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IBS301m Individual Assignment 2 Group 4 Report
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Downloaded by Huyen Hoang (hoanghuyen159869@gmail.com) lOMoARcPSD|42055241 INDIVIDUAL ASSIGNMENT 2
Lecturer: Bùi Thùy Dương Subject code: IBS301m Class: IB1703 Team 4: Nguyễn Thị Phương HS163305 Part 1+9 Vũ Tùng Dương HS163107 Part 2+3 Nguyễn Thị Thanh Thanh HS163179 Part 7 Phạm Anh Thư HS160801 Part 4 Nguyễn Anh Quân HS160054 Part 5+6 Phạm Huy Hoàng Sơn HS160214 Part 8 0
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1. BACKGROUND OF THE COMPANY .......................................................................................2
2. REVENUE, COST, PROFIT AND FINANCIAL INDEXES OF THE COMPANY ...............3
3. DIVERSIFICATION TYPE ..........................................................................................................7
4. THE CAPABILITIES OF THE COMPANY ..............................................................................9
5. GENERIC COMPETITIVE POSITION MATRIX .................................................................12
6. STRATEGIC MAP ......................................................................................................................13
7. DIVERSIFICATION MATRICES .............................................................................................15
8. STAKEHOLDERS OF THE COMPANY .................................................................................21
9. CONCLUSION ............................................................................................................................24
10. REFERENCES .............................................................................................................................26 1
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I. Background of the company
Vietnam Airlines is the national airline of Vietnam, a four-star airline, under the Airlines
Corporation of Vietnam and established in April 1993. Currently, Vietnam Airlines is a consortium
consisting of Vietnam Airlines, Pacific Airlines and VASCO, under the management of a council
appointed by the Prime Minister of Vietnam. The head office is located at 02 Noi Bai and Tan Son Nhat international airports.
The national airline, Vietnam Airlines (VN) was established in 1956 as Vietnam Civil Aviation.
The airline operates from hubs at Noi Bai International Airport (HAN) in Hanoi and Tan Son Nhat
International Airport (SGN) in Ho Chi Minh City. Da Nang International Airport (DAD) is a
secondary transit hub. As a member of the SkyTeam alliance, Vietnam Airlines flies to about 20
domestic destinations and about 30 international destinations in Asia, Oceania and Europe. The
airline also has codeshare agreements with more than 20 other airlines. Vietnam Airlines' fleet of
92 aircraft is configured with 1 cabin (Economy), 2 compartments (Business Class and Economy
Class) or 3 cabins (Business, Premium Economy and Economy Class)
The airline specializes in domestic routes and to Southeast Asia, East Asia, Europe and Oceania,
with 97 routes to 18 domestic destinations, 35 international destinations, making an average of 360
flights per day. With the vision of becoming Asia's leading airline and taking innovation as the
motto in innovation, Vietnam Airlines always innovates constantly in all fields. Over decades of
development, the Group has affirmed its position as a national airline with a global scale of
operation and regional stature.
The scope of analysis in this report is Vietnam Airlines in terms of the Vietnamese national market. 2
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II. Analyze revenue, expenses, profit and optional financial indicators of Vietnam Airlines in the last 3 years. A. REVENUE Entry 2020 2021 2022
Total revenue from sales and service provision 40.756T 28.093T 70,959T
Net revenue from sales and service provision 40.538T 27.911T 70.587T Financial operating revenue 882T 1.557T 977T Other income 1.012T 283T 309T
- After the Covid 19 pandemic, the demand for people to travel by plane increased sharply. It can
be seen that the revenue figure of 2022 is more than the whole of 2020 plus 2021.
+ In 2022, Vietnam Airlines is estimated to transport more than 18 million passengers, reaching
107.8% of the plan and 211.9 thousand tons of cargo, revenue reaching VND 72,359 billion,
reaching 121% of the plan, of which the parent company will reach VND 50,617 billion, reaching 112% of the plan.
- To be able to do this, Vietnam Airlines has focused on upgrading in depth to bring the best flying
experience to passengers. And in 2022, Vietnam Airlines was honored by the Ministry of Industry
and Trade and the National Trademark Council.
