Discuss About The Strategic Management Of The Brand In World.
Strategic management is basically related to the identification and the description of the strategy which can be carried by the managers in order to achieve better performance and a level of competitive advantage for the specific organisation. the organisation is said to have competitive advantage in case the profitability is higher than the average amount of profitability of other companies in its industry (Frynas and Mellahi 2015).
The decisions which a manager takes and which is decisive in understanding the performance of a firm is referred to as the concept of strategic management. In this particular report, the two airline industries which are chosen in order to be compared from a strategic management perspective are the Qatar Airways and the American airlines. A detailed overview is provided of both the airline companies which have been chosen. This is helpful in reaching a befitting conclusion regarding the fact that which organisation is better. The strategic management perspective is usually chosen because it helps in providing a broader perspective to the employees of an organisation in order to understand the way in which the job fits into their organisational plan (Richelieu 2014).
The Qatar Airways is owned by the Qatar Airways which is one of the most famous 5- star airlines which is operative on both the international as well as domestic destinations. The airlines is responsible for providing the most reliable and the best service in terms of comfort to the passengers in the industry. The services that are offered by the airline are excellent both in air as well as on the ground. The main target of the airlines is the corporate, upper middle and middle classes. The latest expansion efforts of the Qatar Airways have been the re-iteration of the commitment of the airline to a wide range of growth opportunities by the addition of service to numerous points all across the world.
Qatar airways is the national carrier of Qatar and it is one of the hugest success stories in the industry concerned. The operations of the Qatar Airways started more than two decades back and the vision of making the airlines the best international airlines of the world was attained. The airways matured as a leader in the global as well as regional aviation genres due to the excellent service which was provided by the airlines (Ibrahim and Harrigan 2012).
The government along with the other political matters were responsible for influencing the evolution of the Qatar Airways as a suitable success story. The national carrier had to deal with the conflicts from the European airlines which used the winging tactics and there were fears regarding the safety of the fleet. There were also a certain amount of indirect taxes which were reported by the European airlines. at the time of the economic crisis, certain factors which were likely to affect the Qatar Airways where the gross domestic product, the rise in the international trade, the concept of globalisation and the changes in the GDP rates in the middle east (Gray 2013).
The social factors in this connection are also essential which are responsible for both the business as well as that of the community. These are also adverse effects for the airways. The Qatar Airways in considering the fact has been responsible for indicating that there might have been a level of positive response towards the community by means of the reduction of the carbon footprints in the environment as it is responsible for controlling the air traffic and the minimisation of the carbon emissions (Merkert and Morrell 2012).
The different strategic partnerships of the Qatar Airways along with notable companies are indicative of a long tern crafting of an aviation base for the advances in technology. The technological development in the airlines is responsible for positively impacting the areas which are routing as well as the internet booking. Apart from this the technological alliance helps in bettering the operations as well as in improvement of the operations of the airlines. The development of the Global distribution system is responsible for playing an essential role in the contribution of the service to the Qatar Airways (Doganis 2013).
The Qatar Airways enjoys many benefits like low taxes, the lower rental charges and the helpful financial and managerial resources from the government concerned. The airways also maintenance costs and privileges which involve that of brand loyalty from the residents of the place. The Qatar airways also has its own niche market. The competitive market the airline has a sustainable market penetration strategy and the airline needs to have an extremely secure future (Airways 2016).
The American airline was founded in the year 1930 and it is a subsidiary of the AMR corporation. The airline operates in the countries like America, Europe and Asia. The competitors of the American Airlines are the United Airlines, Delta Airlines and the Southwest airlines.
The threat of new entrants in case of the airlines is low and there are very high costs of investment. The bargaining power of the supplies is extremely high. The rivalry within the industry is also high. In this connection it can be said that the threat of substitutes is low. The bargaining power of the buyers is extremely high, therefore they have a wide choice to make. Another huge factor to be kept in mind in case of the discussion on American Airlines is that of the high labour costs and also the rising prices for the jet fuel. There have not been any significant changes being made either for the employees or the stakeholders. There has been a loss of the company by 5.2 million between a span of 4-5years.
It is desired that the financial motives of the company be mended and there are certain cost saving synergies for the company. The American airline costs are bound to decrease after the reorganisation of bankruptcy. The company should help in the regaining of premium as well as business revenue. There is also a reduction in the labour costs due to the age of the pilots. The newer and better aircrafts need to be the most fuel efficient by the reduction of the expenses of the fuel.
