2005, p.124). Finally, an imperative employee attribute required is the possession of a desire to perform and achieve success. In this case, the organization has developed a culture of performance and success. Therefore, employees willing to seek employment in the organization should posses and have a self driven culture with the ability and potential to work under minimal supervision. References Beeton, S., 2006, Community development through tourism. Collingwood, Land Links, VIC. Pride, W. M., Hughes, R. J., & Kapoor, J. R., 2012, Business: South-Western Cengage Learning, Mason, OH Qantas, 2014, Customer Care, [Online] Available at < http://www.qantas.com.au/travel/airlines/customer-care/global/en> [Accessed October 6, 2014]. Qantas, 2014, Qantas CEO, [Online] Available at < http://www.qantas.com.au/travel/airlines/qantas-ceo/global/en> [Accessed October 6, 2014]. Riley, J. (2005). Employee protection at common law. Annandale, N.S.W: Federation Press Read More