+ Promoting its role as a national airline, Vietnam Airlines actively participates in activities
contributing to regional economic and social development across the country, through
incentive programs, tourism stimulus, investment, trade and tourism promotion cooperation
with provinces and cities. At the same time, social work, spreading human values is always
of special interest to the company, with notable activities in 2022 being the program to donate
bonus miles, convert into air tickets and air services for domestic and foreign volunteer
groups to move, perform duties. B. COST 3
Downloaded by Huyen Hoang (hoanghuyen159869@gmail.com) lOMoARcPSD|42055241 Entry 2020 2021 2022 Financial costs 1.668T 3.766T 1.549T Cost of sales 2.049T 1.238T 2.932T Enterprise management costs 1.468T 1,680T 1.875T Other costs 75T 116T 213T
Current corporate income tax costs 212T 256T 301T
Deferred corporate income tax expenses 5T 57T (23T) Total Cost 5.477T 7.113T 6.847T
- It can be seen that most types of costs of VNA are increasing. This can also understand for them
that after the pandemic to be able to compete with low-cost airlines, they have to step up marketing.
+ Vietnam Airlines quickly changed its marketing strategy to match new market trends.
Transforming the proportion of flexible services, building a brand image that cares about the
community, promoting digital transformation are some of the series of reforms in Vietnam
Airlines' successful marketing mix strategy.
- In addition, although VNA has been invested in the best products, they continue to upgrade
services to create the best experience on the route.
- However, there is still 1 more factor causing the costs to increase, which is the increase in the price of jet fuel.
+ The company has built a fuel price scenario in 2022 of 138-140 USD / barrel, 2 times higher
than in 2021. But as of June 28, 2022, fuel prices have risen above $162 per barrel.
- In addition to the intense Russia-Ukraine war, in a report to the Ministry of Transport on March
25, the Civil Aviation Administration of Vietnam said that the Russia-Ukraine war has negatively
impacted, increasing the costs of Vietnamese airlines.
+ The fighting has prompted many countries to ban airlines from operating air traffic routes
over Russia. Therefore, to reach Europe, Vietnamese airlines have to change their routes to 4
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avoid Russia. Flight time increased from 60 to 120 minutes per trip, resulting in additional
costs ranging from about $10,600 to $21,200 per trip. C. PROFIT Entry 2020 2021 2022
Profit on sales and service provision (7,436T) (10,018T) (2,625T)
Net profit from operating activities (11,897T) (13,132T) (10,187T)
Profit after corporate income tax (11,178T) (13,278T) (10,369T) Other profits 937T 166T 96T
After-tax profit of the parent company (10,927T) (12,907T) (10,452T)
Uncontrolled after-tax profits of the public (251T) (371T) 83T
- The positive recovery of Vietnam Airlines in 2022 can be seen through statistics from the
financial statements, the profits are reduced, although there are still losses, this is an important
milestone of VNA after the pandemic.
- The main supporting factor for Vietnam Airlines in particular and Vietnam's aviation industry in
general is the tourism opening policy starting from March 3/2022.
+ As a result of transporting in the first half of 2022, Vietnam Airlines Group reached nearly
9.5 million passengers, up 24.6% compared to the plan. Vietnam Airlines' cargo and parcel
transportation reached 113,400 tons, up 18.3% over the same period, approximately reaching
the set target. Through flexible sale programs, consolidated revenue in 6 months reached
VND 30,650 billion, exceeding 35.3% of the plan, the consolidated loss before tax was VND
1,309 billion lower than the plan.
- However, profit growth has not been strong because international visitors are the main source of
profit for all companies in the industry (airports, airline services, airlines). The resumption of
international routes is estimated to be slow during the year, as key markets such as China, South
Korea and Japan have yet to reopen to varying degrees. 5
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- VNA's profit also comes from marketing campaigns such as: Vietnam Airline's attractive
promotions 2022, Mid-night Sales – Up to 20% discount on Vietnam Airlines air tickets,...
- It also comes from preferential policies when buying Vietnam Airlines flight tickets.
+ When you buy Vietnam Airlines tickets and become a Lotusmiles member, you will receive
many good incentives such as: Accumulate miles that are usually converted to award tickets,
increase baggage allowance, get seat upgrades, use of business class lounges, priority
services such as (boarding gate, Choose a seat in advance, check in, give miles for your
birthday...) and many other useful incentives. D. FINANCE Entry 2020 2021 2022
Financial operating revenue 882T 1.557T 977T
- VNA's financial performance is in a bad direction as the share price has continuously declined
at the beginning of 2022. The big reason comes from the fact that the aviation industry has not
been able to restore the business situation after being heavily hit by the Covid epidemic and
regulations on flight route restrictions when the Covis epidemic became stressful.
+ From 2020 to now, Vietnam Airlines (HoSE: HVN) stock price has only fluctuated between
12,000 - 27,000 VND/share. Even in the last months of 2022, the market price of this stock
fell below the threshold of VND 13,000.
- As a result, in September 2022, the Ho Chi Minh City Stock Exchange sent a notice to Vietnam
Airlines Corporation, noting the possibility of delisting Vietnam Airlines shares due to persistent
business losses and negative equity.
