VIETNAM NATIONAL UNIVERSITY
UNIVERSITY OF ECONOMICS AND BUSINESS
ASSIGNMENT: STRATEGIC MANAGEMENT
Fianal report: Strategic management issues of Vietjet Air
(Vietjet Aviation joint stock company) CODE : BSA2005 3
Semester II of the academic year 2020 – 2021
Lecturers: PhD Nguyen Phuong Mai PhD Cao Tu Oanh
Student: Vu Thi Mai BOD: 18/06/2000 Student code: 18050766 Class: QH-2018-E QTKD CLC1 Ha Noi, 02-06-2021 1 OUTLINE
Part 1: Company overview
1.1 Brief history of Vietjet Air………………………………………………………03
1.2 The company’s mission statement: Mission, Vision, Major goals,
Core values………………………………………………………………………06
Part 2: Environment analysis
2.1 Identify and assess the key factors in the macro environment and industry
environment that may have positive or negative impacts on the industry in which
Vietjet Air is based…………………………………………………………………..08
2.2 What are the distinctive competencies of Vietjet Air?………………………….15
Part 3: Strategy analysis
3.1 Identify the corporate-level strategy that the firm is pursuing?............................17
What are the advantages and disadvantages associated with the company’s
choice of corporate-level strategy?
3.2 What general business-level strategy that the company is pursuing?...................19
What are the advantages and disadvantages associated with the company’s
choice of business-level strategy?
3.3 What are your suggestions to sustain the firm’s competititve advantages?..........20
Part 4: References…………………………………………………………………..20 2
Final report: A report about the strategic management issues of Vietjet Aviation Joint Stock Company PART 1: COMPANY REVIEW
1.1 Brief history of Vietjet Air company 1.1.1 General introduction:
- VietJet Aviation Joint Stock Company (Vietnamese: Công ty Cổ phần Hàng không
VietJet), trading as VietJet Air or Vietjet, is an international low-cost airline from Vietnam.
- Abbreviated name: Vietjet., JSC
- Trade name: Vietjet Air
- Business code: No.0102325399 issued by Ha Noi Department for Planning and Investment
 First registration: 27 November 2007
 27th amendment: 01 August 2018
- Head office: 302/3, Kim Ma Street, Ngoc Khanh Ward, Ba Dinh District, Ha Noi, Viet Nam
- Operating Office: Vietjet Plaza, 60A Truong Son Ward 2, Tan Binh District, Ho Chi Minh, Viet Nam 3
- Tel: (84-24) 7108 6668
- Website: www.vietjetair.com - Stock code: VJC
Vietjet Air was the first privately owned new-age airline to be established in Vietnam,
being granted its initial approval to operate by the Vietnamese Minister of Finance in November 2007.
1.1.2 VietJet Air’s history and development
-2007: Vietjet Air was established on 23 July 2007.
-2011: Launched the first commercial flight from Ho Chi Minh City to Ha Noi on 24 December. -2012:
 Launched Vietjet’s new slogan “Enjoy Flying”.
 Expanded domestic flight network to six new destinations including Vinh, Da
Nang, Nha Trang, Da Lat, Phu Quoc, and Hai Phong. -2013:
 Implemented ForYourSmile program for customer services quality management.
 Inaugurated the first international route from Ho Chi Minh City to Bangkok (Thailand).
 Inaugurated four new domestic routes and two new destinations including QuyNhon, and Buon Ma Thuot -2014:
 Signed an agreement to purchase 200 aircraft with one of the largest aircraft manufaturer Airbus.
 Received the first aircraft from the firm order placed to Airbus.
 Launched Vietjet Cargo Joint Stock Company.
 Launched Thai Vietjet Joint Stock Company. 4
 Inaugurated five new domestic routes and two new destinations including Thanh Hoa, and Can Tho.
 Inaugurated three new international routes to Singapore, South Korea, and Taiwan. -2015:
 Inaugurated Vietjet Training Center.
 Achieved IATA Operational Safety Audit certificate from International Air Transport Association (IATA).
 Inaugurated nine new domestic routes and three new destinations including
Dong Hoi, Chu Lai, and Pleiku.
 Inaugurated two new international routes and one new destination to Yangon (Myanmar). -2016:
 Signed an agreement to establish an Airbus Training Center in Vietnam.
 Signed a contract for purchasing 20 new A321 CEOs and NEOs from Airbus.
