Harvard Case - Qantas Airlines: Twitter Nosedive
"Qantas Airlines: Twitter Nosedive" Harvard business case study is written by Jana Seijts, Paul Bigus. It deals with the challenges in the field of General Management. The case study is 6 page(s) long and it was first published on : Nov 27, 2012
At Fern Fort University, we recommend that Qantas Airlines implement a comprehensive strategy to rebuild its brand image and regain customer trust following the Twitter crisis. This strategy should focus on a multi-pronged approach encompassing crisis management, corporate social responsibility, digital transformation, and employee engagement.
2. Background
The case study revolves around Qantas Airlines' disastrous Twitter campaign titled 'Qantas: The Spirit of Australia.' The campaign, intended to celebrate the airline's history and connect with customers, backfired spectacularly. The use of automated responses and a lack of human oversight resulted in insensitive and inappropriate replies to customer queries and complaints. This led to widespread public backlash, damaging Qantas' brand image and reputation.
The main protagonists of the case study are Alan Joyce, Qantas' CEO, and the airline's social media team responsible for managing the Twitter campaign.
3. Analysis of the Case Study
Strategic Framework:
This case study can be analyzed using a combination of frameworks including:
- SWOT Analysis: Qantas' strengths include its strong brand recognition, extensive network, and loyal customer base. However, the Twitter crisis exposed weaknesses in its digital strategy, customer service, and internal communication. Opportunities lie in leveraging technology for improved customer experience and strengthening its CSR initiatives. Threats include competitive pressure from other airlines, volatile fuel prices, and potential future social media blunders.
- Porter's Five Forces: The airline industry is characterized by high competition, low switching costs, and bargaining power of suppliers. Qantas faces threats from low-cost carriers and international airlines, while its bargaining power with suppliers is limited.
- Corporate Governance: The Twitter crisis highlighted the importance of strong corporate governance, including clear decision-making processes, risk assessment, and oversight of social media activities.
Key Issues:
- Crisis Management: Qantas failed to adequately manage the Twitter crisis, resulting in further damage to its reputation.
- Digital Transformation: The airline's digital strategy lacked sophistication and human oversight, leading to inappropriate responses and a lack of customer engagement.
- Corporate Social Responsibility: The Twitter crisis exposed a disconnect between Qantas' stated values and its actions, impacting its brand image and customer trust.
- Employee Engagement: The lack of employee engagement in social media management contributed to the crisis, highlighting the need for better internal communication and training.
Financial Impact:
The Twitter crisis likely had a negative impact on Qantas' financial performance, affecting brand value, customer loyalty, and potentially revenue.
4. Recommendations
1. Crisis Management:
- Immediate Apology and Action: Issue a sincere public apology acknowledging the mistakes and outlining immediate steps to rectify the situation.
- Independent Review: Commission an independent review of the social media strategy and processes to identify systemic weaknesses and suggest improvements.
- Transparency and Communication: Be transparent about the crisis, its impact, and the steps taken to address it. Communicate proactively with stakeholders, including customers, employees, and investors.
2. Corporate Social Responsibility:
- Realign Strategy with Values: Realign the company's CSR strategy with its core values, focusing on initiatives that demonstrate genuine commitment to sustainability, community engagement, and ethical practices.
- Employee Engagement: Encourage employee participation in CSR initiatives and provide opportunities for them to contribute to the company's social impact.
- Transparency and Accountability: Publish regular reports on CSR performance and be transparent about the company's social and environmental impact.
3. Digital Transformation:
- Invest in Technology: Invest in advanced social media management tools and platforms that enable real-time monitoring, sentiment analysis, and automated responses with human oversight.
- Customer-Centric Approach: Shift focus from promoting the brand to engaging with customers, responding to their needs, and providing personalized experiences.
- Employee Training: Provide comprehensive training to employees on social media etiquette, crisis communication, and customer service best practices.
4. Employee Engagement:
- Internal Communication: Improve internal communication channels to ensure employees are informed about company initiatives, policies, and values.
- Employee Empowerment: Empower employees to contribute to the company's success by providing them with opportunities for growth, development, and recognition.
- Culture of Openness: Create a culture of openness and feedback, encouraging employees to share their ideas and concerns.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Mission: The recommendations align with Qantas' core competencies in aviation and its mission to provide safe, reliable, and customer-centric air travel.
- External Customers and Internal Clients: The recommendations prioritize customer satisfaction and employee engagement, recognizing their crucial role in the company's success.
- Competitors: The recommendations aim to differentiate Qantas from its competitors by focusing on its unique brand values, customer experience, and CSR initiatives.
- Attractiveness: The recommendations are expected to improve brand image, customer loyalty, and financial performance, ultimately enhancing the company's long-term competitiveness.
6. Conclusion
The Twitter crisis presented a significant challenge for Qantas Airlines, impacting its brand image, customer trust, and financial performance. By implementing a comprehensive strategy that prioritizes crisis management, corporate social responsibility, digital transformation, and employee engagement, Qantas can rebuild its reputation, regain customer trust, and emerge stronger from this crisis.
7. Discussion
Alternatives:
- Ignoring the crisis: This would have resulted in further damage to the brand and a loss of customer trust.
- Issuing a generic apology: This would have lacked sincerity and failed to address the root causes of the crisis.
- Focusing solely on technology: This would have neglected the importance of human interaction and customer service.
Risks and Key Assumptions:
- Implementation challenges: Implementing the recommendations requires significant commitment from management and employees.
- Changing customer sentiment: Regaining customer trust may take time and effort.
- Competitive landscape: The airline industry is highly competitive, and competitors may take advantage of Qantas' vulnerability.
8. Next Steps
Timeline:
- Immediate: Issue a public apology and initiate an independent review.
- Short-term (3-6 months): Implement changes to social media strategy and processes, enhance employee training, and launch new CSR initiatives.
- Long-term (12-24 months): Monitor progress, refine strategies, and invest in ongoing digital transformation and employee engagement initiatives.
By taking decisive action, Qantas can turn this crisis into an opportunity to strengthen its brand, improve its operations, and solidify its position as a leading airline in the global market.
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Case Description
The executive of Government and Corporate Affairs at Qantas airlines faced a communication situation that was spiralling out of control. Qantas had launched a contest through the social media service Twitter, asking participants to use Twitter to describe their "dream luxury inflight experience." However, the competition dissolved as thousands of people used the opportunity to express negative comments about Qantas. By the second day, nearly 15,000 people worldwide had used social media to vent their frustrations with the airline. The executive needs to devise a plan of action, before additional damage is incurred by one of Australia's strongest brands.
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