+ In 2020 and 2021 both recorded losses. Negative equity is nearly VND 4,900 billion. Vietnam
Airlines is also incurring short-term liabilities exceeding current assets in the amount of more
than VND 36,425 billion, overdue liabilities amounting to more than VND 14,850 billion.
- As a result, VNA has not been delisted, although it is still trading at a loss, but because the stock
is under regulatory control attached to HOSE's decision dated March 31, 2022.
+ HVN escaped delisting by selling Cambodia Angkor Air. 6
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III. Diversification type
VIETNAM AIRLINES' business lines in Vietnam include:
A. Main lines of business:
- Air transport for passengers and cargo.
- Maintenance of aircraft, engines, spare parts, aviation equipment and other technical equipment;
manufacturing components, spare parts, aircraft supplies, technical equipment and other contents
in the field of aviation industry.
- Providing technical services and spare parts for domestic and foreign airlines; export and import
of aircraft, engines, spare parts for aviation supplies and equipment (lease, lease, lease, purchase
and purchase and sale) in accordance with the State's regulations.
B. Business lines related to the main business lines:
- Multimodal transport; provision of ground commercial technical services; services at passenger
terminals, cargo terminals and apron services at airports and airports; freight forwarding services;
producing, processing, exporting and importing food for service on aircraft, equipment for air transport lines.
- Investment and exploitation of technical infrastructure at airports: Passenger and cargo terminals,
technical infrastructure, equipment for air transport lines and synchronous services in air transport chains.
- Export, import and supply of gasoline, oil, aviation grease, specialized liquids and other
petroleum at airports and other locations.
- Agency services for airlines, manufacturers of aircraft, engines, equipment, spare parts and
aircraft supplies, domestic and foreign transport and tourism companies; providing commercial,
tourism, hotel, duty-free sales services at air terminals and in provinces and cities; other air services.
- Vietnam Airlines' diversification is single business. Because it only has business is the service
of transporting customers and goods,... C. Justify:
- The strength of Vietnam Airlines is different from its competitors is the comfort of the aircraft
they are operating and using. It can be mentioned as BOEING B787: 7
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+ This aircraft is rated as a "mobile 5-star hotel". The technology integrated on this model is
very good, such as: "The humidity and pressure in the cabin are kept at the same level as the
pressure at an altitude of 1.8km, while this index in other aircraft models is 2.4km. As a result,
passengers will not feel tired during the flight."
- Or you can add the AIRBUS A350 family. Although not equipped with advanced technology like
the BOEING B787, this aircraft integrates all the amenities that customers need.
- Their side services are also extremely attractive such as duty-free sales on board from January 1,
2016. This is a milestone showing the creativity in business to attract customers to Vietnam Airlines.
+ In 2016, Vietnam Airlines introduced an in-flight duty-free shopping service called Lotushop
to the market and received positive feedback from passengers. In October 2018, Lotushop
officially returned with 4-star quality when cooperating with the "tycoon" of brand
distribution from Hong Kong King Power
➔ Starting from the name Vietnam Airlines abbreviated from "Vietnam national airline" shows
the class. With this name, the airline easily positioned the brand, attracting a number of
customers to trust the national branded service despite the higher ticket prices than others.
- Moreover, the initial orientation was to become a 5-star international airline, so the image of
Vietnam Airlines is also different from other low-cost airlines. They are very delicate when using
“Ao Dai” costumes for employees to enhance the beauty of Vietnamese people.
- Vietnam Airlines also pays great attention to applying technological elements to the ticketing
process to bring the best experience to customers.
