Using of Internet Technologies by the Organization towards Furthering its E-business in Qatar Airways - Essay Example

Qatar Airways A review of use of internet technologies by the organization towards furthering its e-business Executive Summary Qatar Airways has introduced Oracle e-business Suite and revenue management systems to reduce its overheads and also accurately target the potential class of fliers. It has set up new partnerships with travel agents by making online offers to them and arranging for their online training. Application of Porter’s ‘five point analysis’ in this regard generates a clear picture of the business scenario where one finds that the company has efficiently managed the supplier perspective and is well equipped to tackle pressure from buyers while remaining reasonably insulated from threat of new entrants, substitutes and competitive rivalry. The company has also tied up with private portal Bezruk.com and common forum Frommers Unlimited and has marked its presence in social networking forum Facebook where fans of the airline regularly exchange their experiences with this airline. These e-marketing techniques have provided the airline a very substantial presence and publicity in the e-market. E-business depends on attractiveness and user friendliness of company’s website. The visitor must be completely satisfied after a tour of the site and that can be possible only when the website is designed in such a way that a busy visitor is also able to obtain the required details at the shortest possible time and with the minimum of trouble. The language used in the website also plays a substantial role for this to be achieved. The website of Qatar Airways has achieved this target quite admirably. Qatar Airways has become a deft player in the business-to-business marketplace by judiciously applying the strengths of internet in collecting, collating and analysing information related to tour and conference fliers and travel agents. By sifting the available data, the airline is in a position to identify the most economically profitable strata of business fliers and design its promotions and offers in a manner that is most attractive to the targeted strata. The airline has never been oblivious of its social responsibility and the need to behave like a responsible corporate citizen, not only in Qatar but in rest of the world also. It has undertaken numerous programmes for the benefit of orphans and autistic children in Qatar and has also donated handsomely towards rebuilding activities in China after the devastating earthquake in Sichuan province in 2008. It is also aware of environmental pollution and has instituted a programme for fuel efficiency and gradual reduction of dependency on fossil fuel. E-business Background Qatar Airways has always maintained a proactive stance with regard to e-business and remained alert and alive to all the opportunities this new medium of business offers while using it continuously as a means of forging ahead of its competitors. Passengers can visit the website of this airline company to search for suitable flights and connections right across the network and can also book, pay online and have tickets issued without any hassle. The user friendly nature of the website is further emphasised by the presence of such convenient options as lowest fare finder facility which displays the options across different dates. The company uses Oracle e-business Suite to provide real time information on its website. (AME Info., 2003) Use of latest internet technology has enabled it to reduce costs and improve internal efficiencies by limiting the number of sales offices and reducing dependency on computer reservation system or agents. The company is also actively pursuing revenue management through analysis of historical booking trends which helps it to accurately target specific markets, seasons and make reasonably correct forecasts that are based on dependable estimates on willingness on the part of customers to pay premiums up to a certain level during a specific part of the year in certain particular routes. (Yang, 2001) Porter’s Five Point Analysis Suppliers: Qatar Airways has outsourced its revenue accounting function to India, which gives them access to industry standards and best practices. (Nasscom, 2006) The company has also opted for PROS O&D Revenue Optimization which is a system of PNR-based forecasting, network optimization and dynamic pricing through which it can optimise revenue as it is in a position to manage real-time pricing of seat inventory based on customer demand flow throughout the entire network. The company also attempts to maximise revenue from group tours through automation of various business processes and work flow for group management. (Buisness Wire, 2007) Buyers: Fliers and travel agents have a wide choice of airlines, thus their bargaining power is very high. The company has entered into new partnerships with travel agents by making online offers to travel agents and arranging for their online training. (The Peninsula, 2009) Threat of new entrants: Airline industry is extremely capital intensive and it is not easy for a new entrant to survive especially in this time of global downturn that is witnessing a spate of consolidations and mergers. Substitutes: There are lot of substitutes but Qatar Airways has tried to forge ahead through