 Officially became a member of International Air Transport Association (IATA).
 Inaugurated nine new domestic routes and two new destinations including Can Tho, and Hue.
 Inaugurated international routes to new destinations including China, Taiwan, South Korea, and Malaysia. -2017:
 Listed company’s shares on Ho Chi Minh Stock Exchange (HOSE).
 Groundbreaking Ceremony of construction of Vietjet Aviation Academy project.
 Attended APEC Da Nang Summit.
 Inaugurated new routes to increase the total number of domestic routes to 38.
 Inaugurated new international routes to many destinations in Thailand, China,
Cambodia, Taiwan, South Korea, Myanmar increasing the total number of international routes to 44 5 -2018:
 Opened flight routes to Tokyo and Osaka, Japan.
 Signed MOU (Memorandum of Understanding) for long-term engine
maintenance service with CFM International. Signed a USD 7.3 billion
agreement with Safran - CFM, GECAS in France. -2019:
 Inaugurated new routes between Vietnam – Japan.
 Reached the milestone of 100 million domestic and international passengers.
 Expanded flight network with 139 routes including 44 domestic routes and 95 international routes.
 The fleet was upgraded to 78 aircrafts with young average age.
 Signed a purchase contract for 20 new generation A321XLR aircrafts with Airbus.
 Officially became a member of the Japan Business Federation - Keidanren.
With a fleet size of 70 airplanes and over 108 domestic and international destinations,
Vietjet Air has become the largest private airline to offer domestic services in Vietnam.
1.2 Vietjet Air’s mission statement: Mission, Vision, Core values, Major goals 1.2.1 Mission of V ietjet Air
- To operate and develop domestic, regional and international route network
- To create breakthrough in aviation services
- To make flying a popular means of transport in Vietnam and in the world.
- To bring joyfulness, customer satisfaction by providing luxurious and
exceeding expectation services with friendly smiles. 1.2.2 V ision of Vietjet Air
To become a multi-national aviation group with a route network covering the entire
region and the world, providing and developing not only aviation services but also
consumer products on the e-commerce platform and being a favorite and trusted brand name. 6 1.2.3 Core V alues of Vietjet Air
Safety - Happiness – Affordable Price – Punctuality 1.2.4 Major goals of V ietjet Air
 Become a multinational airline corporation
Vietjet Air’s major goal is becoming a multinational airline corporation with a wide
network of flights throughout the region and the world.  Elevate strategic partners
Cooperate with strategic partners who are big names in the international aviation
industry is Vietjet's way of "elevating its brand" as well as its service quality,
dispelling concerns about the idea that "low prices are not high safety”
 Expanding international flight routes
Initially, Vietjet entered the aviation market with domestic routes. However, so far,
Vietjet operates most of the routes in the domestic market. In the following years,
Vietjet will target high-income markets. Vietjet's goal is no longer to compete
domestically, but to compete with airlines around the world. Vietjet will focus on
promoting new markets in Asia such as Japan, Indonesia, India and Australia.
 Focus on developing and training human resources
Less than 7 years of officially entering the aviation market, Vietjet has had
breakthrough achievements. However, in its development strategy for the period
2017-2022, Vietjet sets a growth target associated with sustainable development. In
particular, the focus is on human resource development and training.
After many years of continuously being honored as "Asia's Best Employer Brand",
"Top Vietnam Best Places to Work", Vietjet has attracted high-quality human
resources from more than 40 countries and regions. territories in the world. Vietjet
Air's goal is to become a multinational airline group with a wide network of flights
throughout the region and the world. Therefore, Vietjet's human resources are selected
to fully meet the capacity and experience in the aviation industry (especially pilots,
aircraft repair engineers, flight dispatchers, and flight attendants). . On the basis of a 7
healthy company culture, the foreign workforce together with the Vietnamese force
create a professional, international and high-performance working environment.
PART 2: ENVIRONMENT ANALYSIS
2.1 Identify and assess the key factors in the macro environment and industry
environment that may have positive or negative impacts on the industry in which
Vietjet Air is based?
2.1.1 Identify and assess the key factors in the macro environment
A PEST analysis is a framework or tool used to analyse and the macro-environmental
factors that may have a profound impact on an organisation’s performance. PEST
model consists of 4 factors: Political, Economic, Social, Technology. In this report, I
will use PEST model to identify and assess the macro environment of Vietjet Air.
