Strategy is a Mess
I would have to agree, Timmeeee. Let's not forget though, he is a business man. Therefore, he is the one who will end up with egg on his face if Ozjet fails. But he is an honest man of good repute.
In any race, he knows he can also be the loser. He is prepared to face that, and so must the pit crew. However, the consequence of his ambitous foray into the golden triangle (Melbourne-Sydney-Brisbane) may not yet be realised by him. Fear nothing and you could risk losing everything because of your blindness. Plan wisely and there can be room for everybody.
His reputation presents the industry with a dilemma because he has endorsed the need for such a product over and above the behaviour of the existing markets (in terms of demand and supply of a pure business product in a medium price range) and in doing so is urging the market to take advantage of it. It is this fundamental supposed misconception of the market which may be identified by Qantas and Virgin Blue (and to some degree Jetstar) as being a major threat to them. Accordingly they will position themselves to protect their market share in the event the concept gains momentum.
The frequency with which Ozjet wants to operate will compete very strongly with Qantas' City Flyer and this product is well positioned to meet the Ozjet services head on. Sustained and proactive marketing would result in Ozjet failing to secure sufficient revenue to meet its marketing objectives. These are indicators not un-typical of the Reid and Gray eras. The capacity that Ozjet is proposing to dump into Melbourne -Sydney is there in the long term to be taken but one needs to understand that the growth and uptake is not unilateral.
Whilst there may be sufficient entrainment of Qantas and Virgin defectors with the sweeteners currently on offer, it is my considered view they are not sustainable and this can result in yet another Compass style fall out. If that happens we could see further strenthening of Ozjet rivals in the market with coincident barriers to new entrants for several years to come. This is not too disimilar to what happened in the US and Europe.
On a scale of (Lowest Risk of Failure) 1-10 (Highest Risk of Failure), I would rate (in my opinion) Ozjet on about 8 or 9. This is based largely on my perception that any risk to Qantas would be largely defended, the company has openly announced that it is still developing its marketing plan (and therefore has not had the time to research it well enough) and that the market is bearish about the product.