Qatar Airways: Management of International Competition - Term Paper Example

? Qatar Airways Management of International competition This report paper focused on studying the management of international competition byQatar Airways, one of the renowned airways in the world. The study is conducted with an aim to analyze the historical evolutions of the airline company. In this paper, the increasing problem of competition in the airline sector has been explained with reference to Qatar Airways. The paper has also provided the explanation of different ways the managers in the organisation strive to cope up with the problems of international competition and implementation of certain strategies has been suggested in the paper. At the end of the paper, few of the growth strategies have been recommended to Qatar Airways in order to deal with the problem of rising international competition. Hence, the discussion in this paper is expected to provide with a detailed study of the problem of competition that Qatar Airways is facing in the present scenario. The potential risk of competition is the greatest problem that is faced by the managers of both the new businesses and the existing ones (Ethics Resource Center, 2012). Likewise, Qatar Airways is also facing maximum risks of competition in the international airlines market. In the present day, all the international airline companies are providing their passengers with quality services and several facilities during the air journey. Qatar Airways have been rapidly facing the problem of competition on the global context along with the increase of the number of airlines entering into the market. It is however comparatively a newly set up company, which could expand its business services within a fraction of time being formally restructured and re-established in the year 1997. Historical Review of Qatar Airways Qatar Airways Company was formed as a single leased domestic aircraft in November, 1993. But in January, 1994 it started its operations using Boeing 767-200ER from the Kuwait Airways. In the earlier days of its formation, it was totally owned and managed by the members of Royal Family of Qatar and was running as a no frill carrier. In the year 1997, the restructuring of the Airway was carried on and a new panel of management team was placed for the operations of the business. At present, Qatar Airways is partly owned by the government of Qatar and the private investors in the national market (The Qatar Source, 2011). Arguably, it has been with the virtues of its business level and corporate level strategies that within a fraction of time it was able to expand its services in almost all the continents of the world and become one of the most preferable airlines services providers in the world. The initial intention to establish Qatar Airways was to serve its Qatar based guests from the Indian subcontinents by providing attractive discounts in the journey in competition with the similar western companies. Later, with the rise in demand for the air journey between the routes, it decided to discard the idea of operating within the nation and implement a newer business model of being a global carrier in the airlines industry (Qatarhandball, 2013). Qatar Airways had a raise of 30% customers after its expansion of business as a global carrier across the world. This airline usually provides with international services from Doha International Airport. Recently, in the year 2012, it was observed that Qatar Airways possesses fleet of Boeing and Airbus since four years. Along with the provision of international services, Qatar Airways is also planning for providing the valuable customers with luxury lounge and a 5 star hotel facility in the airport where the airways is operating (Destination Travel, 2012). Description and analysis of the problem of international competition by the managers The airlines industry usually operates in the oligopolistic market where the risk of competition always exists between the different companies. As a matter of fact, modern companies struggle hard to exist in such market and maintain their significant position among their customers aiming towards the accomplishment of a leadership competitive advantage (Rubin & Joy, 2005). Similarly, the managers of Qatar Airways face numerous challenges while keeping up with issues raised due to continuously increasing and intensifying competition from the newer as well as existing airline companies. In the earlier days of its formation, its vision was simple, which emphasized providing the passengers with attractive discounts and special facilities during the journey within the domestic marketplace from the Indian sub-continent. At the present scenario, most of the companies are giving stress on applying a similar idea of providing facilities to the passengers. Under such circumstances, Qatar Airways has been facing the problem of improving its services in order to maintain its leadership position in the global industrial context. It is worth noticing in this regard that different choices of the policy measure has been affecting the level of competition for Qatar Airways in the global realm, owing to the fact that the airlines service industry structure presents a complete mixture of regulatory industry form and competitiveness. Gradually, airline companies are emerging with significant values and facilities to their customers. In such an environment, all the other airline companies, including Qatar Airways, have been striving of the risk of competition and finding solutions to cope up and preserve their growth potentials in the competitive world (Arizona Board of Regents, 2002). How managers handled the specific situation of risk of international competition In order to overcome the challenges, Qatar Airways has been practicing numerous strategies to cope up with the problem and reduce the risk of competition on the global scale. For instance, the managerial notion followed in the organisation emphasises the normative principle that while providing quality services to the customers, the airline companies must keep into consideration certain regulations set by the concerned departments (Tugores-Garcia, 2012). The managers of Qatar Airways felt that being a relatively new company, it must move towards the improvement of its brand positioning. It made a rapid move towards the fulfilment of its objectives of growth strategy along with the brand awareness. In a competitive environment, Qatar Airways also delivered due focus on developing its brand strategies even though few of its features were unique from the other companies. It developed its brand as a young, dynamic and high quality airline company, which offers unique customer services. It also serves its customers in a traditional Arabic way so as to show their gratitude to the passengers of diverse cultures and also to replicate the Arabian tradition of welcoming. The managers’ intentions to apply such a well-framed customer-centric services strategy, concentrated on the cultural values have considerably rewarded it with a better