Provide a brief overview about the market expansion capabilities of the company Qantas in the European and Asian region of the world.
The purpose of this task is to provide a brief overview about the market expansion capabilities of the company Qantas in the European and Asian region of the world. Qantas is an airways company which is world’s second oldest company running its airlines business. Thus, it shall be noted that the organization has diversified business of operation worldwide. The company operates its business in total 182 destinations in 44 countries worldwide. With regards to that, Vatican City in European region and Kyrgyzstan in Asian region are the countries where the company has not initiated their activities where the company is looking for expansion (Qantas 2017). More details about the task are discussed below:
Countries selected for market analysis
The company manages 5600 flights in a week by serving in 59 cities and other regional and mainland territories. Furthermore talking about the countries Vatican City, the country is the smallest country of Europe but it is a beautiful destination to visit. The country is situated in Rome and is divided in 44 hectares and has a population of around 1000 people. The country is small but has natural beauty which mainly attracts the traveller worldwide. Another country is Kyrgyzstan; this country is sovereign state of central Asia and is a landlocked country with mountainous territories. This country is also marked as beautiful destination to visit but due to unavailability of flights the country is not known to all people. Further the company shall aim to expand in both of the countries (STEINER 2013).
It shall be noted that both the countries have beautiful which explains about the past of the countries. The company Qantas has a huge scope to initiate sales as there is less competition present in both the countries. Further the macro-environmental analysis of both the countries Kyrgyzstan and Vatican City is discussed below:
Political: In Vatican City it is expected that the next election will help the country to grow aggressively in the world. Moreover the country is situated in limited area due to which many business activities and investments of firms are denied’ so the government is trying increase the areas where the organizations can emerge. But change in legislations and regulations can poorly affect the state of the business currently working there (Simmons 2013).
The country Kyrgyzstan was formed a democratic country in the year 1993. After which for some time it was difficult for the president Akayev to manage the workings of the country but it is a long gone story. Now the country has eared political stability which states that the country is a developing country and it earning well in the competitive world according to their position. But there is presence of corruption in the governmental bodies of the country which is somehow pulling back to the overall growth (Straube 2016).
Economic: It shall be noted that the current economic trend is fluctuating on daily basis which is affecting business activities of corporates working over there. Also it shall be noted that skilled labour is present in the country but few opportunities to for them in the industries.
Further in Kyrgyzstan, the country is aiming to reduce medium term policies by initiating the industrialization and economic growth. Also the country acceded to WTO (World Trade Organization) in 1998 and also has backing of IMF (International Monetary Fund).
Social: As noted above that the country is the smallest country of European region, so now the country is increase in population, growth rate and age factors as well. This is changing the attitude of the organizations to growth in the country, also generational shift has been started in the country which is providing stage to younger people to show their talents and become competitive. Further the attitude of people towards work and business environment is changing (Kladou, and Kehagias 2014).
Further in the Kyrgyzstan level of education and skills of people is increasing with time. Also the fact has been earmarked that people are attracting towards the aviation to travel as well. Apart from that rise in income level of people is initiating them to travel with flights. Foreign investment is also increasing in the country. The country is famous for their rich heritage due to which people wish to travel here but they have lack of knowledge and resources to reach in this country (Pearson 2016).
Technological: technological implementation is one of the important aspects which help the country to become competitive with time. Lack of technology hinders the growth of the country to grow and compete in the international market. And taking about technological implementation in Vatican City shall be noted that the country is trying to survive but lack of efficient manpower in making the speed slow in the market. But changes in infrastructure are improving the state of the country in the European region (Blundell-Wignall 2016).
The government of Kyrgyzstan is spending their resources to implement new and innovative technology in the market. The focus of the people of the country is shifting from agricultural activities to industrial activities in the market. Also now there is availability of labour and equipped machineries in the market. This aspect is helping the business to come and grow in the Kyrgyzstan’s market.
