E-Business of Qatar Airways - Case Study Example

Running Head: E-Business E-business [Institute’s E-Business Executive Summary: By introducing the Oracle E-business Suite, Qatar Airways has deftly managed to pin point the most poignant of its customers. Partnerships with travel agents have made it easy for it to advertise its services and products, as it uses social media to its advantage. Looking at it from the Porter’s Five Point Analysis, Qatar Airways can be seen to be self-sufficient in handling suppliers and buyers alike, with its unique selling propositions and high standards of quality. Also, the company remains relatively insulated from threats of competitors – as it is proclaimed the best in the region (with reason) – and also from new arrivals, as the airline industry is very cash demanding; and new companies wanting to enter know that it will be hard to survive – especially in the global downturn of economy. The attractiveness and ease of use of Qatar Airways’ website has played a major role in increasing traffic to the company’s site; thus attracting and retaining customers. By adeptly using the business-to-business format of the e-commerce market, Qatar Airways is easily able to identify the most profitable of its clients – and target them accordingly. Also, the airline has always been at the forefront of corporate social responsibility programs. It has thus helped change countless lives both in Qatar and across the globe (especially in Asia) with its joint programs/partnerships with other related affiliates. Its drive to success as always been accentuated by the dedication of the airline to provide quality service and products. This is why customers who fly once in Qatar Airways, fly with it forever. Introduction to E-Business: The era of e-business started in the early 1970s, with the advent of the internet. Over the past 30 years, however, the meaning of e-Commerce or e-business has quite changed. The late seventies saw the introduction to online shopping, which later evolved into a wider and more complex network of Business to Business and Business to Consumer online interactions in the eighties and nineties. Keeping at par with this era of technology, numerous companies have adopted the e-commerce strategy in order to reach out to a wider demographic without the restraints provided by geographic or other barriers. Qatar Airways is no different. It caters to a global population, with the ease of transactions magnified with the help of e-business. Having always had a proactive stance when it comes to the online business factor, Qatar Airways has thus always been one step ahead of its competitors. It has encouraged its customers to transact tickets online, and has facilitated them in every way possible by introducing a user friendly website. Consumers can book, pay online and also get tickets issued with zero trouble via the internet; the lowest-fare-finder option that Qatar Airways uses also portrays – to prospective and current customers – the lowest fares offered in a range of schedule dates. The Oracle e-business Suite is used by the Airline in order to facilitate its website; and this has helped to reduce the airline’s expense and cause efficient management, as the company is now no longer dependant on agents. (AME Info., 2003) When analyzed in the light of Porter’s Five Forces, Qatar Airway’s e-business background may be divided into the following elements: Supplier Power: Providing low rates as compared to other airlines gives Qatar Airways a competitive edge. The era of online transactions has also made it easier for the company to reach out to a higher demographic around the globe. The outsourcing of its accounting role has provided the company with improved and standardized industry practices, and at much cheaper rates than those provided locally. Buyer Power: The internet has provided customers with a large variety of options to choose from. This gives them the chance to survey other competing airline brands and weigh their pricing strategies against those of Qatar Airways. Threat of Substitutes: As mentioned above, Qatar Airways must constantly keep in mind the fact that customers purchasing its tickets online have access to a wide range of other substitutes to the services provided by the company. Qatar Airways has therefore attempted quite successfully at retaining customers by providing innovative products and services, such as the lowest-fare-finder. Threat of Entry: There is, as such, no real threat of new entries into the airline industry, as it requires a very high capital budgeting; which is not possible for most companies. Degree of Rivalry: There is a high degree of rivalry in the airline industry, with various companies competing against one another in order to gain the highest percentage of customers and revenues. Some common examples are Emirates and Gulf Air. E-Marketing: Qatar Airways follows Rappa’s e-business model; whereby both customers and partners are indulged in order to provide full transparency to these shareholders. Bezruk.com, an Asia Pacific search engine, has gotten into contract with Qatar Airways; the company is therefore able to advertise its services and flight fares in different websites, catering to a large populace of potential customers (Wego, 2007). By using pay-per-click, search engine optimization, banner ads and bulk mails, the company has managed to increase its advertising tenfold – and as a result, its marketing budget has widened scope. (Ramos & Cota, 2009) Subscribing to online forums has helped Qatar