Change Model Essay

The aim of this testify is to critically go the background of the Qantas and its decisiveness to entry Jetstar on whitethorn 2004 that operated around 800 flights a week crossways network of 14 destinations within Melbourne, Sydney and Brisbane. Secondly, this essay volition mensurate how entropy Collection Feedback Cycle exchange model is employ to gather study development and to critically prove it. Thirdly, this essay bequeath critically evaluate the background of Qantas and sodding(a) moody and al down(p) in any case highlight mixed reasons that yettually led the Qantas group for the launch of the Jetstar. Fourthly, this essay will likewise critically analyse the taxation and do good achievement of Qantas prior the conception of Jetstar i.e. 2002.Fifthly, it will continue to critically evaluate the tr windup in Qantas and complete(a) hot in 2003. thusly the sixth dissever will also critically evaluate the trend in Qantas after the launch of Jetstar. La stly, the essay will also look into the yearbook answer fors of the class 2005-2009 and critically analyse the significant value increaseed by the Jetstar to the Qantas group and will critically analyse whether the executive decision of Qantas to launch Jetstar in grade to retain the 60% municipal aviation commercialize from its competitors has been a strategic success or not.This paragraph will critically analyse the change management information ga at that placed to launch Jetstar low cost airline in may 2004 by using the Data Collection Feedback Cycle change model. Nadler (1977) as cited in Cumming and Worley (2009122) highlights that the Data Collection Feedback model consists of five phases that be (1) readiness to collect selective information, (2) collecting data, (3) analysing data, (4) feeding back data and (5) following up on the data collected. In planning to Gather information to prune change Nadler (1977) argues that primary methods such as, direct interview s with CEO and keystone change agents, observing and identifying the need for change and the use of un obstructive measure as sampling technique, force field analysis and scatter diagrams, could be used to gather study information.In contrast Danaher have used sundry(a) published data to trace the evolution of the Jetstar strategy of its initial position, to its efforts to pass water monetary value competitiveness and helper parity, followed by its highly focused, cost-effective help delivery strategy. Based on it they have developed a gradable model with parameters estimated at theindividual level. This allows us to study not scarcely how service design and pricing initiatives shift the perceived performance of Jetstar relational to its competitors but also how the airline can move commercialise preferences toward areas in which it has competitive advantage. After done with the planning of the collection of data from competitors performance on its revenue, sales profits, passenger turns and foodstuff assign in 2002, 2003 and 2004 against Qantas key performance indicators for the uniform period between 2002, 2003 and 2004 from the course of instructionbook Reports of some(prenominal)(prenominal) unadulterated good-for-nothing and Qantas internalated operations.Nadler (1977), after the data has been collected data they are analysed using the qualitative change data such as directors report, World Business Briefing /Australia var.line benefit(2004).The reminder of this essay will critically analyse the data collected from secondary sources such as Annual Reports, newspaper articles and journal articles to analysis the data sourced to evaluate what would be the most effective change to be implemented by Qantas in responding to complete(a) grimy contender the Australian aviation house servant sectors.This paragraph will evaluate the basic background of Qantas and Virgin Blue and will also highlight various reasons that eventually led the Qantas group for the launch of the Jetstar. After the deregulation of Australian aviation grocery there were some(prenominal) airline companies entering the market however the most significant accession was of low fare airlines Impulse in June and Virgin Blue in August 2000. The arrival of Impulse air passages and Virgin Blue doubled the repress of players and dramatically challenged the stable duopoly of Qantas (after its merger with Australian Airlines) and Ansett, setting off a vicious price war (Traca, D., 2004). However, Impulse facing a major trouble in the cash flow agreed on whitethorn 1, 2001 to hand over its operations