Resources and Sustained Competitive Advantage

Question: Discuss about the Resources and Sustained Competitive Advantage. Answer: Introduction: Qantas is one of the biggest companies in aviation industry at Australia. It is recognized for worlds leading long distance airways. It has been established in 1920 in Queensland and so it is the second oldest company in aviation industry in world. Today, this company is providing its services across 173 destinations of 42 countries which are covering worldwide. Company has approx 35000 employees. Many subsidiary businesses are offered by the company such as Jetstar, Qantas catering, budget airlines, Qantas holidays etc. to evaluate and analysis the environment of the company today. The logo of the company is red kangaroo. Headquarter of the company is in mascot, Australia (Qantas, 2016). The vision of the company is providing the best premium services to its clients in less fare prices. Qantas is different in Australian aviation industry because only this company is having FSC and LCC. This company has implemented a spoke transportation hub in its operating fleet. The vision of the company is a crucial aspect. It helps the team of the company to understand the objectives and goals of the company. The main strategies of the company are right aircraft at the right routes; safety is always the first priority, efficiency in operational department, strong complementary brands as well as excellence in customer services (Qantas, 2016). Qantas has suffered financially throughout the last decades because of many factors like competition in the market or recession in the market. Due to many such events like war and attacks in several countries, the airline companies from all over the world had suffered these consequences (Fu, Oum, Zhang, 2010). For evaluating the micro environment of Qantas, porters five forces model have been used. Porters five forces model: Even though Qantas is the leader of the aviation industry at Australia but it could be threatened by the other companies in world aviation industry. According to the annual report of Qantas, it has been identified that the Jetstar airways are doing well in the market in comparison of competitors but it has also identified that cost leadership strategy would no longer work for the company as now all the companies are lowering their cost. Thus company should plan new strategy according to the competitors (Frazer, 2015). It is doing very well in Australian industry, but if discussion is done on international markets concern, the potential of new entrance could be strong just like low cost airlines. Thus, Qantas need to concentrate on the new strategies for creating the barriers for new entrance. Threat of substitute products: Almost, everyone choose the airplanes to transport from one country to another or in remote area for saving the time. However, there are many other substitutes for an aviation company like bus, car, cruise, train etc. All of these could be a small threat for the Qantas. Company need to boost up its options and offer some promotional trip to customers. The main supplier of this industry is fuel supplier and aircraft manufacturer. Company is dealing with Industrys largest production companies so it is a powerful weapon for the company and the fuel prices could be a major factor to affect the company. Bargaining power of buyers could be high in international as well as domestic airlines. So company need to plan and implement such strategies that a customer can be influenced in provided prices (Brigden, 2009). Macro environment is the most uncontrollable and external factor which influence an organizations strategies, performance and decision making. For evaluating the macro environment, PESTLE analysis has been used (Gillen Gados, 2008). Political factors had affected the most to Qantas. As the terrorist attacks, hijack and blown up in the middle air affect the most. Recently it has been happened with Malaysia airlines (Coughlin, Cletus et. Al, 2002). Due to many developments in the economy of the country, the company has been affected. Oil price has impacted significantly on the company. Global financial crisis had also impacted the company. Society observation regarding the company affects the policies and strategies of the company. The size of customer has been increased recently due to the economic growth. Many opportunities have been opened in front of the company due to it. New technology in the market is affecting the environment of the company significantly. Company has enabled its services online too for grabbing the more market share. Competitive advantages of a company are those factors which make the company different and significant from its competitive companies. Company enhances this attributes through providing the best services or product to the consumers or combining the best process, technology and knowledge (Gaughan, 2010). In Qantas group, the competitive advantages of the company are its diversity services and 2 brands airlines. This brand is offering both domestic and international airlines services to its clients. The two brand airlines of the company are Jetstar and Qantas airlines (Datamonitor, 2009). Jetstar is focusing on low cost as well as Qantas is focusing on premium. Both of these brands have targeted different customer groups to offer several services. The company is operating 5300 flights in a week approximately for covering regional destinations and 53 cities. Company has implemented many strategies which helped it in growing rapidly. Company has dealt with many other companies to expand its business (Barney, 1991). And contacted many new client through e-chatting or telephonic conversation to satisfy the. The main competitive advantages of the company are its inbound logistics,, manufacturing business, its suppliers, strategies, operational team, professionals, new technology, various services, transportation services, joint ventures, partnership, human resource, process, customer services, sustainability etc (Dallas, 2011). Porters generic models such as differentiations, focus and cost leadership could be used to evaluate and analysis the business strategy of Qantas. This company is managing two brands i.e. Jetstar airlines