The American Airlines made crucial changes to the rates which were four in number. The rate structure it moved to was that of a four tier rate. The airlines offered first class rates and three types of coach fares. By means of this fare structure the American Airlines also eliminated deep ticket discounts. The Americans also eliminated the negotiated discount contracts of several large companies.
It has been observed that the travel agents are both positively as well as negatively impacted by the airline operations. The small business customers are those who are positively impacted by the changes in the fare. It was previously seen that the higher full fare prices were responsible for the small business travel. Therefore the small businesses would either decide against travel or they had the chance of incurring the cost on a Saturday night stay and also purchase a reduced fare ticket. The reduction of the full coach fares would lead the small businesses to purchase much more convenient flights. It can also be stated that the travellers overall have more amount of flexibility and are capable of taking more and more advantage of the discounts on the advanced purchases. These leisure travellers have a chance of payment of higher rates due to the non-offering of huge amount of discounts.
Price elasticity is quite high in case of this air travel as the elasticity of the business travel is usually less than that of unity. In case of the American Airlines the price sensitive customers are bound to be extremely dissatisfied by the new type of value pricing and they have the chance of switching to new cost and better airlines. There is the requirement of high investment, funding , planning as well as the advertisement. This is due to the implementation and communication of the different services between the flight fares and valuing the differences. However, it has been stated that the business travellers are bound to benefit from the concept of value pricing.
In case of the American airlines there is the presence of business strategies involving those of direct flights to the major business cities of the world. The American airline is responsible for the dominance in the field of the home transport network. After a certain point in time in case a company is considered to be the best in a particular area, there are little chances of the company losing chances either locally or internationally (Mallikarjun 2015).
The company’s weaknesses are considered to be the poor level of management in the company, the lack of motivation of the workers, the absence of proper teamwork as well as the appropriate scheme of services for the staff members in the company. There is the fear of corruption and gaps in the cash flow of the company. The lack of motivation a well as the appropriate scheme of services for the workers contributes to the concept of reluctance (Oum and Yu 2012).
The corruption in the company has been a major weakness which has been facing the entire company which has been responsible for the collection of losses in the company. The financial position of the company is also a weakness which has been possessing. It is desirable the company improves on its services in order to compete with the international airlines. The scheme of services need to be managed in order to ensure that the company solves all its external problems and gets in a better position in order to face all the issues and emerge successful (Rothaermel 2015).
Conclusion:
There have been certain areas of specification of the services of both the Qatar airways and the American Airlines. Therefore it has been seen that the Qatar Airways has been responsible for the provision of services to all the people. There have been a major percentage of the people who consider the Qatar Airways to be the provider of the best services to the airline industry. In comparison to the Qatar Airways the American airlines have not been able to ensure the satisfaction level of the customers. The strategic management perspectives of the task point to the fact that the Qatar Airways have been more successful in comparison to the American Airlines. The American airlines need to ensure that they work on their weak points in order to emerge successful as a dependable airline.
References:
Airways, Q., 2016. Qatar Airways Group Annual Report Fiscal 2016. Retrieved from.
Burghouwt, G., 2016. Airline network development in Europe and its implications for airport planning. Routledge.
Doganis, R., 2013. Flying off course: The economics of international airlines. Routledge.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press, USA.
Gray, M., 2013. Qatar: Politics and the challenges of development. Lynne Rienner Publishers Inc.
Ibrahim, I. and Harrigan, F., 2012. Qatar’s economy: Past, present and future. QScience Connect, (2012), p.9.
Mallikarjun, S., 2015. Efficiency of US airlines: a strategic operating model. Journal of Air Transport Management, 43, pp.46-56.
Merkert, R. and Morrell, P.S., 2012. Mergers and acquisitions in aviation–Management and economic perspectives on the size of airlines. Transportation Research Part E: Logistics and Transportation Review, 48(4), pp.853-862.
O’Connell, J.F. and Bueno, O.E., 2016. A study into the hub performance Emirates, Etihad Airways and Qatar Airways and their competitive position against the major European hubbing airlines. Journal of Air Transport Management.
Oum, T.H. and Yu, C., 2012. Winning airlines: Productivity and cost competitiveness of the world’s major airlines. Springer Science & Business Media.
Richelieu, A., 2014. Strategic management of the brand in the world of sport. Journal of brand strategy, 2(4), pp.403-415.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
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