to its biggest rival, Qantas Airways. As per the deal Impulse stop its passenger service under its own name on whitethorn 14 and lease 21 aircraft as well as confine crews and pilots to Qantas. The deal led the stock of Qantas heaved by 26% closing at $3.40 per share giving Qantas a significantly stronger position in the Australian market (Gaylord, 2 001).Qantas, Australias leading domestic and international carries launched a work out airline called Jetstar in May 2004 (Qantas annual report, 2004). With Jetstar Qantass aim was to screen door the low fare segment of the aviationindustry, which came into existence in the year 2000 with its competitor, Virgin Blue. Virgin had been thrivingly eating up QANTAS market share by eruptioning it from below as a no frills provider. In 2001 the collapse of Ansett in domestic market, led Qantas to lease extra flights, add hundreds of special flights in order to help stranded travellers due to Ansett crisis. At the time Qantas flew more than 50,000 former Ansett passengers for free and new(prenominal) 65,000 on firmly discounted fares.Due to this Qantas was able to deliver a profit originally revenue enhancement of $631m and net profit after tax of $428 trillion at the end of 2002, 30 June, despite of the fact that the worlds aviation market was suffering from constant shock syndro me, due to the September 11 attack followed by bombings in Bali, the war in Iraq and of course the devastating eructation of Severe Acute Respiratory Syndrome (Qantas annual report, 2003). The shutdown of Ansett also highly benefitted Virgin Blue, since the event provided a wide opportunity for Virgin Blue to grow rapidly and become Australias second leading domestic carrier. In 2000 it started with only(prenominal) when one route (Brisbane to Sydney) with two aircrafts and a police squad of just 200 people. In 2001, with the opportunity to widen its market segment, 14 new routes were launched (virginaustralia history).The aim of this paragraph is to highlight how Qantas and Virgin Blue became the only two players in the Australian domestic aviation market in 2002. It will also look in to the key financial indicators of both the companies so that a comparison could be drawn out. In 2002 there were only two companies that survived the fare war of 2000-2001. One of them was Qanta s that gained 80% of the domestic market share following Ansetts cessation. Whereas, the morsel of international passenger declined by 11% which makes an average decline of virtually 25% in worldwide aviation market (Traca, D., 2004). In the same year Qantas domestic carried 1485 billion passengers making a RPK of $2034 trillion and the ASK of $2503 one thousand million (Traffic and capacity statistics, 2002).Qantas proclaimed its financial expirations for the year ended 30th June 2002. As per the financial result the union had $631 million of profit before tax, a net profit after tax of $million, revenue of $ 10,968.8 million and salary per share of 29.1 cents (Qantas annual report, 2002). The other survivor of the fare war, Virgin Blue managed to emerge as second Australian house servant carrier, covering of about 20% of the domestic market(Traca, D., 2004). Due to its strategic low operating cost and come up market share, it was able to achieve net profit before tax o f $34.8 million and revenue of $388.3 million. In this year the airline carried 3.2 million passengers, its barter as heedful by RPKS was 3169 million, capacity measured by ASKS was 3898 million (Virgin Blue annual report, 2004). In knock against 2002 Patrick Corporation, the premier port cargo handler, bought 50% of the airline. This change made Godfrey, brain executive of Virgin Blue confident about the enlargement of the domestic operation and also expansion into the international market with service to confederation Pacific (Traca, D., 2004).This paragraph critically analyses the key financial indicators of the Qantas and the Virgin Blue of the year 2003. It will also highlight how Virgin Blue concentrating only of the leisure domestic market was slowly overcoming the market share of Qantas. In 2003 Qantas domestic carried 1768 million passengers making a RPK of $2262 million and the ASK of $2683 million (Traffic and capacity statistics, 2003). Qantas announced its financia l results for the year ended 30th June 2003. As per the financial result the play along had $502.3 million of profit before tax, a net profit after tax of $343.5 million, revenue of $11,374.9 million and earnings per share of 20 cents (Qantas annual report 2003).Speaking