Threats
- Price wars with competitors
-
Terrorism
- Fuel price
- A weakening economy
- Low-cost business jet coming to market
Competitor analysis
There are currently more than 20 commercial air charter companies in Australia. Qantas Airways Limited is a major competitor in this industry but this analysis is focused on the medium-size businesses. National Jet Systems and Pearl Aviation are the leading providers of private air charter services. These companies grew at the same rate and their prices are low. The existences of these competitors indicate that there is indeed a market for aviation services. National Jet Systems, however, extend its services beyond aircraft charter. It offers Engineering and heavy maintenance, and resource industry support. This suggests that National Jet Systems may benefit from extending its services beyond aircraft charter to other types of aircraft services
In summary, most of the competitors within the segment of air transportation are relying on aircraft charter service only. Unlike the SkyPac, which offers a variety of aviation services such as air cargo and maintenance services, which has proven more successful in the long run. Additional bases other than Sydney will also allow SkyPac to cover the whole Australian market.
Marketing Analysis
The demand for fast and flexible transportation services in Australia is constantly increasing. Key reasons for this development are fears of possible terrorist attacks and Public transportation systems, such as rail and commercial airlines, cannot provide time-efficient and cost-effective transportation for corporate executives and VIPs with regard to the whole range of travel needs.
The target market for SkyPac is the Business Aviation Market. By using a business aircraft, corporate leaders are able to use their time more productively, both onboard and off board. They can reduce overnight stays and maximize flexibility. A recently published study by Arthur Andersen has shown that companies using business aircraft are more profitable while experiencing higher growth than their peers relying on commercial airlines.
According to the Aircraft Owners and Pilots Association (AOPA), the segment of business aviation will grow by 6% p.a. worldwide in the upcoming years. This fact is a strong indication of the growing need for flexible and time-efficient executive transportation.
2.1- The legal ownership of SkyPac is a Partnership. The partnership involves two owners, Nick Carpenter and Rick Pegus. The advantages of being in a partnership are that because there is more than one owner it may be easier to raise funds, the profits flow directly to the partners, the workload can be shared instead of one person having to do all the work and also each partner can become more efficient at the task in which they do best. The disadvantages of the partnership is that the owners are liable for any debts, because decisions have to be shared they can be disputes, the profits must be shared and also that if one partner wants to leave of dies then the other partner is responsible to all the debts.
2.2- Future expansion options for SkyPac are rather limited. The business has established the aim of flying corporate people or normal people without the hassles. There are some expansion options for the business and these include:
- Widening their range to include luxury coaches and cars. These could be for corporate people who are going on short trips but want to be able to work whilst traveling there and back.
- They could expand to have offices interstate. At the moment there office is in Sydney but they could also expand into Melbourne, Perth and Brisbane. This would mean that people could come into the offices with enquires rather than speaking over the phone or through email.
- SkyPac could also expand the business to include packages. Meaning that they could offer flights, accommodation and meals for a set price. This would mean less hassle for the business people and leisurely travelers and could create a greater interest in the company.
3.1- There are several government regulations that relate to the running of SkyPac and these include:
- Federal- The Corporation’s act, which involves keeping accounts and meetings regulating the corporate activities of companies. Also, the trade practices act, which involves regulating the commercial and trading activities of the business. The trade practices act involves fair-trading and provides consumer protection.
- State- Occupational health and safety and environment, this involves creating a safe workplace and setting out environment protection strategies.
- Local- Planning and Building regulations- this would involve getting permission to build aircraft hangers or Lounges for guests.
4.1Ethical issues and legal issues relating to the operation of the business
The most common legal troubles of the business are the result of unclear agreements. Whether you're dealing with employees, contractors, vendors, partners, investors or customers, it is important to be clear up front and in writing. Handshake deals and legally unclear agreements can bring a business into trouble.
Bullying behavior and sexual harassment in the workplace should not be tolerated because laws are not in place and they make negative impacts to the company’s operations and profits.
Everyday decisions for a business are also involved in ethical issues. Acting fairly and honestly, on a business level, it can refer, for example, to fair and honest competition.
5.1- Key success factors of the business
· Taking a hard look at your competition
SkyPac have noted the strengths and weaknesses of your competitors helps identifying points of differentiation that can be communicated in sales and marketing programs.
· Being realistic about a business objectives
SkyPac has a clear vision and a mission statement that can be matched with current investment and spending plans
- Understand your customer and providing impeccable customer support
The company understands the target customer and collecting feedback regarding the problem
· Plan for the future.
The partnership is always considering targeted investments for the future to build a stronger business infrastructure.
- Being open to every single opportunity that comes your way.
6.1 Opportunities and Strategies for the Future
SkyPac has a relatively conservative future planned in front of them. I believe that SkyPac should look to consolidate their business in Sydney as well as the other major East-Coast cities including Melbourne and Brisbane. After the Australian market is shown how strong the business is the company should look to expand to business capitals of the world.
Countries that have a large amount of high-profit companies may include the USA, the UK and Japan. If an office in each city could be opened the customer-base would increase significantly. If an office could be opened in New York, London and Tokyo it would be a large step for SkyPac. One advantage that the business has is that it can grow as much as it wants whilst being steady within Australia.
The tourism industry is one that is always going to be unlikely to crash, as holidays are a part of everyday life for many people. This is great for the company as it means it is relatively safe. The fact that the majority of the companies clients are involved in business is another great advantage as there will always be international and interstate business dealings. This is why I believe expansion would be monumental in making the company larger and much more profitable. If the company broke into markets including the USA it would increase business and sales greatly.
Form IV Commerce
Business Report
Due Mon October 16th
Word Count: 1580
Teacher: JIM
Business:
Bibliography
www.skypac.com.au
http://www.businessknowhow.com/startup/whatittakes.htm
http://www.zyra.org.uk/runco.htm
Commerce Textbook
Acknowledgements
Thank you to both Nick and Rick for being so helpful with information regarding their company.
