Strategic Management Reflective Essay

Document Type:Essay

Subject Area:English

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Additionally, I shall utilize the model to highlight how the knowledge on Qantas’s high rivalry with its competitors, its medium threats of new entry, its medium bargaining power of suppliers, and its low threat from substitute products can be used to shape Qantas Airline strategy currently and in the future. Porter’s Five Forces Model The model holds that five competitive forces namely the power of suppliers the power of customers, competition, new entrants and the threat of substitute products shape every industry and highlight the strengths and weaknesses of each industry. The bargaining power of buyers shapes industry by influencing the prices of products or services. When the buyers are a large number relative to the competitors that seek to serve them, then their buyer power is higher such that they can force prices down.

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Additionally, when the products are undifferentiated competitors can play rivals against each other because customers can easily switch their loyalties. This power is medium for Qantas based on the idea that there are many suppliers in the industry competing for business. On the other hand, there are high switching costs from one supplier to the next, because of technology and infrastructure investment thus suppliers may have power over Qantas Airlines. Threat from substitute products is low. This is because the price that customers are willing to spend on a product or service is dependent on the availability of substitute services and products (Grant et al. The Australian airline industry has two major airlines that are recognized, these are Quanta’s and Virgin, which are its own competitors.

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The five forces model is useful in situations where a company is performing well and the challenges it faces are not significant with respect to its external environment. The model presents an overview of the external environment and provides insights on how the company's performance is affected by this environment (Grant et al. The limitation of the model is the lack of insight into the internal performance of the organization. Based on the information provided by the model, Qantas Airlines can make significant decisions with regard to its strategy. Qantas should improve the services it offers in line with advanced technical capabilities to ensure it effectively covers competition from other airlines or new entrants. Collaborative strategy: an analysis of the changing world of international airline alliances.

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