The Problems Affecting the Performance of Qantas Group - Case Study Example

Qantas Report Name Institution Course Instructor Date Qantas Report Student name: Address: Email: Date: The Chief Executive Officer (CEO), The Qantas Group of Companies, 10 Bourke Road, Mascot NSW 2020. Website: http://www.qantas.com.au Dear Alan Joyce, RE: NEW STRATEGIC REPORT IMPLEMENTATION REQUEST Following your request for a volunteer-based market auditing of your company, I am delighted to present you with the attached report which details your company’s current situation and uses SWOT analysis and Porter’s five force model to identify the problems leading to company’s inefficiency, low performance and loss of customers. In order for your company to improve service delivery, attract and retain customers, and restore company reputation, it is necessary for your management to implement the report findings. In this regard, the report presents implementable new goals and strategies that include lowering the company’s operation cost and reducing competition, improving customer service delivery, and investing in quality human resource. The new strategies are achievable via airline diversification, advertisement, product promotion and price reduction. I, therefore, pledge for you to implement the findings. Yours faithfully, Signature Name Qantas Report Introduction Qantas is the leading air service provider in Australasia and the second oldest airline company in the world. Following the acquisition of Jester by Qantas, the company continues to record low income benefits. As such, following a request by the CEO of the company, this paper seeks to present a report that uses SWOT analysis and Porter’s five forces (market auditing tools) not only to show the importance of such tools in strategic management, but also to identify the marketing and management problems that limit the performance of Qantas and provide appropriate remedies to the identified problems. Therefore, for the report to achieve its objective it will put into consideration several aspects which include analyzing the current situation of the company, providing a situational analysis of the company using SWOT analysis and Porter’s five forces model. This means that, it will detail the purpose of the highlighted market auditing tools to the performance of the company. Therefore, in the context of situational analysis, the report will recommend new goals for the company, outline strategies of fulfilling the new goals, state the necessity of the goals and strategies and, finally, provide a tactical plan of achieving the goals. Current situation Qantas thrives on its mission statement to meet its projected objective as the best and reliable airline company in the world. In this regard, the company’s mission statement, “reputation restoration, crisis confrontation, sustainable operation and future planning,” combines together the goals of Jester and Qantas Airways. The combination brings about the current focus of Qantas group on provision of safe air services, provision of quality services, definition of appropriate airline routes, promotion of effective transport operations, and promotion of complementary branding for both Jester and Qantas Airways. As a result, the business strategy for the company achieves airline safety, sustainability, superior branding, social responsibility, customer care, great organization, forward thinking, maximization of operations, and timely collection of feedback. Additionally, Qantas group employs variable business strategies such as differentiation and cost leadership to not only separate itself from other airlines, but also give it a competitive advantage in the air service industry. Situational analysis Purpose of SWOT analysis Due to current low performance of Qantas group, it is important for the company to use market auditing tools to formulate new goals and strategies for the company. The main objective of carrying out market auditing of a company is to formulate a strategic marketing plan. In this regard, market auditing tools such as SWOT analysis plays an important role in the management and marketing of the Qantas group. The SWOT analysis’ purpose is to entail the description of the company’s strengths, weaknesses, opportunities and threats (see attachment 1). By describing the four aspects separately, the company can capitalize on its strengths to eliminate the weaknesses and exploit the available opportunities by taking into consideration the effects of the threats (Danaher et al. 2011, p.588). For instance, if Qantas group undertakes a contextual SWOT analysis, the results from the analysis would reveal that the company’s weakness lies in the framework of its cost structure. It is because; the company has a 20% higher cost compared to that of its closest competitors. Alternatively, the analysis results would identify the available opportunities that Qantas can exploit to eliminate the cost weaknesses, improve its performance, expand its market and increase the income benefits (Fournier 2014, p.436). In this context, the open opportunity includes reduction of operation costs by adopting and implementing e-commerce. The implementation of e-commerce means developing an infrastructure that encourages the company’s exploitation of electronic commerce. In a nutshell, the purpose of undertaking SWOT analysis of Qantas group is to develop an effective marketing strategy by creating a market plan that fills the existing loopholes in marketing. Purpose of Porter’s five force analysis Additionally, for Qantas group to achieve effective implementation of the marketing plan formulated via the SWOT analysis process, it requires a detailed report that describes the economic, political and social environment that surrounds the company. The description is achieved by analyzing Qantas group using Porter’s five forces model. It is because; Porter’s five forces analysis would aid the company in the development of a precise marketing strategy. For instance, the results of the analysis would identify the correct methodology for the company to align its competencies with the surrounding competitive environment, thereby, giving the company a competitive advantage in