- From the above outstanding evidence, it can be shown their success, when they always innovate
to suit the needs of customers and also to attract customers, to affirm as the leading wing of Vietnam's aviation industry. 8
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IV. The capabilities of the company Technology Infrastructure HRM Procurement Development Legal: Vietnam VNA brings customers a Airlines (VNA) is the different experience national airline of with seamless service on a synchronous and most Vietnam. This is modern technology considered a core platform, from finding component of flights, buying tickets Vietnam Airlines and checking in online, Corporation, as of buying add-on services 01/07/2016, the state on the website to after- capital ratio at sales service through Vietnam Airlines was Sabre's advanced 86.16%. VNA is under Vietnam Airlines technology solutions. In the control of the affirms that all
addition to continuing to VNA has Government. recruited coordinate the continuously Accounting and personnel must implementation of the meet the Passenger Service signed contracts Inbound Finance: VNA is state- requirements of System, Sabre will for aircraft logistics owned. In 2016, VNA maintenance, issued private shares health, English support Vietnam fuselage to foreign strategic proficiency, strict Airlines to meet the and transparent distribution technology maintenance,
investor ANA Holdings entrance tests of standards of the wings as well as Inc (Japan), raising the airline. International Air spare parts charter capital to VND Transport Association supply packages 12,275 billion. By the (IATA). Sabre and with Singapore end of December Vietnam Airlines also Technologies 2020, the total aim to use advanced Aerospace Ltd consolidated revenue technology to accelerate for the entire in 2020 of the the development of Airbus A321 Corporation is mobile applications. fleet. estimated at VND Flight operations, flight 42,523 billion, of safety, flight which the parent documentation are company is estimated managed using EFB at VND 32,983 billion, software system. exceeding the plan of • Pilot training: Vietnam Airlines has VND 1,937 billion
VNA and Vietnam launched a feature to (4.8%) and VND 448 Flying Pilot look up ticket and School baggage information on Operation billion (1.4%) inaugurated flight www.vietnamairlines.co s respectively. VNA school at Rach m website, helping publishes annual
Gia airport. This is passengers to actively reports summarizing the first civil pilot check and feel more
their financial position training school in secure when 9
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Outbound Government performs communication logistics two roles: The first is and customer the owner, the service style. At second is the state the same time, manager. With the they are also role of state contributors to management, the spreading the Government has beauty of issued a series of Vietnamese taxes and fees, culture and people Vietnam Airlines to domestic support packages tourists and have many international friends. advantages over Product private enterprises Database marketing: development and such as owning long- The company's main market research: standing national server keeps track of all Marketing VNA's marketing brands, having many customers' records so and Sales team is always businesses backing they can suggest interested in such as service promotions to them. listening to companies, airport consumers' Internet sales: Facebook 10
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V. Generic competitive position matrix
- The driving force for management in building Business-level strategies is the increasing demand
from customers. They are now demanding higher flight quality for a lower price. Both low-cost
airlines and Vietnam Airlines are trying their best to satisfy their customers. It bridges the gap in
price and service quality between them.
- Faced with that situation, Vietnam Airlines decided to apply a different strategy. Through
differentiation, they provide customers with products with differentiated features and values.
- Firstly, they built a new avatar image as "golden lotus", making a strong impression and suitable for Asian psychology.
- Second, Vietnam Airlines also differentiates its products by enhancing convenient and safe
flights. For example, aircraft and infrastructure are modified to accommodate people with
disabilities; human resources developed/trained (pilot staff, maintenance & overhaul); The fleet
is also enhanced in quantity and quality
- Moreover, they also perform differently in ionic strategy by achieving unmatched network
compared to domestic competitors. They will expand their network from 26 international
destinations and 20 domestic destinations (2010) to 44 and 23 destinations (2020) respectively.
- When a company differentiates its products, it can often charge high prices for its products or services in the market.
- Applying a differentiation strategy, Vietnam Airlines focuses on providing unique and high-
quality products and services at high prices. Vietnam Airlines makes customers believe that
higher prices are justified and they are provided with more valuable services (tangible as well as
intangible). Airlines emphasize Vietnam cuisine as a feature of VNA flights, newly designed
tableware, as well as providing pajamas, blankets, bed linen to bring comfort and luxury
experience most important on long journeys.
- Most importantly, to become the leading digital airline, VNA has worked hard on applying
modern technologies. Skywise, Oracle cloud and new mobile versions of the application have more advanced features.
- Most of the tasks in Vietnam Airlines' differentiation strategy are achieved through the
advantages of a state-owned company with 75% government backing, such as huge capital,
political and grassroots support. basic infrastructure available. 12
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Target customer orientation
Vietnam Airlines' customers in the target market are classified based on travel purposes, nationality and income: - By purpose of travel:
• Tourists, business and business travelers, workers, study tourists, family visitors, and immigrants. - By nationality:
• Vietnamese and Chinese guests: similar in culture, price sensitive and not demanding much service quality.
• Japanese guests: high requirements for service quality.
• Korean guests: relative requirements for service quality.
• Taiwanese visitors: high requirements for service quality.
• French visitors: often accompanied by large groups traveling to Southeast Asian countries; is
a very approachable, funny guest, often planning to travel very far away.
• Australian and American guests: these are guests with a high standard of living, large consumer
demand, so they require very high service quality. - By income:
• Economy and economy class: guests are mainly employees, students and students.
• Business class: guests are mainly businessmen, celebrities and successful people.
