Global Business Management

Global Business Management


The report focuses on the managing the organisation across the borders that is it deals with the way organisations implement strategies for conducting their business especially when they are trying to get an establishment on the international ground. This report therefore utilises various models and theories which will discuss the way that a successful organisation has implemented for gaining the establishment on the international ground. The organisation selected for this report is Qantas which is ASX listed organisation.

Porter’s Diamond: Determinants of National Competitive Advantage

Firm Strategy, Structure and Rivalry: These factors play an important role in determining the rivalry among existing businesses with increased production and technological innovations. The ability of the companies to enter foreign markets, degree of competitions and concentration power of market are essential in this segment. Qantas Airways focuses their business strategy on operations, finances and performance (Qantas Airways 2019). The company aims to reach the coveted ASX 100 position and compete with global airline peers in the industry. The operational strategy facilitates the gaol by measuring the return on investment within a segment-level of the business(Qantas Airways 2019). The company measures the annual growth rate for the increment in the customer loyalty program. The company also transforms their gross annual income for the business development. The measurement is done with the Net Promoter Score and the innovation across products and services. Qantas Airways just like other multinational organisation has a divisional system, which facilitates the operations functions.

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Domestic Demand Conditions: These factors indicate the consumer base for the products that improves the product improvement and innovation requirements. The demand of differentiation within the business, innovations and the increased scale in business is important in business expansion (Qantas Airways 2019). Qantas Airways is the the second oldest air transport service in the world making it the business with the maximum amount of experience in the respective industry. The domestic services of Qantas Airways hold the largest market share with its premium full-service facilities. The company transports 22 million passengers annually until 2018 with 4,300 flights flying in and out domestically. All the capital cities, metropolitan cities and regional hubs within Australia are interconnected with Qantas Airways.

Related and supporting industries: The stabilization of a business to support the upstream and downstream innovation. The degree of transparency and knowledge transfer is possible with the support of the industries. The core business of Qantas Airways is supported with other businesses through a number of subsidiaries like QantasLink and Jetstar, holiday as well as travel operations businesses (Qantas Airways 2019). The customer loyalty programme of Qantas Airways is a separate entity known as Qantas Loyalty. This programme allows the company to engage their customers in a wide range of services like travel, finances, retail, healthy and wellbeing of the stakeholders. This entity also acts as a data analytics business that provides corporate insight for the company. Similarly, Qantas freight is another independent business of the Qantas Group where the air freight services ship more than 4000 cargo to 500 destinations. 

Country Factor Endowments: the economic condition of the country can provide support for the business organisation. The supply of resources materials for the business and the availability of skilled labour help in establishing the business are obtained from the endowments of the country (Qantas Airways 2019). The infrastructure, capitals and the technological innovations are improved with this factor. The economic factor of the country influences of the performances of the Qantas Airways. The decline in the country’s economy will influence the business of the organisation.

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A Comprehensive Model of Entrepreneurship

Industry-based considerations: It is essential that the inter-firm rivalry be considered for the establishment of the business. The high barrier in the entry strategy within the industry is beneficial for the larger organisation to establish monopoly in the market. The business organisations need to think about the reduction of the bargaining power of the buyers as well as suppliers to flourish their business. The threats related to the substitute products also need to be curbed.

Bargaining power of Buyers: there is higher power of the buyers in terms of bargaining the consignments. The availability of the different premium travel organisations (Homsombat et al. 2014). The low-cost air travel services also make it easier to control the industry for the buyers.

Bargaining power of Suppliers: the suppler power in the airlines industry with respect to the bargaining is low (Gregson et al. 2015). This is due to the availability of many suppliers in domestic as well as international regions providing similar raw materials.

Threat of Substitute: The substitute services hold low threat for the airlines services as it is the fastest transportation services available currently. In case of both domestic and international travelling the air, transportation services are widely preferred. Therefore, Qantas Airways were able to capitalise on that since the dawn of their establishment.

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Rivalry within industry: Rivalry within any industry is important barrier in business expansion. In case of the Qantas Airways the competition with Virgin Airlines is growing bigger each day (Lucarelli 2015). In both domestic and international competition, the airline company would suffer loss (Homsombat et al. 2014). The increment in the competition would be reflected in the lowering of the customers and sales for Qantas Airways.