2.1.1.1 Economic factors
- Vietnam’s economy in rencent years has made great progress with an annual growth
rate of 7% to 8,6% , per capita income increases. Vietnam’s economy is changing:
upgraded infrastructure, increased invesment. With the growth rate of the economy,
people’s needs are also increasing, in which mention the need to travel. High-income
people’s need to travel by air is increased.
- Vietnam’s economy has reached a relatively high ( in the period 2011-2015,
economic growth is estimated at 5.91% ). Besides, per capita GDP has increased by
more than 40% . Our country’s socio-economic situations has had positive changes, in
the right direction; the macro-economy is getting more and more stable. These issues
will create favorable conditions for the development of aviation transport.
- Vietjet Air’s strength in financial force also lies in the fact that it receives loan
support from HDBank . This also explains why Vietjet Air survived the 2008-2011
crisis, while some other airlines such as Indochina Airlines and Air Mekong had to close down.
2.1.1.2 Political factors 8
- Vietnam is considered to have the most stable and peaceful political environment .
With a stable political background leading to unoccupied airports, free skies ,
unregulated , creating favorable conditions for airlines to do business .
- Vietnam continues to affirm its integration policy, strengthen multilateral and
bilateral relations within the regional and global framework, in line with the
globalization trend of economic integration. In parallel with the process of
international integration, the State continues to adopt policies to improve the
investment environment, increase the attractiveness of foreign investment, and focus
on investment of multinational companies; To encourage and promote tourism
development , to shift from exploring tourism business to building a real tourism
industry , considering tourism as a spearhead economic.
- The Vietnamese government's proposed 15% tax on imported fuel and investment in
infrastructure to meet future demand is seen as an important step. Vietnam has well
implemented the conversion of paper tickets to electronic ones, next needs to promote freight transport. 2.1.1.3 Society factors
- Currently, Vietnam is in the period of “Golden population” where the population by
age changes rapidly. Vietnam is recording the highest proportion of young population
in history. The population aged 10-24 in our country currently accounts for nearly
40% of the population. With the current population situation in our country, Vietjet Air
- a low-cost airline, focuses on young and dynamic customer segments and first-time
flyers, those with average incomes. Customers who are proficient in using technology
and the Internet such as smartphones, email, social networks, online payment forms:
visa, master card, ... and have a hobby of exploring, traveling often at the right cost.
Most of Vietjet's customers are those who like to innovate, create, like to connect, ...
- While the concept of airlines is usually mature and formal, VietJet Aviation Joint
Stock Company is a an exception. This airline is famous for its bikini-clad flight
attendants. General Director of VJC , Ms. Nguyen Thi Phuong Thao , once said that 9
this is a message of confidence and encouragement , if customers feel happy , VietJet Air will feel happy .
- Since its establishment, Vietjet has not looked at how much the aviation market share
has been captured, but only focused on how much more can be exploited. VietJet
Deputy General Director said: “if you keep looking at the water that has been poured
into the glass, VietJet will not see the opportunity of the glass to be poured more”.
Thanks to that "strange" thinking, VietJet saw a great opportunity: "With 100 million
people, only 1% of Vietnamese people use air transport, the 99% chance is Vietjet's".
VietJet is also not targeting customers who have already flown by plane. With this
thinking, Vietjet made a decision to target customers who have never been on a plane .
2.1.1.4 Technology factors
- The change in technology has had the most direct and strongest impact on the
business activities of the aviation industry. The first is aircraft manufacturing
technology. This is the most important factor in the success of airlines. The production
of safe , good quality , fuel efficient , business efficient aircraft of medium and large
sizes , ensuring flight requires high technology . The introduction of these aircraft
made the previous aircraft lines obsolete, reducing the competitiveness of less innovative airlines.
- The second technology affecting the air transport business is the Internet and
computer networks. The development of communication technology makes flights
safer. With the number of 21 million internet users today, it has opened the chance for
airlines to carry out their buying and selling activities over the Internet. In addition,
one of the regulations of the world airline association is airline members have to do
business based on the Internet, specifically you have to be online. This requires
domestic airlines to have a new approach policy, conduct business effectively but ensure safety.
