c11cz assign1 - pm stars inc

STRATEGIC PROJECT MANAGEMENTSTRATEGIC PROJECT MANAGEMENT

CC OMPETITIVEOMPETITIVE S S TRATEGYTRATEGY (C11CZ)(C11CZ)

Group Assignment# 1

PPACIFICACIFIC B BLUELUE ANDAND N NEWEW Z ZEALANDEALAND ’’SS

DDOMESTICOMESTIC A A IRLINEIRLINE I INDUSTRYNDUSTRY

For Review ofDr. Mohd. A. Salama

Submitted byGroup# 9

Group Name

[Yulia Storozheva (091615457), Julie Parbey (091575601), Atiye Arooni (091575553), S Shafaq Akbari (091598828)]

“Fly within New Zealand with Pacific Blue, Qantas or Air New Zealand”

TT A BLEA BLE OFOF C C ONTENTONTENT

Executive Summary........................................................................................................................ iii

Acknowledgement......................................................................................................................... iv

Introduction....................................................................................................................................1

Pacific Blue:................................................................................................................................1

Qantas:.......................................................................................................................................2

Air New Zealand:........................................................................................................................2

Strategic Analysis............................................................................................................................4

PESTLE Analysis...........................................................................................................................4

Political/Legal Analysis............................................................................................................4

Economic Analysis...................................................................................................................4

Social Analysis.........................................................................................................................5

Technological Analysis............................................................................................................5

Legal/Environmental Analysis.................................................................................................5

SWOT Analysis............................................................................................................................7

Pacific Blue - SWOT analysis...................................................................................................7

Qantas - SWOT analysis..........................................................................................................8

Air New Zealand - SWOT analysis...........................................................................................8

Generic Strategy of each Airline.................................................................................................9

Pacific Blue Airline Strategy:...................................................................................................9

Qantas Australia Strategy.....................................................................................................10

Air New Zealand Strategy.....................................................................................................10

Strategic Group Mapping..........................................................................................................11

Strategic Group Mapping Rationale:.....................................................................................11

Mobility Barriers.......................................................................................................................13

Value Chain Analysis:............................................................................................................13

Inbound Logistics:.............................................................................................................13

Operations:.......................................................................................................................14

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Out Bound Logistics..........................................................................................................16

Marketing and Sales..........................................................................................................16

Services:............................................................................................................................17

Information Technology....................................................................................................18

Porter’s Five Forces......................................................................................................................19

Pacific Blue................................................................................................................................19

Attractiveness of New Zealand’s Domestic Airline Market...........................................................20

Conclusion....................................................................................................................................21

References....................................................................................................................................22

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PP A G EA G E L L E F TE F T B B L A N KL A N K I I N T E N T I O N A L L YN T E N T I O N A L L Y

EE XECU TIVEXECU TIVE S S U MMA RYU MMA RY

This report has been prepared towards the completion of the first assignment of Competitive Strategy (C11CZ).

In this study we are going to be looking at the domestic flight market segment of the airline Industry in New Zealand.

The report seeks to analyze the various strategies adopted by three main New Zealand Airlines which are Air New Zealand, Qantas and Pacific Blue in order to gain a sustainable competitive advantage.The report will mainly study the strategies employed by. We then be showing a strategic group mapping placing each of the airlines on the map and giving a rationale for each grouping and plotting.

The report will also study the mobility barriers of Air New Zealand through a Value Chain Analysis of all three airlines, apply the Porter’s Five Forces model to analyze the competitive conditions of Pacific Blue in the domestic airline market and finally evaluate the attractiveness of New Zealand’s domestic airline market based on the five forces analysis.

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AA CK NOWLEDGEMENTCK NOWLEDGEMENT

We thank Heriot Watt for giving us the opportunity to enhance our learning in Strategic Project Management by means of this group assignment.

We would like to give a hearty thanks to our Professors at Heriot Watt, namely Dr. M. A. Salama and Dr. Michael Clarke for their time and guidance for completing this assignment.

We would like to thank the university librarian Mr. Ramakant for his cooperation in providing us the appropriate books and journals in time for reference.

We would also like to thank our friends and families for their support through out the completion of this assignment.

