Management Strategy and Decision Making for Final Exam Essay Example

  • Category:
    Management
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    2
  • Words:
    956

Question 1: Industry competitive structure analysis based on five forces model

The Australian Qantas airline has massive industry supply power made of moderate number of suppliers composed the Boeing, and an airbus. Therefore, it has neutral supplier concentration. It has also a high supply of business class passengers and first class clients. The supply power shows that it is not easy to switch, as the cost will be high.

Qantas buyer power, is exhibited in its large number of customers from the business class personnel hence the high orders. The Qantas airline also has homogenous product with the other airlines. The business class makes the prices be extreme at $1300. There is low switching cost and high buyer power.

Qantas like any other form of business has less competitive rivalry from few of its competitors such as Ansett, and Virgin Blue among others. Despite facing this competition, Qantas has low switching cost, high product differences and low customer costs.

Qantas faces a great threat of substitution, and this is because of new entrants on the pacific route to the US and the kangaroo routes to Europe. In addition, highly subsidized Middle Eastern carriers like Etihad, Emirates and the emergence of low cost carriers in Asia are trying to phase out the old airline. The occurrence of the October 2011 industrial actions had great damage that is difficult to quantify on the Qantas brand. There is also the challenging competition from foreign government airlines. This implies high chance of substitution.

However, Qantas lose not all; the new entrants into the airline market are facing many challenges. Airline business an expensive venture to set up, Vast experience is needed to run, economies of scale must be considered and technological protection and cost benefits are some of the barriers these new flyers are experiencing.

Question 2: Resource base view based on the VRIO model

Resource base view is based on the VRIO model that assesse the valuable, rare, inimitable and organization qualities of a business to deliver a framework.

Qantas has high market value due to its dominance and significance in safe and reliable travel. Its initial domestic market provided by the 23 million Australian populations propels its value to higher level, in addition to its presence in the Europe, American, and Asian markets. Its value is also promoted by its high supply to business groups only, as well as, having strong demand. Qantas has a strong group of buyers that make it highly profitable and dominant service.

Qantas airline quality services are quite remarkably rare and hence, are highly priced, about$1300 for luxury flight. Its ability to provide the three most comprehensive services such as freight, low cost flight, and luxury flights puts it above the rest in its league. Since Qantas products have low demand elasticity, its supply keeps the revenues to be high.

Qantas services are highly inimitable as their products and also services cannot be easily substituted due to its dominance, and this implies that the value is quite high, and it is undemanding to create robust profits. Qantas’ intellectual property seals such as trade secrets and trademarks make it highly inimitable hence, its competitors cannot duplicate it services without facing legal prosecution. Its market presence in decades and reputation makes customers admire to be associated with this reputable brand.

The service or rather the product is produced efficiently and effectively, and this implies some true reflection of the organization complex ability set. The product is quite hard to be duplicated by the competitors. Thus, the complexity of the organization structure saw Qantas sail through the September 11 attacks that sent it competitors out of the market. This has been its major drive to deliver the potential value and create sustainable competitive advantage over its competitors. However, the move by former CEO to pursue Qantas customers was dangerous as he could easily duplicate the services for Virgin Australia airline.

In conclusion, Qantas has and will always be the leader in the airline industry contexts. This is majorly attributed to the fact that Qantas has high capability of resources and high chance of creating profit. Indeed, the various challenges cannot be the basis of failure, but success to the Qantas airline.

Question 3: Providing a set of recommendations based on five-diamond model.

Based on the five-diamond model and after analysis of the case study, it suffices to state that Qantas airlines need some sets of recommendations or strategies.

First the model arenas, is in which case it involves an Australian icon airline. It has also reputation for reliable and safe travel in Australia domestic airlines. It has a great command of business class passengers alongside being the market leader in Australian markets. It has further perused the Asian European markets besides striking deals with international flyers-Emirates.

Another aspect of model is the vehicles, in which the airline has some plans to establish Jetstar in Japan that is a low subsidiary based in Tokyo. It has also a significant deal that links its international operations.

Staging is the other strategy that Qantas embraced. It has a robust international expansion, and this is due to the Australian domestic market that is positive for the airline. The airline is also positioned in the high growth region of Asia.

Then there is the economic logic. In this case, Qantas has the best global, regional, and international economies of scale including the individual store scale. There is also the efficiency and efficiencies from substitution.

Lastly, there is a strategy of differentiations. This involves high reliability quality of services and affordable prices in the business groups. There is also the instant profitability. However, Qantas can be more reliable and different from the rest if they reduce their pricing to encourage more customers.