Research product attributes
- Since 2015, Vietnam Airlines has oriented to invest in converting from 3-star to 4-star airline
rating, focusing on major upgrades in 2 service classes, mainly Business Class (C class) and
Premium Economy Class (Delux). One of the basic criteria for an airline to have a 4-star rating
is that the aircraft must have absolutely flat seats. Since July 2015, Vietnam Airlines has officially
put into operation two new generation aircraft Boeing 787-9 and Airbus 350-900. If you are a
regular customer of Vietnam Airlines, the airline has data to know where you like to sit, what
food you eat, what kind of newspaper you read, what kind of movies or music you like to watch...
Even on that trip, you only use Economy Class. Before you board, there is enough of this data 13
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in your flight records for you to be served as best you can. "Buying a good aircraft is a necessary
condition, but with the service profession, suppliers increasingly have to pay attention to very
small details to bring satisfaction to passengers" - leaders of Vietnam Airlines shared.
- As a 4-star airline, Vietnam Airlines also offers special services for young passengers in addition
to continuing the preferential price policy equal to 70% of the regular price for children under
12 years old or meals exclusively for children. Traveling with children, please ask the cabin crew
to provide them with a catalog of 6 different sets of toys according to age and gender.
- Food service is comprehensively invested, from tableware, glasses, cups, wine cabinets in C
class to a diverse menu with high quality healthy foods. The airline also cooperates with top
chefs from high-end hotels to design, unique dishes and beverages to give passengers exquisite
experiences of Vietnamese and world culinary culture.
- No matter what class you sit in, you can enjoy the AVOD on-demand entertainment system
(watch live TV, movies, music, games...) on the large LCD liquid crystal screen and ancillary
applications in the seat. Economy Class has not been upgraded much because when it was still
at 3 stars, Vietnam Airlines' economy class service was rated to a better standard than 4 stars.
- The 4-star airline is rated to provide products of good standards on all types of travel combined
with the standards of onboard and airport staff. One of the important factors in VNA's service
sector is to equip professional service skills at all customer contact points, from a team of 18
members... Even ground staff such as ticket offices and frontline departments must undergo basic
to advanced customer service training. Customer service training syllabus covers every detail
about dress code, how to greet, how to smile, how to communicate, eye contact and language,
and difficult situations to handle. Customer service skills training will equip employees to always
be courteous, courteous, enthusiastic, attentive and ready to serve.
- Among the pre-flight services that an airline provides, the lounge service for priority guests is
the most enjoyable and engaging experience. Lounge service is not only a quiet space to wait for
departure time, to enjoy high-class drinks, typical dishes of each region but also a way to access
the culture and quintessence of each destination in the passenger's journey. Since upgrading the
4-star service, the number of passengers using Vietnam Airlines' C and Deluxe services has
increased dramatically. In key routes to the UK and France, the coefficient of using C and Delux seats reaches 70-80%. 14
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VII. Diversification matrix
Vietnam Airlines is a de facto company operating in the field of aviation. Based on the information
available until I ran out of knowledge in September 2021, I can give a general analysis of how
Vietnam Airlines' business activities can be placed in the diversification matrix. However, please
note that market conditions and the competitive landscape may have changed since then, so it is
essential to conduct a thorough analysis with up-to-date information.
The diversification matrix typically evaluates businesses based on two aspects: market
attractiveness and competitive advantage. Here is a simple example of a diversification matrix with four quadrants:
- Quadrant 1: High market attractiveness, High competitive advantage
- Quadrant 2: High market attractiveness, Low competitive advantage
- Quadrant 3: Low market attractiveness, High competitive advantage
- Quadrant 4: Low Market Attractiveness, Low Competitive Advantage
Now, let's look at Vietnam Airlin:es' business activities: 15
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- Passenger transportation by air: Vietnam Airlines' core business is air passenger transportation,
including operating domestic and international flights. The airline operates in a dynamic and highly competitive industry.
- Especially from the end of November 2021, Vietnam Airlines has officially operated regular
routes to the US with the goal of expanding the international route network, both to take
advantage and optimally exploit wide-body fleet resources.
- However, Vietnam Airlines has established itself as the national airline and has a relatively strong
presence in the market. Vietnam's total commodity market in 2021 will increase by 17.5%
compared to 2020 (international by 123.5%, domestic by 87.6%). The ranking is based on data
from 54 markets around the world and a survey of more than 17 million people conducted
between October 2020 and September 2021 on aspects of the brand including overall quality,
value, impression, business reputation, satisfaction and willingness to recommend the brand to others.
• Vietnam Airlines is the only representative of the travel sector in the top 10 ranking thanks to
its outstanding efforts in adapting to the Covid-19 epidemic.
• Vietnam Airlines' route network covers 21 provinces and cities across the country.
