1 Executive Summary…………………………………………………………………. 3
2 Introduction…………………………………………………………………………….. 6
3 Strategic Management and Strategic Competitiveness…………………. 8
4 Business-level strategy……………………………………………………………. 10
4.1 Current……………………………………………………………………………. 10
4.1.1 Qantas and Porter’s Five Forces…………………………………… 11
4.1.2 Current Geographical External Environment…………………. 14
4.2 Recommendations……………………………………………………………. 15
4.2.1 Recommended Geographical External Environment………. 15
5 Corporate-level Strategy – Diversification………………………………… 17
5.1 Current……………………………………………………………………………. 17
5.2 Recommendations……………………………………………………………. 20
6 Corporate-level Strategy – Mergers and Acquisitions…………………. 23
6.1 Current……………………………………………………………………………. 23
6.2 Recommendations……………………………………………………………. 25
7 Corporate-level Strategy – International…………………………………… 27
7.1 Current……………………………………………………………………………. 27
7.2 Recommendations……………………………………………………………. 29
8 Conclusion…………………………………………………………………………….. 32
This report examines Qantas’ strategic management and how these strategies increase Qantas’ ability to sustain competitive advantage and achieve above average returns. The Qantas group strategy is to deliver sustainable returns to shareholders with safety always being their first priority (Qantas Airways Ltd, 2015c).
At a competitive strategy and business level Qantas’ unique position as Australia’s largest and longest established airline has not been sufficient alone to sustain competitive advantage. With the pressures of the post Global Financial Crisis economy and increasing new entrant competition in its external environment Qantas has had to establish new competitive strategies including development of a cost lead airline JetStar alongside its value oriented premium service in Qantas. In addition the internal resource based environment as focused on rationalising core competences and developing an approach that resists the competitive forces of the market (Porter 1979) fending off the rivalry of existing competitors through price wars, reducing costs by engaging suppliers, building their loyalty program strength to combat threat of new entrants and develop clear differentiation that is difficult to imitate to ward off product substitutes. Business level recommendations include further stabilisation of relations with unions to contain personnel costs along with a focus on the continued distinction between its cost lead strategy and the value differentiation of premium services.
Corporate strategy has seen Qantas focus on the development of its 5 segment diversification with further development of secondary subsidiaries to smooth revenue and profit generation and limit risks and dependencies on any single business unit. This has been effective stable growth in profits generated by the Loyalty and Freight segments have successfully supported Qantas through recent challenging industry and economic conditions restoring returns to stakeholders. Corporate strategy recommendations include capacity and resource distribution to maximise profitability in the five business segments, evolution and alignment with corporate vision and core brand values to ensure realisation of strategic synergies and consideration of the vertical integration of a travel insurance business line leveraging Qantas’ 10.8 million market reach and travel buying cycle relationship with its customers. Caution is recommended in over diversification of areas such as Loyalty where Qantas may be at risk of crating unnecessary risk and complexity expanding outside its core competences.
As with most companies, Qantas has had limited success in its mergers and acquisitions, with the majority in the last ten years not achieving above average returns and creating greater stakeholder value. This includes expansions in their freight interests, extended travel booking services and even more diverse analytical consulting services in the Red Planet business. Failures can generally be attributed to poor due diligence, a lack of realisation of synergies and limited integration success. With the limited success Qantas must consider several divestments in order to return to core value creation for its stakeholders. There are growth opportunities in leveraging resources for the vertical expansion of air based freight services through acquisition along with international opportunities to grow through acquisition into developing regions such as Asia.
Qantas’ international strategy is supporting growth into new markets, in particular reducing barriers to entry in Asia in the form of foreign ownership limitations by leveraging partnership and alliances. These entities, while minority owned, form the basis of a home office lead global strategy building growth in the rapidly expanding Asian middle class market. To ensure this regionalisation is successful Qantas should consider a transitional strategy to increase local responsiveness and address the cultural and political complexities that will increase rapidly as they increase scale and market power in these regions.
Qantas Airways Ltd is the third oldest airline in the world and was established in 1920. The Qantas group has grown to comprise five major segments generating over $15.8 billion in revenue that include Qantas Domestic, Qantas International, Jetstar Group Qantas Loyalty and Qantas Freight. Their group strategy is to deliver sustainable returns to shareholders with safety always being their first priority (Qantas Airways Ltd, 2015c). The airline has had to adapt too many changes in the external environment following the global financial crisis (GFC) in 2008. These changes have had a very drastic impact on the company’s internal operational environment as will be explained. To address these changes Alan Joyce, Qantas CEO, focused the airline on core business competences to help them sustain their competitive advantage and restore returns to profitable levels.
Under the burden of large capital commitments having ordered 115 new aircraft in 2005 (Hanson 2010), Qantas rationalised many of its resources and capabilities outsourcing 7000 jobs overseas in an effort to reduce costs and offshoring engineering and maintenance work to third parties that have an excellent safety record that limited the risk of damaging Qantas’ reputation as the safest airline in the world. The rationalisation of operations and focus on core competences restored profitability as the broader industry began to recover and Qantas now operate profitably across the group after several years of losses in their three airline segments.
This report examines Qantas competitive, business-level, corporate-level and international strategies to establishing the theoretical strategic management foundations to Qantas current situation. The report provides recommendations based on Qantas current context identifying appropriate strategic management principles that can be applied to sustain competitive advantage and achieve above average returns.
The essence of strategic management is to establish a unique market position that addresses the five forces of competition (Porter, 1980) minimising threats and capitalising on opportunities. To do so companies need to scan the external environment and identifying signals to changes in the environment, monitor identified trends and generate projections. The application of the I/O model pursues above average returns through targeting an attractive industry and implementing a strategy that is determined by that industry.
In turn the company’s internal environment must be aligned to address external opportunities and threats. Applying a resource based model internal analysis examines what is valuable, rare, costly to imitate and non-substitutable (VRIN) (Barney, 1991) to make strategic decisions in respect to its resources, capabilities and focus on core competences in an effort to create sustainable competitive advantage. The company can then assess its value chain (Porter, 1985) and make decisions on what competences create the greatest value for its customers and its ultimately stakeholders. As resource can often be imitated or substituted over time however it is difficult to sustain competitive advantage based on resources alone thus the importance of strategy to address the external environment. This leads to decisions on mergers and acquisitions then need be made to take advantage of economies of scale and earn above average returns on its products and services. International strategies also can help the company like Qantas take advantage of locations nearer to high demand and high growth markets (Hitt, et al., 2015).