and Qantas airlines. Under these two brands, company has operated many subsidiaries business such as Qantas Link, Jet connect, Qantas freight, express freighters and Jetstar airways to reach the target group and expand its services to grab more market share (Pearson, David, 2008). Cost leadership strategy has been opted for evaluating the strategies of the company: Cost Leadership Strategies: This strategy has been developed by porter for describing the ways to establish competitive advantages. Basically it stands for lowest cost operations in comparison of other companies in the industry. Qantas is following cost leadership as its main competitive advantages for grabbing the more market share. Currenntly, there are many companies in the market with low cost, so company has also offered cheap fair to its passengers to attract them more and enhance its market share (Craigie Bekiaris, 2010). Jetstar still need to reach at the lowest price, for that company needs to plan and implement other strategies like partnership strategy to make a deal with main competitors. According to many research it has been identifies that company could easily grabs the market if it adapt the cost leadership strategy. It is true that airlines which are offering low price could attract more customers who are having low budget. But in recent time, it is also true that cheap prices could not be eno ugh to compete with competitors (DAveni, Dagnino Smith, 2010). It could be said that company could adjust another strategies to build the main strategies that is cost leadership and can be differentiate from other low cost competitors. Qantas group has generated $15,816 billion in 2015 as total revenue. It has been possible due to 5 main segments i.e. domestic, international, Jetstar group, Qantas Loyalty and Qantas freight. Company has focused more on diversification strategy to grab more market share and satisfy its customers. In addition to the value created and economies of scope through many diversified segments of the company, it would be able to achieve the market power against the price competition. Diversification helps a company to be different and it is also good for a company to be different (Campbell, Goold Alexander, 1995). So it could also be good for Qantas as through it company could learn new culture and ideas. Further, diversify the business into new market would help the company into getting new ideas, innovation which might be good but it could also enhance the complexity for the team to learn or understand the different culture and working method. Strategic Recommendation: After considering all the functional aspect of the company, it is recommended to the company to improve some of its strategies to enhance the market share and competitive advantages of the company. Company must focus on both international and domestic market to diversify its political, economical and social situations. Company should offer new services and promotions to its passengers like discount in fair etc (Dallas, 2011). Company should consider the employee relationship by providing them a proper training, benefits and wages. Company must take help of new technology and very well trained employees to improve the services (Dean Yunus, 2001). Company should also take care about the sustainability and corporate social responsibility. Conclusion: After considering all the aspect of this study and report, it is concluded that Qantas group is the leader of Australian aviation industry which has adapted many strategies and policies to expand the business and manage it effectively and efficiently. However company could face some issue like low cost issues, fuel cost, alternative transport etc. But company is enough capable to handle such situations. Company could take help of its diversification strategies to deal with competitors through development, channel distribution, technology and innovation etc. To survive in the competition globally, company is suggested to establish effective strategies. References: Barney, J. (1991). Firm Resources and Sustained Competitive Advantage.Journal of Management, vol. 17, no. 1, p. 99. Brigden, Cathy. (2009). Journal of Industrial Relations. Unions and collective bargaining in 2008, 51(3), 365-378. Campbell, A, Goold, M Alexander, M. (1995).Corporate Strategy: The Quest for Parenting Advantage. Harvard Business Review, viewed 18 Jan 2017, https://hbr.org/1995/03/corporate-strategy-the-quest-for-parenting-advantagegt. Coughlin, Cletus C. et. Al. (2002). Review. Aviation Security and Terrorism: A Review of the Economic Issues, 84(5), 9-16. Craigie, J. Bekiaris, M. (2010). Money. Qantas gets cosy with AirAsia, 2(120), 16-16. DAveni, R, Dagnino, G, Smith, K. (2010). The age of temporary advantage.Strategic Management Journal, 31, 13, pp. 1371-1385, Business Source Complete, EBSCOhost, viewed 18 Jan 2017. Dallas, H, (2011). Strategic Management; competitiveness and globalization. Strategic management, Asia-Pacific 4thed, pp 434-440. Datamonitor. (2009). Airline Industry Profile: Asia-Pacific. Airline Industry Profile: Asia-Pacific, 1-32. Dean, E. Yunus, K. (2001). An overview of strategic alliances. Management Decision, Vol. 39 Iss 3 pp. 205 218. Elmuti, D. Kathawala, Y. (2001). An overview of strategic alliances.Management Decision,vol. 39, no. 3, pp. 205-217. Frazer, S (2015).Jetstar expansion stalled by Hong Kong authorities, Text, ABC News, viewed 12 October 2015. https://www.abc.net.au/news/2015-06-26/jetstar-expansion-stalled-by-hong-kong-authorities/6576346gt. Fu, X., Oum, T.H. Zhang, A. (2010). Air Transport Liberalization and Its Impacts on Airline Competition and Air Passenger Traffic.Transportation Journal,vol. 49, no. 4, pp. 24-41. Gaughan, PA (2010).Mergers, Acquisitions, and Corporate Restructurings. John Wiley Sons. Gillen, D Gados, A (2008). Airlines within airlines: Assessing the vulnerabilities of mixing business models.Research in Transportation Economics, vol. 24, The Economics of Low Cost Airlines, no. 1, pp. 2535. Pearson, David. (2008). Wall Street Journal-Eastern Edition. Airlines Face Shortage of Pilots, 251(95), p. B11A. Qantas. (2016). Qantas Fact file. [Online] Available from: https://www.qantas.com.au/infodetail/about/FactFiles.pdf [Accessed 18 Jan 2017].