- Applying advanced technology is the Vietjet’s breakthrough compared to
competitors in the market. Vietjet Air currently uses over 20 advanced software to
manage its operations such as: Vietjet Air’s ticketing system is developed and 10
managed by Intelisys (Canada) ; Gatekeepers software for risk management, credit
card fraud detection and transaction verification; Aviator software to manage and
optimize flight revenue; flight analysis and flight safety operations are managed by the EFB software system…
- Wih an investment orientation for Internet-based information technology, Vietjet Air
will build an expanded ecommerce tecnology platform to support customers most
conveniently in purchasing tickets for goods and services from website VietJetair.com.
2.1.2 Identify assess the key factors in the industry environment
Porter's Five Forces is a model that identifies and analyzes five competitive forces that
shape every industry and helps determine an industry's weaknesses and strengths.
Porter’s five forces are: Intensity of rivalry among established firms, Risk of entry by
potential competitors, Threat of substitutes, Bargaining power of suppliers, Bargaining power of buyers.
2.1.2.1Intensity of rivalry among established firms
Vietjet's major domestic competitors are Vietnam Airlines, Jetstar, Bamboo Airways,..
- The match between Vietnam Airlines (VNA) and Vietjet Air (VJ) is a match of two
opposing schools. VNA has a high price but invests heavily in services. Meanwhile,
VJ accepts to reduce many service quality and uses cheap guise to attract customers.
With a larger scale, VNA's revenue is also nearly twice larger than VJ's, but the pre-
tax profits of both are approximately the same, showing that both strategies of the two firms bring certain effects.
- Vietjet has been facing increasing competition from another airline in the country,
Jetstar Pacific. Jetstar Pacific is Vietnam's first low-cost airline, which started
operations in 2008, but after years of no growth, they began a strategy of rapidly
expanding market share in 2014. Jetstar Pacific is now a formidable competitor and an
important component of Vietnam Airlines' overall strategy 11
- Bamboo Airlines is a young, the fleet has only 10 aircraft, but has a great ambition to
"divide the world" with the two giants. Bamboo has chosen the strategy between 2
carriers: Good service like VNA and Cheap price near VJ. By the end of June 2019,
this strategy of Bamboo is bringing 7% market share but also causing the company an
estimated loss of 500 billion dong.
In the near future, we may see the market split into 3: luxury customers will go to
VNA, cheaply use VJ and middle customers buy Bamboo tickets. The upcoming year
2019-2022 will be a period of fierce competition between airlines. Of course,
customers will be the biggest beneficiaries in this battle. The more airlines jump into
the profit distribution company, the domestic seems to be reduced, many discount
programs, 0 dong tickets, … but customers will inevitably “experience” like: flight
delays or cancellations because the aviation infrastructure can not meet the requirements.
2.1.2.2 Risk of entry by potential competitors
Besides famous airlines in Vietnam such as Vietnam Airlines, Vietjet Air,
Jetstar, Bamboo Airways..., there is still many airlines waiting for permission to fly
such as Thien Minh, Viettravel…
Vietravel (the travel agency with the highest market share in the country) and Thien
Minh are both under pressure of "losses" from the impact of the COVID-19 epidemic.
Therefore, it is likely that the "flying" project of the two can hardly be implemented in
the near future. Moreover, Entering the aviation market in the harshest period, there
are many several Barriers for Vietravel Airlines and Thien Minh:
- High capital requirements: The airline industry is one of the most expensive
industries, due to the cost buying and leasing aircraft, safety and security measures, customer service and manpower.
- Restrictive regulatory policies: According to Decree No. 76/2007/ND-CP dated
May 09, 2007 of the Government on air transportation business and general aviation,
enterprises applying for this industry’s business licenses must satisfy the conditions
of quality and quantity of aircrafts; operation, maintenance and human resources to 12
operate and maintain aircraft, capital source to assure the possession of aircraft; and
legal capital ranging from 200-1000 billion. This legal capital is so high that it
prevents enterprises from operating private airlines in Vietnam.
Another obstacle for new entrants is brand value. Brand identity is important in
airlines industry, and benefits large airlines. Major carriers allocate considerable
resources to marketing efforts. Frequent flyer programs and other incentives have
been successful in enticing travelers to fly with certain carriers. This incentive can
often be strong enough to cause a customer to choose one carrier over another - even
when another carrier offers a lower fare.
Barriers to entry are also heightened by the hub system. Carriers can offer travelers
more choices while tying up less capital through their hubs. As a result, the hub
system creates market power for large carriers
 The financial and Government policies pressure put on newbies of domestic
airlines industry is so heavy that it is greatly difficult for them to jump in.