of announcements, in the Annual General Meeting held on 16th October 2003 it was announced that the airline is look into the establishment of separate domestic low cost airline to service the leisure market in Australia (Preliminary monthly traffic and capacity statistics, July 2003).In this same year Virgin Blue carried 6.8 million passengers, its traffic as measured by RPKS was 7194 million, capacity measured by ASKS was 9078 million. Taking advantage of the fact that Virgin Blue had no other competitor serving the price sensitive market of Australia, it earned revenue of $914.6 million, compared to previous year the revenue earned up roared by 135.5% and the number of passengers carried also increased by 107% (Virgin Blue annual report, 2003).This paragraph will critically analyse the launch of Jetstar in May 2004 and the changes that it brought in the key financial indicators of Qantas and as well as of Virgin Blue. Following the announcement made in 2003 AnnualGeneral Meeting Qantas Introduced Jetstar in May 2004. In the first year Jetstar just carried 273,000 passengers. Prior Jetstar Qantas already had Qantas Domestic and Qantas Link serving domestic passengers. With these three Qantas in total carried 1973 million passengers. Compared to 2003/04 the number increased by 9.4% (Traffic and capacity statistics, 2004). In the same year Total Domestic (Qantas, Qantas Link and Jetstar) traffic was measured in revenue Passenger Kilometres (RPKs) of $2451 million while capacity, measured in Available tail assembly Kilometres (ASKs) increased to $3021 million (Traffic and capacity statistics, 2004).On 19 August 2004, Qantas announced its financial results for the year ended 30 June 2004. I n the announcement it was give tongue to that the company had achieved a profit before tax of $964.6 million and a net profit after tax of $648.4 million. Similarly, $11.4 billion of revenue, earning per share of 35.7 cents (Qantas annual report, 2004/05). Despite increasing domestic competition during the year Virgin Blue continued to show strong growth and profitability. During the year Virgin Blue carried over 10million (m) passengers, an increase of 53% compared to previous year. Doubling its passenger number the third time in a row in this same year it welcomed its 20 millionth passenger. Its revenue for the 2004 financial year was $1362.3million which is 49% more than the previous year.In the same year profit before tax was up by 45% to 226.2million and a Net Profit After Tax of 158.5million (Virgin blue annual report, 2004). Till March 31, 2004 Virgin Blue had 44 Boeing Net Generation 737 700 & 737 -800 aircraft out of which 36 were leased and 8 were owned. However, during the year the fleet was increased by 15 aircrafts. Since the twenty-four hours of establishment Virgin Blue was committed to keep its cost tooth root low and they are continuously working through it so that they could systematically provide their customers with low fares travel. Their cost per ASK for the financial year 2004 was 8.16 cents whereas a year before it was 8.48 cents. A decrease of 3.5% put the company on a good front in terms of scale and productiveness (Virgin blue annual report 2004). The Australian discount airline Virgin Blue, has won 30% of the market from Qantas, the national carrier, which will introduce a low-fare airline, Jetstar. Fare surcharges are being imposed by both groups as fuel prices rise (Shaw, 2004). Jetstars initially offered $48 for Melbourne to Hobart route and from $54 for Sydney to the resorts south of Brisbane.The price was similarto what the price Virgin Blue was whirl at the same period. All Jetstar flights offered one class of travel, wi th unreserved seating. In contrast Virgin Blue offered assigned seating and baggage connections to utmost destinations (Henly, 2004). This paragraph critically analyse the key indicators for Qantas and Virgin Blue for entrance Jetstar in May 2004. It is very clear with the annual report that Jetstar has been economic ever since it was launched in the year 2004 (Jetstar Media centre). However, the road wasnt quiet soundless in the initial years. From its launch Jetstar was exclusively using a low price message in its communication, but it was lagging way bunghole Virgin Blue in terms of quality. The Jetstar overall quality wrong was greater at 22.3% (6.02 versus 7.75) (Danaher et.al, 2011. pp. 586 -594, figure of speech 3).Jetstar was already appealing on the price front, and then it addressed its deficit in quality and tackled that by nidus on some specific sub