STRATEGIC ANALYSIS
STRATEGIC ANALYSIS : QANTAS
Company Overview
Qantas was founded in 1920, in Queensland outback and has now grown to become Australia’s largest international and domestic airline. It operates flights that are regional, domestic and international through its various airline brands . Qantas Airways Limited is part of the larger Qantas Group which include subsidiary businesses such as Qantaslink, JetStar, Qantas Holidays, Q Catering, Qantas Freight and Express Ground Handling. Qantas currently has a 143 strong fleet which flies to around 41 destinations around the world. Qantas also employs 35,700 people with 93 percent based in Australia ,being true to their slogan and representing the Spirit of Australia (http://www.qantas.com.au). Qantas is registered as a private company limited by shares. Its major stakeholders can be considered as its shareholders, employees, customers, business partners and community. They also have indirect stakeholders in the form of academics, media persons and government and non governmental organizations all of whom impact the company’s business strategies and thereby its performance (Aulenbach, 2007)
Strategic SWOT Analysis
Strengths
Qantas has a strong home base in Australia, which has been built over the years especially with its domestic services handling 65% of all domestic market. In Australia, 18% of all international traffic is through Qantas.
Qantas’s partnership with other airlines such as American Airlines, Cathay Pacific, Air Jordanian, Singapore Airlines through Oneworld Alliance where passengers are given incentives for flying with member airlines and allowing them also to make easy transfers on connecting flights. This strategically helps the airline cut costs by helping each other in terms of marketing, online ticketing facilities and maintenance and using it to provide value for customers.
Qantas approach of diversifying business by expanding into various budgeted airlines and also ancillary activities within the airlines industry gives it an economical edge of stability and also internal resourcefulness. For example: Qantas Group owns Q Catering which is a business unit that helps centralize meal production for the aviation industry . This allows for Qantas to save on costs and additional logistics involved in hiring external catering for their needs.
The advantage of being a home grown national airline and its almost 100 years of experience in Australian aviation is one of its strengths as it gives them irreplaceable experience, strong local reputation and also leading in technology and services.
Weaknesses
Recent reports of engine malfunctions and issues of air safety can negatively affect their image in terms of being reliability and safety and might cause a downward plunge in sales.
The industrial dispute that resulted in Qantas grounding and bringing to a halt all its operations in Oct 2011 created a massive loss for the company that had repercussions. This action can possibly lead to unrest among their employees and a general dissatisfaction within its working force. The company was also hit by a strike in 2009 which caused major delays and inconvenience,
Opportunities
Qantas has the opportunity to expand its international operations into untapped markets in Asia and far east where there are emerging hubs and potential hubs are being established. A recent development has been a deal signed with China Eastern to plan a low cost carrier for that region.
The strong Australian dollar gives Qantas an advantage over its other international competitors.
Its dominance in the domestic market is an opportunity they can exploit to their advantage.
Threats
The main threat is the possibility of pro-australia air bills being passed which will result in Qantas having to cut services and jobs and focus its main activity within Australia itself. This would according to the CEO Alan Joyce curb their freedom to be competitive when they need it the most to adapt and survive.
Rising fuel costs which have risen 26% in the last quarter of 2011 is proving to pose a threat to its operational cost budget.
The rise of low cost carriers and its popularity in the growing hubs of the Middle East and Asia are proving to bring down demand
High competition that Qantas has to face in the international market and main emerging hubs especially from other government backed airlines in these regions.