customer relationship, to add on its brand loyalty (Rubin & Joy, 2005). Qatar Airways possess certain unique features, which makes it quite differentiated from the other airlines service providing companies globally. Its unique style of rendering services to its customers and the employees presenting themselves as the symbol of the country’s culture are few of the features considered by the managers, which differentiates the company as a brand from others. The strategy of re-branding, as was taken by the managers of Qatar Airways, also helped the company to create a significant position in the airlines sector. Apart from the rebranding process of the company, the managers of Qatar Airways developed a growth plan, which helped it to ensure that its customers are provided with better and variety of choices of destinations, current provisions of products and/or services of the company and all kinds of flight information. This growth plan was expected to safeguard the company’s reputation as one of the premium customer service providers in coming future. Evidently, with the adoption of the growth plan, Qatar Airways have been successful in connecting its passengers from Doha to the other countries of the world (Rubin & Joy, 2005). The higher officials of Qatar Airways had suggested earlier that the philosophy of rebuilding the brand is very much essential under a situation where increasing competition among the international airline companies is so evident and impactful. According to them, the new philosophy of branding was expected to help the company in knowing its customers by building a stronger customer relationship model and thus communicating with them in order to build loyalty, developing confidence and creating awareness among the customers group. The company, holding a strong brand identity, could certainly cope up with the number of challenges presented in the global realm, such as identification of the varied perceptions of the customers and developing effective strategies in order to mitigate those problems (New York Institute of Technology, n.d). In order to survive in the competitive international market, Qatar Airways has also been focusing on other various aspects, which also helped the managers meet the organizational goals and objectives more efficiently. Qatar Airways has always been improving its services and developing various strategies aimed towards its continuous development, in accordance to the safety and security of the customers. It focuses on its customer services by providing quality services and hospitality facilities too, with due significance to quality measures. The managers therefore continually seek to identify the needs of its customers and strive to fulfil those needs in the most efficient way. The company has also emphasized on the development of the employees on a gradual but continuous process, as the managers believe that the reputation of the company is a consequence of the hard work and commitment made by its employees. Qatar Airways has diverse workforce as it has the feeling that the diverse workforce would be a sign of the traditional Arabic culture, which adopts the people of all cultures (Oshri et al., 2009). This strategy of greeting the customers in accordance to the traditional Arabic culture is believed to be one of the crucial and sustainable differentiating ways to establish the company as distinctively identifiable from its competitors, therefore adding to its brand value on the whole (Oxford Business Group, 2004). The managers of Qatar Airways reported that the name itself depicts the Arabic culture and prosperity. Thus, the managers decided to utilise this fame and implement a new style of services, emphasising quality, quantity and sustainability as priority values of its business level strategies. The company also came into partnerships with many of the popular companies around the world, such as American Express, Forum Hotels, Mayfair Intercontinental London, Nippon Airways, Doha Golf Club, Radisson and others with the intention to grab a larger proportion of the global market share and build a leadership reputation within the industry (Qatar Airways, 2013). This partnership helped to provide the customers with various service offers in a quality based manner also making it a cost-effective venture of the company. Few of the noteworthy offers can be illustrated as facilitating passengers in Qatar Airways with discounted holiday tours in any of their partner hotels or may be in terms of options such as passengers of Nippon Airways can avail flyer miles, which can be utilised in Qatar Airways as well (New York Institute of Technology, n.d.). Notably, these are few of the growth strategies that had been laid down by the managers in order to remain stable in the competitive market and attain its organizational goals and objectives efficiently. Apart from the growth strategy, Qatar Airways has been showing recommendable aggressiveness towards creating awareness and building its leadership reputation within the market periphery. The development of Qatar Airways has been a result of the manager’s participation in the improvement process and the entire employee’s hard work involved in the implementation of the growth strategies. In a nutshell, the branding strategy of the managers also helped to raise the company’s position in the global market and also implemented complete provision of quality services to the valued customers (New York Institute of Technology, n.d.). Critical personal evaluation of how the managers managed the problem of competition Identification of the problem according to management concepts and theories The above study provided the ways used by the managers of Qatar Airways in dealing with the problem of competition in the global context. The managers used various ways of dealing with the problem, such as branding of the services and products, implementing growth strategies and focusing on the building of reputation in the global airlines market (Qatar General Secretariat for Development Planning, 2011). The branding strategy was also successful in the implementation, which can however be criticized as a common process of solving the issues of competition in the global market. This further advocates the fact that the airlines industry reflects an oligopolistic market structure, where the competitive strategies considered by one of the companies is very likely to influence the competitive scenario of the industry on the whole, creating pressure on the rival brands to follow a similar or a more aggressive business strategy. Undoubtedly, the growing competition in the airlines sector has created a considerable risk for Qatar Airways, especially in the fields of operations management (Pinnington, 2010). In this context, which facing the international competition, it is suggestible that Qatar Airways emphasises building its organisational structure efficacies as an important element of combating the identifiable risks. The organisational structure includes numerous concerns such as the network of responsibilities and roles