Qantas unique position in the market has not been adequate to sustain competitive advantage alone. Its well establish and valuable position in the market has attracted competitors who have sort to imitate and provide substitute products, that seek to emulate Qantas products and services and also undercut them through cost lead strategies. Following the Global Financial Crisis where Low Cost Carriers (LCC) addressed changes in the external environment of customer price sensitivity and Qantas was forced to respond through establishment of it’s JetStar Group creating its own LCC imitation. Qantas do have substantial resources that address the four VRIN criteria, the most significant of which is their intangible brand asset and associated loyalty being Australia’s long-standing national carrier. Qantas focus attention on core competence surrounding this resource and leverage its capacity to sustain competitive advantage.
Qantas must understand its strengths, weaknesses, opportunities and threats, as well as its resources and capabilities from its internal conditions where competitive advantage can be achieved (Nandakumar et al 2010). The below reviews Qantas’ ability and success at deploying its resources to achieve a sustainable competitive advantage over their competitors and earn above-average returns by integrating and coordinating a set of commitments and actions.
Firms have to develop their business level strategy based on how they will deploy their resources to compete in a specific industry or market section (Raphael 1986). This helps form the core strategy that the firm chooses to achieve its competitive advantage. Another important factor in the foundation of a successful business level strategy requires understanding the customer value proposition. To create customer value firms have to satisfy three aspects:
- What will be the proposition, in terms of product and service about customers’ needs and satisfaction
- To which customer segment will the product be served
- How will the firm use its core competencies to satisfy the costumers needs
Qantas use the NPS (Net Promoter Score) program to understand whether passengers will advocate for them. The feedback is passed on to frontline employees in order to improve service delivery and is used by the business to inform strategic decisions and to improve travel experiences.
To create competitive advantage, firms can evaluate different business-level strategies that can match with the course of action pursued by the company. The strategies are:
- Cost leadership: the production of the low per-unit cost from a product.
- Differentiation: the production of goods or services within an acceptable cost which produce unique products in the industry.
- Focus strategy: the production of goods and service that is determined to satisfy a specific customer segment.
Competitive advantage growth occurs when firms create value for its products that exceed the firm’s cost to creating it (Porter 1985). Value is what buyers are willing to pay, and superior value stems from offering lower prices than competitors, with equivalent benefits or providing unique benefits that more than offset a higher price. There are two basic types of competitive advantage: cost leadership and differentiation.
Qantas has achieved competitive advantage using the integrated cost leadership/ differentiation strategy. This is evident due to Qantas’ longevity and unique position (in global terms) in being able to cover a diverse (business and leisure) national market with a diversity of products and services that reflect different services levels. This strategy is driven by its route segmentation, where Qantas differentiate the service provided by the type of traffic to reduce operational cost. The results are the business outcomes of increasing revenue and (return to) profit, route growth and continued, sustained cost reduction (Whyte and Lohmann 2015).
Qantas addressed each of Porter’s Five Forces (Porter, 1979) it faced to achieve its dominant market position and deliver upon its business level strategy.
Rivalry within Existing Competitors
The high volume of competitors in the aviation industry produces a fierce competition between them, in which the rivalry is strong due to the crowded marketplace. Rivalry is manifested through price wars, regular and long discount cycles, regularly adding new products, large marketing campaigns and service improvement. Qantas has achieved a competitive advantage against competitors as they have developed and maintained a larger diverse market with a diverse range of unique products.
Bargaining Power of Buyers
Most buyers tend to be price sensitive and will shop around for better prices or better value (Porter 2008). The primary buyers in the aviation industry are middle class individuals or business professionals. They command significant buyer power because they are able to move freely between airlines. Buyers can easily hold a number of frequent flyer loyalty accounts, so this is no longer as effective in keeping buyers loyal to the product or service. Because of this, Qantas has its two major brands; Qantas (for product differentiation) and Jetstar (for best value). Qantas’ strategy has to be mindful as to not cannibalise its own market, leading to customer confusion and a loss in revenue opportunity in customers choosing to fly with the wrong brand.
Bargaining Power of Suppliers
Qantas is a highly recognized brand around the world which makes it a trusted company in the eyes of the suppliers. During the last year, Qantas worked with many of its suppliers to reduce operational cost and preserve their current margins. As many suppliers are dependant on Qantas, most begrudgingly complied. Where supplies hold key strategic assets (eg. jet fuel, airliner construction), airlines have little bargaining power over prices, however, the industry can negotiate contractual outcomes over a number of years. Most other airline industry suppliers are not critical and operate in a competitive environment where the industry players can switch suppliers with little effort and recourse. Unlike other competitors, Qantas relies heavily on unionised labour to run its operations. Unions have significant influence and power over Qantas as key resource suppliers.
Potential New Entrants
The barriers to entry in the aviation industry are high due to the need for large capital outlays to enter and compete in the market. There are many airlines in the market (ranging from large national carriers to small regional carriers), the industry operates on fairly low margins (due to constant price competition and price reporting), and experiences volatility with jet fuel. This makes the industry quite unattractive for new entrants to successfully enter and compete against existing operators. Furthermore, Qantas has developed a highly successful loyalty program, through brand development, which helps them preserve their customer base and complicates the task of new entrants even further.
Train and road travel are the main substitutes locally, however, with heavily reduced prices (where a domestic air ticket can cost less than the taxi ride to the airport), the airline industry will be able to demonstrate significant value (time saving, convenience, comfort) over road or rail based travel. Qantas’ integrated cost leadership/differentiation strategy helps to reduce the possibility of customers switching to substitutes.
Qantas needs to develop core competence in integrating horizontal acquisitions and building a business outside of Australia. External market trends show growth in Asia and Africa and Qantas needs to be closer to those markets in order to offer new customers its safety record core competence.
Air New Zealand and Qantas, have several times claimed that Emirates is dumping capacity in the trans-Tasman market, seeking only to cover its marginal costs and in the process driving down fares to levels unprofitable for competitors (Mullins 2014). Another problem in aeronautical relations with Australia involves the imbalance in benefits from the air service agreement, with the benefits heavily slanted in Emirate’s favour (Mullins 2014). Qantas has complained that the operations of sixth freedom carriers – SIA as well as Emirates – have been responsible for a sharp fall in its market share of international traffic to / from Australia. Emirates is seeking to double flights into Australia in the future which will threaten Qantas’ geographical advantage. The UAE maintains an open skies policy and so it could offer Qantas the opportunity to set up a hub in Dubai (Mullins 2014). But this might well be something of an empty gesture given that Qantas would still need fifth freedom rights to operate beyond Dubai. As a third / fourth freedom carrier Qantas also complains that Emirates simply diverts traffic, but more than 80 per cent of the passengers Emirates currently carries in and out of Australia are flying to / from cities not served by Qantas, for example Paris, Zurich, and Vienna ( Airline Business 2006). But because a third / fourth freedom carrier cannot match the sixth freedom carrier’s economies of route traffic density, it is bound to be at a competitive disadvantage, due to the geographical accident of its home country’s location (Mullins, 2014).
