Describe about the Strategic Business Management for Structuring and Implementing.
The report is based on the strategic management and the strategic planning for an organization. The strategic management deals with the structuring and implementing of the objectives of the companies. It also deals with the planning of the efforts to be taken by the management to achieve the objectives taking into account the resources available in the competitive environment of the company.
Brief description of the organization and its industry:
The chosen company is Qantas Airline. This organization is one of the leading airline companies in the country and the second oldest airline company that has been chosen for the report. It is an Australian airline company that has been founded in the year 1920. It is the largest airline in Australia with its huge range of services for the domestic and international flights. There are almost 33000 employees and operates a fleet over of over 250 aircraft (Qantas, 2016). Fleets of this airline company include Boeing, Bombardier aircraft and Airbus Since a long time this airline company is performing its services successfully. It has been able to cover huge network that covers almost 182 destinations in 44 countries. International Air Transport Association IATA has declared this airline company to be 11st largest in terms of the revenues earned per kilometres (qantas, 2016). The company formulates those strategies that have been able to bring in enhanced revenues to the company. The company had experienced some of the setbacks in the past in the international market and with the help of its effective marketing audit and planning along with the effective strategies this company has been able to restore the lost position and the loses. In the current scenario The Company now enjoys lucrative earnings and competitive returns on the investments. Jet Star and Qantas Link are the brands of the company (qantas, 2016).
The industry in which it operates is highly competitive and there are many rivals that also provide quality services. The company has to be highly competitive so that it could enjoy the competitive advantages and could perform better than the rivals. The industry is served by many of the airline companies that provide standard services and it has been seen that Qantas tries to charge very reasonably from the customers and provide value added services to enhance their loyalty(Tadros, 2008). The domestic market of this company is favourable and the international market is also good for the company. Qantas has been able to bring in changes in the industrial development of the country and through its quality wise best services and reasonable prices has been able to rule the industry (qantas, 2016).
Identification of the vision statement, mission statement and statement of values:
The vision of the company is to become the leading airline enterprise in the industry. Within a very short tenure the company has been able to reform itself to be one of the largest companies. The vision has influenced the company to provide the best services in the market (Qantas, 2016).
The company aims to provide best quality services to the customers and to be one of the innovative companies in the industry. This has been motivating the company in performing well and competitively in the market.
The company aims at providing value added services to the customers. The employees of the company are taken into serious consideration and there have many provisions that could enhance the satisfaction of the employees. The company tries to retain the value of the corporate and social responsibilities.
Identification of the objectives:
Qantas has been one of the oldest airlines in the world and it is the leading airline company in Australia. The organization has been successfully conducting the domestic and the international flight operations. It is one of the few airline companies in the world that has declared to be a profitable organization. The organization has been running on certain aims and objectives those are enumerated as follows:
- To become the most successful airline company in Australia.
- To become one of the leading international airlines in the world.
- Improving the international market share.
- Developing the decent domestic market share further.
- Implementing more facilities and amenities for the customers by bringing overall development of on and off-flight services.
- Offering value-added services to the customers to earn their loyalty.
- To offer budget air travel to those passengers who cannot afford business class travel.
- To make the flight travel popular by bringing it to those people who were not able to afford flight travels previously(GRIN, 2014).
Analysis of their appropriateness for the organisation:
The aforementioned objectives are the fundamental aims of the company as of the present situation. The management of the organization have implemented some of the strategies for the purpose making the company grow more and attain increased popularity. The company has been providing the services to the people those can afford flight travel. But, the company has now planned to offer budget flight travel for those people who did not have the good fortune to experience flight travel so far. So this strategy is very much relevant for the company as it would surely increase the interest of the customers to travel by Qantas. The domestic market is already very favourable and now Qantas wants to improve the international market share substantially and this objective is certainly one of the most important and relevant one for the company. The offering of more facilities, amenities and value added services to the customers at the domestic and international levels is a prudent strategy that will ensure growth and sustainability in the long run and improve the decreasing international market share of Qantas (Qantas, 2016).
Suggested potential improvements:
Qantas has potential areas where it has significant scope of improvement. The company needs to take care of the occasional delays in the arrivals and departures of the domestic flights in particular those are more susceptible to delays. This has caused passenger agitation in the past. The management needs to ensure that these lags are minimized in order to prevent the company from losing its reputation and goodwill. The company can also undertake research and developmental endeavours in the department of adopting much advanced technological innovations in the department of aviation. It can purchase some more advanced fleets of the long-haul aircrafts those will offer much safety, security and comfort of travel. The services of the staffs and employees can be made more professional by conducting even better training and development programs to handle emergency situations. The company will have to try to increase its international flight services and match up to the global leaders like Emirates, Etihad, Lufthansa, etc. Therefore, more research and development is required in this domain along with more investments from the management (Preez, 2015).
Internal analysis of the organisation:
The internal analysis of the organization could be done with the help of the SWOT analysis. Following is the SWOT analysis of the company:
· It is leading in the industry in Australia.
· Both the national and global market of this company is good.
· In terms of revenue passenger kilometres it is 11st airline company.
· The fares of the tickets are affordable and also the value added services provided.
· Market share seemed to have declined few years earlier.
· The ineffectiveness in the strategies had led the company to that situation(ABC Net, 1999).
· The future of the company is good.
· The company now implements effective strategies.
· The marketing audit and planning of the company are formulated in successful manner.
· The company could bring innovative strategies to replace the conventional ones.
· The industry is highly competitive.
· There are threats from the new entrants.