innovative products as lowest fare finder facility in its website. Competitive rivalry: Competing airlines as Emirates Airlines, Gulf Air, and Royal Jordanian have also applied the same technology to enhance their e-businesses. Saudi Arabian Airlines is also in the running though it has adopted IBM’s Websphere technology. (AME Info., 2004) E-marketing analysis Qatar Airways has been following an inclusive e-business model where partners and prospective customers are considered part of the marketing endeavour allowing full transparency to these stakeholders regarding fares and seat availability in its network. The company has also entered into an agreement with Bezruk.com, an Asia Pacific travel search engine, which allows Qatar Airways to float its fares on flights search engine and deals channel of Bezurk.com. This has allowed Qatar Airways to target a larger section of potential customers and consequent increase in revenue. (Wego, 2007) The company also obtains personal information of customers online (of course, with explicit permission from customers), analyses their needs, improves and modifies products and services and sends updates on the latest promotions and offers. (Qatar Airways, 2007) The airline has substantially increased its budget for online advertising through PPC (pay-per-click), SEO (search engine optimization), banner-ads, and bulk mails. These forums provide details regarding where the traffic came from, how much of it is translated into sales, the cost per sale, and the value per visitor. (Ramos & Cota, 2009) The airlines has also subscribed to common forums as “Frommers Unlimited” to gain access to a larger audience of fliers. (Ezard, 2009) These forums generally operate on performance-based pricing models and allow airlines to get in touch with huge volumes of prospective customers especially during holiday seasons when a large number of passengers who are not frequent fliers take to skies. (Rush, 2003) Channelization of highly qualified traffic leads to a high rate of sales conversion which motivates these forums to provide more links to these popular websites and companies like Qatar Airways get more exposure resulting in healthier bottom-lines. (Markosweb.com, 2009) Appendix A and Appendix B show screenshots of two such third party websites that provide links to the website of Qatar Airways. Social networking based on consumer generated media through new technologies like digital video, blogging and podcasting have become one of the prime forums of advertising with Facebook having a pride of place. (Young, 2007) Appendix C shows a screenshot of the relevant page in Facebook. It has 9761 fans of Qatar Airways sharing their experiences at that particular instant. Website Design Analysis Several experts have put forth their learned opinions about what should be an ideal website but as a website is the forum of first interaction of a visitor with the company its usability becomes possibly the primary factor in judging whether the website is designed properly or otherwise. A website should be such that the end users feel satisfied by navigating through the various nooks and corners of entire site. An impressive and compelling design that provides information that the user is looking for with minimum navigation and least hassle is a genuinely effective design. An attractive design immediately creates a brand identity that gets associated with efficiency and alacrity and generates goodwill and brand commitment on the part of the user and the battle is already half won even before the user has actually waded into the intricacies of each page and subsection. This complements the basic purpose of setting up a website – to attract and retain customers. (Brinck, Gergle, & Wood, 2001) The next most important issue that needs to be kept in mind while analysing a website is the text that fills its pages. The general method of providing information is one in which the most vital information is provided right at the beginning with supporting information following suit. In a website this assumes greater significance as one cannot rely on the patience of the visitor and it is more likely than not that an average visitor rarely scrolls right down to the bottom of a page. On top of this, a web developer has to also factor in the proverbially short attention span of an average visitor. Thus all the necessary and relevant information must be made available as succinctly and as fast as possible in short easily intelligible sentences and small subsections with ample headings, subheadings, bulleted lists and paragraphs. The basic trick is to provide the conclusion initially with links that detail the background information that has led to the conclusion so that a visitor interested in only the core information instead of all the details that support it can get the desired information with the minimum of effort. (Foraker Design, 2005) A visit at Qatar Airways website convinces even the most casual visitor about the quality of the website. Right at the top of the home page there is a separate area that deals with all the queries that a flier can possibly pose. A visitor willing to book flights, or, enquire about flight details, or, willing to know about the latest flight status (these are the most common and pertinent queries directed towards any airline) can get all the queries answered