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Competitive Strategy

II NTRODU C TIONNTRODU C TION

A brief introduction to each airline is as below.

Pacific Blue:

Slogan: “Get what you want”.

Objective: “The leading low-fares scheduled passenger airline through continued improvements and expanding offerings of its low-cost service.”

Mission and Value: Value for Money, Good Quality, Brilliant Customer Service, Innovative, Competitively Challenging and Fun.

Pacific Blue is the New Zealand based subsidiary of Australian airline Virgin Blue (headed up by the brash, bullish and brilliant entrepreneur Sir Richard Branson, it has risen from humble beginnings in the 1970's to be one of the most highly respected global brand names of the 21st century). Based in Christchurch, it currently operates low-fare air services of Boeing 737-800 aircraft within New Zealand, between New Zealand and Australia, and Australia to south Asia. Pacific Blue's Australian New Zealand bases are Christchurch Airport and Auckland Airport.

Since August 2007 Pacific Blue has been providing domestic services in New Zealand between –Wellington, Christchurch–Wellington and Auckland–Christchurch. In April 2008 Pacific Blue also started to provide domestic route to Dunedin.

Virgin Blue is part of a very big family, the Virgin Group. Virgin Group employs more than 35,000 people around the world, 4000 of which are Virgin Blue team members who share the same principles that Richard Branson defined in the 1970's.

Refer to appendix A section I for further details.

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http://en.wikipedia.org/wiki/Auckland_Airport

http://en.wikipedia.org/wiki/Christchurch_Airport

http://en.wikipedia.org/wiki/Christchurch,_New_Zealand

http://en.wikipedia.org/wiki/Virgin_Blue

http://en.wikipedia.org/wiki/Australia


Qantas:Slogan: “Spirit of Australia” or “I still call Australia Home”.

Objective: “’Creating Shareholder value through high quality travel experience, sustainability by prioritizing safety and then minimizing the environmental effect of our operations and finally the dedication and professionalism of our people through extensive training”.

Mission and Value: “The Qantas vision is to offer the best airline experience"

Qantas was founded in the Queensland outback in 1920. Registered originally as the Queensland and Northern Territory Aerial Services Limited (QANTAS), they have built a reputation for excellence in safety, operational reliability, engineering and maintenance, and customer service.

Tenacity and the ability to survive adverse conditions have characterized the history of Qantas. Qantas and its people remain focused firmly on the future, to getting on with the job and moving into a new era.

Refer to Appendix A section II for further information on Qantas.

Air New Zealand:Slogan: “Amazing journeys. Every day."

Objective: “We will strive to be number one in every market we serve by creating a workplace where teams are committed to our customers in a distinctively New Zealand way, resulting in superior industry returns.”

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Mission and Value:

We will be the customers' airline of choice when travelling to, from and within New Zealand.

We will build competitive advantage in all of our businesses through the creativity and innovation of our people.

We will champion and promote New Zealand and its people, culture and business at home and overseas.

We will work together as a great team committed to the growth and vitality of our company and New Zealand.

Our workplaces will be fun, energizing and where everyone can make a difference."

Air New Zealand's story began in April 1940 when its forerunner airline, Tasman Empire Airways Limited (TEAL) was incorporated. In October 1953 TEAL became jointly owned by the New Zealand and Australian Governments, and in April 1961 the New Zealand Government assumed full ownership.

In addition to TEAL operating international services, the New Zealand Government established NZ National Airways Corporation (NAC) in 1947. NAC was the primary operator of domestic air services between major centers and provincial cities and towns, and along with TEAL would later form the basis for today's Air New Zealand.

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SS TR ATEGICTR ATEGIC AA N A LY S I SN A LY S I S

PESTLE Analysis

Political/Legal Analysis

Looking at the political system in New Zealand it can easily be said that they are an independent, democratic nation with a popularly elected parliament and a stable social and political environment. Elections are held every three years and all New Zealand citizens over 18 can vote.

New Zealand is progressing quickly towards a technical able country. Recently the government has an online presence, with all central and local government departments and services accessible through a single portal: www.govt.nz.

New Zealand consistently ranks as one of the world’s most transparent and least corrupt societies.

