Identify and strategically analyse corporate reputations and the characteristics of their identities.
Jetstar Airways is an airline service company of the Qantas Group operating in Australia. With the low cost facilities and the recognition of the brand, Jetstar has been able to have a recognized position in the sector (Jiang, 2013). The case study of the company of Jetstar in the report forecasts the corporate reputation that it holds in the Australian market. It also elaborates the various means by which the company can be affected with the various incorporations that the organization makes. It thereby suggests the actions that the company could undertake in order to frame its corporate image. The report represents the importance of stakeholder theory for every company and the relevance of the stakeholders who serve to be the basis for influencing the perception about the organization as a whole.
Jetstar Airways Pty Ltd., commonly known as Jetstar is the low-cost airlines operating in Australia with its headquarters at Melbourne. The airline was establishes in 2003 in response to the threats posed by the other low-cost airline Virgin Australia. The company is owned by the Qantas and carries about 8.5% of the total passengers travelling to and from Australia ("Jetstar Airways - Australia | Jetstar", 2018). It operates about 4000 flight a week and has branches in New Zealand, Japan, Singapore and Vietnam ("Jetstar Airways - Australia | Jetstar", 2018). The airline operates both nationally and internationally with its base at Melbourne Airport. The company has a mixed fleet of the Boeing 787 Dreamliner and the A320 family that serves within and across nations.
Being a part of the airline industry, the various factors that are affecting the market of the Jetstar airways are as follows:
Political factors- Australia being a politically stable nation, has rendered to the smooth operations of Jetstar airlines ("Australia still home for Qantas", 2018). The country has a wide network of trade and business that has benefitted the company to a significant extent. This has enriched the economy of both the nation and the airline company. The tourism industry that the country has been promoting has a positive impact on the airlines that would incur profits for them and bring to them more number of customers as well.
Economic factors- due to the impact of the global economic crisis, the world travel market has been affected badly. The global passengers’ traffic has not been increasing more than 4% (Homsombat, Lei & Fu, 2014). The increase in fuel price has also been affecting the business. This hampers the company to sustain its main aim of having low fares for the travelers.
Social factors- the changes in family and job structures affect the airline industry to a significant extent. Thus, the company has to constantly formulate policies accordingly. People have to opt for multiple flights in a day due to work purposes. This is beneficial for the company. Moreover, the acceptance level of low-cost air travels within customers has enabled the Jetstar airways to hold a good reputation. It has also opened up doors for the company to offer premium class travelling services.
Technological factors- due to the advancement of technology, it has smoothen the processes of airline industry. Online ticket bookings have become very effective for both ends (Dodgson, 2018). In addition to this, the Jetstar airline has been able to apply satellite technology based on global landing system.
Thus, it can be analyzed that the performance of the Jetstar company has been able to perform its activities smoothly and in accordance to customer benefits due to the various factors that has accelerated its sustenance and performance significantly.
The chief executive officer of the Qantas Group that owns Jetstar airlines is Gareth Evans and Dean serves to be the CEO of Jetstar Australia and New Zealand ("Jetstar Airways - Australia | Jetstar", 2018). They have an organized executive team that works collaboratively for the success of the company. The company has code share agreements with the American Airlines, the Emirates, Japan Airlines, Jin Air, Latam Chile and Qantas. The company owns various stakes in the Asia-Pacific region and partners with local investors to overcome foreign ownerships, traffic right restrictions and reduce the capital investment.
The theory of organizational management and ethics that frame the core of the business processes accumulatively connotes to the Stakeholder theory. It addresses to the morals and values that must be considered in organizational management. The stakeholder theory reflects the various principles on which each organization must work in to aid to the interests of the people who really matters for the company’ functioning. These people are the stakeholders for the companies. Stakeholder theory justifies the role of the core groups involved in the business and its success that includes the employees, customers, suppliers, political groups, government officials, financiers, trade associations and trade unions (Harrison & Wicks, 2013). All these people have the capacity to affect the business renderings and thus they are very important for its performance. The two aspects of the stakeholder theory are normative, that defines the specific stakeholders of the organizations and the descriptive, that examines the various conditions on which the manager of the companies treats the groups as stakeholders. These are called the identification and salience aspects of the theory.
The theory has been criticized on multiple grounds but has been very successful in the business ethics perspective. The stakeholder theory has been widely used to assess the corporate social responsibility of the companies and is applicable to all types of industries. The theory has been very beneficial to complement management issues relating to the social, organizational and individual dilemmas.
Stakeholders of the organization:
The head of the airport partnerships at Jetstar stated that partnership lies in the DNA of them. He connoted that business partnerships play a very important role in the development of airline industry. The Jetstar airline has three core dual brand partners, 46 codeshare and interlines partnerships. Apart from the internal stakeholders being the employees, managers and other operating people, the company considers the customers to be the most valued stakeholders. Leaving put the suppliers, investors and government, the community leaders and the tourism and business officials serve to be the stakeholders of the company. The multiple alliances that the company aims to have in the Asia-Pacific region also account to be the stakeholders for it
Corporate Reputation Theory
The corporate reputation theory explains that every company has their image in the eyes of the stakeholders of the company. These stakeholders have their own perception about the image of the company. This may be positive or negative. In the case of big companies, the Corporate Reputation plays a very important role. This is also known as the goodwill of the company. The companies spend mainly in areas of CSR to increase the goodwill (Cornelissen & Cornelissen, 2017). Goodwill is one of the intangible assets of the company. It is not perceived by senses but it is understood by the general perception of the people in the company. The stakeholders of a company include the customers, the investors, the suppliers, the vendors, the various tertiary companies working with the company and also the employees. The company must have a very stable corporate goodwill that will help the company in gaining new customers, increasing the number of investors, retaining employees and have better relationship with the vendors (Walker, 2010).. The CSR activities on various levels such as “Profit, People, and Planet”, helps in gaining more investors, making employees more productive and gaining goodwill.
