QATAR_report.docx

1. Introduction

This Report will be focusing on the Strategic Position of Qatar Airways

Capability

Environment

Strategic positionQatar Airways

Culture

Purpose

(Richard, L 2006, p.76)

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2. Qatar Airways Market Share and Growth Qatar Airways launched its first low cost carrier in the year 1994, and has been relaunched with an expansive strategy of international carrier under the instructions of The Emir, his highness Sheikh Hamad Bin Khalifa Al Thani, The growth of Qatar Airways is seen to be increasing globally and its expansion doubled every year. At the Later stage of development, 

50% of the share of private share is owned by Chief Executive Officer (CEO)



Akbar Al Baker ad well as stakeholders 50% is owned by the government, which has turned the Qatar Airways into



most prominent airline accepting the award of most top class airlines. Mr Akbar Al Baker’s management strategy of Qatar Airways has made Qatar



Airways to stand out to have best strategic competence. Owns 70% of market share successfully. Contributing 520Billion USD towards the economy through tourism receipts.

3. The Turbulence Since the launch of Qatar Airways in 1994, the airlines have started to flourish rapidly in decade.

 The

technological advancement and the economic impact had a greater

influence on the organization.

 Fluctuating prices in basic resources and pay scale of the income group had a major impact in the change of the airline specification to attract the target audience to survive in the economic shift.

 According to Degree of turbulence factor coined by (Loizos, H 2003, p.73), it is measured as Qatar Airways has a complexity by which the organization will be affected based on the change in macro environment

4. Strategic Environment Analysis Qatar Airways The Macro Environment 4.1 Political Factor The government norms and other political issues have affected Qatar airways with its evolving success for the past few years. The airlines had a deal conflict with European

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airlines for which European airlines used winging tactics as the airline was feared for its fleets manufacturing and safety regulators. According to CEO, Akbar Al Baker, the two factors that affected the alliance would be.

 

Indirect Taxes announced by the European Airlines Political barricade to deny the taxation procedures

4.2 Economic Factor In the current economic crisis, part of the factors that could influence Qatar Airways would be

  

GDP Increase in the international trade Globalization,

GDP rate in the Middle East by current statistics pointed as 3.6% and rise in the passenger traffic constituted 5.5%. Thus, the sate owned airlines would overcome the fluctuation in price policies of the resources. 4.3 Social factor It is very crucial for any industry to look after the social factor which indeed makes sure that both community and the business is not been affected. Considering this issue, Qatar airways has shown a positive response to the community by reducing the treat to environment by controlling the air-traffic that minimizes the carbon emissions. 4.4 Technological Factor The strategic partnership of Qatar Airways with “Qtel” brings out a long-term technological relationship that helps in developing the aviation’s groundwork to technological level. The technological advancement in the business has a positive effect in the areas of routing and the Internet booking. This technological alliance helps in better and smooth operations and the improvement for the airline operations. Advancement of Global distribution system also plays vital part in contributing the service to Qatar Airways as the revenue generating feeds.

5. Five Forces analysis- Qatar Airways

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Sectorial Analysis

(Gerry, J.,Kevan, S. and Richard, W 2009, p.31)

5.1 Bargaining Power of suppliers Airline industry’s bargaining power of suppliers is dominated by Boeing, Airbus, AJ Walter and Rolls -Royce. The bargaining power of suppliers has always been on the positive power over the Qatar airways. However, the derby based Rolls-Royce also plays a major role in terms of supplying raw materials to the Qatar airways, where as it supplies a exclusive ranged aircrafts and also holds the brand image which adheres to supply Qatar Airways and being a single supplier transaction that holds them to have a higher bargaining power. 5.2 Bargaining Power of Buyers The bargaining power of the buyers in the aviation industry remains unchanged, as there are price fluctuations between the airlines leaving a wide opportunity for the

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buyers. However, Qatar airways have unique product differentiation that makes the consumers to choose Qatar Airways as an option from The Emirates being a close competitor as they provide similar product but different service techniques. This induces buyers to have less power over Qatar Airways. 5.3 Intensity of Rivalry among Competitors Qatar Airways being a base airline from the Middle East has two close competitors Etihad and The Emirates. The customer expectation and change in mindset prevails as the product differs from the best to normal category. Increase in number of traffic, new forms of alliances across boundaries and Qatar Airways should also provide both safety and security to compete with the rivalries located in the similar location. Similar product of the firm creates a strong threshold to the rivalries in airline industry.

6. Competitor analysis

6.1 Strategic competitor - The Emirates Airlines Qatar Airways is one of the fastest growing airlines in the

(David, H 1998, p.239)

world, which is equally owned by the government of Qatar and private stakeholders. The key competitor of Qatar Airways is The Emirates, which is fully owned by 5

government and it is 24 years Old Corporation, which has a huge networking hub. Even though Qatar Airways is a fast growing airline, it still lacks behind Emirates in terms of networking and connectivity. AIRLINES

FLIGHTS

DESTINATION

COMPETITIVE

OWNED

COVERED

ADVANTAGE Entering new destinations which

Qatar Airways

120

120 destinations in

Emirates does not

70 countries

focus on with 50 million passenger count in year 2012 Focus on current routes and

The Emirates

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129 destinations in 72 countries

developing aircraft features with a passenger count of 35 million in the year 2012

Qatar Airways has become major competitor for Emirates due to its rapid growth and expansion globally. Qatar Airways has placed its strategic hands into numerous emerging countries in order to create its new network in niche market segment with and upcoming route, which Emirates has blindfolded.