without moving anywhere else on the site. Anyone in a hurry would surely appreciate this feature. The invitation to subscribe to the company’s newsletter follows immediately after, and, a visitor on his first or most definitely during the second visit, will in all probabilities sign in, as the satisfaction of getting to know the relevant information about flight bookings and status without any hassle is too much for a regular flier to forget in a hurry. The other most prominent feature of the home page is a highly attractive photograph of the latest destination or flight that has been added to the flight schedule. This is bound to attract the attention of even the busiest visitor. Below the photograph is a small block that in a nutshell states the latest information concerning the airline and passenger amenities that would be of interest to customers. Any visitor willing to know the details can easily navigate to the relevant area through easily navigable and prominent links. Just at the bottom right hand corner there is a teaser that invites the visitor to know more about Qmiles and the corporate reward programme run by the airline for small and medium businesses. For a better idea, of one should visit this website at http://www.qatarairways.com/global/en/homepage.html. Appendix D shows a screenshot of the homepage of Qatar Airlines website. Business to Business Analysis Bulk booking and group tours have always been a prime source of revenue of all established airlines and Qatar Airways is no exception to this general rule. The immediate macroeconomic benefit of business-to-business electronic commerce is a perceptible decline in the cost of information to service providers and in a market characterised by razor sharp competition, such cost reductions substantially impact the bottom-line. Projections of growth of business transacted over the internet show that values of retail sales conducted online, so-called business-to-consumer transactions, will be dwarfed by business-to-business transactions. Such B2B use of the internet (as opposed to B2C – business-to-consumer) is growing rapidly and is expected to continue growing strongly in the coming years. Analysts of Goldman Sachs had quite rightly forecast way back in 1998 that B2B commerce in the US will rise from just $39bn in 1998 to $1,500bn in 2004, an annual growth rate of 84 per cent. (Brookes & Wahhaj, 2000) This scenario from the purchaser’s perspective is extremely encouraging as a prospective buyer can avail of perfect information about market parameters prior to making and purchase decision by visiting either horizontal e-markets that cover a given type of good or service across all industries or vertical e-markets that service a particular industry, facilitating the buying and selling of the range of goods and services used in that industry. In the given situation of airline industry, a visit to a vertical e-market dealing with airlines would best serve the purpose of the prospective buyer. This scenario is similarly extremely attractive to the suppliers also. They will be able to effect bulk sales over a contracted period of time at negligible cost. Internet becoming the meeting point, the marketplace, to be more specific, of bulk buyers and suppliers provides completion of such protracted business transactions at negligible cost. The other benefit that accrues to the suppliers is unrestricted information about how competitors are behaving in order to increase their sales revenue. This allows them to modify their sales techniques and regulate their sales pitch. From a macroeconomic perspective, this leads to a reduction in prevailing market price with improvement in quality of goods and services offered leading to a substantial increase in sales volumes of all participants in the market. (Lapidus, 2000) Travel industry being highly information sensitive is possibly best suited for internet business to business marketing and according to a report by Forrester Research; the online revenue generated from the Asian travel market alone was expected to reach US$32 billion by 2003. (Asia Pulse News, 2000) On a micro plane, a company undertaking business to business analysis attempts to analyse the demographics of corporate visitors. Thus, an e-commerce manager at Qatar Airlines is able to form a clear idea about what percentage among group or conference fliers are coming from small and medium companies that have less than 100 employees. Though this information might seem inconsequential to the uninitiated, it carries tremendous potential for Qatar Airlines to modify and target in a better way the potentially lucrative section of fliers. Further, the e-commerce manager will also be aware about the percentage of signups for the company’s newsletter that has come from various types of industries from a particular geographic zone. Such industry-wise and location-wise breakup goes a long way in deciding the nature of content that would be provided in the newsletters of the airline. Qatar Airways is able to gather all such details through personal information voluntarily provided by satisfied fliers in the company’s website. Social Responsibility of Qatar Airlines Qatar Airlines is one of the premium airlines of the world and is aware that any sort of corporate leadership is always accompanied by a substantial slice of social responsibility. The