Economic Analysis

New Zealand’s Economical market can be explained by the following points1. It has an internationally competitive market-oriented economy2. Strong focus on international trade3. Stable political environment4. Educated workforce5. Absence of corruptions

All this makes New Zealand a great and easy place to do business. In the 1990s and 1980s the economy underwent radical restructuring to increase competitiveness. The restructuring included the following reforms:

1. Removal of subsidies2. Tariffs and price controls3. The floating of the exchange rate4. The abolition of controls on capital movement5. The privatization of many state assets.

The government policy now encourages growth through innovation and creativity. When doing business from New Zealand businesses can gain duty-free access to Australia.

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http://www.govt.nz/


Social Analysis

The social environment in New Zealand is relaxed but not laid back. The people of New Zealand are very helpful to one another and there are a lot of fun activities around the corner. In New Zealand people spend far less time in commuting and so have more time for a social life. People here like to enjoy themselves. Considering that New Zealanders are such happy people they would like to travel to new destinations of nature or to explore their country further through travel.

Technological Analysis

New Zealand is constantly developing its technology base. The Human Interface Technology Laboratory New Zealand (HITS Lab NZ) is constantly working on making human interface with computers better.

New Zealand’s government is currently has launched itself on the portal www.govt.nz where one will find all information related to the New Zealand government. They have new technologies being used for their farming and agricultural industry.

The airline industry in New Zealand is also working on installing new technologies at its airport to make exit border control faster and the custom and immigrations are cleared in less than 10 minutes for each passenger. They will install Kiosk and gate system called the ‘SmartGate” to allow passengers with e-passports to self-process through passport control .

Further to this major airlines in New Zealand are working on making fuel from Jatrophe Oil which will have less cost and environmentally safe.

Legal/Environmental Analysis

Business Environment

With the new reforms in place New Zealand moved from being a highly regulated market to one with very low tariffs, a floating exchange rate, flexible labour markets and broad base, low-rate tax system. Agricultural subsidies and import controls have been eliminated.

An Independent Central Bank is established to achieve medium-term price stability and laws which commit the government to open and make transparent management of the country’s finances.

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http://www.govt.nz/


Tourism remains a key and growing industry, with two million tourists visiting New Zealand every year.

The key laws relating to business are:

Commerce Act: sets out the types of anti-competitive practices that are illegal. These include company mergers and takeovers which lead to a lack of competition. The Commerce Commission is responsible for administering the Act.

Companies Act: sets out the legal framework for forming and operating a company.

Consumer Protection: the Fair Trading Act protects consumers from unfair and misleading practices. The Consumer Guarantees Act gives consumers rights regarding goods and services.

Employment Relations Act: emphasizes good relations between employers and employees through the good faith obligation, and promotes collective bargaining, but retains voluntary unionism.

Securities Act: protects the investing public by requiring businesses to provide certain information to investors. Companies must register prospectuses when offering new securities to the public.

Looking at the above political, economic, social, technological, environmental and legal structure of the government of New Zealand, they have portrayed a very attractive country to live and do business in. Since the 1990s they have encouraged competitiveness in the market and made it easy with the low tariffs or duty-free to setup a company in New Zealand. They are also making sure that companies follow a proper legal framework and are regulating employer and employee relations. Overall New Zealand is a great place to start a business. The Airline industry is also making great progress due to the increase in tourism and also the

Further to the PESTEL analysis below is the SWOT analysis for all three airlines.

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SWOT AnalysisLets look at the SWOT analysis of each company which will help to explain further the strategy of each airline.

Pacific Blue - SWOT analysis

Internal Factors

Strengths Weaknesses

- Low cost strategy- High quality service - Strong Brand name- Lower cost due to a greater

capacity to outsource ground handling, engineering, crew support and infrastructure

- Limited assets (3 Boeing 737 )- 10 flights a day along the main routes- Lack of terminal facilities- Limited routes

External Factors

Opportunity Threats

- Part of the Virgin Blue Group- Have substantial capital and

complementary resources to support.