of the employees, designing of the organisational products and/or services, and the mobilisation of the various decision making channels. It is suggestible in this regard that if the organisation is successful in aligning the structure of the organisation with the various developing strategies, it can attain a higher degree of strategic competitiveness and service the customers with greater efficiency. This can further reward the company with greater customer satisfaction, which is often determined as key to sustainable growth in the service industry (Rubin & Joy, 2005). Likewise, Qatar Airways, with its various organisational strategies, such as the expansion of its business through partnerships, can reduce the risks of time consuming as well as costlier ventures required to be performed in order to compete in the global context. Qatar Airways’ branding strategy and creating awareness among its customers and employees can further be considered as the organisational structuring strategies that can be considered by the company. Accordingly, the managers possessing the skills of strategic leadership can motivate others to adapt and stimulate changes in the organisational structure and also for maintaining flexibility at a sustainable rate. The strategic leadership skill can help in mitigating the problem of the competition and also the other common risks that may arise in an organisation. The managers of Qatar Airways, therefore needs to boost their strategic leadership skills, which can prove to be quite beneficial to enhance the organisational structure efficacies along with maintaining a satisfied and motivated workforce. The implementation of the rebranding strategy set by the managers of Qatar Airways also proves the presence of effective strategic leadership skill. The most common strategies of the international business are focused on the improvement of its products and/or services and continually penetrate new potential markets for operating its business. The aforesaid two of the management’s strategies will be helpful for the managers of Qatar Airways in reducing the ill and unwanted consequences of international competition and also in the expansion of the business on the global context. The managers must also be conscious in implementing those strategies effectively within the organisation (Pinnington, 2010). Recommendations that can be used for managing the problem The managers of Qatar Airways have taken justifiable and focussed measures for reducing the risk of international competition and also for gearing the organisation’s performance to survive in the fluctuating market of international airlines. One of the foremost strategies that have been used by the managers of Qatar Airways is the rebranding of services in a more customer-centric manner and also giving maximum focus on the organisational structure, which involves redesigning of the products and/or services and also adapting the change that is occurring frequently in the airlines industry (Qatar Airways, 2013). It has been observed in the above conducted research discussion that the company had adopted the redesigning of its services from a national carrier to an international airline with maximum numbers of flight destinations. This strategy would be much beneficial as it is a service provider company, which needs to obtain highest possible customer satisfaction to ensure their long-run loyalty with the company and therefore, preserve its sustainability interests. It can also be said that in an oligopoly market of airlines industry, it is very obvious that if one of the companies is going under a change, the others will follow the same so as to avoid the creation of a monopolistic market economy (Delfman, 2005). Thus, in this situation, Qatar Airways must emphasize continuous market research and operations conducted by its rival firms and applying the data in designing of more effective business strategies, apart from focusing on its corporate level strategies merely in terms of rebranding or the change in the organizational structure. Although Qatar Airways is popular in providing its customers with all the luxuries during the journey, it must also emphasize on the improvement of its services on quality basis, which would reward the company with an augmented volume of satisfied customers and market share (Ivanko, 2013). Qatar Airways must emphasize retaining skilled managers at the top level management team, who are proficiency enough to understand the market requirements and competitive demands of the industry so as to design long-run goals as well as corresponding strategies to overcome these challenges. The management team, with effective leadership skills must be hired so that the strategies set by the organisation would be aimed towards mitigating the risks. However, considering the notion that leadership is an uncertain concept which differs from one organization to the other, the company must ensure due measures to align managers’ role with its workplace culture and structure, including its vision and mission (Pinnington, 2010). Conclusion The above study reveals various facts regarding Qatar Airways, concentrating on the effective measures taken by the company for surviving in the international competitive market. Initially, it was developed for providing low cost journey to the guests visiting to Qatar from the Indian sub-continents. Later, identifying the growth prospects in the global industrial context, it expanded its destinations and became a reputed international airlines service provider. It has a unique style of serving its customers in traditional Arabic way, which makes it different from the other airline companies and also contributes to its customer relationship prospects. Recently, it has been facing the risk of competition due to the rise in the number of excellent service providing airline companies, whereby the managers have emphasized the redesigning of the organisation and implementation of effective leadership style so as to preserve its organisational efficiencies in the global. Nevertheless, Qatar Airways needs to take much initiative in innovation of its services style and focus equally on its business level strategies so as to gain momentum in attaining a leadership positioning in the market. References Arizona Board of Regents. (2002). Competition and regulation in the airline industry. Retrieved from http://www.u.arizona.edu/~gowrisan/pdf_papers/airline_competition.pdf Delfman, W. (2005). Strategic Management in the Aviation Industry. United Kingdom: Ashgate Publishing. Destination Travel. (2012). Qatar Airways. Retrieved from http://www.destinationtravel.info/reviews/qatarairways.html Ethics Resource Center. (2012). Ethics and compliance risk management. The enterprise risk management model, 1-19. Ivanko, S. (2013). Modern theory of organization. The notion of organization and the basic characteristics of the more significant development period of the scientific organization, 1-199. New York Institute of Technology. (N.d). 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