Internationally, the airline has opened routes to Asia, Europe, Australia and the Americas, with
a total of 28 destinations in 26 countries and territories.
- On Skytrax's World Airlines Awards 2018, Vietnam Airlines is ranked 50th while Thai Airways
is 10th. Vietnam's airline is up to 40 places behind Thai Airways. When comparing each category
surveyed by Skytrax, it can be seen that Vietnam Airlines scored lower than Thai Airways in many categories.
➔ With its extensive route network and well-known brand, the Airline operates in an industry
with high market attractiveness but can see a relatively low competitive advantage compared
to some global competitors. Vietnam Airlines can be placed in Quadrant 2.
Freight and logistics services (Current business): In addition to passenger transportation, Vietnam
Airlines also provides cargo and logistics services. While the air transport industry can be
competitive, the growth of e-commerce and international trade presents opportunities. Vietnam
Airlines can leverage its existing infrastructure, fleet and customer relationships to develop a
competitive advantage in this area. 16
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- Freight: Vietnam Airlines provides cargo transportation services on its flights. This is an
important area in air transport operations, allowing customers to send and receive goods quickly
and securely through Vietnam Airlines' flight network.
+ From March 12 to 31, 2020, Vietnam Airlines launched 45 cargo flights from two major
cities, Hanoi and Ho Chi Minh City, to Japan, Korea, China, Hong Kong, Singapore, Malaysia and Bangkok.
+ In addition to goods serving the economy and social life, Vietnam Airlines' cargo flights also
transport goods for the Covid-19 prevention and control campaign including medical masks,
anti-epidemic clothing, medical equipment and supplies.
- Cargo logistics: Vietnam Airlines provides cargo-related logistics services, including storage,
handling, loading and unloading and handling of cargo at airports. This ensures that goods are
properly managed and handled, ensuring their safety and quality. Vietnam Airlines provides
general cargo transportation services including various types of goods such as dry goods,
consolidated goods, household items, personal goods, and other types of goods that are required
for normal service. With an extensive transportation network including air and road of Vietnam Airlines.
- Cargo tracking: Vietnam Airlines provides cargo tracking services, allowing customers to track
the transit of goods from the point of origin to the point of pick-up. This gives customers detailed
information about the location and condition of the goods throughout the shipping process.
+ Over the past year, Vietnam's total exports to the UK reached £5.9 billion, up 30.3%
compared to 2021. Total UK exports to Vietnam reached £1 billion, up 22.3%. In Southeast
Asia, Vietnam is the UK's second largest trading partner, accounting for 0.4% of the UK's total turnover.
➔ Vietnam Airlines' growth potential in terms of market attractiveness and operating capacity,
Vietnam Airlines' freight and logistics services are very high. showing high market
attractiveness and high potential for competitive advantage, should fall into Quadrant 1
- Ancillary Services and Partnerships (Existing and Potential Businesses): Airlines often generate
additional revenue through ancillary services such as in-flight retail, frequent flyer programs,
and partnerships with hotels and car rental companies. Vietnam Airlines can leverage its
customer base and expand ancillary services to enhance the overall customer experience and generate additional income. 17
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+ Travel agency services: Vietnam Airlines cooperates with travel agents to provide ticketing,
tour booking services and assist customers in booking and adjusting flight schedules. This
helps to expand the reach with customers and strengthen partnerships with the tourism industry.
- Saigontourist Group is a leading travel group in Vietnam, aiming to become one of the leading
tourism brands in Southeast Asia and the continent in the fields of accommodation - cuisine -
travel - entertainment - training and other services. Vietnam Airlines signed comprehensive cooperation agreement
+ Airline partner services: Vietnam Airlines establishes links and partnerships with domestic and foreign airlines.
This includes codeshare, interline cooperation, and affiliation with member airlines of international
airline alliances. This expands the flight network and enhances connectivity to destinations around the globe.
From 15/5 to 20/7/2020, Vietnam Airlines operates a total of 12 code-share flights every day
Vietnam Airlines - Jetstar Pacific
The form of "codeshare" cooperation helps the two partner airlines to "spread" each other's route
networks. Airline A does not have direct routes to point C but can still sell tickets there thanks to
a codeshare agreement with Airline B that operates to point C.
However, Vietnam Airlines faces stiff competition from domestic and international service
providers, which may affect the market share and profitability of airlines such as Vietjet Air, Jetstar
Pacific and Bamboo Airways. Support services and ground handling are often under price pressure
as airlines and airports look for cost-effective solutions. This could lead to price wars and reduce
profit margins for service providers like Vietnam Airlines.