- Loosening of New Zealand’s Government regulations

- Australian shareholders- Not a member of alliance - Higher Prices on maintenance

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Qantas - SWOT analysis

Internal Factors


- Better pricing- Similar level of frequency as ANZ- In alliance with ANZ and they

follow their strategy - Good reputation among

customers

- 4 Boeing 737- 13 flights- Limited routes

External Factors

Opportunity Threats

- Bigger and financially stronger- Loosening of New Zealand’s

Governmental regulations

- Competition

Air New Zealand - SWOT analysis

Internal Factors


- Monopoly on many routes- Monopoly supplier- 14 Boeings 737- national support- 50 flights a day- Recognizable brand name

- Poor customer service

External Factors

Opportunity Threats

- National support- Presence at most New

Zealand airports- Arrival of New

Technologies (e.g. e-gate….)

- Lower prices higher value from other airlines competing in the field.

- New regulations (Government of NZ disabled monopoly)

- Emergence of substitute product-

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Generic Strategy of each AirlineKeeping in mind the above PESTEL and SWOT analysis let’s look at the generic strategies of Pacific Blue, Qantas and Air New Zealand.

Pacific Blue Airline Strategy:

Pacific Blue is a subsidiary of Virgin Blue in New Zealand. Virgin Blue started on 31 August 2000 as the first sustainable low fare airline in Australia. As its corporate office Pacific Blue follows the Low-Cost strategy in order to provide low fare prices. They are able to sustain as a low fare airline on the following basis:

1. Eliminating In-flight meals2. Eliminating Printed tickets 3. Using telephone and internet booking systems4. Selling food on board the flight5. Limiting the number of airports serviced6. Operating one type of aircraft, the Boeing 737, thus reducing maintenance cost7. Pays employees less than its rivals but pays incentives for employee productivity and

commission for on board sales of products.

Pacific Blue has acquired a Low-Cost strategy to enter and establish itself in the domestic flights airline market in New Zealand. Their strategy is made up of the following components:

1. Low Costa. They target fare conscious leisure or business travelers orb. Travelers who might have used a car, train or bus to get to their destinationsc. They sell seats on a one-way basisd. 75% of seats are sold at the minimum available fare and then price per seat rises

2. Frequent point-to-point flights on short haul routesa. Flying only short-haul routes enables Pacific Blue to offer frequent serviceb. Eliminate the frill services otherwise expected by customers on longer flightsc. With short-haul routes they avoid connecting passenger services including

baggage transfer and transit passenger assistance cost3. Low operating Cost

a. They reduce cost on the aircraft equipment by flying a single type of aircraft which is Boeing 737.

b. This minimizes cost associated with personnel trainingc. Maintenance and the purchase and storage of spare parts is easier.

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d. There is greater flexibility in the scheduling of crews and equipments.e. They have their own reservation and internet booking facility thus eliminating

agent commissions. f. Since Pacific blue has recorded delivering high volume of passenger traffic

growth they are able to negotiate favorable contracts with airports.

4. Internet Bookinga. Their online booking system allows user to reserve, book and make payment in

real-time through their website http://www.pacificblue.com.au/.

5. Commitment to Safety and Quality Maintenancea. They recruit and train pilots, cabin crews and maintenance personnel.b. They maintain their aircraft in accordance with the highest International airline

Industry Standards. c. Although they follow a cost-effective strategy but they do not compromise on

safety, maintenance, training or quality assurance.

Qantas Australia Strategy

Qantas mainly follows a product differentiation strategy . It is a full service airline that provides in-flight meals, assigned seating, baggage check-in and a premium level of service.

Considering that major businesses are owned by Australian based companies it would make sense to say that Qantas is in a better financial position than the other Airlines.

Air New Zealand Strategy

After the entry of Qantas into the domestic flight market and with the greater quality and level of service that Qantas was offering in 2003 Air New Zealand announced a new low-cost strategy where business class was removed and in-flight meals for domestic flights were removed.

Today, Air New Zealand is focusing on the business travelers who pay higher fares. They are providing business class travelers with bigger seats, quicker check-ins, improved frequent flyer benefits, free priority parking and access to lounges.

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http://www.pacificblue.com.au/


Strategic Group MappingBelow is the strategic group mapping for the three Airlines. Their justification is also given below.