The argument of location and Emirates dumping capacity is a serious concern especially, even with the hub location and the brand image of Qantas safety record.
The analysis has identified the bargaining power of suppliers as a primary threat. Qantas’ main operational workforce is unionized; the job cuts to outsourcing and the continuous reductions of jobs has frightened the unions. This resulted in a significant strike in 2009, with more than 300 cancelled flights and the loss of brand reputation.
The recommendation is to create a much closer relation with the unions in order to reduce the possibility and impact of future strikes that can affect the profit and reputation of the company. The establishment of enterprise agreements that contain rising personnel costs are critical to maintaining profitability and competitiveness for the airline.
Qantas also need to continuously monitor and respond to potential market cannibalization. Passengers can easily take advantage of lower fares by using Jetstar with potential brand loss to Qantas (Whyte and Lohmann 2015). Qantas has experienced the reduction in sales of its flagship product as the result of the introduction of Jetstar as a low-cost alternative. This strategy affects sales volume and market share which could result in the erosion of value differentiation in their premium service Qantas products.
The recommendation is to perform a study on the feasibility of setting a horizontal integration into airline operations in Dubai taking advantage of the access to new customers and marketing the core competence of perfect safety record that cannot be easily copied. According to Handley (2012), “Mounting anecdotal evidence suggests that there are sizable resource (human and physical) related implications associated with many outsourcing initiatives. Surprisingly, relatively little empirical research has been conducted which addresses the capability issues that accompany the disposal of organizational resources by outsourcing firms”.
Virtually all preferential trade agreements (PTAs) are between geographically contiguous countries. Those that are not tend to be based on former imperial relationships, which have been diminishing in importance. Given the relationship between proximity and PTAs, there is little distinction between preferential trade and ‘regionalism’ (Ludema, 2002). This is a double edged sword for Qantas. It means that it will be very difficult for the airline to setup a trade agreement or merger with a powerful geographically positioned operator, but if one can be setup then that will open up new opportunities for strong relationships from their new and now preferential location in a location like Dubai.
The value of corporate strategy is largely determined by the degree to which the businesses under the company’s management are of greater value than if they were managed by a competitor or independently (Campbell et al 1995). Thus an effective corporate strategy generates aggregate returns across the portfolio than they would be without (Kenny, 2011), contributing to the companies competitive advantage and ability to generate above average returns (Porter, 1980).
In FY 2015 the Qantas Group generated $15,816 billion in total revenue (Qantas Airways Ltd, 2015a). This was generated across 5 main segments or business units as highlighted in figure 1.1. Qantas operate with low levels of diversification in a dominant business strategy (Hitt, Ireland, & Hoskisson, 2015) with 84% of revenue generated through its passenger airline business focusing on a core set of capabilities and competences to generate above average returns (Porter, 1987) in a single industry market.
Interestingly from a segment profit contribution perspective there is less dominance of the passenger airline business with Qantas Freight and Loyalty generating 35% of the company’s EBIT tipping their strategy into more moderate diversification with its related business units sharing product, technology and distribution linkages (Hitt et al., 2015).
|Segment||Revenue||% of total||EBIT||% of total|
Figure 1.1 FY15 segment contribution $ millions (Qantas Airways Ltd 2015a)
Analysing the segments reveals that revenue contributions (figure 1.2) have remained relatively stable over time, however profit levels (figure 1.3) of the passenger airlines are far more volatile. The profit from freight and loyalty show stable levels of increasing return providing support for the other segments (Matusik & Fitza, 2012) when they are challenged by internal and external influences creating sustained value and returns for the Qantas Group.
Figure 1.2 Annual revenues by segment (Qantas Airways Ltd 2015a)
Figure 1.3 Annual EBIT by segment (Qantas Airways Ltd 2015a)
In addition to the economies of scope and value created through Qantas’ diversified segments, they also achieve market power against price competition. Through successfully establishing services in both premium service and Low Cost Carrier (LCC) airlines they have mitigated risks of revenue loss, a value neutral benefit, and blocked competition through price competitiveness. Achieving this airline within airline strategy is a rare occurrence with only a limited number of successful cases globally, with the main success factors being customer segment alignment, clear differentiation, vertical integration and realised back end synergies (Gillen & Gados, 2008).
From a resources perspective, Qantas also derive value-neutral benefits through both their tangible and intangible resources. As an example in anticipating the effect of the low Australian dollar increasing international passenger travel, Qantas are redeploying aircraft from reductions in their domestic demand (Qantas Airways Ltd, 2015c) ensuring continued high returns on capital invested (Kaul, 2012). Qantas is also leveraging it’s strong, established brand credibility across many of its diversified businesses. One key example is the attraction of its Loyalty products to external companies not only for the audience reach but also for the reputational association with Qantas.
Qantas also operates several other diversified business lines including – Q Catering, QantasLink, Engineering and its in-flight magazine.
Qantas should continue to strengthen the advantages gained through their existing diversification strategy of the five major business segments. Multiple revenue and profit sources, especially from Loyalty and Freight, will continue to smooth the variable returns from the passenger airline segments addressing uncertainty in the external environment (Matusik & Fitza, 2012) of the aviation industry. Continued aircraft and operational capacity allocation across the airline segments will maximise the Qantas groups’ economies of scope and create value due to the synergies between these segments (Campbell et al., 1995).
As the Qantas Group grows it is critical that each business segment remains strongly aligned with the corporate vision and core brand values continuing to develop stakeholder value and strong return on investment for the entire group, not just profit for the segment (Kenny, 2011). Synergies must continue to be assessed and developed as each segment evolves to maximise value creation.
Opportunities have also been identified for further diversification into a vertically integrated travel insurance business. At present Qantas provide travel insurance options through third party insurers via their online booking service with Qantas receiving a small referral margin. Analysis should be undertaken into the viability of leveraging the Qantas brand and unique customer touch point in the travel buying cycle and its 10.8 million member reach to upsell its own Qantas Travel Insurance at full margin. The new products could be underwritten and supported by an experienced insurance partner to limit the risks of establishing an actual insurance business that is outside of Qantas core competences (Prahalad & Hamel, 1990) focusing on retail only. Careful consideration should be given to the negative effectives of over diversification in order not to divert attention from organic growth focus on existing segments (Kenny, 2011). However a moderately unrelated level of diversification often outperform highly related business units which is why travel insurance has been identified as a strategic fit with the appropriate due diligence.