airline acknowledges no business can exist in a vacuum and even if a corporate entity is not interested in altruistic overtures, it has to exhibit strains of social responsibility as a vibrant company can exist only in a vibrant and healthy society and not where the society is crumbling or fraying at its edges. Qatar Airways, however, never needed any coaxing or persuasion from any social arbitrator to perform its social obligations – it has always been acutely aware of the role it has to play as a socially responsible commercial organisation. Qatar Airways has always been sensitive to the needs of children and had arranged under the aegis of its social responsibility programme "The Oryx Flies Green", a special flight of one hundred children from Qatar Orphan Foundation "Dhreima" over the state of Qatar. These orphans were welcomed on board the special Airbus A321 flight by Qatar Airways Chief Executive Officer Akbar Al Baker who accompanied the group on its unique twenty-minute flight. Most of these children have never been on board an aircraft and were ecstatic at being privy to this extraordinary gift. Qatar Airways has entered in a partnership with “Shafallah Centre for Children with Special Needs” to highlight the impact and incidence of autism among children of Qatar by running a month-long campaign starting on April 2 – World Autism Awareness Day. The airline has made in-flight relevant announcements, distributed informative pamphlets and awareness staple pins on 2nd April as a part of this social awakening programme. The airline has also sent its cabin crew to Shafallah Centre for becoming aware of the special needs of children afflicted by autism. A green society is the need of the day as global warming and environmental pollution is spreading its pernicious shadow over this blue planet of ours. Qatar Airways arranged for more than a hundred of its employees to participate in the 9th National Green & Clean Qatar Campaign it had organised jointly with the Ministry of Municipality & Urban Planning. As a part of this programme, the staff of the airline also volunteered to clean up Al Whakra Beach situated 12 kilometres South of Doha and managed to collect more than fifty bags of garbage during this three hour operation. The airline has also embarked upon a fuel efficiency programme and plans to systematically reduce its dependence on fossil fuels as airplane exhausts contribute significantly towards environmental pollution. Qatar Airways operates internationally and is aware that its social responsibility does not and should not be restricted to Qatar only. It has made a handsome donation in 2008 to China Youth Development Fund as a token of empathy with those affected by the earthquake in China’s Sichuan province. Through this programme, code named ‘Project Hope’, Qatar Airways was able to build school buildings for one and a half thousand Chinese children. These are but glimpses of acts of social responsibility undertaken by this world class airline. (Qatar Airways, 2009) Conclusion and Recommendation There is no doubt that Qatar Airways has earned its leading position in the airlines industry by dint of its merit and relentless pursuit of excellence. It has been one of the first players in this arena to take advantage of the immense marketing potential of internet and has spent substantial amount in internet advertising to become one of the most prominent entities in this latest medium of publicity. It has also been prudent enough to take advantage of computer software to rationally allocate its resources and leverage its preeminent position as a quality service provider to bolster its sales revenue and bottom-line. Truly it has been a phenomenal growth from a fledgling airline several decades ago to the global giant it has now become. But, this industry is extremely competitive and other players can be underestimated only at the risk of jeopardising one’s pole position in this inexorable race towards global supremacy. To add to this already stifling situation, the price of aviation fuel also shows hardly any signs of stabilising. Thus, the only way to retain the leadership position is through continuous improvements in service and operational efficiency. Qatar Airways has always been improvising, both in providing better service to its customers and also towards reduction of operational expenses. However, it needs to maintain that if it wishes to retain its current prestige and glamour. 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 AME Info. (2004). Saudi Arabian Airlines launches e-business centre using sophisticated IBM technology. Retrieved October 11, 2009, from AME Info.: http://www.ameinfo.com/34819.html Asia Pulse News. (2000). Honkong.com Corporation forms B2B E-travel Strategy. Asia Pulse News . Brinck, T., Gergle, D., & Wood, S. (2001). Usability for the Web: Designing Web Sites that Work. Morgan Kaufmann Publishers. Brookes, M., & Wahhaj, Z. (2000). The shocking economic effect of B2B. 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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 Appendix A Source: http://www.addme.com/reports/qatarairways.com Appendix B Source: http://www.markosweb.com/www/qatarairways.com/ Appendix C Source: http://pagedata.insidefacebook.com/page/view/238624/ Appendix D Source: http://www.qatarairways.com/global/en/homepage.html Read More