Air New Zealand

Qantas

Pacific Blue

Strategic Group Mapping Rationale:

Group 1: Air New Zealand (Low-cost Strategy)1. Low Price2. Quality of services for business and economy is good3. They have national support4. They are a monopoly supplier for spare parts, terminal access and maintenance.

Group 2: Qantas Australia (Differentiation Strategy)1. Qantas provides premium services 2. They have their own facility

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3. Is in alliance with Air New Zealand so lowers its cost 4. Qantas is also renovating its business class services to appeal to the business class

travelers.

Group 3: Pacific Blue (Focus Low-Cost Strategy)1. They are providing the lowest cost among their rivals especially for last minute bookings2. Their services do not match their rivals 3. Substantial capital and back up from Virgin Blue support. 4. They focus on short-haul domestic flights so more flights in a day

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Mobility BarriersTo understand the mobility barriers to hinder the effectiveness of pacific Blue and Qantas airlines we must first do a Value Chain Analysis.

“Michael Porter (1980) developed the concept and applied it within his overall system of strategic analysis. He explained strategic groups in terms of what he called "mobility barriers". These are similar to the entry barriers that exist in industries, except they apply to groups within an industry. Because of these mobility barriers a company can get drawn into one strategic group or another. Strategic groups are not to be confused with Porter's generic strategies which are internal strategies and do not reflect the diversity of strategic styles within an industry” (http://en.wikipedia.org/wiki/ (online). [Accessed on 03 Oct 2009])

Value Chain Analysis:

In this Value Chain Analysis we will look at mainly the InBound Logistics, Operations, Outbound logistics, marketing and Sales and Services. Since technology is also playing a major role we will also be evaluating the same.

Inbound Logistics:

Route Selection

Air New Zealand 27 domestic Destinations

QantasAuckland, Wellington, Christchurch, Rotorua and Queenstown

Pacific Blue

Auckland, Wellington and Christchurch. In 2008 Dunedin - Christchurch route was added and in August 2009 it is changed to a direct Auckland route.

Yield Management System (Pricing)

Air New Zealand $59 to $229

Qantas $56 to $ 229

Pacific Blue $60 to $260

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Flight Schedule

Air New Zealand 50 flights a day

Qantas 13 flights a day

Pacific Blue 10 flights a day

Facility Planning

Air New Zealand Has its own facility

QantasThey are using their own facility and with the Air New Zealand alliance they are using Air New Zealand’s facilities at a better cost.

Pacific Blue Pacific Blue is using Air New Zealand’s facility mainly

Operations:

Aircraft Operations

Air New Zealand

Air New Zealand and Qantas, working with air navigation services provider Airways New Zealand, are conducting an Optimum Arrival Trial which allows landing aircraft to follow “glide descent” approach procedures. The test is currently limited to Air New Zealand and Qantas 747 aircraft arriving at Auckland (New Zealand) International Airport. Qantas

Pacific BluePacific Blue is using AN’s facilities so they are using the same navigational facilities as well but Airways New Zealand gives priority to Air New Zealand and Qantas

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On-Board Services

Air New Zealand

They are providing healthy, nutritious food and beverage choices. In-flight services not satisfactory. Crew are not friendly. (www.nzherald.co.nz/opinion/new/article.cfm?c_id=466&objectid=10453476)

Qantas

Qantas is evaluating a new technology that will enable customers to send and receive e-mails, access the Internet and send and receive text messages from their own mobile phone, GPRS data enabled personal device (such as BlackberryTM and PalmR TreoTM) or laptops with GPRS capability in-flight.

Pacific BlueProfessional but friendly crew with high quality service for their low cost. In-flight meals which can be purchased on board. In-flight entertainment.

Baggage Handling

HandlingEconomy Baggage

AllowanceBusiness Baggage

Allowance

Air New Zealand

Self baggage check-in services through new Kiosks & priority baggage handling.

25Kgs & 7Kgs Carry-on


QantasQantas Freight's unaccompanied baggage service



Pacific BluePacific Blue provides normal baggage services



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http://www.nzherald.co.nz/opinion/new/article.cfm?c_id=466&objectid=10453476


Out Bound LogisticsRental Car and Hotel reservations System

Air New Zealand

Hotel reservation and car rental available for reservation through their site.