Qantas Loyalty segment with its high profitability, stable revenue growth and 10.8 million customer reach should be developed thoughtfully. There are a growing number of subsidiary operations within the Loyalty segment adding an expanding secondary level of diversification that could lead to over-diversification and investment in highly unrelated businesses (Palich, Carini, & Seaman, 2000). One of the Loyalty subsidiaries that requires further examination is the Red Planet consumer analytics and consultancy business incorporating the acquisition of Taylor Fry. While immediate synergies can be identified in the monetisation of the loyalty database and consumer transaction history, the choice of taking this to market via an internal consulting agency is questionable. There is limited overlap in the resources, technical knowledge and operational capabilities (Campbell et al., 1995) of Red Planet and Qantas nor is their apparent value created by Qantas that produces greater returns than Taylor Fry had as an independent entity. A more appropriate model to consider would be to license the Qantas data asset to experienced third party consulting firms, increasing the scale of return through recurrent licensing income and enabling diverse value creation without the increased overheads and capability development.
Companies pursue mergers and acquisitions for a range of regions to increase the stakeholder value of the acquiring company. Reasons include growth, market expansion, eliminate competitive threats, operational synergies, or to diversify (Gaughan, 2010). However while the apparent benefits are obvious more acquisitions have reduced shareholder value than created it through lack of effective corporate strategy (Porter, 1987). A Price Waterhouse Coopers survey (2014) found that only 65% of acquisitions achieve their strategic goals and 49% achieve their financial goals with success through to an operational level only being achieved through “sustained commitment to integration (2014, p. 6).”
Qantas has incorporated mergers and acquisitions into its corporate strategy over the last twenty years that have seen it increase market power, diversification, vertical expansion, restructured its competitive scope and expand capabilities.
In 2008 Qantas embarked on a merger with JetSet Travelworld Limited to pursue vertical expansion in the travel services market. Qantas anticpated growth of $3 billion a year in revenue and $800 million in profit through the integration of Jetset’s capabilities with the Qantas Holidays business unit (Qantas Airways Ltd, 2008). The Jetset venture has failed to achieve these returns after numerous ownership restructures and further mergers to incorporate greater market power and reach, which saw Qantas controlling share reduce from 58 to 28 percent. The travel services group, now called Helloworld, continues to produce profit losses with declining revenue, having failed to capitalise on the benefits of vertical integration with Qantas and create additional value.
Qantas entered into a joint venture with Australia Post in 2003 acquiring Star Track and Australian air Express (Supply Chain Digital, 2012). It is an interesting example of the establishment of core competence in corporate strategy as the initial structure failed to create sufficient value for either stakeholder. In 2012, under the pressure of $25 million in group losses, Qantas sold its 50% share in Star Track to Australia Post and purchased 100% of Australian air Express. This focused Australia Post on their core capabilities in parcel delivery and in turn Qantas on air freight.
Red Planet was created in early 2014 as a subsidiary business to Qantas Loyalty analytical consulting services (Qantas Airways Ltd, 2015c). The aim of the new business unit is to leverage Qantas frequent flyer and transaction data, empowering consumer insight with a view to becoming a leading digital media, analytics and research service business. To increase capability and experience in this field, Qantas acquired Taylor Fry in February 2015 a company that generated revenue of $12 million in FY14 with its origins in insurance actuarial data analysis. The underlying logic of the acquisition and diversification is in leveraging Qantas’ 27 years of experience in analysing its loyalty data for internal purposes, with the CEO Martin Fry highlighting strong synergies between Qantas Loyalty and Taylor Fry (Qantas Airways Ltd, 2015b).
Ultimately these mergers and acquisitions have created very limited value for Qantas to date consuming capital investment and distracting strategic focus.
Qantas are faced with the challenging decision of several divestments with possible loss write-downs due to returns not exceeding capital invested. However due to a lack of understanding of the industries it was getting into, poor due diligence and failure to realise the identified synergies through effective integration (Kenny, 2011) these acquisitions have failed to create competitive advantage and generate above average returns (Porter, 1987) within the Qantas Group.
Based on the continued lack of returns after several restructures and waning investor confidence Qantas should divest 100% of its stake in Helloworld/Jetset unless it can establish a way to align the vertical synergies of the two businesses.
The Red Planet diversification and Taylor Fry acquisition should be reviewed with a critical eye. There are serious questions here on the over diversification of the strategy, the highly unrelated nature of the line of business and the legitimate overlap in complementary capabilities. The capabilities of a professional consulting firm are vastly different in structure, resource and competences and it is difficult to establish how this can be adequately overcome to provide material value creation.
In the freight business segment, Qantas should look to strengthen synergies in aircraft resources and logistics while pursuing further growth and market power through horizontal acquisition of compatible airline freight businesses. The economies of scope and costs efficiencies in further acquisitions are likely to see profitability grow substantially along with growing revenue streams. Potential acquisition targets could include international targets to take advantage of aircraft capacity distribution overseas. Thorough assessment of acquisition targets should be undertaken identifying quantifiable synergies (Jeffery S. Perry & Thomas J. Herd, 2004).
Finally the JetStar Group should consider a merger or acquisition to support its international strategy of expansion into the Asian regional airline markets (Frazer, 2015). Difficulties in competitive barriers to entry including government regulation, airport slots and speed of expansion could all potentially be addressed through an appropriate M&A strategy. Expansion into the Asian market is also likely to mitigate some of the fluctuations in its dominant passenger airline income stream with varying regional cycles and fluctuations in international markets offsetting local cycles.
Continuing with the analysis report in the case of Qantas in the global airline industry. Now we are going to focus on the corporate level international strategy used by the company to venture the sale of goods and service out of the domestic market. We are going to understand the benefits that drive Qantas to decides to establish an operation out of their border areas, and the trend and risk that Qantas evaluated to choose the correct corporate-level strategy.
Qantas started its expansion into the Asia market after a liberalisation move that gave to the company the opportunity to create a partnership between different investors. Establishing a majority shareholding in Jetstar Asia with base in Singapore, and gain competition in a market with many start-up airlines (Whyte, R, Lohmann, G, 2015, p143).
The benefits of expanding into the Asian market driven by the entry of market conditions where the demographic and market characteristics of the region have created competitive opportunities. The Asian regional market represents a substantial population size with demographic of a large middle-class, increasing leisure activities and the absence of competitive transportation helps the continuous growth of the industry (Lawton, T, 2005). At the same time, the market conditions in Asia are creating opportunity with the liberalisation of the bilateral services agreement improving the competitive conditions between airlines (Fu, X., Oum, T.H. & Zhang, A. 2010 encouraging airlines to compete and create operational efficiencies at the same time.
This makes entry into the Asian market highly attractive for Qantas creating the opportunity for increased market share, revenue growth, and higher return profit margins due to increased economy of scale and lower salary costs in the Asian region.