New entrant threat: The high capital investment in the air transportation industry has made it difficult for newer business to establish. The nature of the infrastructures and necessary financial support needed is not possible for smaller business firms to enter the market.

Resource-based considerations: Maximisation of the shareholder value is essential in the significant supplier relationships within the resource gathering for Qantas Airways. The organisation maintains strict discipline in the procurement of the raw materials through an ethical and reliable supply chain. This ensures that the reduction of the total costs and maintenance of the technology, and service quality within Qantas (Lucarelli 2015). The procurement of the significant quantities of services including the stationary and the goods necessary for the decor of the aircraft are done in the Qantas. However, the Qantas Airways recognises the commercial risks, operational, financial and legal risks associated with the procurement within the airlines industry. Therefore, the company opts for regulatory systems associated with the purchase of the resourcing materials.

Institution-based considerations: The responsibility of the Qantas Airways is evaluated by the directorial board, which ensure that the corporate governance is maintained. This helps in the creation of value, protection, and enhancement of the shareholder value. The separate committees organised by Qantas Airways are responsible for auditing, nominations, remuneration, and safety, health, environment and security committee separately. All the applicable laws and regulations are complied with the applicable laws and regulations with the strict ethics and integrity by Qantas Airways (Lucarelli 2015). The business value, practices and standards are compiled by the organisation. The stakeholder communications, whistle-blower protection, safety, risk management, employee share trading and continuous disclosure are some of the important business practices for the company.

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Foreign Market Entries Strategies

Market-based considerations: The market-based considerations is essential to be considered for newer markets like United States. This is done using the Porter’s five force model based on the new market.

Buyer bargaining power: the online purchase of tickets have become more popular in most developed nations including United States. The buyers in the region have had high benefits with the entry of the low-cost air services in the industry (Bachwichand Wittman 2017). The balance of power is in the hands of the buyers additionally due to the tight regulation of the safety procedure. This denotes that the consumers have moderate to high power in the US airlines’ industry.

Supplier bargaining owner: the high resistance from the suppliers in the regions due to the fact that the fuel, aircraft and labour are highly influenced with the changes in the external environment (Borenstein 2017). The procurement of fuel is affected with the geopolitical events in the USA along with the power of the union when it comes to labour management. The aircraft needs are dependent on Airbus and Boeing for their industry requirements. These events suggest that the supplier power is very high in the region.

Entry and Exit Barriers:  The capital investment in the airlines industry just like any other region is extremely high for which a major portion of loss is obtained (Bachwichand Wittman 2017). The condition is similar in case of the exit from the industry for which newer and smaller companies cannot become a threat to the existing players. This would need to be effectively managed with Qantas Airways if they want to invest in the US market.

Substitute Threats: The airlines industry in the region does not have a threat from substitute services as the consumer usually depend on the fastest air transportation services for travelling long distances (Bachwichand Wittman 2017). The trains and other substitute services are not as impactful for the industry sales. Therefore, the substitute products have very low influence in the competitive scenario of the industry.

Industry Rivalry: the extreme competitive nature of the US airlines industry is due to the prevalence of low-cost carriers. The tight regulation of the suppliers and the flier safety the grounding of the full service due to the rapid turnover of the country.

Resource-based considerations: It is challenging to enter dynamic environments like the airlines industry in US which is highly regulated. Strategic flexibility could be suggested to international firms trying to enter the market due to the variable demands in the market.  It is commonly observed that the entry into the industry is less with more variation being brought by the existing firms. This is why the entry into market with more flexibility and more demands of variation (Claussen et al. 2018). The relation between the market entry and the variable demand in the airlines industry in US is difficult to predict. For this reason, the flexibilities in the strategic actions would be most suitable for expansion in the US as the unpredictability cannot be controlled. The entry into the volatile markets are predicted with the firm’s inclination I the operational efficiency rather than the strategic flexibility. The association of the strategic flexibility would be beneficial to the business analytics in the US airlines industry.

Currency risks: transaction risks would be faced by Qantas Airways in the US as the price of the product would be denominated with the sealing of the company’s currency. Price of the product will be determined by the denominated company’s currency within a particular region.  The selling of the company’s currency if in the condition is supported of the companies buying currency than the chances of success are increased (Borenstein 2017). Based on the contractual Agreement Company making the foreign Investments will have to make a larger payment based on the transaction risk related to the foreign market.A foreign company that owns a subsidiary in the US that could be a risk of translation with respect to the industry is the translation risk (Bachwichand Wittman 2017). This for lose the subsidiaries financial statements where their denomination will be recorded against translated back to the parent company. Economic risk is respect to the US market is also termed as the forecast risk when the market value is determined by the continuous impact of unavoidable exposure to currency fluctuations.

