This case study provides an overview of the Australian airline industry and its competitors with a focus on the question why OzJet failed.
The first chapter will give an insight on the main task and on the case study structure, concentrating on a brief outline of OzJet and the Australian airline industry.
In chapter two, the external environment OzJet had to face is examined, including the analysis of the main trends and its competitive intelligence through scanning and monitoring. Furthermore, it presents a survey of the environment using Porters five forces, completing with a brief conclusion of the threats and opportunities in the Australian airline industry.
Chapter three gives information of OzJet’s internal environment from a resource based view that examines the collection of its tangible and intangible resources, as well as its organizational capabilities shaping OzJet’s competitive position. This chapter ends with a short conclusion about OzJet’s strengths and weaknesses.
Finally, it is discussed why OzJet failed and a strategic recommendation is given, about the likelihood of a third airline being successful in the Australian airline industry.
OzJet started its business in November 2005 with the strategy to enter the Australian business traveller market on the Sydney-Melbourne trunk route. It had to compete with three other airlines: Qantas, Jetstar and Virgin Blue. OzJet’s core capability was to provide a top-notch service at a fully flexible economy price. However, the focus on customer service was not able to meet the needs of the targeted market. Business-class travellers were loyal to Qantas, offering a much higher flight frequency and loyalty program for this not so price sensitive market segment. In the end, OzJet had neither the cost structure (using old plains) nor the reputation and financial background to consist against its strong competitors.
As a result, despite the high quality of its services, the airline OzJet couldn't find its niche and made a double digit million $ loss (about 10 million $) after 4 months. It ceased all scheduled operations on 12th March 2006 and now operates as a private charter company.
Table of Contents
- Executive Summary
- Introduction and Overview
- Structure Outline - Main Task and Procedure
- OzJet and the Airline Industry
- The External Environment
- The General Environment
- Demographic Changes
- Socio-Cultural Forces
- Political/Legal
- Technological
- Economic
- Global Factors and Other Issues
- Conclusion - General Environment
- The Competitive Environment – The Airline Industry
- Competitor Analysis
- Qantas
- Jetstar
- Virgin Blue
- Conclusion Competitor Analysis
- Conclusion – Opportunities and Threats
- The General Environment
- The Internal Environment
- Summary of SWOT Analysis
- Conclusion - Why OzJet failed
- Evaluation of the likelihood that a third carrier can make a successful entry
Objectives and Key Themes
This case study aims to analyze the reasons behind OzJet's failure in the Australian airline market. It examines the external and internal factors contributing to the airline's downfall within a short operational period.
- Analysis of the competitive landscape of the Australian airline industry.
- Evaluation of OzJet's strategic choices and their effectiveness.
- Assessment of OzJet's internal resources and capabilities.
- Examination of the external factors impacting OzJet's operations.
- Discussion of the feasibility of future entrants into the Australian airline market.
Chapter Summaries
Executive Summary: This provides a concise overview of OzJet's launch, strategy, market challenges, financial losses, and ultimate cessation of scheduled operations. It highlights the failure despite a focus on high-quality service, due to insufficient cost structure and lack of competitive edge against established players.
Introduction and Overview: This chapter introduces the case study's objective, which is to analyze OzJet's failure. It outlines the structure of the report and briefly introduces OzJet and the Australian airline industry context. OzJet's launch in November 2005, its target market of business travelers on the Sydney-Melbourne route, its low-cost structure, and its focus on high-quality service are mentioned, setting the stage for a deeper analysis in subsequent chapters.
The External Environment: This chapter delves into the external factors affecting OzJet. It analyzes the general environment, including demographic, socio-cultural, political, legal, technological, economic, and global forces. The competitive environment is assessed using Porter's Five Forces framework. A detailed competitor analysis of Qantas, Jetstar, and Virgin Blue is conducted, revealing the intense competition and established market positions of existing players. This chapter concludes by identifying the opportunities and threats faced by OzJet in the Australian airline market, highlighting the challenges posed by the strong established competitors and the overall market dynamics.