· The services of the rival companies are also of similar types.
· The market share of the rivals could get enhanced if lower rates are offered by them (Dyson, 2004).
Analysis of its external environment using appropriate strategic management tools:
The external environment could be analyzed with the help of the PESTEL analysis and with the help of the Porter five forces analysis (pestleanalysis, 2015).
Political factors: The Commonwealth Level and the political environment of the country regulate the airline industry of Australia. The political factors exert influence on the industry and its participants. The airline industry of Australia is deregulated and that is why the competition is steep.
Economic factors: The increased prices of the fuel and the unfortunate incident of 11th September along with the issues in the SARS have impacted the volume of sales of this company. The inflationary situation in the economy has catapulted the prices of the flights and that impacts the global market of the company.
Social factors: The training and development of the workers of the country has been the demand in the social environment. The awareness for the need of the technological improvement has put a pressure on the company to enhance the quality of the technical know-how. The lifestyle of the people of the country and changing pattern of the tastes and preferences has also impacted the business of the company.
Technological factors: The technology is one of the prime factors of the airline industry. The company has to ensure regular improvement of the technological know-how and to the need of the innovation is felt. The company implements best in class techniques and tools of the Information technology and this has impacted the growth of the economies of scale for the company.
Environmental factors: The Company is one of the most environmental friendly companies. The company implements the environmental friendly procedures and policies to avoid the harmful impacts on the environment.
Legal factors: The Company complies with the legal regulations and the norms of the governing bodies (Abdullah, 2011 ).
Porter’s Five Forces:
The factors in the macro environment could also be analyzed with the help of Porter’s five forces.
Rivalry- It is one of the most important factors in the external environment. The company faces steep competition not only from the existing companies but also from the new entrant(Boundless, 2015).
Threats of new entrants- As per the regulations of the Australian governing bodies the new entrants are entering in the market and this is one of the reasons behind the steepness in the competition in the domestic and internal market
Bargaining power of the consumers- The customers could exert moderate power because of the prices of the flights provided by the company are reasonable and there is huge cost of switching to the services of the rivals.
Bargaining power of the suppliers- The suppliers could exert lower bargaining power because of the instability of the economic factors in the country. The use of the high end technology by the company has also reduced the bargaining power of the suppliers.
Threats of substitutes- The services provided by the rivals are substitutes of the services of the company. But it is found that in the airline industry of the country the rate of substitution is low as the company provides unique services than its rivals and that also at affordable prices.
Developing an appropriate strategy for the organisation:
The organization has plans to improve the overall quality of the services. The main focus is to improve the international market share. For this aim in mind, the focus of the company is to invest in technology to match up to the likes of the global giants like Emirates. The company has plans to purchase much advanced fleets of aeroplanes both in the long-haul and the short-haul category. However, the prime focus is on the long-haul category now that implies the international flights where the company has not been able to put up the desired level of performance, being the leading airline of Australia. Therefore, the company should invest in buying new fleets, providing state-of-the-art services both on and off the flights, offer much professional and dedicated services to the customers by remaining more accountable and responsible. The management should also invent some new value-added services like special discounts and gifts to loyal customers on some special days like their birthdays or marriage anniversaries. The customer services should also be improved by making it more prompt such that queries are resolved within a period of 24 hours. For that, there should be 24x7 online assistance also on the website of Qantas where many customers those are not able to call the customer care at that point of time can chat with the customer care executives and discuss their problems (Flynn, 2016).
Relevance of strategy:
The proposed strategies by Qantas management to improve the quality of the services is in line with its objective of extending budget air travel to the people of Australia those were so long not able to enjoy the experience of flight travel. The air fares will be lower than the competitors for the executive class travel. This will at first be implemented in the domestic circuit. The company will observe how this reduced cost is affecting the profitability of the organization. Depending on the success or failure, the management will then decide to reduce the executive class travel fares for the common people of Australia those cannot afford the business class travels. This strategy is very significant for the company if it has to improve its dwindling international market share. Along with these objectives there are other strategies also those are discussed earlier and are needed to be implemented for improving the international market growth and sustainability aspects of Qantas (Milanpintar, 2015).
How the strategy is related to vision/mission/objectives:
The international and the domestic strategies those are proposed by the Qantas management are aligned with the vision, mission and objectives of the company. This is ensured from the fact that Qantas was losing its international market share despite being the leading airline company of Australia. It was doing a satisfactory business in the domestic circuit though. But, there was need for improving the overall quality of services in terms of technology and commitment to professionalism. These strategies are to be followed by the company in order to achieve the organizational goals and objectives, the primary of which is to become one of the global aces in aviation sector. Thus, the proposed strategies are very significant and pertinent to the growth and developmental agenda of Qantas (Smith, 2015).
The critical importance of implementation, execution, and evaluation of the strategies:
The strategies those are designed for the domestic and the international circuits need to be implemented by Qantas in reality. But, the implementation if not backed by proper execution plans and evaluation measures like key performance indicators, and then it has no value. The organization will not attain success if the implemented strategies are not monitored at every stage. Thus evaluation becomes a very important measure to ensure success.
On a concluding note to the essay one can observe the several strategies those are proposed to be undertaken by Qantas in order to gain much popularity as a global brand in the international arena. The company was facing the issue of decreased international market share and thereby it needed to devise strategies for improving the international market share. The company also needed to improve on some other areas those were highlighted in the said essay. In the end, it can be said that the implementation and evaluation success of the strategies will ensure the future growth and profitability prospects for Qantas.
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