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Question:

Learning Outcomes:
 
a) Describe and evaluate the objectives, aims and the primary aspects of a strategic plan whilst taking into account the vision and mission of the organisation.
 
b) Discuss and evaluate the processes and forces that influence the strategic decision-making process in relation to business strategy

Context:
 
An organisation typically achieves superior returns when it has a sound strategy that is well implemented. A key part of determining an organisation’s strategy is a clear understanding of the environment in which it operates. Evaluating the external environment is a critical part of the strategic management process, and this assessment requires that you undertake an analysis of the industry environment that Qantas Airlines is currently facing. To do so, you are required to apply Porter’s Five Forces model to Qantas Airlines and reflect, using an academic article of your choice, on how analysing the environment in this way can help to inform managers in creating the organisation’s strategy.
 
 

Answer:

Introduction

In the current economic world competition is very high. As a result, industries in the economic field have to find ways to ensure survival and to keep up with the competition. The survival of any business relies on opportunity creation that enables the business to explore new ventures and to equally compete with other businesses in the field. The opportunities created also ensures the growth of the business. The developments occur through a series of step that are usually planned by the management of the business. Therefore, there is need for business to develop strategies that will enhance business growth failure to which the business suffers stunted growth and become less competitive (Ufartiene, 2014). The paper reviews the necessary consideration to be made during the development of a business strategy. In the review it uses the Porters Five Model. It also uses the Qantas Airline to illustrate the model application.

Porter’s five model illustrates on competitive forces can describe the profitability of a business in a new entry. The model considers five competitive forces namely; the risks involved with new entry, the power of supply, risks posed by substitutes in the business field, rivalry among developed firms and buyer power (Dobbs, 2014). The model focus on the effects of each force on the growth of a business. In addition, the model develops an insight on strategy development in each of the force and implementation.

Application of the model

New entry to the market poses a danger to the existing businesses. The new business reduces the profits of the existing businesses and increases the competition levels in the business field. The extent of risk to new entry depends on the barriers posed both by the existing firms and the market availability in the venture. Existence of barriers discourages new entry and allows for domination of the established firms. In the case of Qantas airline, it has developed discount fare to enhance its competitiveness in the airline market (Bimonthly news and views, 2015). The company has also improved its service standards ensuring it growth and development. This reduces the possibility of new entry since the company has gained market share and dominance in the market.

Suppliers play a great role in the growth of a business (Indiatsy, Mwangi, Mandere ,2014). The suppliers determine the standards of services provided depending on the quality of materials they supply. Qantas company has ensured that the company is supplied with high quality materials to run the airline business. This is evident from the continued improvement of the company planes. The suppliers have developed big flights to enhance the company capacity. As a result, the company has increased the number of passengers from 16 million to 50 million since 1995. Also, the suppliers have developed technology in the interior design of the flights. This has led to satisfaction of passengers increasing the consumption for the company services. The development in flight production has helped the company to attain its goal to offer high standard services to its customers and safety.

Following the high-quality services produced by Qantas company the company has realized significant growth in its business ventures. According to the infrastructure and regional development department in Australia Qantas services have improved the tourism industry in Australia. The main factors that have contributed to the development include the ability of the company to market and sell tickets in Australia. Also, the collaboration with American airlines has helped the company to offer services between America and Australia.

 

In return the company has increased its revenue and increased its market share. Furthermore, the company has developed discounted fares to enhance its competitiveness and increase market share.

In every market field there exist rivals who do create competition in the field. The competition results because the companies in the sector do same products and services and target a particular group for market. As a result, consumers get a chance to substitute a good or a service that is expensive with a cheaper one. Also, the consumers prefer the goods and services that are of high quality since they meet the consumers demand. Managers in various business should therefore develop strategies to enhance competitiveness (Kasimogul, 2018). Qantas airline has developed strategies to help it deal with it rivals in market share. The company has initiated the discounted fare for its service consumers. As a result, many passengers do prefer its services due to the low cost they make. This is significant from the company statistics where 70% of the passengers opted for the discounted fare in 2014. In addition, the company has developed high quality services by including innovation in its service production and supply. The strategies have ensured the survival and growth of the company.

Businesses are ensured of survival in the market from their continued growth and opportunity exploration. Similarly, Qantas company has developed through the exploitation of opportunities in the airline field. Among the key development made by the company include partnership with American airline and the expansion of its services to Japan. The company launched its airplane services between Australia and Japan in August 2015. This opportunity was created following the Japan-Australia economic partnership. Also, the partnership with American airline has boosted the growth of the company and the tourism market at large. The new development has made the company more competitive in comparison to its rivals and ensure the company survival.

Usefulness and limitation of porter’s model approach

The model helps a company to analyze its environment which helps develop business strategies aimed and making a company more competitive (Essays, UK, 2013). This helps a company to identify the possible investment opportunities in the market. As a result, the company develops strategies towards exploring the new venture. The development enhances business development and ensures its survival in the market. Furthermore, the analysis gives the business an idea on how to improve its competitiveness in the market field. On the other hand, scholars have developed critics on the model based on various factors which include; changes in the economic field based on technology, globalization and regulations and inclusion of other factors since the model is not all inclusive. According to porters he highlights that the model is not all inclusive and insight should be made on factors since he has only highlighted forces (Porter, 2008: Dobbs, 2014).

Conclusion

Business should consider the study of the forces within their environments while developing business strategies. The study helps them to identify the possible areas of expansion. More so the study helps develop strategy which increase the competitiveness of the business in the market field (Bencesilas, Ombui & Irova, 2016). The implementation of the developed strategies enhances the business growth. However, the market is changing and companies should develop their insight beyond market forces. Among the factors to study include technology and innovation and globalization of economy at general.

 

References

Bensecilas, K., Ombui, A. & Irova, M. (2016). Influence of porters five model strategy on performance of selected telecommunication companies in Kenya. International journal of scientific and research publication, Vol. 6 Issue 10. Pp. 558-568

Bimonthly news and views. (2015). National Carrier. Qantas Group Public Affairs Journal, Issue 2. Pp. 1-4.

Dobbs, E. (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis template. Competitiveness review, Vol. 24 Issue 1. Pp. 32-45

Essays, UK. (2013). Porter’s Five Analysis: Advantages and Disadvantages. Retrieved from https://www.ukessays.com/essays/business/

Indiatsy, M., Mwangi, S., Mandere, N., Bichanga, M. & George, E. (2014). The application of Porters Five Model on organization Performance: A case of cooperative bank of Kenya ltd. European journal of business and management, Vol. 6 Issue 16. Pp. 75-85

Kasimogul, M. (2018). Survival strategies for companies in global business world- A case study. Retrieved from www.opf.slu.cz  

Porter, M. (2008). The five competitive forces that shape strategy, Harvard business review.

Ufartiene, J. (2014). Importance of planning in management developing organization. Journal of advanced management, Vol. 2 Issue 3. Pp. 176-180

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