Qantas Hotel reservation and car rental available for reservation through their site.

Pacific Blue

Hotel reservation and car rental available for reservation through their site.

Marketing and SalesPromotions

Air New Zealand

Special offers, packages, travel insurance, hotel reservation and car rental. Plans to spend a large amount on the promotion of New Zealand and Air New Zealand.

QantasMake your own packages and gift vouchers, Travel insurance, hotel reservation, car rental.

Pacific Blue Happy Flying Sale. Travel insurance, hotel, car rentals

Advertising

Air New Zealand

“We have nothing to hide”. "Amazing journeys. Every day."

Qantas “Spirit of Australia”

Pacific Blue “Get what you want”

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Advantage Program

Air New Zealand

If you are a frequent flyer of Air New Zealand.

It allows Air New Zealand air point members to upgrade their status based on their Qantas Frequent Flyer status. (www.nbr.co.nz/article/air-new-zealand-office-slice-it-qantas-slashes -101180)

Qantas Also has its Frequent flyer program.

Pacific BluePacific Blue does not have any Frequent Flyer programs or any advantage programs

Services:Lost Baggage

Air New Zealand

For lost, damage or late delivery baggage they will compensate by paying NZ $1500 for each unit of baggage

Qantas Qantas pay $28 per Kgs. For lost or damaged baggage

Pacific Blue

Pacific Blue provides Baggage Blues contact on their website where customers can call and find out information regarding their lost or damaged/mishandled baggage. They have not posted any policy on compensation for lost or damaged baggage.

Customer Complaints

Air New Zealand

Air New Zealand has a Customer Care number that can be called in case of any problems that arise. They also provide information regarding the same on their website. They have a 42days policy after return

QantasQantas Customer Care can be contacted by email through their site on through snail mail or otherwise they have a customer care number for any complaints.

Pacific Blue Pacific Blue provides a number to call for customer complaints

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http://www.nbr.co.nz/article/air-new-zealand-office-slice-it-qantas-slashes%20-101180

http://www.nbr.co.nz/article/air-new-zealand-office-slice-it-qantas-slashes%20-101180


Information Technology

Technology Advances

Air New Zealand

Jetropha jet fuel. Air New Zealand has announced it plans to tst renewable diesels made from Jetropha oil in one of its Boeing 747-400 aircraft later in 2008. In decembe tests with this fuel have already taken place and very recently one of the airplanes in Air New Zealand is already using this fuel to run the plane.

They are also setting up kiosk and self check-in and self- baggage check-in also through new technological advances.

QantasCompared to the technology advances that Air New Zealand Qantas does not have so much of technological Advances

Pacific BlueCompared to the technology advances that Air New Zealand Qantas does not have so much of technological Advances

Looking at the above Value Chain Analysis it can be said that due to the monopoly of Air New Zealand in terms of the Inbound logistics, operational sector and their technological advances their main Mobility Barriers lie in these sectors. To explain further here are some of the points to consider.

1. Pacific Blue and Qantas must gain access to terminal facilities (which are monopolized by air New Zealand);

2. Qantas must into commercial arrangements for maintenance services ground handling services and equipment.

3. Due to its large customer base and with so many flights in a day they are in a better position to negotiate better charges at New Zealand airports.

4. Air New Zealand is the national airline of the country thus the Maori’s give it a nationalistic support.

5. Technology advancements with Air New Zealand puts them ahead of not only the domestic airlines but also the world airlines.

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PP ORTERORTER ’’ SS F F IVEIVE F F ORCESORCES

Pacific BluePower of Suppliers: High (because Air New Zealand monopoly supplier)

On New Zealand’s domestic airline market for most of their needs they have Air New Zealand as a supplier. Supplier can put any price they want.

Power of Buyers: High

They have a choice of Qantas and Air New Zealand which are slightly higher on price but better in value

Threat New Entrants: Low (high entry barriers)

The entry barriers are moderate because any new entrants will require high amount of investments to establish themselves

New entrants must gain access to terminal facilities which are largely monopolized by Air New Zealand.

