Market analysis for Qantas - Essay Example

Introduction This paper is about the macro environment of Qantas. The analysis is done on the six dimensions that make up the external environment for Qantas and the emphasis is on understanding the nature of its business and the impact of each of the six dimensions on the strategies of the airline. Pls. Note: The paper was written before the latest news that Qantas had grounded all its aircraft over a dispute related to pay and working conditions at the airline. Hence, that part of the analysis is NOT done in this paper.

Political Qantas has a congenial political environment in its home country of Australia as the government there is business friendly and pursues policies that are conducive to the interests of corporations. However, Qantas needs to be aware of the volatile situation in the Far East where it operates quite a few flights and hence there is some cause for concern there. Overall, Qantas can expect some turbulence in the political macro environment in the next few months (COMNAP, 2011). Economic Qantas has been hit hard due to the ongoing global economic crisis as well as the steep rise in the prices of aviation fuel.

This double whammy has resulted in drop of passenger traffic along with rising costs of operation which is again a self perpetuating loop since rise in costs of flying automatically leads to drop in passenger volumes. Hence, it can be said that Qantas is facing a tough economic environment and the situation is not expected to improve for a year or so (WASSENER, 2011). Social Qantas operates out of Australia where social trends indicate that there are no societal barriers to its growth. The overall social trends in the Asia Pacific region are largely positive and with the demographic dividend that these countries are reaping (in the form of younger populations) this trend is largely favorable to Qantas in the longer term.

With higher disposable incomes likely after the recession ends, Qantas can expect significant numbers of people using its services (Archive, 2011). Technological With the introduction of the Dreamliner from Boeing and Airbus A-380 from Airbus Industries, the technological dimensions of flying have been a cause of concern for Qantas since the business landscape has been altered with the introduction of these aircraft which is in itself a revolutionary trend. Though Qantas has placed orders for the newer models, it would be some time before it gets the delivery and hence Qantas would be behind on the curve till such time it inducts these newer versions into its fleet (Qantas, 2010).

Legal As mentioned earlier, Qantas operates out of a country that is relatively business friendly and hence there are no major worries on this front. However, the recent incidents involving Qantas aircraft that were grounded following mid air malfunctioning of engines and other parts, the airline needs to be on the watch for legal action from passengers and the aviation regulatory authorities for breach of safety standards. This is indeed a worrisome trend and something that Qantas should take care of (SMH, 2011).

Environmental Qantas is perceived to be more of an eco friendly airline than its competitors and with the stringent environmental regulations in place, the airline needs to maintain its position vis-à-vis its competitors who cannot boast of the same green consciousness that Qantas has. On the other hand, with increasing environmental consciousness, many passengers are not taking flights for shorter distances and this can be a downside for Qantas (Qantas, 2010). Prioritization The six macro environmental factors according to their importance to Qantas would be: Economic Technological Legal Environmental Political Social.

References Archive, W. (2011, Aug 04). About Qantas: Our Company - History - Small Beginnings. Retrieved Oct 29, 2011, from Web Archive: http://web.archive.org/web/20061009061143/http://www.qantas.com.au/info/about/history/details2 COMNAP. (2011, May 07). Antartic Aviation Overview. Retrieved Oct 29, 2011, from COMNAP: https://www.comnap.aq/operations/aviation/ Qantas. (2010, Sep 11). Qantas Annual Report 2010. Retrieved Oct 29, 2011, from Qantas.com: http://www.qantas.com.au/infodetail/about/investors/2010AnnualReport.pdf SMH. (2011, Oct 29).

Qantas suspends flights indefinitely . Retrieved Oct 29, 2011, from Sydney Morning Herald: http://news.smh.com.au/breaking-news-national/qantas-suspends-flights-indefinitely-20111029-1mpb0.html WASSENER, B. (2011, Aug 16). Airlines Race for Slice of Expanding Asia Market. Retrieved Oct 29, 2011, from New York Times: http://www.nytimes.com/2011/08/17/business/global/airlines-race-for-slice-of-burgeoning-asia-market.html?_r=2&partner=rss&emc=rss