Company behavior and Activities
The company is known for its very low pricing of air tickets. The company in its website also offers the customer a 10% decrease in price if they find any company offering lesser price. Therefore, the people of the country has a perception about the company that it is budget and pocket friendly. The company has various Corporate Social Responsibilities schemes that it performs either single handedly or in collaboration with other companies. The company has a partnership with World vision which has humanitarian relief projects. The people who are living in poverty, especially the kids are provided assistance to achieve a better future (Newsroom.jetstar.com, 2018). It works not only within the borders of Australia but in various countries in between which the company operates flights including Cambodia, Indonesia, Myanmar, Thailand and Vietnam.
The company has a program for startups and projects that will enrich the life of “the local communities”. Two initiatives are listed in this order “Flying Start New Zealand” and “Flying Start Australia”.
The company has a number of initiatives and programs that endeavor in reducing the effects on environment. The “Fly Carbon Neutral Program”, in which the passengers of the company can choose to fly “carbon neutral”, in which the contribution is used to buy verified carbon offset projects around the world. New aircrafts which are brought are fuel efficient and also the flight strategy is revised to support sustainability.
The company has a smart and professional team for corporate communication process and media relations. This team handles the internal, external and social media communications. A single team performing all the communication activities makes it easier and simple. The team has its presence in various countries such as “Australia, New Zealand, Japan and Singapore”. The corporate communication strategy is to protect and promote the brand.
The Corporate Reputation of the Company
The company has carefully built its image in a way that in case of budget airlines people will be thinking immediately of this brand. It has been seen that the remembrance factor of the company in the customer’s mind is very high, especially the customers who prefer to travel in budget flights. The company promises a 10% lower price if the customer finds any other company offering tickets at a lesser price. Therefore, the company has its own strategy towards brand placement. It has placed the brand in the low budget airlines category but provides many offers and amenities which are usually provided by the costly airlines.
In spite of providing the customers with very less amount of ticket price the company takes part in various corporate social responsibility activities which helps the company in gaining goodwill from the customers and the investors. The investors of the company are also amused by the fact that the company is growing quite fast and has its presence in a number of countries including New Zealand and Singapore apart from Australia. The customers have a strong positive perception about the company because of its lower price and various initiatives like reduction of carbon emission, helping the poor children and supporting the startups and projects across the country and in other countries.
According to the company website “Jetstar is committed to helping their employees find a work-life balance that suits them. As part of this, we give our team access to a range of finance, health and wellbeing programs to assist with achieving balance and managing stress, fatigue and finances. We also provide free access to an Employee Assistance Program.” Also the staffs and their family gets to travel for highly discounted prices. This makes working at the company a rewarding experience (Jetstar.com, 2018).
Implication, Conclusion and Recommendation
Therefore, it is evident from the above analysis about the various aspects of the company including its corporate social responsibility, corporate communication and corporate reputation, that the company is well ahead of many of its competitors in many of these aspects. By CSR activities it has established its goodwill in a strong way. By building up a separate, dedicated, professional and compact team for corporate communication it had excelled in the process and also developed its corporate reputation.
A few recommendations however can be given for the company which will further help in boosting its image. One is to expand its bases to more countries and increase the number of destinations. Second is to hire a brand ambassador who will help in boosting the company’s image. Third is to advertise the CSR activities so that more people may come to know about these. All these activities will help the company in increasing its business further.
Cornelissen, J., & Cornelissen, J. P. (2017). Corporate communication: A guide to theory and practice. Sage.
Dodgson, M. (2018). Technological collaboration in industry: strategy, policy and internationalization in innovation (Vol. 11). Routledge.
Easdown, G. (2007). Australia still home for Qantas. Heraldsun.com.au. Retrieved 10 April 2018, from https://www.heraldsun.com.au/businessold/australia-still-home-for-qantas/news-story/43dd8dc34c8d0fff992ccda6abce8e24?sv=654f662e6512c81c00fce9d530751210
Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value, and firm performance. Business ethics quarterly, 23(1), 97-124.
Homsombat, W., Lei, Z., & Fu, X. (2014). Competitive effects of the airlines-within-airlines strategy–Pricing and route entry patterns. Transportation Research Part E: Logistics and Transportation Review, 63, 1-16.
Jetstar.com. (2018). Recognition and Benefits. Jetstar. Retrieved 10 April 2018, from https://www.jetstar.com/au/en/careerportal/home/life-at-jetstar/recognition-and-benefits
Jiang, H. (2013). Service quality of low-cost long-haul airlines–The case of Jetstar Airways and AirAsia X. Journal of Air Transport Management, 26, 20-24.
Newsroom.jetstar.com. (2018). Community and sustainability. Community and sustainability. Retrieved 10 April 2018, from https://newsroom.jetstar.com/community-and-sustainability/
Walker, K. (2010). A systematic review of the corporate reputation literature: Definition, measurement, and theory. Corporate reputation review, 12(4), 357-387.