The Internal Environment: This chapter focuses on OzJet's internal environment, utilizing a resource-based view. It examines OzJet's tangible resources (physical and technological assets, financial resources) and intangible resources (reputation, innovation, human capital). The analysis encompasses the airline's capabilities and identifies its internal strengths and weaknesses. The chapter ultimately concludes by synthesizing these elements to illuminate OzJet’s competitive position, providing a crucial foundation for understanding the reasons for their failure.
Summary of SWOT Analysis: This chapter synthesizes the findings from the external and internal environment analyses, presenting a comprehensive SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for OzJet. It directly addresses the central question of why OzJet failed, attributing the failure to a combination of internal weaknesses (such as insufficient resources and a less-competitive cost structure) and external pressures (strong competition, market saturation). A final section evaluates the probability of a third airline finding success in this highly competitive market, drawing on the lessons learned from OzJet's experience.
Keywords
OzJet, Australian airline industry, competitive analysis, Porter's Five Forces, low-cost carrier, strategic management, resource-based view, SWOT analysis, business failure, market entry, competitive advantage.
OzJet Case Study: Frequently Asked Questions
What is this document about?
This document is a comprehensive preview of a case study analyzing the reasons behind the failure of OzJet, an Australian airline. It includes a table of contents, objectives, key themes, chapter summaries, and keywords. The study examines both the external and internal factors contributing to OzJet's downfall.
What are the main objectives of the case study?
The primary objective is to analyze why OzJet failed in the Australian airline market. The study also aims to analyze the competitive landscape of the Australian airline industry, evaluate OzJet's strategic choices, assess its internal resources and capabilities, examine external factors impacting its operations, and discuss the feasibility of future entrants into the market.
What are the key themes explored in the case study?
Key themes include the competitive dynamics of the Australian airline industry, OzJet's strategic decisions and their effectiveness, an assessment of OzJet's internal strengths and weaknesses using a resource-based view, the impact of external factors (economic, political, technological, competitive), and the likelihood of success for future airline entrants in this market.
What are the key external factors affecting OzJet's performance?
The case study examines various external factors, including demographic changes, socio-cultural forces, political and legal factors, technological advancements, economic conditions, global factors, and intense competition from established airlines like Qantas, Jetstar, and Virgin Blue. Porter's Five Forces framework is likely used to analyze the competitive environment.
What are the key internal factors contributing to OzJet's failure?
The internal analysis focuses on OzJet's resources and capabilities using a resource-based view. This includes an examination of its tangible assets (physical, technological, financial) and intangible assets (reputation, innovation, human capital). The analysis identifies internal strengths and weaknesses that contributed to the airline's inability to compete effectively.
What is the overall conclusion of the case study regarding OzJet's failure?
The case study concludes that OzJet's failure was likely due to a combination of internal weaknesses (e.g., insufficient resources, less competitive cost structure) and significant external pressures (e.g., strong competition, market saturation). The study also assesses the probability of a third airline successfully entering this highly competitive market, drawing on the lessons from OzJet's experience.
What analytical frameworks are used in the case study?
The case study likely utilizes Porter's Five Forces framework to analyze the competitive environment and a resource-based view to assess OzJet's internal capabilities and resources. A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is also employed to synthesize the findings from the external and internal environment analyses.
What are the chapter summaries included in the preview?
The preview includes summaries for each chapter: Executive Summary (overview of OzJet's launch, strategy, and failure), Introduction and Overview (setting the context and objectives), The External Environment (analysis of external factors and competition), The Internal Environment (analysis of OzJet’s internal resources and capabilities), and Summary of SWOT Analysis (synthesizing findings and concluding reasons for failure).
What are the keywords associated with this case study?
Keywords include OzJet, Australian airline industry, competitive analysis, Porter's Five Forces, low-cost carrier, strategic management, resource-based view, SWOT analysis, business failure, market entry, and competitive advantage.
- Quote paper
- Marco Hierling (Author), 2007, The Australian airline industry and the case of OzJet, Munich, GRIN Verlag, https://www.grin.com/document/76304