7. Customer analysis Qatar Airways has its own target market that has the brand loyalty towards the national carrier. However, Qatar Airways focus mainly on targeting the business class and elite class customers who are willing to pay the sum of money for the service rendered by the organization. They focus on attracting the nouveau riche target audience, baby boomers, yuppies as well as frequent economic travellers .By this selective and focused market segmentation Qatar Airways has a strong hold on its position in the brand uniqueness and sustainable business in the competitive environment.

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8. Product Life cycle Qatar Airways being a well-flourished Airline and it is sustained in the maturity stage with no declination seen in near future due to its innovation and sustained market penetration strategy. Qatar Airways focus on delivering its elite services to their focused target audience and retain them by not only meeting their demands and expectation but also by exceeding the expectation and providing them more than the audience demand by their change in product line as well as aesthetics. As there are minimum close competitors who provide similar product specification, however Qatar Airways would continue to flourish in new future by their focused strategy.

9. Key factor of success

(Gerry, J.,Kevan, S. and Richard, W 2009, p.40)

The key factors that drive the organization to be successful in the market by constantly retaining the pride are their strategic capabilities in acquiring new ventures, the social responsibility and drive towards preventing the depletion of resources. As well as the well-organized corporate governance structure that are people oriented and matrix hierarchy.

10. Strategic links Qatar Airways works closely with their alliances and links in order to be the leading airline in the global market. Currently it holds the alliances with Rolls-Royce for the supply and manufacturing of their fleet engines and Qtel a technology company, who works closely with Qatar Airways for the marketing and sales profit contribution

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through selling tickets and monitoring sales. Being a state owned national carrier it has a strong government link, which provides subsidies, financial resources as well as the land with low taxes and rental charges. These strong links has made Qatar Airways the leading brand by focusing more towards the internal and external people meeting their demands continuously due to the low operating costs and maintenance cost.

11. Qatar Airways Resources

( Kevan, W 2009, p.37)

11.1 Tangible and Intangible In a competitive airline sector, it is crucial for airlines to gain competitive advantage over their rivals. Qatar Airways being a national carrier they are fervent to a certain amount of sheerness in terms of dealings and operations. This holds down the competitive advantages of Qatar Airways over their rivals. However, being a smart player in the business climate the organization can imitate strategic orders and approaches using its resources effectively. 11.1.1Financial resources

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Global economic recession saw the airline industry profits drop significantly, however, in 2010 the strongest expansion was seen in developing economies and Middle eastern airlines experienced the largest growth overall as stated in IATA annual report, 2011. As Qatar Airways is 50 % government owned and 50% owned by private shareholders, the government funds the airline and even though they do not disclose financial figures to the public, Qatar Airways CEO Akbar Al Baker has been quoted as follows.  The group made a net profit 7.5 billion USD for the year until March 2012  70% of Market Expansion contributing to the economy 11.1.2 Physical Resources Over the decades Qatar airways has expanded its business globally by opening their headquarters and office establishments in the geographic locations where the resource capabilities and accessibilities are high. The main headquarters of Qatar airways is located in Doha, connecting over 100 destinations worldwide using Hub and spoke links. More over having and premium classed terminal based at the Doha terminal ease their operations and day-to-day activities smoothly and efficiently. 11.1.3 Human resource The human resource management of Qatar Airways are predominant in the airline industry, every staff that are recruited are trained and taught the culture and values of the organization. The Skytrax awarded organization has provided the best inflight services by the personnel and makes sure that the service is standardized globally. Experienced staffs and matrix hierarchy culture has kept the organization on the top of its substitute classes, promisingly providing the best human skills and customer service skills to their customer whilst carrying the companies pride with a full fledge training. 11.1.4 Technological Resources Qatar airways have acquired both Airbus and Boeing aircraft’s, which are world leaders in their respective industry and a firm leader of safety and technology providing world class fleets and machineries. On the other hand Rolls- Royce the leading engine equipment brands have contributed Qatar Airways to stand 9

out in the market for the consumer safety and management procedures. Qatar Airways has been awarded the best flight service and the innovative approach awards for the safety and security, inflight technological experience, ease of access to the bookings and reservations facilities audited and surveyed by the (Skytrax Airline Global Industry Audit, 2011-2012). 11.1.5 Brand Visibility Qatar Airways has a greater brand visibility in the global market because of its innovative approach of product, superior customer service skills both inflight and ground operation with a excellent service equality approach, technological feed over the brand for sales and marketing using user friendly interface and sustained survey process which helps them to collect live feed backs from the consumers and reforming their product to serve their people better than the sectorial competitors. 11.1.6 VRIN Measurement The robust corporate culture and complexity towards the hierarchical structure it makes the competitors to imitate the product and Qatar Airways has a rarity factor of strong government influence and their resources, clear patent rights over the fleets and design as well as in flight aesthetics, having the base at the Doha terminal is a strong advantage which leaves the competitors ambiguous to compete with the Qatar Airways action plans.