Qantas operates a global strategy where the home office takes decisions to allocate domestic products in the international market. Reflecting a price lead competitive strategy to develop rapid growth in the region, Jetstar’s CFO stated that the product approach was as simple as “destination, price and offer to stimulate demand (Whyte, R, Lohmann, G, 2015, p 145).” To establish market entry into Asia Qantas has leveraged its alliance partnerships, but should also examine opportunities for acquisitions or mergers to increase above average returns.
The Alliance entry mode is a strategy where two or more companies work together to deliver the same product. Peter Drucker (1996) stated “The greatest change in corporate culture, and the way business is being conducted, may be the accelerating growth of relationships based not on ownership, but on partnership” (Elmuti, D. & Kathawala, Y. 2001, p 205). Qantas international business created an important alliance with Emirate Airline to provide a major numbers of destinations in Europe, moving its hub to Dubai. This alliance will provide reciprocal service to many destinations, creating a benefits-sharing model. Qantas also has many other alliances where they codeshare seats. This strategy allows Qantas to enter many different markets with a limited invested capital (Dean Elmuti Yunus Kathawala, 2001).
Qantas have developed international partnership with companies in Asia to overcome foreign ownership limitations which create barriers of entry for Qnatas just as Qantas is protected in Australia from majority foreign ownership. Partnerships include – Japan Airlines and Mitsubishi Century and Tokyo Leasing Corp, where Qantas owns the 33% of Jetstar Japan, JetStar Asia where Qantas owns 49% with Westbrook Investment who own 51% and 30% share in Jetstar Vietnam with Pacific Airlines who own the 70% (Whyte, R, Lohmann, G, 2015, 144).
Qantas have also expanded focus on international long-haul development acquiring up to 110 AirBus A320 aircraft to support growth over the next 10 to 15 years (Qantas Airways Ltd, 2011a). This strategy seeks to capitalise on the opportunity created through a growing international market and attraction to travel to Australia due to the favourable foreign exchange rates. Qantas are further supporting this expansion through increased partnership commitments with its One World Alliance having invested $400 million in upgrading its international lounges for use by both Qantas and One World members (Qantas Airways Ltd, 2011b).
This international strategy and expansion into Asia supports the diversification strategy from Qantas. The expansion of the Jetstar into the Asian market brings a unique and differentiated product to the local market based on technology, marketing, or specialised management focused specifically on this new market (Montgomery, C & Singh, H 1984). The establishment of market power through aggressive growth in the region and leverage of existing knowledge assets will create competitive advantage.
Qantas should continue to strengthen its global strategy developing regional business unit strategies from its home office as this has successfully created advantages and growth to date. However Qantas should also consider adopting a transitional strategy as they expand their international strategy to developing countries. The opportunity for regionalisation to target a rapidly growing middle class in regions such as India and China, who have a strong propensity to travel internationally, is likely to require increased local responsiveness to pursue profitable growth in those markets (Lyles, Saxton, & Watson, 2004). Qantas should leverage its strategic strengths to enter these markets leveraging experience and knowledge (Si & Bruton, 1999)in strategic alliances and partnerships which will overcome foreign ownership barriers and limit political and economic risks (Hitt, Ahlstrom, Dacin, Levitas, & Svobodina, 2004). Qantas should also examine opportunities for suitable horizontal acquisitions in target regions along with the establishment of wholly owned subsidiaries where foreign ownership restrictions are not a barrier. In managing this regional expansion Qantas will need to thoughtfully develop its management structures to support successful integration of different cultural and institutional practices and align them constructively with the central vision and direction of the company. Qantas must also consider the scale of their international strategy to avoid negative consequences of over expansion and complexity.
As Qantas expands its long haul international operations, Qantas should implement more fuel efficient aircraft by changing their fleet for the new generation of B787 to create cost efficiencies. The cost of the fuel in the total expenditure amount of the company is equivalent to more than 25% of the total cost for Qantas. The company has reduced in $500 million the cost of fuel during 2015 FY, due to the cost of fuel which has decreased in comparison to 2014 FY (Qantas Airways Ltd, 2015b). Qantas should review its network and schedules to re-assign aircraft according to performance maximization. Under this consideration, Qantas could reduce the economic risk that it could be generated by the uncertainty of fuel price in the future.
Qantas has to increase their product value in foreign markets where high competitors and recognized airlines operate, to create advantage competitiveness. In the international business, the competitiveness between airlines is high. The number of new entry airlines and star up companies related to the opening of the Asia market created a high volume of airlines that operate in a high competitive market. The high-cost base in routes where the high range of possibilities exists due to the high volume of supply in a high-demand market.
Qantas have successfully operated their business in its developing forms for almost 100 years. Driving their continued success will depend on their strategic management ability to sustain competitive advantage and achieve above average returns through competitive business level strategy and corporate strategy including diversification, mergers and acquisitions and international strategy.
Globalisation and the competitive landscape will continue to create competitive and environmental forces, both external and internal that will require Qantas to establish strategies that determine its place and focus in the industry it competes in as well as addressing changing factors in the political, social, economic and technological environment. Resource based strategy is also critical to Qantas business strategy ensuring that they create differentiation and value from the internal environment to generate above average returns. These strategies must in turn be cohesively linked with the overall vision and mission of the company to generate sustainable competitive advantage and ongoing returns for stakeholders.
Qantas relationship with its customers is critical to its business strategy and they must continue to find new ways of satisfying their existing customer needs while anticipating and capturing emerging customer requirements in response to industry, environmental and competitive changes. Qantas must continue to build differentiation between them and their competitors establishing whether it does things differently or does different things to differentiate. Qantas has successfully run a dual business level strategy, a rarity in the airline industry, in developing a cost lead airline business within a value lead differentiation business.
Qantas corporate strategy value is determined by the degree to which the businesses under the company’s management are of greater value than if they were managed by a competitor or independently. The effective establishment of the five diversified business segments has generated aggregate returns across the portfolio that are greater than those they would generate if the businesses were independent. This has contributed to the company’s competitive advantage and ability to generate above average returns. The continued development of business units that leverage synergies across core competences of the Qantas group will ensure continued profitability and value creation. Qantas must be careful however of over diversification given their low to moderate level strategy. Expansion into businesses that our outside its capabilities should be avoided, combining instead a strategic partnerships to integrate third party skill sets complements a range of vertical and horizontal mergers and acquisitions. Mergers and acquisitions to be targeted should provide Qantas with advantages that include increased market power, reducing entry barriers, cost of development, competitive scope and development of new capabilities that complement existing.
Internationally Qantas have identified significant opportunities for horizontal, regionalised expansion into new geographic markets. Qantas must consider revision of their globalised strategy into a transitional strategy that addresses local responsiveness and efficiency. Given the barriers to entry in foreign ownership in many of these countries it is important Qantas establish deliberate strategies such as partnership alliances to overcome these limitations to growth. Qantas must also provide the appropriate management focus and specialisation to this international expansion ensuring that cultural and regional complexities are managed effectively.