2.1.2.3 Threats of substitutes
Substitutes for air travel include travelling by train, bus or car to the desired
destination. The degree of this threat depends on various factors such as money,
convenience, time and personal preference of travellers. The competition from
substitutes is affected by the ease of with which buyers can change over to a substitute consisting of three factors:
- Availability and Price Attractiveness of Substitute: comparison to other means of
transportation, airlines ticket price is much higher. Nevertheless, this gap will get
smaller on the long route from the North to the South. So, Vietjet Air still has its stand in domestic market.
- Comparibility of Substitute (quality, performance, and other relevant attributes):
airlines has the highest level of quality, speed and safety. However, in domestic
market, esepecially on short routes, competitive advantages get worse because it takes
time for passenger both on air and to travel to airport and vice versa while airports are
located far from city centers. 13
- Switching cost: Due to low fare non-stop flights, Vietjet Air can lure both price
sensitive and convenience oriented travellers away from these substitutes.
 Because the majority of Vietnamese people is budget-income, the switching cost is
low and the location of airport is far from city center, in domestic travel, airlines is
left behind other means of transportation because of its price and inconvenience.
2.1.2.4 Bargaining power of suppliers
Factors relating to the bargaining power of suppliers include the threat of forward
integration and the concentration of suppliers in the industry. Suppliers for aviation
industry ranging from aircraft makers, fuel corporation, flight academy which
provides pilots, flight attendances, etc to a catering company.
-Suppliers of Boeing and Aircraft:
 Airbus S.A.S: On February 11, 2014: Vietjet Air and Air bus signed a contract
to deploy orders for more than 100 aircraft, bought 30 more aircraft and leased 7 other Airbus aircrafts.
 Boeing aircraft manufacturer: Vietjet Air and Boeing aircraft manufacturer
(America) has signed a contract for 100 aircrafts called B737 MAX
 Alafco Aviation: Vietjet Air has signed a contract to lease 3 aircraft from
partner Alafco Aviation to serve the airline’s take-off plan at the end of 2011 - Suppliers for fuel:
Fuel cost accounts the most in total operating cost in Airline industry in general and
thefore by strictly monitoring and controlling fuel consumption, the company will not
only reduce the fuel waste to the environment but also gain substantial economical
benefits. In Vietjet’s cost structure, annual fuel cost accounts for 38% to 45% of total
operating expenditure of the Company.
According to Mr. Luu Thanh Binh, Vice president of VNA, main force to aviation
industry comes from aviation fuel which constitutes around 80% of operating cost
(Sharma, 2012) and directly effect to the price of each air ticket. High fuel prices
forced airlines to cut 10-20% of current spending on all items, use fuel-efficient 14
aircrafts, operate flexible schedule. Besides, the monopoly of Vietnam Aviation
Petroleum Corporation-Vinapco (Vinapco official website) pushes domestic
companies into a dilemma which is they have no option but to choose Vinapco as their
fuel suppliers. A typical example which clearly show the huge power of Vinapco is the
case of JPA on March 31st 2008, Vinapco sent a written request to increase the cost of
Jet A1 fuel from VND 593,000/ton to VND 750,000/ton with the deadline within 1
day (LD, 2008). While Jetstar had not agreed and tried to negotiate, on April 1st,
Vinapco stopped supply fuel for this airline which leads to 30 delayed flights and
more than 5000 affected customers.
2.1.2.5 Bargaining power of buyers
Buyer power is determined by switching costs, the relative volume of purchases, the
standardization of the product, elasticity of demand, brand identity, and quality of
service. Because of the Internet, pricing information is less fragmented and easier to
compare. Often, a traveler can find price discrepancies for the same exact flights.
Airline travel is not cheap, and can be the most expensive part of a family vacation.
