ITH Strategy And Management Sample

Introduction Of ITH Strategy And Management

According to the Australian Competition and Consumer Commission, 2021, the harmful impacts of a duopoly within the Australian Airline market generally led by Qantas-Jetstar and Virgin Airlines are highlighted in a recent report. The data shows that more than 90% of domestic travellers travel through either Qantas or Virgin, resulting in greater costs and inferior experiences for customers. The study also highlights the need for improved competition and offers capability measurements, such as paying out for delayed or cancelled flights. Additionally, it demands that an unbiased commissioner be appointed to properly resolve disputes between consumers. The report relies on the government to address monopolistic airports, which have a significant impact on the industry's rising prices.

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Identification Of The Main ProblemOr Issue

Indicators of the problem or issue:

• Lack of competition: The report emphasises the lack of domestic airline competition, with more than 90% of domestic customers travelling through Qantas-Jetstar and Virgin. This industry's dominance indicates an absence of alternatives for end-users.
• High penalties for delayed flights and cancellations: According to Leonie, 2023, In April, close to 4% of the domestic routes were cancelled and close to 30% arrived late. The cancellation charge for the Qantas-owned Jetstar was above 8%, which was significantly more than that of other airlines. The findings support a decline in the performance and dependability of services provided by airlines.
• Unimpressive results for customers: According to the ACCC report, the duopoly through the domestic airline sector has resulted in higher prices and worse customer service. This suggests that customers are not receiving the amount of excellent quality and reasonableness they need.

Problem identification:

The key issue identified within the case study is the lack of competition in Australia's domestic airline sector, which mostly caused by the dominant position of Qantas-Jetstar and Virgin Airlines. Customers have suffered from several unforeseen consequences as a result of the lack of competition, including higher costs, poor client service, and limited options. The issue is further complicated by the high rates of cancellations of flights and delays, which harm the dependability and efficacy of airline services (Gregory, 2022). Additionally, the contemporary conflict resolution mechanism's failure shows its inability to handle client issues effectively. The lack of competitiveness within the Australian domestic airline market has significant consequences for customers.Itresults in lower airline expenses. Customers have less power to bargain because of the limited options and domination of some big firms, such as Qantas-Jetstar and Virgin, leading airlines to maintain lower prices. This immediately affects domestic and individual costs, ensuring airline tickets areless affordable towards individuals.

Figure 1 Australian airline passengers could soon receive compensation for delays and cancellations

(Source: Elias, 2023)

iii. Critical statements by major parties:

According to the ACCC chairperson Gina Cass-Gottlieb, "There could be pointless opposition leading to more expensive charges along with thepoorer quality of service than Australian travellers deserve” (Elias, 2023). "If the federal government is interested in looking at the one possible incident it may be able to do to enhance competition within the airline industry more generally, it would accomplish well to look into dominance airline terminals and the charges which make up a huge chew of the price," says Alison Roberts, leader of the administration of airline companies for Australia and New Zealand (a4anz). According to theindustrial association a4anz (protection of Airlines' general performance), a few reasons that lead to cancellations and delays are beyond the control of airlines, and passenger guidance rules may have unintended consequences.

Goals of the major parties:

Customers' goals include having access to low prices, cutting-edge customer support, trustworthy travel schedules, and a greater choice of airlines. The ACCCs mission is to create astrong rivalry within the domestic airline sector, which will benefit consumers by ensuring fair prices and high-quality services (Leonie, 2023). Although their distinct goals may also differ, Qantas-Jetstar and Virgin Airline's current focus is to preserve their strong market positions and profitability. According to Competition and Consumer Commission, 2021, The Airlines for Australia and New Zealand (a4anz) is an organisation that works to protect and advance the rights of airlines operating in those two countries.

Their objectives can also include supporting laws that support the organization's profitability and longevity. Typically, the lack of competition within the domestic airline industry serves as the major issue, which has detrimental effects on customers. The issue is highlighted by significant withdrawal and delayed charges (Gregory, 2022) Like higher prices, and limited passenger options. The ineffective resolution of disputes system makes matters worse. While promoting increased competition and consumer rights, the ACCCseeks to address this issue alongside prospective clients. However, sustaining the airlines' financial viability and position as market leaders might additionally be among their top priorities.

