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Soumi answered on
Oct 27 2020
Running Head: INTERNATIONAL BUSINESS: QATAR AIRWAYS 1
INTERNATIONAL BUSINESS: QATAR AIRWAYS 2
INTERNATIONAL BUSINESS: QATAR AIRWAYS
Table of Contents
Introduction 3
Organizational Structure and Scheme of Qatar Airways 3
Assessing the Aviation Industry, its Customers and Competitors 5
Trade Ba
iers Faced by Qatar Airways and its Decision of Foreign Direct Investment 6
Global Sourcing Policies of Qatar Airways and their Impact on Local Market 7
Global Human Resource Policies of Qatar Airways 7
Subjective Evaluation of the Future of Qatar Airways 8
Conclusion 9
References 10
Introduction
A business organization is always expected to make its targeted profits in the market it performs. However, if it operates only within national boundaries, it will always earn limited profits and one day, it will not have enough popularity. Hence, a business firm should always aim to expand its business internationally, and compete on a global level, so that international customers also buy from it. It is a very beneficial idea because internationally, more profits can be earned. Nevertheless, there can be many risks of failure, which is why assessing the market before operation is very important. In this context, the cu
ent assignment takes Qatar Airways as the chosen organization.
Organizational Structure and Scheme of Qatar Airways
Established in 1993, Qatar Airways is owned by the government of Qatar and is an aviation business organization, which is very popular in international aviation industry. The airlines offer 177 flights to 150 locations worldwide on daily basis, utilizing its huge workforce of 46,000 employees. The organizational structure is very complex, where a major upper management section of the company is controlled and regulated directly under the Group CEO executive H.E. Mr. Akbar Al Baker while departmental heads of each location regulate the air and ground staffs respectively. Although the organization has its headquarters in Doha, Qatar, it has maintained a decentralized management, which works as a network for the company. The company operates in more than 150 locations; however, the hub of Qatar Airways is Hamad International Airport. The airways company offers its services to America, Asia, Middle East, Africa and Europe (Qatar Airways, 2018).
Figure 1: Qatar Airways
(Source: Qatar Airways, 2018)
Qatar Airways has been very skilful when it comes to the use of schemes for the benefit of the company. The airways has partnered with international service providers for the offering services that has made the travelling experience of the passengers unique, effective and superior to that of the rivals in the market. Starting with the complimentary services, the airlines is seen providing free visa, 30 day touring offers from Qatar Airways, free transit visa and most importantly free Stay over. It is worth the mention that in order to avail the benefits provided by Qatar airways passengers have to abide terms and conditions of the company, which ultimately converts into profit of the organization. The airways have also managed to lure in customers on their honeymoon by offering packages that are planned for honeymoon couples (Qatar Airways, 2018).
In order to offer the international travelers a great travelling experience, Qatar Airways offers medically assessed meals for persons with medical issues, child special foods including ice cream, chocolate, sweets, curd and many more. As for the regular passengers travelling through the airlines regional foods are provided, while there are options for choosing between vegetarian and non-vegetarian are also available (Qatar Airways, 2018). The used tissues, furniture within the aircrafts, the materials used in seats are all of premium quality. The aircrafts are also one of the best in class, making travelers around the world confident about their opting of Qatar Airways.
Assessing the Aviation Industry, its Customers and Competitors
The aviation industry, in which Qatar Airways is a prime competitor, has a potentially healthy chance of growth. It is expected that the global industry is set of benefit from consistent growth increasing from 4.6% in 2017 to 4.7% in 2018. The number of passengers has also increased by 6% than 2017’s 4.1 billion in total. There is also consistent growth observed in the shipment of cargos. However, the fuel prices, labor expenditure and implementation of newer technology are cutting deep to the profit margins (IATA, 2017).
Despite the growth in the prices of fuel and subsequently air travel tickets, the number of passengers has increased globally. The increasing customer traffic is set to increase the revenue of the business. It is assumed that until the end of 2018 the total revenue earned by aviation industry would be 581 billion, a handsome growth of 9.2% than 2017 (IATA, 2017). It is assumed that of the number of customer continued to increase in the same rate the availability of the ticket would gradually reduce, which will boast the aviation business and aviation business organizations such as Qatar Airways will increase its capacity to tackle the load.