The demand for ground handling and support services is often associated with the seasonality and
flight schedules of the aviation industry. During low seasons or periods of reduced air travel,
demand for these services may decrease
On the other hand, Vietnam Airline's ground support and handling is highly competitive because:
Vietnam Airlines has a long and reputable experience in providing ground handling and support
services. The company has accumulated professional knowledge and skills in this field, ensuring 18
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high quality for the services provided. Vietnam Airlines has strong partnerships with airports and
other relevant partners in the aviation industry. This enhances the company's ability to provide
high-quality ground handling and support services, as well as create close links with
stakeholders,With the continuous development of the aviation and tourism industry, the demand
for ground handling and support services is increasing. Vietnam Airlines takes advantage of this
market and provides high-quality services to meet the needs of its customers.
➔ Shows low market attractiveness and high competitive advantage potential, should fall into Quadrant 3.
Expanding international influence
- Competition from international airlines: There are many international airlines that have a strong
presence and operation in the international market. These airlines often have wide flight
networks, high-quality service, and strong competitiveness. Vietnam Airlines will have to
compete directly with these airlines, and this could present a significant challenge.
- Restrictions on Local Power: International expansion requires compliance with regulations, local
powers, and the jurisdictions of countries in which Vietnam Airlines wants to operate. Some
countries may impose legal, tax and regulatory barriers that Vietnam Airlines needs to comply
with. This may increase costs and reduce Vietnam Airlines' competitive advantage over local rivals.
- Adaptability to market requirements: International markets may have different specific and
regulatory requirements. Vietnam Airlines needs to be able to adapt to these requirements and
provide tailored services to meet the needs of its international customers. If Vietnam Airlines
does not meet market requirements, it may find it difficult to compete with competitors in the international market.
- Brand factor: Although Vietnam Airlines has built a reliable and reputable brand in the country,
their brand may not be widely recognized in the international market. This may reduce Vietnam
Airlines' competitive advantage over international airlines that already have strong and widely known brands.
- Regulatory and regulatory barriers: International expansion requires compliance with local
regulations and jurisdictions, including competition restrictions, licensing and legal conditions, 19
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taxation, and market regulation. Adapting and complying with these regulations may be a
challenge for Vietnam Airlines and reduce its competitiveness.
Overall, although Vietnam Airlines has had international expansion, the low level of competition
can be explained by network limitations, brand factors, regulatory and legal barriers, Vietnam
Airlines' international expansion is less attractive due to fierce competition, Restrictions on local power
➔ Vietnam Airlines' market attractiveness and competitive advantages in expanding its
international influence are ranked Quadrant 4.
By placing Vietnam Airlines' business activities in this diversification matrix, the airline can
strategically assess its current and potential operations, and identify areas for growth and
diversification. This allows Vietnam Airlines to leverage its existing customer base and expertise
while exploring new opportunities to expand its business. 20
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VIII. Stakeholders of Vietnam Airlines PRIMARY STAKEHOLDERS
The key stakeholders are customers, employees, shareholders, suppliers, communities
- Customers are an important group contributing to bringing profits to VNA development, and maintaining stability
- Staff: is also one of the important factors that help VNA develop, they help provide services to
customers such as ticket sales,… Make work smoother
- Shareholders The largest shareholders of Vietnam Airlines with corresponding ownership are the
State Capital Management Committee at enterprises (55.20%), State Capital Business
Investment Corporation (31.14%) and ANA Group (5.62%). are capital contributors in business,
jointly responsible for the company's contract.
- Main suppliers: including Aircraft Engineering Company Limited (VAECO), Vietnam Aviation
Fuel Company Limited (SKYPEC), Vietnam Airport Ground Service Company Limited
(VIAGS), Noi Bai Aviation Meal Joint Stock Company (NCS), Sabre Vietnam Joint Stock
Company, ....... they are also one of the indispensable components in VNE's operations Suppliers
have an important role to play in supporting Vietnam Airlines to improve service quality, expand
its flight network, modernize its fleet and enhance its competitiveness.
- Community: The company constantly strives for sustainable development, creating a friendly
working environment, considering employees as the most valuable asset, complying with
environmental protection standards, actively participating in community and social activities.
The stakeholders are government, competitors, media,
- Government: has an important role for VNE as the owner of VNA will exercise rights and
responsibilities towards the airline and is the largest shareholder of VNA
- Competitors: are direct competitors with VNE, typically Vietjet Air, Jetstar Pacific, Bamboo Airways, Vietravel Airlines.
- Media: set up a media information website to provide press releases and promotions,… FB social
networking site for services, promotions, events and interactions with customers. Recently, VNA
started collaborating with young singer-songwriters to promote. 21
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Customer Vietnam airline has a high rate of delays, cancellations, flight changes, lost goods
The number of passengers checking in is more than the actual number of seats of the aircraft.