The cohesive linkage of all of these strategic elements is critical to the success of Qantas strategic management approach. Ensuring they apply competent leadership to integrate the strategies with operations with the overall strategic mission and vision will ensure sustained competitive advantage and achievement of above average returns for stakeholders.
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According to Qantas investor day (2015) airlines group is made up of Qantas, Jestar and the Qantas loyalty program. Their group strategy is to deliver sustainable returns to shareholders with safety always being their first priority. The airline has had many adapt to changes in the external environment due to the global financial crisis (GFC) in 2008. These changes have had a very drastic impact on the company’s internal environment as will be explained. The airline was in merger talks with British Airways during the same year to benefit from the economies of scale by buying more aircraft together and merging IT and frequent flier programs. According to Hanson (2010) new CE, 28 November 2008, Alan Joyce stopped the merger talks and focused the airline on core business competences to help them get through the GFC.
According to Hanson (2010) Qantas decided to order 115 new aircraft in 2005 and the CEO, Geoff Dixon announced they would also be outsourcing 7000 jobs overseas in an effort to reduce costs. The mainetence work, which is one of Qantas’ core competenece, would be given to Luftansa which also has an excellent safety record. Alan Joyce change to focus Qantas on its core competence and according to (Creedy, 2014) Qantas brought the maintainance work back to Brisbane for the majority of their fleet but they plan on offshoring the maintainance to Singapore, Germany, Hong Kong, the US and Britain. These decisions are to reduce costs and to therefore be competitive in a very competitive industry but you they have much bigger competitors like Emirates that they can’t compete with in terms of scale so Qantas needs to look at the external environment and focus on core competences is can beat it’s by adding more value that customer are willing to pay and a differentiation that cannot be easily copied.
External Environment- Geography
External environmental factors like geographic location have a large impact on future revenue. According to Hanson (2010) Asia and Africa has the largest projected growth by 2050 and “… it isn’t unusual for students to travel to five or more countries on holiday before they obtain well paid work” (Hanson, 2010). Qantas can market its superior maintenance record if it can establish a base close to growth. Hitt, et al. (2015) explains how Qantas had started off with routes to and from Australia and it is the incumbent in the local Australian market. As long as the Australian population chooses Qantas then it should stay in business because of its location and importance to the local market. Qantas is 55% Australian owned, 25% owned by British Airways. Ansett has gone out of business in and Virgin Blue entered the local market as a well branded low cost competitor. Qantas in response launched a low cost airline called Jetstar utilizing its low cost value chain and internet bookings with lower payed pilots and cabin staff.
External market trends show growth in Asia and Africa and Qantas needs to be closer to those markets to offer new customers its safety record core competence. Qantas although needs to develop core competence in integrating horizontal acquisitions and building a business outside of Australia.
“Air New Zealand and Qantas, have several times claimed that Emirates is, through these tail-end charlies, dumping capacity in the trans-Tasman market, seeking only to cover its marginal costs and in the process driving down fares to levels unprofitable for competitors. Another problem in aeronautical relations with Australia centres over the imbalance in benefits from the air service agreement, with the benefits so heavily slanted in favour of Emirates. Qantas has complained that the operations of sixth freedom carriers – SIAas well as Emirates – have been responsible for a sharp fall in its market share of international traffic to / from Australia. And in the future, with Emirates seeking to double flights into Australia, Qantas is going to feel its geographical disadvantage even more… The UAE maintains an open skies policy and so it could offer Qantas the opportunity to set up a hub in Dubai. But this might well be something of an empty gesture (as it was regarding Singapore) given that Qantas would still need fifth freedom rights to operate beyond Dubai. As a third / fourth freedom carrier Qantas also complains that Emirates simply diverts traffic, but more than 80 per cent of the passengers Emirates currently carries in and out of Australia are flying to / from cities not served by Qantas, for example Paris, Zurich, and Vienna ( Airline Business , 2006). But because a third / fourth freedom carrier cannot match the sixth freedom carrier’s economies of route traffic density, it is bound to be at a competitive disadvantage, due to the geographical accident of its home country’s location.” (Mullins, 2014)
The argument of location and Emirates dumping capacity is a serious concern especially, even with the hub location and the brand image of Qantas safety record it. The recommendation is to perform a study on the feasibility of setting up a hub of operations in Dubai taking advantage of the access to new customers and marketing the core competence of perfect safety record that cannot be easily copied.
External Environment- Technology
Drucker (2006) explains that marketing and innovation are the only departments that make money for a company. Technology in the current external environment with regards to airlines is an area that Qantas can innovate and market. A simple step to improve the customer experience is to improve the customers access to the internet in Qantas lounges. Including charging ports for everyone and having extremely fast free internet for only Qantas customers while waiting and if possible while on the aircraft will differentiate Qantas from the current competition. Qantas could also use their current website and include live video feeds off many great places for all the locations they fly. Qantas would likely need to outsource the setup of these technology and user experience innovations and therefore it would not likely impact the internal environment. This would however add to the Qantas brand of innovative great user experiences and the airline should continue to focus on developing it’s competence in user experience research. A budget and even a merger with streaming providers or telephone network opeators Qantas customers can benefit from new technology like streaming via 5G network expected in 2020. This will make it possible for customers to have an augmented or virtual reality live video stream of location around the world. Essentially traveling anywhere around the world without moving out of their homes. This is a possible disruptive technology innovation Qantas can position its brand globally before competition. People will always need to travel physically but setting up the infrastructure and brand to for people to all meet through Qantas virtual network will allow everyone with an internet connection to travel every day anywhere in the world for very low costs to consumers, maybe subsidized by advertising.
Qantas has a tangible assets like the aircraft and staff but it has one intangible asset that cannot be copied, its long history in combination with a perfect safety record. The airline operates in a very competitive external environment and beat its competition it needs a product of moving customers through the air with superior attributes for which the customer is willing to pay. Value chain activities can be outsourced to reduce costs and by increasing the airlines size it can achieve economies of scale to compete. Qantas need to identify its sustainable advantages that are valuable and costly to imitate or cannot be substituted. Airlines can be located anywhere with the right political and legal support it means airlines can copy successful business models. According to Qantas Investor Day (2015) low cost airfares using Jetstar is one of the Qantas groups’ long term objectives and this is a common model around the world. Maintenance with high competence and standards set by Qantas and Australia can also be outsourced to reduce cost but it is a risk to the airlines only competitive advantage and having that competence in another country is an unknown variable and a threat to its competitive advantage and reason to charge a premium. All remaining value chain activities like IT, follow up services and supply chain management can be outsourced to reduce cost. Marketing and sales value chain should also be kept as a core competence as part of understanding and innovating with regards to the customer experience and technology external environment. All support functions like finance, human resources and management information systems can be outsourced because they do not add value to the customer experience. Marking and innovation also grows the airlines brand and intangible value.