Trade and business policy
Being a small country, the trade and business of policies of the country are only based on the feature present in the country and people of the country. Further considering the business and environment of the country with respect to the airline services in the country it shall be noted that, that the country is a tourism destination. Due to this feature the transportation services are prominent in the country but there are no airports or highway. So with respect to that the country has no policies for the Qantas airlines service. As discussed above the country is aiming to and develops the areas which are kept idle by the government. They want to utilize them so as to increase the business and trade in the country. Thus there is no better way to help the country to grow rather than making its infrastructure viable. So, first airport of Vatican City developed by Qantas will support the country to gain revenue (McNeill 2016). And it will also help the company to grow overtime as there is no competition present in the market. Further the Qantas also gains the advantage with this expansion as they can mold the policy implementation in the country according to their requirements. Also as noted that tourism is most prominent aspect in the country but there is no route for tourist to reach there but expansion of Qantas in Vatican City will support the customers to travel in the country; with its brand image Qantas can easily promote tourism in the country due to which sales of the flights of the country will also increase overtime. Vatican City Heliport is the official airport use in the country but it not for the domestic people and visitors. It shall also be noted that two airports of Rome: Ciampino and Fiumicino are used by the people of the country to travel, this negatively affect the growth of the country as the revenue is going, so the country is also raising fund to develop infrastructure to promote the country in the international market (Bock 2015).
Comparing the business and trade feature of Kyrgyzstan with Vatican City it shall be noted that the country has efficient trade and business policies to grow for an airline service Qantas. The country has many airports and airlines but still they are small scaled organization which is not profound in the international market. So presence of Qantas will help the country to gain revenue from transportation overtime. Further a notice was issued by the government of the country which stated that now with the emergence of technical regulation law; it helps the companies to decrease the interferences of the governmental bodies. The national system earlier said that standards of the products and services shall be certified according to soviet standards. It was restricted that 70% of the products and services shall be approved but now the margin has decreased to 22% which gives advantage to the companies to initiate their business successfully in the Kyrgyzstan’s market (Toktomushev 2015). Further the Kyrgyz make it efficient for the organizations to open initiate the foreign direct investment in the country. Further the trade promotion agencies formed by the organization regulate the business in Kyrgyzstan, so the company needs to take approval from Business and entrepreneurial council which strengthen and co-operate the functions of the company with the legislation of the country. Furthermore it shall be noted that there is so as such restriction on the transportation services off the country but the political insecurities of the country can stagnant its growth in the international market (Engvall 2017).
Current and short-term policies
There are many current and short term policies implemented in both the countries according their geographical and political specification. These feature of the country change time to time resulting to which, it might act as an advantage or barrier in the growth of the company Qantas.
Expansion in this part of the world is good but as there is presence of low income level in the country due to which the company can face danger for the sale of their products and service. Airlines is a luxurious travel services, resulting to which, it might become difficult for the company to attract the right type of customers present in the market. Also there is presence of small and tight target market due to which the damage of the company to succeed increases.
The risk in this country is the risk of competition as there is already many airlines organizations placed in this country which increase the scope of danger for the Qantas Airlines.
- Less improvement in technology results in inefficiency of the people to match up to the competition present in the market and inefficiency of the country to adopt innovation as well.
- Lack of adequate space and infrastructure setting make it more difficult for the company to expand their business in this country. As the country is placed in limited boundaries due to which it become difficult for Qantas to create adequate environment for their airline business (Kladou, Kehagias, and Dilmperi 2015).
- Risk of competition is present in the market which makes it difficult for Qantas to expand their business.
- The policies of Kyrgyzstan develop make restriction and barrier in trade and business due to which the process become slow while implementation (Curtis, and Rhoades 2013).
- The company can gain the first mover advantage
- Also lack of competition will help the company to create monopoly in the market and increase sales (Vogt 2017).
- High income level of people makes them capable to purchase airlines ticket.
- Attracts tourists and high economies of scale (State.gov 2017).
Thus, in the limelight of above mentioned events the fact that shall be noted is that the company Qantas shall aim to expand its business process in the Kyrgyzstan as it gives comparatively more opportunities to the company to grow and initiate sales in the target market. The task explains the macro environmental features affecting the growth an expansion of Qantas in international market. Further the reason for choosing Kyrgyzstan to operate the business of Qantas is discussed below:
- Comparatively Qantas has a large segment to target in Kyrgyzstan’s market which gives an advantage to the company to attract the right type of customers.
- Also due to large scale area and good infrastructure the company receives the advantage to initiate their activities without facing barriers.
- The political stability of Kyrgyzstan support Qantas to initiate their operations in the global market. Further the country is also a tourist destination so this is another aspect which can help Qantas to make repetition in their sales.
- People of Kyrgyzstan have medium and high income level so they are capable to afford the airlines services.
- Lastly, the government of the country is also aiming to expand their global business with these alliances both company and the country can earn profit and achieve competence.
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