29/4/2019: Vietnam Airlines had to deny boarding for 20 passengers on flight
VN126 from Hanoi to Ho Chi Minh City. HCM due to the number of
passengers checking in exceeds the number of seats on the aircraft. The airline
has compensated affected passengers and arranged replacement flights.
January 4, 2018: Vietnam Airlines had to deny boarding to 10 passengers on
flight VN1547 from Da Nang to Hanoi due to the number of passengers
checking in exceeding the number of seats on board. The airline has
compensated affected passengers and arranged replacement flights.
30/12/2017: Vietnam Airlines had to deny boarding for 6 passengers on flight
VN118 from Ho Chi Minh City. HCM to Hanoi due to the number of
passengers checking in exceeds the number of seats on the plane. The airline
has compensated affected passengers and arranged replacement flights.
Employee Employee attitude to customers how to talk
shortage of flight attendants. Staff redundancy
Personnel involved in illegal sales of goods
Shareholder Conflicting shareholders over interests and interests .
Suppliers Delayed goods such as slow food when brought on the plane to serve customers, poor quality food
Delayed moves, hangfs still transfer, causing flight delays
untimely maintenance of aircraft, maintenance of airports,... 22
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communication crisis: During the long Covid epidemic for nearly two years,
Vietnam Airlines has suffered many successive communication crises, making
its production and business difficulties even more difficult
Competitors About price
about service attitude, service quality Customer benefits Stakeholders Solution Customer when delayed:
The number of passengers checking in is more than the actual number of seats
of the aircraft. Then the airline will compensate or arrange another flight nearest
Employee suspension, discipline, heaviest dismissal
If you are involved in smuggling goods, you will be fired and punished by the law Media
Vietnam Airlines arranged a flight to transport more than 300 lecturers and
students of Hai Duong University of Medical Technology to Ho Chi Minh City.
HCM to fight the epidemic. However, this also caught waves from social
media. A series of Facebookers have spoken out, attacking Vietnam Airlines
for using inappropriate words in its press release.
hire artists and singers to promote VNA to promote the brand;
Competitors Improve the quality of the star star service in proportion to the amount of
money that guests spend to use the service
hire artists and singers to promote VNA to promote the brand; 23
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In general, by taking full advantage of the advantages that Vietnam Airlines has such as a wide
route network, being a central airline under the state of Vietnam with a reputable and reliable brand,
and along with more than 60 years of operation, Vietnam Airlines has built a reliable and reputable
brand. This helps the airline gain trust from customers and build long-term relationships with partners and sales agents.
In parallel with the transformation of the operating model, the corporation has had a transformation
in image and upgrades in products and services. Since July 2015, Vietnam Airlines has successfully
put into operation two types of new and modern aircraft of the world, Boeing 787-9 and A350-900,
contributing to improving the image, position, service quality and business efficiency.
Vietnam Airlines focuses on providing high quality services to make a difference in the aviation
industry. This includes ensuring aviation safety, training staff with good communication skills and
quality management, providing friendly and professional service to customers. To enhance the
expansion of the route network, it is necessary to study and evaluate potential international markets
to expand the route network. Learn about routes with growth potential, identify partner partners
and build partner links to expand your reach. This is an ideal strategy for expanding routes internationally.
With a population of over 93.7 million people, a stable economic growth of 6.5-7%/year and a
rapid growth in people's incomes, especially the middle class, international visitors to Vietnam in
2017 reached 12.9 million, Vietnam's air transport market is experiencing a period of explosive
development, average over 20% / year for 5 consecutive years. This is a great opportunity for the
aviation industry and Vietnam Airlines to develop.
Although Vietnam Airlines is leading in Vietnam's aviation industry and is also developing in the
world market, however, the competitiveness compared to other airlines such as the Philippines and
Thailand is still not strong. While each airline has its own unique advantages and different
strategies to meet customer needs and strengthen its position in the regional market, it is important
to focus on competing to grow internationally. Focus on expanding the route network, increasing
service quality to attract and retain customers, along with strengthening affiliate cooperation. This
is the key to enhancing international competition and business capabilities. 24
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Competitive challenges are natural and this motivates Vietnam Airlines to change, improve service
quality, resolve to improve punctuality, dedicated customer care on the basis of absolute safety and
sustainable development. However, the pressure on infrastructure and high oil prices will also
affect the sustainability and safety of aviation operations. 25
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Vietnam Airlines successfully issued nearly 800 million shares (mt.gov.vn)
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