Airways reach out to those who are not frequent travelers, and thus has increased sales during holidays. Also, by attaining personal information of customers – with their permission – the company is able to successfully improvise on its services and products, by means of focusing on different customer needs. Social Media has also been at the forefront of major marketing improvements in the past decade. Qatar Airways is no exception when it comes to using this medium in order to reach to a larger clientele. Facebook (Refer to Appendix B), YouTube, and other media related to v-logging, social forums, blogging etc. are some of the social media used by Qatar Airways. (Young, 2007) In line with its above-stated marketing strategy, Qatar Airways has also recently announced the launching of its Vietnamese Expansion Drive. This opens flights to Hanoi and also flights along the Ho Chi Minh City Route. This increase in building customer interest to learn more is followed by Qatar Airways’ strategy to aim at the desire component of the AIDA model. This is done by providing a unique mix of products aside from the lowest air fare. These products include Qmiles (which are awarded based on the booking class the consumer purchases), and are based on whether the customer is a member of Qatar Airways’ Privilege Club Program. This offers discounts and extra mileage (as mentioned above) to special customers – especially those who are frequent fliers. Also, the company provides customers with an online virtual tour of its services and products, causing customers to want to experience the delights first hand. Qatar Airways has also made it effortless for customers to book tickets online, via customizing the product he/she requires. For individual customers, billing is done instantaneously, whereby the customer can tally up the amount first, and after being completely satisfied with the result, pay his due. Corporate clients are offered a higher advantage by the company, and are usually issued invoices. Web-designing: A good website is of paramount importance in order to attract and retain customers. A company must never disregard the importance of a good online website; as research shows that the first 30 seconds are the most crucial in deciding whether the customer will go through the trouble of going through the website. Most clients are too busy to scroll through the entire layout; thus the website must be designed in such a way that the most important information is given right at the top, with snippets of additional information given either further below the page – or linked through different portals. The most effective design is one which allows the user to gain access to maximum information with minimum amount of clicks, while also keeping in mind the attractive outlook necessary in order to please the customer’s eye. (Foraker Design, 2005) Qatar Airways’ website (see Appendix A) is designed in such a way that even the most casual visitor is incited to go through the website at least once, in the least amount of time. At the top right hand corner of the website is a query box; this contains all the queries any customer could possibly have in mind. This is a very attractive feature as it tells one everything one could possibly need to know (from latest flights details and flight schedules to varying price rates, etc). The invitation to subscribe to the company’s newsletter is right at the bottom, beneath the booking corner at the left; which also has other options like flight status, check-in, etc. An invitation to join the privilege club of Qatar Airways incites the customer, as it glares at one in bold magenta. The website’s homepage also features different newly added services and flight plans, displayed in small boxes on the bottom right hand corner. At the top of the page are links that lead a visitor to different areas of interest such as Bookings, Special Offers, Privilege Club, Holidays, etc. The About Us link is at the top corner, just before the small query box. Other links (known as Quick Links) invite customers to check out a multitude of other options related to Qatar Airways, such as careers, corporate travel, and the like. The web design of Qatar Airways is inviting and cheery, as it easily conveys the most important messages in the shortest of time. Business to Business: Bulk bookings have always been very profitable; and Qatar Airways in no exception to this prime source of revenue. Business to business transactions are much cheaper and more efficient than Business to consumer transactions. It is a very attractive portrait for buyers and suppliers alike. Buyers can easily acquire the best information regarding respective goods and services in the travel industry. Suppliers benefit equally from these transactions, as they can easily affect sales on the internet with minimum costs. This is possible because the internet provides a free platform for interaction between buyers and suppliers; alongside unrestricted information about competing suppliers, which can be used advantageously by other suppliers. Learning about how competing companies are using different unique selling propositions online in order to generate greater revenue helps suppliers improve their own products and services. (Lapidus, 2000) Qatar Airways is therefore a forefront player of the Business to Business transactions. These transactions help the company assimilate its various customers into a wide range of corporate customer portfolios (small and medium companies, large corporations, etc). This helps the