Competitive Strategy In Global Marketing: A Study Of Australian Hospitality And Airlines Industries

Adaptation

Discuss about the Competitive Strategy in Global Marketing.

The Australian hospitality and airlines industries are among the most influential industries in the world. With a rapid development in technology and infrastructure the nation has been growing at a fast rate. Despite being a large country with a considerably low amount of population, the business of the two industries primarily focuses to meet domestic demands and also exert significant control on the international market. According to Motohashi (2015), the big size, diversification in products, geographical spread, and complexity in transaction create problems in business. Further, with an increasing desire and change in taste and preferences companies broadly abide by the theory of three A`s.

Ghemawat`s strategy of adaptation, aggregation and arbitrage are based on a global study and substantially proves to be beneficial for Australian business organization. As stated by Schlegelmilch (2016), hospitality and airline aim to increase revenues through a well-developed marketing and management strategy. Moreover, the framework of the three A`s is also promoted by the government of the country to ensure a noticeable contribution to the GDP. Typically the C.A.G.E blueprint of the policy adds up as positivity in the model.

For this project, the four companies chosen from hospitality and airlines industry are Base Backpackers, AHS Hospitality, Qantas Group and Air New Zealand. In addition to analyzing the exercise of the three A`s in the brands, the report creates an idea about the pros and cons taking into consideration the capacity of the organization. The research also studies the presence of issues in the businesses and aims to solve these problems practically. Further, the last part of the analysis seeks to provide a helpful list of recommendations for the brands.

A capability of changing as per the needs and demands of the people is one of the most important methods of profit maximizing. According to Arblaster (2012), Qantas and Air New Zealand being the two leaders in Australian aviation industry remains among the masters of investors and dominators in the market. A change of prices to attract more customers is one the essential step to facilitate adaptation (Bogdanovic et al. 2015). There exist differences in cost of the same product depending upon its geographical location. On the other hand, it is seen backpackers, leisure and business travelers are the three primary types of Australian hospitality and tourism industry. Companies like Base Backpackers and AHS Hospitality to gain an advantage in the market involve in variation strategies. 

Aggregation

Business adaptability to change in policies, employment structure, business positioning is among the different practice of adaptability by the hospitality brands. Since the industrial revolution Qantas has been trying to provide its clients with best possible product and on-air services. In recent years both Air New Zealand and Qantas Airlines catered to more of the wealthy class as compared to the middle-class people (Ashwini et al. 2013). Managers of the organization recognize the need for a well-planned adaptation strategy of altering prices, opening new travel segments and innovation of services. Studying the hospitality industry of the country, it was further seen that Base Backpackers gathered backpackers visiting the country but lacked to cater to the rest of the types. In order to attract more people, an introduction of new packages and promotion is required. Being a four star hotel AHS Hospitality mostly concentrates on developing most needed products at an affordable price and also set up lodging all over Australia (Ahshospitality.com.au. 2016).

The enterprises hugely focus on collaborations, product orientation and a successful add of adaptation to the value chain process (Cassiman 2015). Considering the cases of all the four brands, despite being in the list of leaders they face a lot of problems when it comes to smooth functioning. Air New Zealand emphasizes design and innovation tactics. While Qantas with access to an enormous amount of capital, is able to launch new aircraft for its different class of targeted customers. On the contrary, the key to success for AHS Hospitality and Base Backpackers is their specialization in personal relationship management and strategic alliances for the development of production techniques, reducing risk and meeting local requirements. 

Regarding maximizing capabilities, businesses largely concentrate on franchising and also promote flexibility in workings. As stated by Schlegelmilch (2016), enterprises further seek to improve managerial efficiency and communication at all levels. Being located in Australia, it is the responsibility of the companies to prove beneficial for the government and the people. Ghemawat`s adaptability policy helps the business firms to not only maintain a positive dominance on the market but also gain develop a sustainable future.

The process of aggregation promotes business intelligence. A collection of data from various sources provides the companies with a firm base of decision making and implementing new techniques. Regarding companies like Qantas and Air New Zealand, it is observed that supervisors in the company use aggregation as their first step towards a new future. The exclusive capacity of these large corporations allows them to collect necessary data in small pieces and use the information as per their practical needs. Being a huge company, Qantas and AHS Hospitality is confronted with a situation of an ethical dilemma when it comes to carrying out accounting transactions. Aggregation by these brands in financial planning proves to be a time-saving and cheap process. The gathering of data from investors, retailers, as well as online financial institutions is a newly practiced method that approves future decision making.