In conclusion I agree with the current CEO Alan Joyce’s strategy to focus Qantas on its core competence. The environment is very competitive but Qantas has some unique differentiating attribute over all its competition, which is its safety record. Keeping maintenance in Australia where the variables are known is critical to the airlines future safety record success. Qantas should therefore focus on its core competence of maintenance. Qantas needs to develop better merger and acquisition core competence to take advantage of economies of scale and expanding its operations to Dubai. There are also opportunities to improve the customer experience through the use of technology innovations and that should be performed but the in house marketing team core competence. All other activities should be assessed for outsourcing if long term sustainable benefits can be found for customers or shareholders. All actions should take into account long term impact on the company’s triple bottom line and choose actions that benefit its economics, environment and people.
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What is Marketing – Sharing my MBA post
Peter Drucker summaries what a business is and captures the essences of how marketing fits in the picture perfectly.
“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” (Drucker)
From this we can see from all the discussion about “commodity hell” the only way to differentiate yourself is to focus on marketing and innovation. Philip Kotler also in a videohttps://lms.latrobe.edu.au/mod/book/view.php… explains that customer is boss and the job of marketing is to create, communicate and deliver value to a target market T and a profit P and the only think you can’t copy is a company’s culture. Employees are the most important and you need to think business and see the big picture.
Simon Sinek illustrates http://www.ted.com/…/simon_sinek_how_great_leaders_inspire_…
What how why. And the how was asked me recently for an innovation in terms of the USP (unique selling point) but the head of media in XXXX did not ask why! They are stuck at the how and do not thinking about the customer.
Marketing is 4P’s Promotion, Product, Place, Price.
Market is the buyers and sellers but today where is ambiguous, there are less geographic borders and therefore more niches. Twitch.tv shows how advertising can be finely tuned to the gaming niche where people can watch, discover, interact and subscribe to celebrities in their favourite game(s).
What is a product:
Real or Financial Property
Experiences and Events
To effectively meet the needs of their customers and fulfill organizational objectives, marketers must be astute in creating products and combining them in ways that make them unique from other product offerings.
500, combine people (drivers), a place (Daytona), an event (the race), organizations (sponsors), and goods (souvenirs) to create a memorable and unique experience for special events, like the Daytona race fans.
Good insight Milan Pintar!
We still do follow Peter Drucker’s view about marketing and innovation. However, researchers have simplified the idea and broaden the scope of marketing. Now, regarding the definition of modern marketing we simply say: delivering ‘Value’ to our customers. All marketing functions/marketing strategies (4Ps) are used to deliver the desired value. Before the aim of marketing was to make selling superfluous. And this was done by knowing and understanding the customer needs very well. But now we consider how we can make a relationship with them so that we can retain the customers to increase their satisfaction, convert this to loyalty and ultimately maximize the share of heart.
I like to share the YouTube link with you where you will see how Harvey Norman is delivering value to its customers and creating a positive relationship.
In ‘Shop with Confidence’ TVC, you will see the customers’ feedback and experience, why they like to do shop there. Truly all the word associations/expressions are considered ‘Value’ as I mentioned earlier. In short, they are doing great and successful Marketing!
Dr. Tanvir Ahmed
Lecturer of Marketing, La Trobe Business School
College of Arts, Social Science and Commerce
La Trobe University
Melbourne Victoria. 3086
So they are selling the experience “I love to shop” … and the value that they are adding is the shopping with confidence.
For Harvey Norman it seems like as long as customers in the picture feels like that are getting “value” instead of being somewhere else or shopping online then business should grow. This advertisement really seems to add unique value of location over online options and unless there is a new innovation to improve the online experience then they should have a market. I think they do have that threat from sites like amazon.
I would improve their campaign: I like to shop with confidence and take it home today!
… but I guess there is a problem that maybe they can’t hold to the promise of taking it home today. They can always guarantee shopping with confidence.
Excellent overview Milan!
Like Daytona, the cost of Super Bowl adds probably gives a good insight into the value of what good marketing can bring to a business…
Frederick Taylor seemed to be on right track with his scientific management to solve natural and systematic soldering but then things fell apart. The part that I believe is correct is to look at finding ways to make the team more motivated, he observed that people in debt worked harder so he should have then tried to offer employees good debts. Bringing into the organisation advisors and financial services for staff to help them buy a home or investment property would be a better motivator. Incentivizing staff by offering them title promotions without major pay rises to only target ego’s would help motive them to work harder as long as the promotions are based on measure of staff productivity. For large pay rises they should be only associated with bringing in large sales or driving down costs and they should of course be associated with a larger title.
Taylorism definitely exists today in operations jobs like telco network operations centres (NOC’s). I did shift work for 3 years in Sydney at a NOC like this. Shift work is very focused on process. Natural soldering occurs because of the pressure to constantly be capturing and ticketing faults while sitting for twelve hours looking at monitors, the more ticket you close the more that is expected. Systematic soldering helped with controlling expectations. The processes are now industrialized and are a commodity that can be done cheaper overseas, the culture of innovation was suppressed having simple processes is not expected while in reality an innovative better motivated team can do a lot more with less. One positive out of Taylorism is repetition bread perfection and people working in repetitive processes can learn develop some strong foundations in understand the job.
Foyal’s principles that managers are more important then the workers, this is flawed. A manager is not always more important then the technical expert. This is all to do with timing, the founder is usually the technical expert and therefore has the right balance of expert and manager usually. To be a great manager you need to know the business in small to medium companies, in large companies then the manager needs to focus on coordination or work and developing competence of her/his team. Centralization and chain of authority is valid but that chains goal should be predict the correct competence to develop in the team and make sure they have work in the future.
La Trobe Business School
La Trobe University
10 April 2015
The reason for this essay is to prepare a Personal Leadership Action Plan that helps build a foundation for future leadership objectives and identifies realistic goal, actions and timelines. The plan will included an overview of my career and then future career aspirations to provide an insight into the current state of my leadership journey. I will identify personal and professional strengths and weaknesses identified by various diagnostic tools and questionnaires. A basic action plan a the conclusion of this document will highlight my future direction.
At the age of 21 I was in my final year or university and had been accepted into Ericsson’s graduate program for the following year. My first role I was made a sub project manager but three months of exhibiting the values of professionalism, respect and perseverance I was promoted to total project manager reporting directly to the board of directors. This is where I learnt the importance of lobbying and performing root cause analysis. After two years in this position I was given the opportunity to get back into technical work and to travel. I believed this would be the best career move because I would gain a much deeper understanding of Ericsson’s core business. It was after I had moved back into the technical area that I telecommunications we privatised and the .com crash occurred. For the next seven years I moved to Sydney where I worked on the front line with Ericsson’s only client, essentially helping keep Ericsson’s in business. I performed shift work in a network operations centre with a handful of other Ericsson engineers but under this pressure I learnt to be humble, organised and independent. I learnt how to understand client expectations and dealing directly with their customers.