Due to New Zealand’s geographic isolation new airline entrants must enter into commercial arrangements for maintenance services, spare parts, ground handling services and equipment with Air New Zealand as it is a monopoly supplier of many of these services.

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Air New Zealand’s market supremacy places it in a powerful negotiating position in terms of airport charges at many of New Zealand’s airports.

Substitute Products: Moderate

Customers can use Air New Zealand or Qantas instead of Pacific Blue

Rivalry competition: Moderate

There is an oligopoly of airline like Qantas, Air News Zealand and Pacific Blue thus although rivalry occurs but it is still in control as there are only three main airlines in play.

AA T TR AC TIVENESST TR AC TIVENESS OFOF N N EWEW Z Z EA LA NDEA LA ND ’’ SS DD OMESTICOMESTIC A A IR L INEIR L INE M M A R K ETA R K ET

Although our PESTLE analysis shows that the overall business environment in New Zealand is favourable for opening a new business and the legal conditions are also in favour of the same but as per the five forces analysis for Pacific Blue, we can see that it will be challenging for new airlines to enter the domestic airline market. Thought a challenge but with the new laws regulations against monopoly, any new airline company wanting to enter this market will need a huge investment. Plus a new company would need to win customer loyalty in competition with the three airlines which would basically mean better prices and better quality of service.

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CC ONCLU SIONONCLU SION

In conclusion we can say that after analyzing the political, economic, social, technological, environmental and legal structure of the government of New Zealand, they have portrayed a very attractive country to live and do business in. Since the 1990s they have encourages competitiveness in the market and made it easy with the low tariffs or duty-free to setup a company in New Zealand. They are also making sure that companies follow a proper legal framework and are regulating employer and employee relations. Overall New Zealand is a great place to start a business.

SWOT analysis shows that Air New Zealand is the one company which has more strengths and opportunities than others. It means that it has more chances to be leader in competition with other airlines like Qantas and Pacific Blue.

Value Chain Analysis helps us to understand mobility barriers which may hinder the effectiveness of Pacific Blue and Qantas airlines.

Airline industries have very complex value chains. Even though there are some challenges to a value chain approach it can be a very effective strategic management tool. When competition is fierce, firms must very precisely manage their activities and costs to continue their competitive advantage. We can see through our analysis that Air New Zealand company has a better competitive edge.

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RR EFER ENCESEFER ENCES

Porter, M.E. Competitive Strategy: Techniques for Analyzing Industries and Companies. New York: Free Press, 1980

http://www.qantas.com.au/infodetail/about/FactFiles.pdf (online). [Accessed on 03 Oct 2009]

http://www.nzembassy.com/aboutmore.cfm?CFID=4603240&CFTOKEN=99686852&c=14&l=56&i=5486&p=477 (online). [Accessed on 03 Oct 2009]

http://www.nzembassy.com/aboutmore.cfm?CFID=4603240&CFTOKEN=99686852&c=14&l=56&i=5497&p=477 (online). [Accessed on 03 Oct 2009]

http://en.wikipedia.org/wiki/Pacific_Blue_Airlines (online). [Accessed on 03 Oct 2009]

http://www.biomassmagazine.com/article.jsp?article_id=1745 (online). [Accessed on 03 Oct 2009]

http://www.treasury.govt.nz/publications/informationreleases/airnewzealand/recapitalisation/pdfs/anz-tr01-1184.pdf (online). [Accessed on 03 Oct 2009]

(www.airnewzealand.com) (online). [Accessed on 03 Oct 2009]

http://webjet.com.au/flights/baggage-allowance/ (online). [Accessed on 03 Oct 2009]

http://tvnz.co.nz/view/video_popup_flash_skin/2238618 (online). [Accessed on 03 Oct 2009]

(http://www.enviro.aero/OptimumArrivalsAirNavigation.aspx) (online). [Accessed on 03 Oct 2009]

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http://www.enviro.aero/OptimumArrivalsAirNavigation.aspx

http://tvnz.co.nz/view/video_popup_flash_skin/2238618


Completed by

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PP A G EA G E L E F TL E F T B L A N KB L A N K I N T E N T I O N A L L YI N T E N T I O N A L L Y

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