Arbitrage

Business organization objects to achieve economies of scale. Gathering of data by the brands is executed to obtain geographical similarities. Air New Zealand in response to its increasing international market recognizes ways to maximize available global opportunities without lowering domestic demands (Airnewzealand.com.au. 2016). Despite a difference between Base Backpackers and Air New Zealand, both the brands promote the idea of geographic aggregation for creating economies of scope. A regional and semi-globalization practices by the companies affect investment and trade methods of the enterprises. Further, operating in a number of countries Qantas seeks to generate a sufficient amount of cost advantage.

Aggregation methods are needed in AHS Hospitality and Base Backpackers because it helps in the setting of a price ceiling along with predicting future business performances. In a case of aviation companies collection of information educates managers about customer`s behavior, buying patterns, market rates and thereby increases efficiency. Moreover, to develop and launch a new product effectively the process is of great importance to marketing executives and senior managers. As stated by Ostrovsky (2012), the dual nature of this theory conquers the evolving dynamics of the market. Aggregation helps the company to make decisions that only benefit the company but also its clients.

The framework of this process is simple and clear to understand. With a rise in domestic population and an increase in a visit by foreigners, there is an equivalent increment in demand for hospitality and tourism. With a presence of Ghemawat`s policy of aggregation, the business employs modeling of price and advertising. Additionally, to gain the people`s belief the investigated firms simplify consumer relationship management with this procedure. All the four companies pay taxes and perform with the country`s code of law. According to Pourzolfaghar et al. (2013), an action of economic aggregation educates the business managers about market conditions and upcoming companies and hence helps to build up new models.

There exist a large gap between the performances of a company and what a stakeholder wants. Even though businesses try to mix in the nation, there still exists a variety of differences between them and the market itself. Brands like AHS Hospitality and Base Backpackers being in the hospitality sector specializes in accommodation services. A customer residing in a hotel is supplied with different a wide range of services. Food, festivals, and entertainment programs are often organized in order to ensure customer satisfaction. Going through the data and structure of the considered companies, it is seen that a production of all needed goods by the brand itself results in sufficient rise in the cost of the goods. In this case, both AHS Hospitality and Base Backpackers purchase the necessary products in a bulk thus lowering prices. 

Enterprises seek to benefit from market differences rather than just adapt to them. Business intelligence supports exploiting the gaps in the market and also profit from variations in supply mechanisms of different regions. Qantas substantially objects target marketing and market segmentation to bring changes in sales patterns (Qantas.com. 2016). The company classifies air tickets into business, premium and economy classes. Further, it positions the selling of tickets in places where there is a high brand value. There exists a vast amount of cultural and geographical diversity in Australia. Business actively takes part in making the most of these inequalities. Air New Zealand reports indicate that the firm faces a vigorous level of risk and competition from the domestic and foreign airline organizations. Winning over the competition in the global world is not an easy take, but is needed greatly to ensure business growth and a high yield. Outsourcing is one the most basic policies implemented by the company to gain an advantage over the rest.

The leading companies gain knowledge about the economy to actively take part in bargaining with suppliers, evaluate and eradicate risks and also let the people know more about the offered services. Base Backpackers provides its visitors with an exclusive line of programs and schemes further exploiting cultural values of the visitors and the country (Backpackers 2016). On the contrary, in situations of disputes within the company, Qantas focuses to settle the conflicts with arbitration. The introduction of the new labor umpire policies and collaboration with a group of cabin crew and aircraft engineers helped the brand to resolve differences.

Ghemawat`s theory of arbitration is comprised of a CAGE (cultural, administrative, geographic and economic) framework. As opined by Buhalis and Crotts (2013), establishing the use of a Risk-IT model in the management is an addition to the list of arbitrage procedures. Positivity of the Australian culture has provided AHS Hospitality and Base Backpackers with a success factor. Additionally, with strong government rules and regulations in the country, business firms function in an ethical manner to lower tax liabilities and also benefit the stakeholders. Political differences in the nation create an opportunity in economies of scope for the aviation and hospitality industries. Over the years there has been a rapid advancement in communication factors (Morrison 2013). Qantas and Air New Zealand has developed steadily with a decrease in transportation cost and building of new planes. Furthermore, the companies in study equivalently promote economic arbitrage by maximizing differences in labor cost and at the same time diversifying in the creation of low costing complementary products (Morschett, Schramm-Klein and Zentes 2015).