Hence, for some buyers, price sensitive and search for the best deals available,
demand is very elastic. Nonetheless in Vietnam airline industry, bargaining powers of buyers is not that strong. 2.2
What are the distinctive competencies of Vietjet Air? 2.2.1 Valuable
At the end of 2011 when the world economy was falling into a difficult period`, many
private airlines could not stand firm in the market but had to give up. . Meanwhile,
VietJet has been patient enough to wait and welcome the low-cost airline trend of the
domestic market as well as Southeast Asia with the first commercial flights. Since
then, VietJet Air has grown its fleet non-stop with a total of 51 aircraft at the end of
2017 and transported more than 17 million passengers, an increase of 22% compared
to 2016. As a result, VietJet's market share increased to 43% by the end of 2017, rising
to the position of the leading airline in Vietnam, it took only 6 years for VietJet Air to 15
surpass Vietnam Airlines and Jetstar Pacific to become the airline. has the largest domestic market share. 2.2.2 Price leader
VietJet Air now has a larger market capitalization than AirAsia - Malaysia's largest
low cost airline in Asia; VietJet's average cost per seat is the lowest of all airlines
worldwide - according to the latest news on Nikkei Asian Review. Basically, VietJet
Air's biggest competitive advantage still lies in its ability to manage costs and reduce
service delivery costs, which is also an important key to international markets in the
region if we do a cost comparison between Vietjet Air and major airlines in the world. 2.2.3 Unique media campaign
VietJet has made a difference in choosing cheerful - creative - inspirational images as
core values that lean towards emotions with the slogan "Flying is like right away".
The slogan "Flying is like right away" is VietJet Air's manifesto based on 4 core
values: Safety, Fun, Cheap Prices, Punctuality.
Surely many people still remember the image of advertising models for Vietjet Air in
bikinis. In early 2015, VietJet launched a youthful and dynamic flight attendant
calendar with bikini. It can be seen that these campaigns of VietJet have hit the minds
of young people who are curious, like to share, express their interest on social
networks and create a new wave and perspective on how to do bright communication.
The strategy VietJet implemented has been deployed by Virgin Atlantic in the UK
when facing the "big" British Airways and brought great success. According to
Nikkei, behind such advertising tactics is a young airline that is developing nimble and clever. 2.2.4 Embrace technology
When VietJet Air was born, the partners, customers and IT environment in Vietnam
were still limited. Applying advanced technology is VietJet's breakthrough compared
to competitors in the market. VietJet currently uses over 20 advanced software to manage its operations. 16
2.2.5 Business philosophy is ambitious and personality but rich in humanity
From the humane business philosophy towards the community and the desire to bring
joy to everyone, the appearance of VietJet has made air travel close. Between 2011
and 2016, the number of airline passengers in the domestic market increased at an
average rate of 17.2% per year. Along with its business success, VietJet has left a deep
mark with its volunteer activities towards the community, especially the poor and
disadvantaged children throughout the country.
PART 3: STRATEGY ANALYSIS
3.1 Identify the corporate-level strategy that the firm is pursuing? What are the
advantages and disadvantages associated with the company’s choice of corporate- level strategy?
3.1.1 Identify the corporate-level strategy
Vietjet Air is pursuing Growth Strategies ( known as Expansion Strategies ). This
strategy help the firm dominate the market and gain control over competion. Vietjet
Air’s growth happens by concentrating resources on few things that the organisational
can do better than rivals. Expansion through concentration is undertaken through 3
strategies: namely market penetration, market development and product development.  Market penetration
Vietjet Air tries to thoroughly exploit its expertise in a delimited competitive arena
and increase the sale of its existing products in the existing markets by:
- Price competition: Low fares are a special competitive way for Vietjet Air to attract
customers and surpass competitors to become the second largest airline in Vietnam.
Vietjet implements its low-cost strategy by: putting more seats on one plane,
optimizing employee resources and productivity, and maintaining low operating costs.
This is the formula that helps Vietjet surpass its competitors in the Southeast Asian market.
- Unique marketing: Vietjet air also penetrates the market with unique marketing
tactics. From the early days of establishment, the image of the hot bikini-clad 17
hostesses on planes has received a lot of criticism. However, it is these criticisms that
have attracted the attention of the public because the airline dares to change what
seems to be the norm of the aviation industry. It can be seen that behind such
advertising tricks is a young airline that is developing nimble and clever.  Market development
Right from the beginning of 2020, vietjet air has operated four more international
routes including Da Lat - Seoul (Korea), Can Tho - Seoul, Can Tho - Taipei (Taiwan,
China) and Hanoi - Bali ( Indonesia ). At the same time, the airline also announced the
opening of 3 more direct Vietnam-India routes connecting Da Nang and Delhi, Hanoi
and Ho Chi Minh City with Mumbai, operating from May 2020.
