ASSIGNMENT QUESTION Choose an organization, preferably one in which you have or have had some personal contacts. Your task is to collect information relating to various components of strategic...

1. Executive summary
Strategic management plays an important role in success of any business including airlines. Started in 1947, Malaysia Airlines is the government carrier of Malaysia. Its operations are spread over more than 60 destinations across the globe. This assignment identifies the strategic aspects of the company including its vision, mission, goals and objectives. This assignment will look at the award winning Malaysia Airlines by analyzing its internal environment through SWOT Analysis, external environment through PESTEL analysis, competitive analysis with Porter’s Force Model. It also recommends the relevant strategies for adoption to remain competitive and profitable.
2. Objective and introduction
The aviation industry operates in a fast paced, ever changing and highly competitive environment. Malaysia Airlines is one of the most successful international airlines a strong reputation in the aviation industry. The national airline of Malaysia, Malaysia Airlines (MAS) started in 1947, is known for its constant innovations and consistent profitability. MAS has always outperformed its competitors by differentiating itself from other airlines in aspects of excellent customer service, both in-flight and on the ground, giving it a competitive advantage.
The objective of this assignment is to have an understanding of overview of size, structure, the type of product or services it provides, its locations including an organization chart showing the formal structure of the organization of Malaysia Airlines. The assignment identifies Malaysia Airline’s mission, goals and objectives as well as stage of industrial life cycle the firm is currently experiencing. Thereon it moves on to analyze the competitive position of Malaysia Airlines, its competitive advantages, the macro-environment analysis, internal analysis of the company. It also reflects on the company's strategies at different levels and its differentiation and enhancement practices. In the end based on the present situation of the company, some recommendations are made to improve its competitive position and strategic position.
3. An overview of the organization
3.1 Background
Malaysia Airlines, hereafter referred to as MAS, was founded in 1947. MAS is owned by the government and is headquartered at Sultan Abdul Aziz Shah Airport in Subang, Selangor. Its first base is at Kuala Lumpur International Airport. Presently MAS is one of the fastest growing airlines in Asia. It flies to around 80 destinations across the globe. On a daily about 37000 fliers avail services of MAS. (Malaysia Airlines 2011) The airlines company is known for its excellent customer service and best practices of the industry. It has been recognized and awarded for more than a hundred times over the last decade. MAS has two subsidiary airlines namely, Firefly and MAS Swings. Its fighter fleet is called MAS Kargo.
Products and services
MAS offer differentiated service offerings for different segments of fliers. Its cabins has three classes namely, first class, business class and economy class. First and Business class travel options offer more personal space, comfort and excellent services and targeted to high level corporate employees having high income and high class lifestyle. The Economic class of MAS is good enough for people travelling on leisure with budget constraint and not much concerned about services and facilities. Through its website, www.malaysiaairlines.com, it gives customers options for booking its flight tickets and also offers car rental, hotel booking and holiday packages booking services. Internet booking options launched in 2004, has reduced distribution costs of the company significantly. Sales offices of MAS are located at airports of all the destinations that MAS covers.
Oganisation structure
The organization structure of the company is explained in Figure 1.
Source: Malaysia Airlines 2012, viewed in 31 August 2012,
List of board of directors and senior management is attached in Appendix 1 and 2 respectively.
3.2 Vision, missions, goals and objectives of Malaysia Airlines
Vision:
‘An airline uniquely renowned for its personal touch, warmth and efficiency.’ (Malaysia Airlines 2005)
The vision of MAS is to be known to the world as a 5-star Airline for superior customer service with ‘personal touch’ and ‘warmth’; delighting the customers by exceeding their expectations. It aims to achieve greater levels of excellence in all its operations.
Mission
‘To provide air travel and transport service that rank among the best in terms of safety, comfort and punctuality.’ (Malaysia Airlines 2005)
The mission of the company is to be among the leading airlines of the world and set new standards in terms of ‘safety, comfort and punctuality.’
Objectives
The objectives of MAS are to be profitable by offering customers highest levels of safety, excellent customer service, compliance with laws and regulations, operational efficiency, cost management and set new standards for the aviation industry.
3.3 Stage of industrial life cycle Malaysia Airlines is currently experiencing
Every industry has its own lifecycle. The industry lifecycle has four stages – introduction, growth, maturity and decline. Each stage is characterized with different competitive intensity and different competitive strategies are effective in different stages (Yoo, 2000).
With increasing number of fliers from the middle class segment, the global trade of airlines industry has increased (Malaysia Airlines 2011). Based on the favourable economic factors, the demand for airlines is only going to increase over the next decade (Jiang, & Hansman, 2006). This will be providing growth opportunities for MAS. Appendix 3 reflects the forecast details.
Over the past half of the decade airlines industry has grown by 6 percent per annum. (Malaysia Airlines 2011) This is a capital intensive industry with strict legal and government regulations and requires highly competent management. MAS faces competition from other similar airlines, low cost airlines and other modes of transportation. (Jiang, & Hansman, 2006) With changes in global business environment, the airlines industry is facing different challenges. With the global slowdown of economy, the low cost airlines are gaining dominance. In 2008, the total passengers of MAS reduced by 15.6 percent approx whereas the low cost airlines, Air Asia’s passenger count increased by 20 percent.
Analyzing the present airlines industry scenario, it can be said that MAS is in the maturity stage of industry life cycle. MAS is well established brand with strong operational set up in the airlines industry. The success of MAS in this stage depends primarily on marginal revenues from customers at competitive price and sustained economic growth.
4. Finding & Analysis
4.1 SWOT analysis
Strengths:
MAS carries the Malaysians flag. It is one of the best known airlines company globally and has a 5 star image. MAS has reached high levels of operational efficiency through investments in technology, staff training and effective strategizing. The...