the airline company. It is important to note that the company’s current marketing strategy is ineffective which pronounces a decrease in profits and an increase in losses (Oxenbridge et al. 2010, p.184). Therefore, it is correct to state that the company does not effectively utilize Porter’s five forces model which is important, especially in international airline companies. For example, when the company launched its Jester brand, the Qantas Airways customers’ loyalty shifted to Jester based on its economical operations. They shifted to avoid the high expenses charged on standard operations of Qantas Airways. Consequentially, Qantas group recorded low profits. The company would avoid such instances by using Porter’s five forces model to identify that the company lacks airline hubs in European and Asian countries. Therefore, the customers shifted to Jester due to low rate charges and quality customer service. As if it is not enough, the lack of diversity in Qantas Airways opens chances to stiff competition from other airline companies (Pike & Page 2014, p.207) (see attachment 2). Recommendations New goals Therefore, basing on the Qantas group mission statement and the results from both SWOT analysis (attachment 1) and Porter’s five force model (attachment 2); it is important for the company to restructure its goals to meet its objectives. Whereby, the new goals for the company include lowering the company’s operation cost, eliminating the threats of competition, improving customer service delivery and investing in quality human resource. By implementing the new goals in a new strategic marketing approach, the company will improve its performance, restore its reputation, increase customer loyalty and attract new customers, and increase the income benefits. New strategies To achieve the new goals, Qantas group requires a new approach of management and a new framework of marketing (new strategies). In the context of cost and competition reduction, the company will adhere to the government’s independed price deregulation of the airline industry. On the other hand, in improving the customer service delivery, the company will form various mergers or collaborations with other service providing companies such as hotels. It calls for both domestic and global collaboration. Finally, in the context of investing in quality human resource, the new strategy will involve training the company’s employees to meet the customer expectations and promote brand recognition. Explanation First, the absence of re-deregulation increases competition, because companies have freedom to decide the travelling costs of their flights. As a result, low travelling costs leads to poor service delivery (a factor that currently characterizes Qantas group). However, re-deregulation will renew Qantas reputation, reduce operation costs, renew financial situation and eliminate new competitors. Second, by collaborating with companies such as the Metro Hotel, Qantas will provide tertiary services such as car hire, bank services and grocery stores. The company will entertain the customers’ pleasure, thereby, increasing customer loyalty. Additionally, it will conduct constant surveys to obtain the customers’ feedback on the process of service delivery. By doing so, the company will restore its reputation and prevent customer from shifting to other companies by ensuring that both the first class and economic class passengers are satisfied. Finally, by training the employees, Qantas group will increase the customers’ confidence in the airline, exploit the employees’ full potential, and reduce the safety risks that currently characterize the company. In summary, it is necessary for Qantas group to adopt the highlighted new goals and strategies to aid the company in restoring its reputation, improving its service delivery, eliminating new competition, increasing customer loyalty, and lowering costs of operation. Tactical plan In achieving the new goals and strategies, Qantas group will implement a results-oriented tactical plan that includes specific approaches of market mix factors that include; Invest in advertising to notify the customers on the new changes in the company. Promote the products of the company by sponsoring special events such as world sporting events. Lower the price of the Qantas Airways, especially to attract the domestic customers. Open new airline hubs in Europe and Asia to increase the market of the company. Conclusion In conclusion, the paper presented a report that identified the problems affecting the performance of Qantas group using the market auditing tools (SWOT analysis and Porter’s five force model). As such, it is important for the CEO of Qantas group to implement the findings of the report that include lowering the company’s operation cost and competition, improving customer service delivery and investing in quality human resource. They are achievable by promoting the company’s products, lowering airline prices and advertising. By implementing the new strategic goals, the company will improve its performance, restore its reputation, increase customer loyalty and attract new customers, and increase the income benefits, among other long-term benefits. References Danaher, PJ, Roberts, JH, Roberts, K & Simpson, A 2011, ‘Practice Prize Paper-Applying a Dynamic Model of Consumer Choice to Guide Brand Development at Jetstar Airways,’ Marketing Science, vol. 30, no. 4, pp. 586-594. Fournier, K 2014, ‘The qantas/emirates decision: How the competition commission of Singapore used the net economic benefits exclusion to regulate the air passenger market,’ Singapore Academy of Law Journal, vol. 26, no. 2, p. 436. Oxenbridge, S, Wallace, J, White, L, Tiernan, S & Lansbury, R 2010, ‘A comparative analysis of restructuring employment relationships in Qantas and Aer Lingus: different routes, similar destinations,’ The International Journal of Human Resource Management, vol. 21, no. 2, pp. 180-196. Pike, S & Page, SJ 2014, ‘Destination Marketing Organizations and destination marketing: A narrative analysis of the literature,’ Tourism Management, vol. 41, pp. 202-227. Attachment 1: Qantas’ SWOT analysis Attachment 2: Qantas’ Porter’s five force model Read More