Internal Business Environment At Qantas example essay topic

If change can be defined as 'any alteration that takes place in the business and work environment than it must be said that, the magnitude of change being experienced in today's business environment can only be compared with that of the Industrial Revolution in the 18th century. There has been no other industry that has been so extensively affected by the change occurring in everyday business than that of the airline industry. The leading airline operating within the Australian industry is Qantas. Qantas in Brief Aviators Paul Mcginnis and Wilmot Hudson Fish established Qantas, on the 16th of November 1920. The company Name Qantas is derived from Queensland And Northern Territory Aerial Services Ltd. Qantas' Prime function is the transportation of passengers within an extensive air network, which serves a total of 32 countries worldwide, with 142 destinations (67 Nationally and 75 Globally).

Qantas's ubsidiary companies also serve specific markets, which include: Qantas Link Qantas Freight Qantas Holidays Qantas Flight Catering Qantas's trategic alliance with OneWorld in addition to Code sharing alliances with 18 international airlines allow Qantas to deliver a global service to its' customers. Qantas is the leading company in the Australian airline industry with a domestic market share of approximately 80%. Nature and Sources Of Change For Qantas Qantas has experienced much change and turbulence in its' operations over recent years, the major forces driving change and affecting the way in which Qantas operates can be sourced form both external and internal business environments. External Influences The external business environment comprises of the factors and characteristics that are largely outside the direct control of the owners, directors and managers.

It is the external business environment is a major source or driver for the change Qantas has recently experienced. There are 6 key external Influences currently impacting on the operations of Qantas: 1. Economic Influences Fluctuations in the level of economic activity occur in all market economies. Economic activity results in a pattern of peaks, troughs, recession and recovery within Australia and throughout the world, which impacts on all business including Qantas.

The recent Terrorism attacks on the world, namely September 11, 2001, have had a considerable impact on the international aviation industry. Internationally it has been recorded that major U. S, Japanese and European airlines have been forced to retrench staff and reduce their flying capacity by 20%, and in some cases major American Airlines have declared that daily operations were resulting in a loss of up to $20 million. Europe, South East Asia and Japan have also experienced a downturn of up to 30% in some key routes as a result of the terrorist attacks. Qantas was significantly impacted upon by the downturn in the international aviation industry as a result of 78% of Qantas's profits being generated on international operations.

In the years leading up to the financial year impacted upon by the terrorist attacks of 2001 Qantas were experiencing a healthy increase in profits. In the year following the terrorist attacks Qantas recorded a titanic loss of profits with the profits generated falling from a level of $458.7 million in June 2001, to $203 million in the period between July-June 2002. This was a decrease of 55.7% 2. Legal and Political Influences The process of deregulation and regulation within the Australian Airline industry has significantly impacted on the conduct of Qantas. The Government through enforcing the alteration to the law governing the industry have impacted on Qantas.

The laws and regulations impacting upon Qantas are: . The Civil Aviation Safety Authority (CASA) State that Qantas are required to hold the relevant air operating licenses. CASA is the organisation whose task is the certification of aircraft; licensing operators, conduct of safety surveillance and enforcement of safety standards and regulations. Any investigation by CASA into Qantas that finds reason to revoke its license would have disastrous impact on Qantas' operations...

Qantas operates to 32 different countries worldwide, and each of these different countries have different regulation, which affect Qantas' operations, contracts etc, within that country... The war in Iraq, although previously thought that it could have a negative affect on oil prices for Qantas (Sending prices higher) has actually decreased the price of oil from $33.49 U.S. to $29.94 U.S. per barrel. This has led to a decrease in costs for Qantas as the fuel is on of Qantas' biggest costs... An increase of Discount competitors has resulted as a result of the growing trend of the international privatisation of airports... The Australian Federal Government's planned authorization for unlimited capacity to operate at international airports across Australia. This was illustrated on the 16 of September 2002 when the government stated that Indonesian Airlines would be authorized to fly into international regional airports...

Qantas has been limited in retrieving capital from foreign business's, by the Federal government declaring that it is in the nations best interest to secure Qantas as being majority owned by Australian investors. This caps the foreign capital available to Qantas at 49%. Which disadvantages Qantas as other companies have greater access to capital from foreign investors... Qantas's bid to the Australia's Competition and Consumer Commission (A ) to take a 22.5% stake in Air New Zealand was rejected on the grounds that it would advantage Qantas to the point where their market share would be to great in the Tran Tasman market. 3. Changing Nature Of Markets The International airlines market is becoming an increasingly global market.

With the introduction of Technological advances on a consistent level the market is subject to Globalisation. Globalisation is the process whereby hi-tech communications, lower transport costs and unrestricted trade and financial flows are turning the whole world into a single market, producing a more integrated global economic system. Globalisation has changed the face of the aviation industry, which Qantas competes within. Qantas also now faces greater competition form overseas competitors in the domestic market, as well as increased competition in the international market. Ansett's Demise has been a bearer of great profit for Qantas with the increasing of its market share form 56% of the Domestic market to approximately 80% Before Ansetts Demise After Ansetts Demise Qantas management effectively took over a large proportion of Ansetts market share by moving planes from its less profitable international routes to the domestic market to expand its fleet by 15%. The acquiring of Impulse airlines by Qantas is a move to further increase it's market share and strengthen its position within the domestic market.