The global aviation companies such as Qatar Airways are facing tough competition from the likes of local airlines companies, operating in local areas. The prime competitors are Southwest Airlines, JetBlue Airlines, Spirit Airlines and many more (DigiBulletin, 2018). As mentioned by Rodríguez and O’Connell (2018), local aviation companies have smaller routes to maintain and therefore, it can work with limited capacity, less work staffs and lower airfares, making it hard for the international companies to compete in case the travelers prefer to have budget more than quality.
The competition is also observed at the global level, as all international aviation organizations try to offer best features and come up with features that offer value. International aviation organizations such as Lufthansa, Emirates, and Singapore Airlines are creating competition for Qatar Airways as the mentioned international airlines offer great services in Europe, Asia and USA, where Qatar Airways offers its services (The Independent, 2018).
Trade Ba
iers Faced by Qatar Airways and its Decision of Foreign Direct Investment
Similar to that of any other international aviation business organization, Qatar Airways faced the issues of restricted visa, ca
ying of cargo, political rift, air ticket pricing and multicultural human resource management on global scale. Firstly, in many countries Qatar Airways is not being able to offer its services as the local government of the countries have restricted their policies for visa, which makes the company’s ability to give air travelers their services (Qatar Airways, 2018).
In addition, Qatar Airways have faced issues with the import and export duties applied on its cargos, making the profit percentage meagre and unsatisfactory. It is also seen that Qatar Airways have not been able to operate in countries with which, Qatar does not have a diplomatic relationship, hence restricting its international expansion plans. The increase in the fuel prices, as stated by Qiu and Chen (2018), have forced the airlines companies to price their air tickets costlier so that they can retain the need of profit for sustaining in the business. In many countries the economic stability and strength has given Qatar Airways to price their tickets costlier, however, they have face d issues with finding a mutual and equal pricing for all countries as there are differences in the value of their cu
encies, human resource and offers.
In case of the FDI or Foreign Direct Investment, Qatar Airways has chosen to enter Indian aviation market as the government of India has promised an ownership percentage of 100%. India has a huge population and is cu
ently one of the fastest growing economies. In addition, a country has air routes to neighboring countries, which makes the choice by Qatar Airways logical and profitable, however, the local aviation companies are opposing 100% FDI, therefore, the entry to the Indian market is pending (Hindustan Times, 2017).
Global Sourcing Policies of Qatar Airways and their Impact on Local Market
Qatar Airways has to maintain a high standard of quality for its products offered to the passengers, therefore, huge amount of money are expended for retaining the standards of the products relating to food, leisure items and furniture that are used by the air travelers. In order to benefit in the local market, Qatar Airways uses its global partners for importing products. The importing of the products is done through cargo air ca
iers of the company (Qatar Airways, 2018).
Qatar Airways uses the global partners and their business ties to get products at cheaper rate, which met national standards, eventually giving the company competitive edge over the local aviation companies who struggle to offer all the quality products on cheaper rates. In order to provide its passengers the best in class foods and utility products, Qatar Airways uses international business partner both partners work as a team, offering the best of both sides. In case of availing regional foods at best rates and quality, Qatar Airways ties up with regional business partners in the zone, they are serving (Supply Chain Digital, 2018).
Global Human Resource Policies of Qatar Airways
As Qatar Airways operates internationally, it is very conscious and strategic about its human resource policies. As mentioned by Olson, Slater, Hult and Olson (2018), international business organizations must be very careful about their human resource polices for they retain the potential risk of inco
ect assessment of different types of cultural, religious and social expectation of the employees, offering service to a huge number of customers.
Starting with the recruitment process, Qatar Airways despite being an Arab country is not in favor of keeping its upper management occupied by Qataris, instead the company has been very vocal about its focus on talent and it has been found recruiting staffs from all over the globe. In case of career opportunity, Qatar Airways has also given newcomer chance to learn the skills necessary for becoming a part of aviation industry (Gulf Times, 2018).
As for the human resource retention policies, Qatar Airways has proved itself as one of the most prefe
ed aviation business organization internationally. The company based on its consistently high profit earning has focused on the development, recruitment and retention of staffs with medical benefits, ample salary and accommodation facilities for international staffs travelling most of the time.
The company however, has fixed salary scales and employees offering service areas where the minimum wages rates are high do not get more salaries. In case employees offer longer duty hours, the wages are paid on fixed rates. There is no doubt that Qatar Airways has a very fast and formal organizational culture, however, it has assessed the importance of multicultural practices and have been very flexible in its approach. As supported by Meyer and Xin (2018), multicultural prioritization is a very effective human resource retention policy.