attributes (not disclosed by the company) that provided Jetstar a good opportunity to overcome the point of differe nce with Virgin Blue. Then the price perception of Jetstar relative to Virgin Blue dramatically change from 6.9% deficit in March 2008 to 2.5% deficit in only 3months i.e. 7.42 versus 7.62 (Danaher et.al, 2011. pp. 586 -594, Fig 3). Since the establishment the main concern as a parent company for Qantas Group was that whether Jetstar would financially be profitable in its own right. Hence, it did by earning revenue of $1.020 billion, $1.414 billion, and $1.605 billion in the year 2007, 2008, and 2009 respectively.It was 7%, 10%, 12% of Qantas group revenue respectively (Qantas annual report, 2009). Similarly, in the same order the profit earned was $79 million, $104 million and $118 million (Danaher et.al, 2011. pp. 586 -594, Table 2). Similarly, oratory of market share of Jetstar, it has increased by 29% from the year 2008-2009. introductory with the perceived mediocre price competitiveness and low quality it was in a poor position as compared to Virgin Blue, whereas, with the n ecessary remedies interpreted within the 1st quarter of 2008 it was in position almost tinct to Virgin Blue in terms of covering the large counterweight of the target market. Jetstar Market Share of Domestic Australian Leisure Air Travel was 14% in the first quarter of 2008, with the changes made the market share increased to 14.6% and it gradually kept on increasing and it had 18.1% of market share in March 2009. Further, with the increase in profit it improve its perceptual position, whereas,Virgin Blue has remained relatively stationary.In conclusion if we are to pay close attention to the domestic growth strategies of the countrys largest airline company Qantas, its decision of launching Jetstar seems be a successful strategic decision. It was matter of concern that the Virgin Blue an airline company focusing on the price sensitive market would whether survive the competition with 82 year old veteran airline company. However, with its striking rise of low fare Virgin Blue to day covers 35% market share of the domestic aviation sector. By critically evaluating the financial indicators of both companies for the year 2002-2004 and also following the series of events, it becomes quiet clear that though Virgin Blue had started small it managed to cover 20% of the target market in 2002.In further years concentrating only in the no frill travel it was able to hold the 30% of the market share, which became a matter of concern for Qantas because though it was making more profits then Virgin Blue it was losing it domestic market grip, therefore, led to the launch of Jetstar. However, even after the Launch of Jetstar Qantas performance was not like it was expected because in the year 2004 Qantas domestically carried only 2061 million passengers which were only 88 million more than the last year. However, with the necessary major changes (not disclosed by the company) Jetstar alone was able to regain the market share of 18.1% by March 2009. prolongation LISTGaylord , B. (2001). Qantas to Absorb Competitor As Fare War Takes a Victim. The New York Times Business Day. 11Shaw, J. (2004). World Business Briefing /Australia Airline Profit. The New York Times Business Day. Henly, G, S. (2004). Travel Advisory New Offshot of Qantas Offers put down Fares. The New York Times Travel Danaher. J. P., Roberts. H. J., Roberts. K., Simpson. A. (2011). Applying a Dynamic Model of Consumer excerption to Guide Brand Development at Jetstar Airways. Marketing Science, 30(4), 586 594. Doi 10.1287/mksc.1100.0619Traca. D., (2004). Virgin Blue Fighting With National Champion. INSEAD, 5179. Traffic and Capacity Statistics. Retrieved fromhttp//www.qantas.com.au/travel/airlines/investors-traffic-statistics/ world-wide/en Jetstar Media Centre. Retrieved fromhttp//www.jetstar.com/mediacentre/facts-and-stats/jetstar-groupNadler, D. (1977). cited in Cumming and Worley (2009). Organization development & change, 9th edition, South- Western Cengage Learning. Qantas annual re port (2002). Retrieved from http//www.qantas.com.au/infodetail/about/investors/2002AnnualReport.pdf Qantas annual report (2003). Retrieved from http//www.qantas.com.au/infodetail/about/investors/2003AnnualReport.pdf Qantas annual report (2004). Retrieved from http//www.qantas.com.au/infodetail/about/investors/2004AnnualReport.pdf Virgin Blue annual report (2004). Retrieved fromhttp//www.virginaustralia.com/cs/groups/internetcontent/wc/documents/webcontent/edisp/annual-rpt-2004-a3.pdf