Analysis Of Issues Or Problems

a. Useful ideas, models, and theories:

• Market Segmentation Theory: According to Kuok, Koo and Lim, 2023 The conceptual framework of market concentration is relevant to the case study because it helps to understand why Qantas-Jetstar and Virgin Airlines dominate the domestic airline industry throughout Australia. The dominance of either of these main players within the market shows a lack of competition, which might harm consumers.
• Coverage of the Opposition Theory: According to Gürkaynak, Ye?ilaltay and Aydo?an, 2021 The assessment is appropriate to the ideas and principles of the law regarding competition. The organisation offers an outline for analysing the impact of market concentration, evaluating an organization's level of competitiveness, and discovering capabilities improvements to enhance competition.
• Consumer protection Theory: As the author Decker, 2020 stated that, Theories and frameworks related to consumer protection can help understand how limited competition affects consumers' rules and regulations entitlements, satisfaction, and access to fair prices and high-quality services. This perspective emphasises the need for efficient dispute-resolution processes and customer reimbursement right.

b. Application of conceptual tools:

The following conceptual techniques can be used to evaluate the problems and issues identified in the case study:

• Market recognition: The domination of Virgin America and Qantas in the domestic Airline sector is a clear indication of consumer focus. This focus restricts client options and minimises competitive pressure, which results in higher prices and poor customer service (Kuok, Koo and Lim, 2023). Employing the concept of market awareness enables users to better understand the root cause of such issues and their effects on the company and its clients.
• Competition policy: By examining the business through the perspective of competitive strategy, the study willthe capacity to determine the efficacy of competitiveness and pinpoint solutions for skill policies. The absence of competition throughout the market for domestic airlines raises questions about market dominance and entrance limitations (Gürkaynak, Ye?ilaltay and Aydo?an, 2021).
• Customer protection: The study can assess the effects of a lack of competition on consumer rights and satisfaction using the application of consumer protection theories. It emphasises the importance of strong dispute resolution processes to deal with consumer dispute resolution and the requirement for reimbursement entitlements for flight delays and cancellations (Decker, 2020). This analysis makes it easier to see where the modern system is lacking and the need for an independent arbitrator to have the authority to make enforceable decisions.

To get back to the sub-step, it is necessary to go over the initial recognition of relevant theories, ideas, and frameworks when additional information becomes available. This stage is essential since newly acquired knowledge can reveal unique aspects or dimensions regarding the issue that had not been previously recognised. The study may make certain that the analysis is still comprehensive and relevant by examining and extending the collection of conceptual frameworks.

For instance, whether newly collected information or investigation findings become available, the study can use theoretical frameworks concerning marketplace circumstances, a monopoly and exclusive competition to gain a greater understanding of the competitive environment and its effects. Similar to this, sociocultural or behavioural theories may present valuable information about customer behaviour and decision-making processes (Grollier and Hirani, 2021). The ongoing study can grow knowledgeable of and integrate relevant requirements and ideas that provide a more comprehensive review by continuously upgrading the understanding of the case study.

The study continue to be flexible within an analysis and adjust to newly acquired information as it emerges available by cycling back to sub-steps a and b. It ensures that the research is up-to-date, includes contemporary insights, and takes a wider range of factors and viewpoints into account. By repeatedly going through various sub-steps, the study can develop a deeper understanding of the case analysis, resulting in more informed and effective decision-making.

Comments On Effective Solutions Or Strategies - Action Planning

a. Specify and prioritize the criteria used to choose action alternatives

The following criteria can be considered to take into account when choosing circulation options to mitigate the lack of competition in the Australian domestic airline industry:

• Effectiveness: The degree to which the suggested activities can effectively influence public opinion, improve customer satisfaction, and resolve the issues found.
• Sustainability: It involves the probability and realizability of carrying out the suggested changes in the current regulatory and commercial contexts, taking into consideration possibly challenging conditions and Limitations.
• Impact: The shifts in prices have the potential to have excellent effects on competitiveness in the market, consumer choice, price, supplier quality, and overall marketplace performance.
• Longevity: According to Bowyer, et.al. 2020, The long-term economic viability and affordability of the suggested activities, ensuring that they are capable of withstanding the changing conditions of the dominant market and changes throughout the foreseeable future.
• Stakeholder perspectives: The compatibility of the suggested changes with the preferences and interests of significant stakeholders, such as airlines, clients, regulatory bodies, and certain industry associations.

b. Discover or invent feasible action alternatives

Several possible movement solutions may be taken into consideration depending entirely on the issues that have been identified and the requirements stated above:

• Regulatory reforms: According to the Competition and Consumer Commission, 2022, Introduce new regulations and rules, or enhance existing ones, to promote a more competitive marketplace. This could include steps to improve consumer protection, offer transparent pricing practices, and ease entry for new airlines.
• Improvements regarding reservation allocation: Examine and modify methods used at major airports to provide fair and accurate gain access to new, smaller airways. Enabling new players to differentiate themselves and equally participate with Qantas-Jetstar and Virgin, can enhance competition.
• Establish monetary or administrative rewards: To stimulate the entry of new airlines within the domestic market (Bowyer, et.al. 2020). Rewards for new competitors, lowering landing expenses, assisting with advertising, or streamlining regulatory strategies for new players are a few examples of this.
• Enhancing consumer rights and protections: While strengthening consumer safeguards within the airline industry, such as mandatory payment for flight delays and cancellations that exceed a certain minimum amount. This may motivate airlines to enhance their operational performance and give customer pleasure atop priority.

c. Examine the probable consequences of action alternatives.