Qantas has also announced plans to purchase 15 New Generation Boeing single class 737-800 aircraft in order to replace their less efficient 737's. Qantas's fleet renewal and expansion is aimed at reducing costs and keeping Qantas competitive. Recently on the domestic market Qantas has faced competition from Virgin Blue, which has been rapidly increasing the size of its fleet as well as planning to venture overseas and float itself on the stock exchange. Virgin Blue has in recent times secured a 17-year, $25 million deal to move into the former Ansett terminal at Sydney Airport. Virgin Blue also has plans to implement several marketing strategies such as a guaranteed seat frequent flyer program to entice business travellers away from Qantas. 4.

Geographic Influences Australia's geographic features such as its climate and natural heritage areas like Kakadu National Park and The Great Barrier Reef help to make it one of the most attractive tourist destinations in the world. Australia's remoteness make flying much more attractive than any other forms of transport. 5. Technological Influences There are many technological innovations, which have impacted on various aspects of Qantas' operations... Qantas has engaged newer planes, which have greater seating capacity and are more efficient...

Qantas has installed power outlets for its business customers to allow laptops to be operated mid flight. The innovations in technology have also lead to a downturn in customers flying with Qantas. One of these innovations is video-conferencing, which enables staff to work securely online as an alternative to travel costs. Sweeney research found that 49% of companies have cut their travel expenditure and 78% of companies were using technology as a substitute for travel, during its survey in January 2002.6. Social Influences Rapid identification and response to changes in tastes, fashion and culture can lead to sales, profit opportunities and business growth. This is a factor which Qantas management has been very successful in maintaining; throughout the years with which Qantas has operated it has dealt with social influences from the 32 countries worldwide to which it flies.

Each of the 32 countries maintain their own languages, tastes, religion and business practices. Qantas has implemented the relevant training schemes in order to have 65% of its cabin crew fluent in foreign languages. There has also been a change on the Australian airline (Qantas's subsidiary company) routes as they now focus on Asian dishes in flight Internal Influences The desire to develop new and improved methods of production is the major driver behind Internal change. Internal change may be brought about as the result of a company's constant motivation to achieve higher levels of efficiency and productivity. 1. E Commerce Electronic Commerce or E-Commerce is the use of electronic communications to do business.

E-Commerce covers all transactions made by electronic methods, inclusive of phone, the Internet and facsimile. The early E-commerce employed by Qantas was chiefly aimed at its external customer interface. Recent records have shown an increase in the level of Internet bookings throughout the airline industry, Qantas have stated that now more than 20% of domestic bookings received by Qantas are made through the Internet. As part of their new E-commerce strategy Qantas has highlighted key initiatives as being: . Internet-based offerings for leisure, corporate customers and travel partners. The ongoing maintenance and development of the Qantas website...

Purchasing Partnerships. New Consumer business supported on-line Qantas's website is being continually updated with new information, media releases and the ability to purchase tickets at the applicable prices (keeping up with competition fares). The website underwent major changes in September of 2002 with the inclusion of: . Increased alternatives for customers searching for the lowest priced itineraries... An online demonstration of the new Qantas Quick Check Self service check in kiosks and an interactive friendship tour.

The establishment of the first foreign language Qantas website. Customer access to alternative fares when red e-deals or global deals are not available. Qantas launched eQ, an E-business initiative which streamlines corporate human resources and creates an Internet based inventory management system as part of its plans to increasingly apply e-commerce to its internal corporate programmes, and in November 2002 Qantas transferred its flight booking system to an Amadeus- based online system. 2.

Effects of accelerating technological change Technology is changing the machinery and equipment we work with, as well as changing the workplace environment. This has had a significant influence on the internal business environment at Qantas. Qantas uses the advancements in technology within the aviation industry in order to establish and maintain a competitive advantage. In order to expand and update it's fleet and improve lounge facilities Qantas has plans to spend $13 billion over the next decade. Qantas has also experienced and are currently experiencing a number of additional technological changes, some of which being: . SMS services have recently been employed by Qantas in order to provide its customers with up to date information on departure times and any alterations to timetabled departures, which is intended to assist business travellers to manage their travelling time...

Qantas is has commenced the investment into more than $10 million in new 'state of the art' passenger screening equipment; the purchasing of 39 X-ray machines, 69 walkthrough metal detectors, and explosive trace detection equipment designed to reduce the potential risk of terrorists attacks and Hi-jacking's. As well as this Qantas has stated that it is requesting authorization from the federal government to place officers of the law on each international and domestic flight. The issue of customer safety was brought back into the spotlight after the recent failed hi jacking attempts made aboard Qantas flight 1737. The incident was recorded to have been attempted by a male passenger armed with two stakes. It resulted in two flight attendants being treated in Royal Melbourne Hospital... A $300 million total entertainment in-flight system is being installed gradually on Qantas's fleet, offering personal telephones, video games and 16 audio channels.