 Product/Service development
To improve service quality, in mid-2019, Vietjet Air officially launched “Priority
Check-in” service. This is a quick check-in service to help passengers save time. Not
stopping there, from the beginning of October 2019, the airline continued to launch
the “Priority Lane Service” to help passengers use the priority entrance at the
departure gate area. Previously, in June 2019, Vietjet put into use the smartphone
application version integrated with the Vietjet SkyClub membership program with
many practical incentives and utilities and quick ticket purchase on mobile phones.
In August 2019, Vietjet launched a partnership with Swift247 and Grab to provide
super express delivery services, through Grab's GrabExpress freight forwarding
service platform and Vietjet aircraft.
3.1.2 The advantages and disadvantages associated with the company’s choice of corporate-levael strategy
 Advantages: Pursuing Growth Strategy helps Vietjet Air:
- Quickly penetrate the aviation market and become the largest private airline in
Vietnam, even surpassing Vietnam Airlines in the domestic market.
- With a low price strategy compared to other competitors as well as a unique
marketing strategy, Vietjet air has succeeded in positioning its brand in the eyes of 18
potential Vietnamese customers, to become the most popular airline in Vietnam which
customers consider first when they need to travel by plane.  Disadvantages:
-Although the low price strategy helps Vietjet Air attract more customers than its
competitors, this also brings difficulties to Vietjet Air. To get such a "breathable" price
for passengers, VietJet always has a headache to find ways to optimize costs.
Currently, they only operate narrow-body aircraft A320 and A321. This is a flight line
specializing in serving short routes (5-6 hours of flight), to help VietJet save a large
amount of operating costs as well as food and rest for the flight crew.
-Vietjet's unique marketing strategy is "a sexy airline" that many people disagree with
and consider offensive, excessive PR.
3.2 What general business-level strategy that the company is pursuing? What are
the advantages and disadvantages associated with the company’s choice of
business-level strategy?
The business-level strategy that Vietjet Air is pursuing is Cost Leadership Strategy.
The goal of Cost leadership Strategy is to provide goods or services at the lowest
possible cost. Then, by achieving the lowest possible cost, the leader can position their
team or organization to have the lowest market price charged for the required good or service.
With this strategy, Vietjet air has become the airline with the lowest fares in Vietnam.
This is the leading strategy that VietJet Air still maintains until now. Based on the
average income of Vietnamese people, this is absolutely correct
 The advantages of this strategy:
- It reduces competition from the marketplace: Vietjet are able to successfully
implement their cost leadership style also gives them an competitive advantage in the
future. Because they can offer a superior pricing model to consumers, new
competition in the market is limited as other competitors such as Jetstar, Air Asia,
Bamboo... may have to Struggling to get the same price. 19
- Compete well with substitute products: By implementing the strategy of the lowest
price compared to domestic airlines with the slogan "Everybody can fly", Vietjet air
has increased its competitiveness compared to other alternative products. For example,
instead of taking the train from Hanoi to Thanh Hoa, tourists will use Vietjet Air
because of the cheap fares and time savings.
- It provides better profit: Cost leadership styles are focused on creating low-cost
operations within their market and industry. When competitive pricing is available,
with greater margins than what other airlines are able to achieve, then Vietjet Air gains
more business because it is offering a stronger value proposition to its customers.
 The disadvantages of this strategy:
- Because it is a low-cost airline, flight time delays often occur. Vietjet's flight time
delay rate is always quite high. Vietjet's delay rate is always high, this is the airline
with a record number of delayed flights with 6,742 flights out of a total of 29,261 flights in 2018
- The cost-cutting makes Vietjet unable to provide the same high quality standards and
services as rival Vietnam Airlines.
3.3 What are your suggestions to sustain the firm’s competititve advantages?
- Although Vietjet air's competitive advantage is its cheaper price compared to other
competitors, Vietjet is also known as the airline that receives the most negative
customer feedback about frequent flight delays, cancellations, service staff is not
enthusiastic... Therefore, besides building the cheapest airline brand in Vietnam,
Vietjet Air needs to focus more on investing in flight quality and staff.
- Unlike many other brands that position only one brand, VietJet is also known as the
"sexiest airline in Vietnam", the most scandalous airline. it is a right and reasonable
marketing strategy for Vietjet but it should only be a temporary strategy if Vietjet does
not want to be caught in a wave of boycotts. The image needs to be more civilized, the
flight service needs to be more professional than what Vietjet needs right now because
their brand identity is more than enough. 20