It was at the end of the seven year stint in Sydney that I decided to start my own online travel business. I paid developers over the next eight years to build a customer friendly travel website. I also setup a business model and training program for partners. I coached a team about 10 people on how to engage new clients. I also went out to hotels and proved the business model works with 100% signup rate for hotels. The lesson learnt while building this company is it is easy to get clients involved but it is very difficult to get customers, the website needed to solve a customer problem by at least being easier to use or having content that helped them make a decision. The root cause of closing the company is because I was traveling with Ericsson and I could not spend any time with the developers to help this design and test a website focused on customer experience. It is very important when building a company that you work closely with developers to keep the product vision on track. You can see how Steve Jobs starting a new company with his own money, he called it NeXT, and how he had the correct customer focus and great teamwork allowing each member to use their strengths. (EverySteveJobsVideo, 2014) You can see in the team that as the founder he took the role as the “Plant: Creative, imaginative, unorthodox. Solves difficult problems”, (Belbin, 2012). The rest of the team filled in the remaining eight team roles outlined by Belbin. My company had the same team role dynamics but we lacked engagement and proper follow up with the website developers relying too heavily on trust.
Continuing to refocus on my career in Ericsson I was moving out of technical expert roles and back into leadership positions based on my both technical expertise and understand our clients when working in network operations in Sydney. The last five years I have been involved in very high profile projects in the capacity of team leader. I have also been involved in changing Ericsson’s strategy for global delivery or their core products. Because the culture of the company is solidly founded on professionalism, respect and perseverance in most cases the teams I have been assigned have performed their jobs but in every case I have had to keep the team focused on the overall goal and at times on the expectation for that day.
It is important to always keep in mind during my career that “Vision must be based on your customers… Steve Jobs, even in the earliest days, understood that every powerful business vision has to focus on the customer experience, not just lowest cost or most impressive technology or other isolated competitive advantages.” (Elliot, 2012)
I have a very strong interest in developing new business opportunities. I believe it is very easy to foresee future customer expectations and build a product that meets their needs. I have been working on a business opportunity IPTV for Ericsson for the last four years and only now is the opportunity being regularly reported on the news. In the next five years I aspire to continue to communicate this business opportunity. In the next ten years I plan on building a business case and promoting the opportunities of virtual reality (VR) when the goggle and taptic suit technology becomes available. (Cline, 2011) To help me improve my public speaking skills specifically my introduction and conclusion, I will join Toastmasters technospeakers in Doclands, Melbourne. (Anon, 2015)
To help me develop the skills and tools to move forward in my career I am doing and MBA. In the MBA I have identified the traits of leadership style in Goleman (2000); Coerciveness, authoritative, affliative, democratic, pacesetting and coaching. I noticed these styles indicate the behaviour you need to exhibit during the team building period but need to be employed flexibly whenever needed. This also works very closely with Belbin’s (2012) model of nine team roles.
For each of the 16 leadership competencies (Zenger, Folkman, & Edinger, 2011) have identified a range of competency companions, personal capabilities which if consciously developed, will strengthen the core skill. I have a good fit with Ericsson at the moment, I found in my leadership effectiveness assessment regarding competence, passion and company needs is innovation and this is a large focus for Ericsson current vision. (Ericsson)
The Johari window reflective self awareness tool I found I have a high willingness to disclose and I also solicit feedback. In my experience totally honestly is always appreciated as long as it is constructive and genuine.
My Career Oriented Inventory survey shows that I have a entrepreneurial anchor with managerial anchor. I would also add that I am heavily evidence based and I try to minimise risk by working with others with diverse backgrounds to get their insights, I then change my mind as needed based on new evidence.
Ericsson has a tool called ITM which we input and review with our manager twice a year, this includes looking at feedback like 360 degree surveys.
I need to keep reading and using citations as evidence to convince people around me. Although Ericsson has an excellent culture that was successful during it’s monopoly period it still needs to prove itself during the Oilopoly. I believe it will need to change it’s culture and focus a lot more on teams, presentation skills and with change the culture to have all management focused on their listening skill. I hope to show management the value of Belbins Team roles at work, diversity in backgrounds and fostering new business opportunities.
My long term plan is to create and run profitable customer focused company driving innovation and coaching my team to success. This goal can be achieve in Ericsson or anywhere. I have also thought to start my own company again. Work life balance is also very important and will be important for me to balance family and work. Financial security will also be an important and hopefully positive side effect of all the other actions I plan on taking.
|Goals||Action||Completion Date||Measure of Success|
|Improve academic qualifications||Complete MBA||Mid 2016||Receive a certificate of completion for MBA course|
|Improve public speaking||Engage in more public speaking and team development initiatives.||End 2015||Conduct two speeches|
|Involved in stratigic planning||Request projects with strategic planning is involved||End 2015||Complete next strategic assignment in Croatia or Thailand and complete presentations for Mexico focused on a vision and strategy going forward|
|Review EI using 360 degree surveys||Send out surveys regularly for feedback||ongoing||Send out after each assignment, at least three times a year|
|Improve work life balance||Improve delegation skills and learn to say no||mid 2015||Try to delegate more and not over work|
|Practice MBA knowledge||Write essays and submit to journals||ongoing||weekly update my e-portfolio, CV and linkedin|
|Work life balance||Travel less||mid 2016||Stable family life without needing to travel more then 2 weeks|
Anon. (2015). Technospeakers Toastmasters Club. Retrieved from http://technospeakers.toastmastersclubs.org/
Belbin, R. M. (2012). Team Roles at Work. Retrieved April 9, 2015, from http://latrobe.eblib.com.au/patron/FullRecord.aspx?p=535053
Cline, E. (2011). Ready Player One. Great Britain: Century .
Elliot, J. (2012). Leading Apple with Steve Jobs. New Jersey; Canada : John Wiley & Sons, Inc.
Ericsson. (n.d.). Visionary ideas. Retrieved from http://www.ericsson.com/thinkingahead/visionary-ideas
EverySteveJobsVideo. (2014, January 1). youtube. Retrieved April 03, 2015, from https://www.youtube.com/watch?v=BNeXlJW70KQ
Goleman, D. (2000). LEADERSHIP THAT GETS RESULTS. Harvard Business Review.
Zenger, J. H., Folkman, J. R., & Edinger, S. K. (2011, Oct). Making Yourself Indispensable. Harvard Business Review Vol. 89 Issue 10, pp. p84-92.