Subjective Evaluation of the Future of Qatar Airways
Considering the consistent growth in the aviation business perceived in the last few years it could be ascertained that the near future years are beneficial for aviation business companies such as Qatar Airways. The company is planning to buy a dozen of new passenger aircrafts every year based on the increasing number of air travelers around the globe. As a part of the company’s business expansion plan on global scale, it is expected that it will enter new locations, develop new routes for better air travel facilities to the local and international passengers (Qatar Airways, 2013). Qatar Airways would also increase its air ticket prices as the fuel prices are going to increase in near future as the Middle East remains to be su
ounded by political tensions.
Considering the fact that the industry will grow in future years, Qatar Airways have to recruit staffs in huge numbers, however, the skills of the recruited staffs will be a potential risk the company face. As per general evaluation of aviation staffs worldwide, it is found that the ground staffs, maintenance staffs and the cabin crew have a moderate performance and quality level, which can be improved over time otherwise, can lead to quality issues in future. Qatar Airways would probably face the problem of career growth opportunity and increment offering issues as the company would have to deal with a huge workforce, managing of which would be crucial and difficult at the same time (Fo
es, 2018).
Conclusion
As concluded from the cu
ent assignment, it can be seen that international business is a very profitable option for business companies in order to earn a huge amount of revenue. However, since in international market, the target customers do not belong to single cultural, economic or social background; therefore, it is compulsory for business organizations to know what the preferences of international customers are. In case of Qatar Airways, as it has to depend on high economic cash flow, it must ensure quality services so that its passenger get the deal for their money. Besides, it could also keep its resources ready, so that it can take risks and earn profits.
References
DigiBulletin, (2018) Global Low-Cost Airline Sales Market 2018 Cu
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www.digibulletin.com/global-low-cost-airline-sales-market-2018-cu
ent-trend-southwest-airlines-allegiant-jetblue-airways-spirit-airlines-azul-
azilian-airlines
Fo
es, (2018) Recruiting And Training For Critical Jobs Threaten Airline Growth. Can Technology Help? Retrieved from https:
www.fo
es.com/sites/marisagarcia/2018/08/22
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Gulf Times, (2018) Qatar Airways welcomes 47 Qatari graduates under Al Da
programme Retrieved from https:
www.gulf-times.com/story/606329/Qatar-Airways-welcomes-47-Qatari-graduates-under-A
Hindustan Times, (2017) Indian airlines continue to oppose 100% FDI. Fear of Qatar Airways’ India plans? Retrieved from https:
www.hindustantimes.com
usiness-news/indian-airlines-continue-to-oppose-100-fdi-fear-of-qatar-airways-india-plans/story-tsceIKjwY7uN9FzmlKp8CO.html
IATA, (2017) Strong Airline Profitability Continues in 2018 Retrieved from https:
www.iata.org/pressroom/p
Pages/2017-12-05-01.aspx
The Independent, (2018) THE 10 BEST AIRLINES IN THE WORLD REVEALED Retrieved from https:
www.independent.co.uk/travel/news-and-advice
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Meyer, K. E., & Xin, K. R. (2018). Managing talent in emerging economy multinationals: Integrating strategic management and human resource management. The International Journal of Human Resource Management, 29(11), 1827-1855.
Olson, E. M., Slater, S. F., Hult, G. T. M., & Olson, K. M. (2018). The application of human resource management policies within the marketing organization: The impact on business and marketing strategy implementation. Industrial Marketing Management, 69, 62-73.
Qatar Airways, (2013) QATAR AIRWAYS HOSTS SENIOR AIRLINE HR MANAGEMENT FROM AROUND THE WORLD FOR ANNUAL CONFERENCE Retrieved from https:
www.qatarairways.com/en-mv/press-releases/2013/May/pressrelease_qr-hosts-hr-management-conf.html
Qatar Airways, (2018) About Qatar Airways Retrieved from https:
www.qatarairways.com/en/about-qatar-airways.html
Qatar Airways, (2018) Our partners Retrieved from http:
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Qatar Airways, (2018) Special meals Retrieved from https:
www.qatarairways.com/en-in/services-special/special-meals.html
Qatar Airways, (2018) Terms and Conditions Retrieved from https:
www.qatarairways.com/en/legal.html
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www.supplychaindigital.com/company/how-qatar-airways-overcoming-qatars-blockade-industry-leading-procurement#