12. Capabilities Being a State owned carrier Qatar Airways has its own unique resource capabilities that contributes in their business expansion geographically and expansion in their fleet counts to connect the world efficiently. 12.1 The land Qatar Airways headquarters occupies the biggest resource capability that implies the push on competitors to have minimal accessibility to the land and space leaving them to attract only minimal number of target audience. 12.2 The Financial 50% stake holder and 50% state owned carrier has a huge back up which leaves them

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to dominate the market effectively with lower cost over rent and place as well as the maintenance cost. 12.3 Brand Image Qatar Airways consumer market is wider than their competitors. The cost leadership with broad audience makes it be the product leader in the prevailing competitive sector.

13. Purpose and Culture-Qatar Airways 13.1 Mission The mission statement of Qatar Airways quotes “Excellence in everything that we do.” In order to accomplish the goals of the mission statement, the airlines ensures the high end safety and security norms as well as focusing on rendering 5 star services with well trained staffs who are also trained towards organization culture awareness. 13.2 Vision The vision statement of Qatar Airways is“ To become a world class carrier and cargo service provider with global reach”. In order to uphold the statement the organization focuses on 3 factors quality of the product, reliability of the product, and world-class network reach with 122 aircrafts increasingly serving over 6 continents and 120 destinations. 13.3 Objectives The key objective is to magnify the brand awareness globally whilst increasing the knowledge of airline products through their safety, security, customer service, comfort and convenience by providing luxury service to the customer. Innovation and creativity are the key factors to accomplish the objectives of their organization. 13.4 Strategic purpose Qatar Airways stands firm on the purpose to deliver excellence in everything they do. That means the organization focuses on the needs and constantly exceeds expectation of the clients flying with them and allied with them to serve better. They consider the hopes

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and dreams of the people and fly with the hopes and dreams of satisfying the people flying with them. 13.5 Corporate governance

Emir Chairman

Akbar Al Baker

CEO

Ali Al Rais Senior Manager

Abdullah Gohar General manager

Rinesh Ramakiss on General manager

Joan batten General manager

( Kevan, W 2009, p.45)

As state owned carrier the funding are directed through the government and the Emir of the UAE, the management process starts by the CEO and other private stake holders as the decision authority in marketing, financial, sales, procurement and operations delegated to the relevant general managers and their subordinates. Which forms a strong matrix approach in the governance. 13.6 Organization culture The company values the people inside and outside the organization, they believe that they are linked through corporate benefits and building relationships internally grows a strong external links, which gains a positive reputation in the market. 13.7 Stakeholder expectation 12

(Garry, T. and Michael O, K 2000, p.70)

Investors have greater interest towards the organization because they

focus

on

capital

gains

and

long-term

involvement.

Shareholders have significant interest on the company as they look for the profit and trading in the future. Government has a greater interest on the organization as it supplies the resources and controls the corporate capital of Qatar Airways. Community and suppliers have medium to low interest, as they do not affect the company’s actions directly as they focus mainly on cheap prices and long-term brand loyalty. 13.8 Corporate Social Responsibility Qatar

Airways

focuses

on

enlightened

self-interest

of

the

stakeholder and the internal people. The organization focuses on educating the people in the organization and the stakeholders to care and protect the environment. The organization also encourages business partners and community through improving their business

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activities by using the resources carefully without depleting the ecosystem using a 5 pillar corporate social responsibility.

14. Conclusion & Future Positioning The ravishing market penetration and robust strategy has kept Qatar Airways in the top order amidst the big players. It is see that they excel in satisfying the consumers and the people they are adhered too. Qatar Airways strong hierarchical structure has developed the company intact and powerful from the base inside out in the market. Qatar airways have planned to establish more global fleets with the Arabic touch, the organization has also planned to sustain as a leader in the technology and product standards which would help to position itself top amidst leading airline brands. Acquire more strategic partnership and alliances to develop the product to attract and serve the Qatari as well as global target audience. “ What we do we do best and the best we stand in the market” CEO(Akbar Al Baker)

15. Reference 14

David, H. 1998. Strategic Management from the theory to implementation. 4th ed. Massachusetts: Butterworth-Heinemann Gerry, J., Kevan, S. and Richard, W. 2009. Fundamentals Of Strategy. 3rd ed. England : Pearson Education Limited Kevan, W. 2009. Strategic Management. 1st ed. New York: DK Publishing Special Markets Loizos, H. 2003. Strategy and Organization. 1st ed. United Kingdom: Cambridge University Press Richard, L. 2006. Corporate Strategy. 4th ed. England: Pearson Education Limited Garry, T. and Michael O, K. 2000. New Directions in Corporate Strategy. 1st ed. Australia: Allen and Unwin

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