company very effectively target its most lucrative customers. The number of customers signing up for Qatar Airways’ newsletter also reveals to the management the popularity of the newsletter in various geographic zones. This helps the management in deciding the content that must go into the newsletter, in order to satisfy the maximum amount of customers. Ethical Aspect and Corporate Social Responsibility: Corporate social responsibility goes a long way in building images of companies. Fallen companies can redeem themselves in the eyes of the consumers by indulging in corporate social responsibility. However, most companies – Qatar Airways included – need no persuasion to indulge in what is only their social duty. They help with the social welfare of the society in order to have a healthy society to work in. Qatar Airways has indulged in a wide array of social responsibility activities and programs over the past years. The Oryx Flies Green Project (2009) was an attempt by the company to put a smile on the faces of children belonging to one of Qatar’s biggest orphanages. “Dhriema” is the Qatar Orphan Foundation, whose children had never been aboard a flight until Qatar Airways took the initiative to take 100 children from the orphanage on a free trip aboard Airbus A321 over the state of Qatar. This special twenty minute flight was a unique gift to these underprivileged children, who were – to their delight – accompanied by their aides, local media and the Chief Executive Officer, Akbar Al Baker. Keeping in view the danger the environment today is facing, Qatar Airways organized the 9th National Green and Clean Campaign in by sending its crew to clean Al Wahkra Beach. More than 50 bags of garbage were collected in this campaign. Its fuel efficiency program also focuses towards systematically reducing the dependence of the airline on fossil fuels, in order to prevent airline exhaust fumes from contributing even more to green house gases and global warming. The company has also donated $450,000 to ROTA (Reach out to Asia), a charity organization founded in 2005 in Qatar. This project seeks the joint initiative of Qatar Airways and ROTA in providing quality primary education to the underprivileged. The main goal of this initiative is to improve adult literacy by 50% and also provide free education by the year 2015. (Qatar Airways, 2009) Conclusion and Recommendations: Relentless in its pursuit for perfection and excellence in service and quality, Qatar Airways has acquired one of the top positions in the airline industry. With an extensive budget allocated solely for internet advertising, Qatar Airways has truly used the e-business format to its advantage. The airline industry, however, is extremely competitive – with even the slightest mistakes costing companies millions in losses. The prices of aviation fuel show no tendency towards reducing as they continue to rise exponentially. Qatar Airways needs to maintain its high quality standards – if not continuously improve them – if it wants to remain at the top. References: AME Info. (2003). Qatar Airways goes live on Oracle E-Business Suite. Retrieved October 11, 2009, from AME Info: http://www.ameinfo.com/32601.html Brinck, T., Gergle, D., & Wood, S. (2001). Usability for the Web: Designing Web Sites that Work. Morgan Kaufmann Publishers. Buisness Wire. (2007). Qatar Airways Moves Forward with PROS Technology. Retrieved October 11, 2009, from Buisness Wire: http://www.allbusiness.com/company-activities-management/company-structures-ownership/5306954-1.html Christopher H. Lovelock, (1999) "Developing marketing strategies for transnational service operations", Journal of Services Marketing, Vol. 13 Iss: 4/5, pp.278 – 29 Foraker Design. (2005). Website Design. Retrieved November 26, 2009, from usability design: http://www.usabilityfirst.com/websites/index.txl Facebook. (2010). Retrieved November 4, 2010, from Qatar Airways: http://www.facebook.com/pages/Qatar-Airways/9471112401 Lapidus, G. (2000). Gentlemen, start your search engines. Goldman Sachs Investment Research . Qatar Airways. (2009). Social Responsibility. Retrieved November 27, 2009, from Qatar Airways: http://www.qatarairways.com/global/en/csr-social.html Qatar Airways. (2010a). Retrieved November 4, 2010, from Bonus Qmiles for booking online!: http://www.qatarairways.com/global/en/bonus-qmiles.html Qatar Airways. (2010b). Retrieved November 4, 2010, from Bookings: http://www.qatarairways.com/global/en/homepage.html Qatar Airways. (2010c). Retrieved November 4, 2010, from Special Offers: Over 90 DestinationsWorldwide: http://www.qatarairways.com/global/en/special-offers/overview.html Twitter. (2010). Retrieved November 4, 2010, from Get short, timely messages from Qatar Airways: http://twitter.com/Qatar_airways Wego. (2007). Bezruk.com signs marketing agreement with Qatar Airways. Retrieved November 3, 2009, from wego.com: http://blog.wego.com/61/bezurkcom-signs-marketing-agreement-with-qatar-airways/ Yang, S. (2001). E-Commerce in Airline Buisness. Retrieved October 11, 2009, from unpan1.un.org: http://unpan1.un.org/intradoc/groups/public/documents/UN/UNPAN001219.pdf Young, A. E. (2007). Social Media Marketing and the Hotel Industry. Retrieved November 3, 2009, from 4hoteliers.com: http://www.4hoteliers.com/4hots_fshw.php?mwi=2351 You Tube. (2010). Retrieved November 4, 2010, from Qatar Airways: http://www.youtube.com/watch?v=232PHJCd3dY Appendix A: http://www.qatarairways.com/global/en/homepage.html Appendix B: http://www.facebook.com/pages/Qatar-Airways/9471112401 Read More