Every possibility for shifts may potentially have beneficial and horrible outcomes. Before making a decision, it is crucial to carefully review and remember those ability findings, for example:

• Reforms to rules may boost competition, but too many regulations will raise the cost of maintaining compliance for airlines, possibly raising ticket prices (Competition and Consumer Commission, 2022).
• Improvements to slot allocation may make it easier for new airlines to operate, but they would likely encounter criticism from existing airlines, who might claim that any changes would decrease their percentage of the market.
• Rewards for brand-new competitors may also encourage rivalry as well as diversification of operations, but their success in attracting long-term new competitors needs to be carefully considered.
• Consumer satisfaction can be increased by enhancing consumer protections, however, the additional costs associated with repayment schedules could exceed this benefit.

Select a course of action

A strategy to take needs to be chosen after evaluating the results and considering the prioritised standards. This decision should be determined by a careful evaluation of the advantages, risks, and trade-offs associated with each option. The chosen course of action must have the best potential to deal with the lack of competition, improve customer outcomes, and promote an increasingly competitive and long-lasting domestic airline industry.

e. Design and implementation plan/schedule

After deciding on an approach of action, a strategy for execution and agenda must be developed. This strategy should lay out the necessary actions, resources, and timetable needed to successfully carry out the selected action. Additionally, it should take into consideration any interdependence, involvement of stakeholders, and capability concerns that might materialise throughout implementation.

f. Create a plan for assessing the action to be implemented

A strategy for assessment needs to be developed to ensure the achievement and effect of the action that has been implemented. Specific measurements, metrics, or standards should be included in this strategy to assess the action's effectiveness and grade its results. Regular evaluation and monitoring will help identify whether adjustments or changes are required to achieve the intended results.

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Conclusion

According to ACCC research, the lack of competition in the domestic airline market in Australia has had negative effects on consumers, including higher prices and fewer options. Regulations that are changed, slots that are allotted differently, new entrant incentives, and improved consumer safeguards are all examples of effective solutions. These tactics must be carefully implemented while taking stakeholder viewpoints, practicality, and implications into consideration. The sector can improve pricing, customer service, and dispute resolution by putting the interests of the consumer first and encouraging fair competition. The effectiveness will be maintained through ongoing evaluation. It is essential to address these problems if Australia's domestic airline operations are to become more competitive and customer-focused.

References

Books and Journals

• Bowyer, D., Jones, G., Bowrey, G. and Smark, C., 2020. Survival of the fittest? Challenges to regional aviation and regional communities from the privatisation of Australia's airports. Australasian Journal of Regional Studies. 26(1). pp.1-28.
• Competition, A. and Consumer Commission, 2021. Airport monitoring report 2019–20.
• Competition, A. and Consumer Commission, 2022. Digital platform services inquiry: Interim report no. 5–regulatory reform.
• Decker, C., 2020. Consumer protection frameworks for new energy products and services and the traditional sale of energy in Australia.
• Gregory, M.A., 2022. Australian Competition and Consumer Commission Telstra and TPG application for merger authorization for proposed spectrum sharing in regional Australia.
• Grollier, J. and Hirani, H., 2021. Competition in WTO Trade Policy Reviews: How has it been addressed.
• Gürkaynak, G., Ye?ilaltay, K.A. and Aydo?an, Z.A., 2021. A critical assessment of the recent proposals and reports on the regulation of digital mergers. Competition Law Journal. 20(3). pp.120-133.
• Kuok, R.U.K., Koo, T.T. and Lim, C., 2023. Air transport capacity and tourism demand: A panel cointegration approach with cross-sectionally augmented autoregressive distributed lag (CS-ARDL) model. Tourism Economics. p.13548166231178355.

Online

• Brook, R., 2023. Qantas tops world's safest airlines list again, with Virgin and Jetstar also featuring. Online. Available through: <https://thenewdaily.com.au/news/2023/01/03/qantas-tops-worlds-safest-airlines-list-once-again-virgin-and-jetstar-also-feature> Accessed on 29/06/2023.
• Leonie, T., 2023. Qantas-Jetstar and Virgin airline 'duopoly' driving domestic flight prices up, ACCC report says (ABC News): Online. Available through: <https://www.abc.net.au/news/2023-06-05/accc-report-on-airlines-flights-qantas-jetstar-virgin> Accessed on 29/06/2023.
• Visontay, E., 2023. Australian airline passengers could soon receive compensation for delays and cancellations. Online. Available through: <https://www.theguardian.com/australia-news/2023/may/09/australian-airline-passengers-could-soon-receive-compensation-for-delays-and-cancellations> Accessed on 29/06/2023.
• Visontay, E., 2023. Qantas and Virgin given little incentive to cheapen air fares, watchdog warns (Transport and Urban Affairs Reporter: Online. Available through: <https://www.theguardian.com/business/2023/jun/05/qantas-and-virgin-given-little-incentive-to-cheapen-air-fares-watchdog> Accessed on 29/06/2023.