Conclusion

Qantas, Air New Zealand, AHS Hospitality and Base Backpackers tend to gain the best in their fields. Despite belonging to different industries, Ghemawat`s AAA framework grabs the attention of the company`s management. on learning about the AAA Triangle, supervisors often tend to execute all the three strategies together which may or may not end up to be fruitful for the company. A study on the company and its capability reveals levels of tension among them. To eliminate an issue, increase brand value or grow the business leaders usually abide by the typical try and error method to implement the policy. It can be concluded that with an ever-growing market, all the aspects of the organizations expands as well that needs to be controlled to ensure a secure future and societal welfare. 

Further in terms of choosing among the A`s, managers prioritize the issues and rely on the capacity of the business. Analyzing the four companies, it is recommended that the firms carry out a detailed study of their financial reports, differentiate between product costs and target specific high demand markets. Also as compared to Qantas and Air New Zealand, AHS Hospitality and Base Backpackers concentrate on adaptation rather than arbitrage in some cases. On the other hand, the method of aggregation proves to be fruitful for all the companies. It can also be recommended that the brands shift from A to AA to AAA over the time. Pursuing of policies ultimately leads to managerial efficiency. Being an aviation company, Qantas and Air New Zealand operates in many countries among many corporate cultures. It can be suggested that the management of these two firms contemplates the AAA policy in their free and fair organizational structure.

References

Ahshospitality.com.au. (2016). Outsourced Managed Accommodation Services | AHS Hospitality. [online] Available at: https://www.ahshospitality.com.au/ [Accessed 16 Sep. 2016].

Airnewzealand.com.au. (2016). Customer Service & Tarmac Delay Plan. [online] Available at: https://www.airnewzealand.com.au/customer-service-and-tarmac-delay-plan [Accessed 16 Sep. 2016].

Arblaster, M. 2012, “Comparing consultation on investment and technology decisions in air traffic management in Australia and the UK”, Journal of Air Transport Management, vol. 22, pp. 36-44.

Ashwini Nand, A., Singh, P.J. and Power, D., 2013. Testing an integrated model of operations capabilities: an empirical study of Australian airlines.International Journal of Operations & Production Management, 33(7), pp.887-911.

Backpackers, B. (2016). Base Backpackers Sydney & Scary Canary Bar. [online] Stayatbase.com. Available at: https://www.stayatbase.com/hostels/australia/sydney/base-sydney [Accessed 16 Sep. 2016].

Bogdanovic, I.D., Kokot, M. and Krishnan, S., Juniper Networks, Inc., 2015.Customer extendable AAA framework for network elements. U.S. Patent 8,955,055.

Buhalis, D. and Crotts, J., 2013. Global alliances in tourism and hospitality management. Routledge.

Cassiman, B., 2015. Developing an Innovation Mindset. In Shaping Entrepreneurial Mindsets (pp. 81-96). Palgrave Macmillan UK.

Morrison, K., 2013. Backpackers help boost regional growth. Government News, 33(6), p.42.

Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. The Integration/Responsiveness-and the AAA-Frameworks. In Strategic International Management (pp. 25-49). Springer Fachmedien Wiesbaden.

Motohashi, K., 2015. Management Strategies for Global Businesses. InGlobal Business Strategy (pp. 21-40). Springer Japan.

Ostrovsky, M. 2012, “INFORMATION AGGREGATION in DYNAMIC MARKETS WITH STRATEGIC TRADERS”, Econometrica, vol. 80, no. 6, pp. 2595-2647.

Pourzolfaghar, Z., Ibrahim, R., Abdullah, R., Adam, N.M. and Ali, A.A.A., 2013. Improving dynamic knowledge movements with a knowledge-based framework during conceptual design of a green building project. International Journal of Knowledge Management (IJKM), 9(2), pp.62-79.

Qantas.com. (2016). Sydney. [online] Available at: https://www.qantas.com/au/en/destinations/australia/nsw/sydney.html [Accessed 16 Sep. 2016].

Schlegelmilch, B.B., 2016. Marketing: A Global Discipline. In Global Marketing Strategy (pp. 1-19). Springer International Publishing.

Schlegelmilch, B.B., 2016. Global Marketing Strategy: An Executive Digest. Springer.