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Alliance Formation

The experience of contrast Airways in their domestic Australian market has provided it with the position of premium air service provider in the country.  This could be advantages for contest areas for achieving and performance Alliance with the major airline operators in USA (Summers and Smith 2014). Major support from all the functional areas including marketing sales finance HRM information technology and Research and Development would be required to ensure its expansion in the US. Strategic decision of Qantas airways to collaborate with airline services such as JetBlue, Southwest Airlines would be helpful in its entry to the US market. 

This can be evidence from the success obtained by Qantas Airways prior with its collaboration with South African Airways, British Airways and Malaysia Airlines (SeredyÅ„ski et al. 2017). Interconnected distribution network of Qantas airways would be helpful in creating an Alliance with the US market as it is the leading provider of long distance travel services. Growth obtained by Qantas Airways International front could be the key success factor for its entry into the US market (Summers and Smith 2014). Financial act aspect of the alliance would be to expand its air route Along with the purchase of new aircrafts would be required. Marketing strategies would be required to form alliance in the US in order to get market entry.  The high cost carrier services might be attracted to the population in terms of long distance travel services. Execution of the corporate level strategy would be obtained through the alliance with us competitors in improving their information technology and research by complying with US demands.

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Resource-Based Considerations: VRIO

Valuable:Qantas Airways has a dividend policy in terms of financial modelling where the resources are highly valuable for the organisation.  These values help in the investment for the organisations to overcome external links and opportunities within the dynamic and fluctuating industries.  Dividend policy is extremely efficient for the risk management from external threats for the business (Grafova et al. 2017). The services provided by Qantas Airways is extremely valuable to the customers which decreases the competition from differentiation strategies.  The employee valuable resource to the Qantas Airways and a significant proportion of the business profits are invested in the training and development. This improves the productive output of the organisation overtime and loyalty from the workforce is obtained (Summers and Smith 2014). The company has a list of patterns for services and products that can be easily profitable in the market without competitive interference.  Even the distribution network of the compass error is extremely valuable where more and more customers can be reached and the company is able to attend the second position in the market of Australia (Gregson et al. 2015). Innovation and breakthrough products that has been produced by the Qantas Airways over the past few years has been advantages and valuable for the business which facilitates its success in the domestic market.

Rare: Qantas Airways has a strong financial resource which is rare in case of the competitors in the Airlines Industry in Australia. The services provided in the high cost carrier services with Qantas Airways inheritance comparative advantage (Homsombat et al. 2014). The flight customisation availability provided by the customers for passengers are there and insured with intention to provide a memorable service for the flight.  This is real in case of the competitors within the airlines industry and provide the competitive advantage for Qantas Airways. Customer feeling rights policy formed by the contest Airways is also there in the aviation industry keeping in mind the safety and security of its passengers.

Imitable: Entertainment services provided by Qantas Airways flight or not in a table by other competitors as premium services are the unique selling point of the organisation. The Cabin comfort provided forthe passengers are not invertible by competitors since the company invest in customer satisfaction more than its competitor.  However the international presence can be imitated by companies like foreign Airlines.Customer bill protection provided by count as it was also not imitable by other competitors in the country along with the low cost flying services.

Organisation: Ability of the organisation to maintain a proper structure separating the entities of different committee to manage the risk auditing and financial services are important for the success of the business of Qantas Airways. The organisation is successful in implementing research and development autonomously and utilise patent for full competitive advantage in the airlines industry (Homsombat et al. 2014).  The company is organised distribution network provides it with the ability to reach all the urban and regional portions within Australia.  Accessibility is also maintain a wide range of customer friendly platforms.


The need for globalisation is directly related to the success of a multinational corporate like Qantas Airways. The discussion provides an understanding of the current position of the organisation and the necessary barriers in its entry in the US market. The effective market entry strategies and the alliance strategies need to be provided in order to establish in a highly competitive industry.

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Summers, J. and Smith, B., 2014. Communication skills handbook. John Wiley & Sons Australia, Ltd.