A strategic management perspective…

 NOOR UL HASSAN 61
 IFTIKHAR 04
 ALI SULTAN 07
 SALMAN IQBAL 16
 IBTAHAL 32
 SIDRA 21
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AUTHORS
We are Noor UL Hassan, Iftikhar, Ali, Salman, Ibtahal and Sidra. PIA has been given to
this group to observe and analyze its strategic management disciplines and performance.
This group belongs to Superior University and going to present the overall disciplines of
PIA according to fundamentals of strategic management. Currently we are in first
semester and instructor allotted us to prepare a grand report on PIA. Each assignments
desire complete research, efforts, body and mental participation, a lot of personal interest
in making it as explanatory as it can be. All research tools and tactics had been involved
in gathering of data (internet, official websites, questionnaires and relevant books).

CREDIT
I would like to express my special thanks of gratitude to Allah, the most Kind and the
most Generous, who offered us power and enabled us to accomplish our objectives. The
subject of our task was the comprehensive Strategic management prospective of
PAKISTAN INTERNATION AIRLINE (PIA) and its impact on Pakistan. During this
task, we had to face some difficulties as data was not readily available; we had to go to
PIA office to collect data after having some solid reference and then sort out relevant data
for our task. We would like to express my special thanks of gratitude to our instructor
Prof. Dr. Shumaila for his continuous and pre-emptive and continuous support. Without
her support we would not have been capable to complete our task on timely manner. We
are thankful to staffs of several units of PIA that help out us during our field work and
helped us in building our assignment fruitful.

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TABLE OF CONTENTS

HISTORY

EXECUTIVE SUMMARY

INTRODUCTION

Number of Employees..............................................................

Organizational design and Hierarchy.......................................

Nature of business....................................................................

Type of ownership.....................................................................

MISSION / VISION STATEMENT, EXTERNAL ASSESSMENT

PESTLE Analysis........................................................................

Porter’s 5 forces model................................................................

SWOT Analysis...........................................................................

STRATEGIC MANAGEMENT ESSENTIALS IN PIA

KEY TERMS OF STRATEGIC MANAGEMENT IN PIA

BENEFITS OF STRATEGIC ANAGEMENT IN PIA

SOCIAL AND ENVIROMENTAL RESPONSIBILITY IN PIA

CORE COMPETENCIES ANALYSIS & KSF CORPORATE CULTURE IN PIA

STRATEGIES UNDERTAKEN AT 3 LEVELS IN PIA

Corporate Level.........................................................................

Business Unit Level....................................................................

Functional Level.........................................................................

MANAGEMENT STRATEGIES

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Marketing strategy…………………………………………

HRM.........................................................................................

Administration.........................................................................

Decision Making (Centralized V/s Decentralized)......................

Motivational & Incentive Techniques........................................

OTHER STRATEGIES

R&D...........................................................................................

Procurement..............................................................................

MARKET ANALYSIS

Segments & Target Market......................................................

7 p’s………………………………………………………….

STRATEGIC MANAGEMANT PROCESS

Formulation…………………………………………………..

Implementation………………………………………………

Evaluation……………………………………………………

PRODUCT LIFE CYCLE

Graph………………………………………………………..

PIA situation……………………………………………….

DIFFICULT SUBDIVISION

Focal problems regarding to the administration..........................

Focal problems regarding to your investigation................................

Sub issues............................................................................

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STRATEGIC ALTERNATIVES

Solutions to solve the problems................................................

Evaluation of the solutions........................................................

IMPLEMENTATION PLAN.............................................

CONCLUSION

RECOMMENDATIONS

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HISTORY:
In the days when Pakistan was still in the revolting position (June 1946) Mr. Mohammad
Ali Jinnah the Founder of the upcoming Nation instructed Mr. M.A. Ispahani, a foremost
industrialist to set up a national airline on precedence basis. With his stupendous vision
and forethought Mr. Jinnah had anticipated that with the formation of the two wings of
Pakistan alienated by 1100 miles a swift and well-organized mode of transport was
imperative.
The novel airline was primarily a pilot project registered in Calcutta as Orient Airways
Ltd on 23rd October, 1946. With A.M. Ispahani as the Chairman and Air vice Marshal
O.K. Carter as the General Manager of the new air hauler operating license for the airline
was obtained in 1947 with Calcutta as the base.
Orient Airways was a privately owned company with limited capital and resources. It
could not be expected to grow and expand on its own. It was then that the Government of
Pakistan decided to form a state-owned airline and invited Orient Airways to merge with
it. The outcome of the merger was the birth of a new airline named Pakistan International
Airlines (PIA) on 11th March 1955.
Pakistan International Airlines established in 1954. PIA's first Super-Constellation (AP-
AFQ) registered on Apri'24 1954. PIA started its regular service from May 10, 1954.
Pakistan International Airlines Corporation formed with merger of PIA and Orient
Airways. PIA entered the world of international aviation with a service from Karachi to
London via Cairo and Rome. Boeing 707-320 "International" introduced on the London
route. First three of five Fokker F-27s received and order placed for three Boeing 720B
jet aircraft. PIA is the first Asian airline to operate a pure jet aircraft.
At present PIA operates to 75 destinations (38 international and 37 domestic) in countries
spread over 4 continents of the globe. One could say that since its inception in 1955 PIA
has indeed come a long way

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Executive summary:

Pakistan International Airlines is the national flag carrier and was established in 1955. It
not only provides transportation services, but its operations extend to providing cargo
services and courier services also. Pakistan International Airlines serves two markets.
Domestic and International. In the domestic sector, it has outperformed itself by
stretching its networks to areas where other airlines do not fly to. In the international
market it faces severe competition, especially due to the fact that these international
organizations are providing fares much lower than Pakistan International Airlines.
Internationally also, Pakistan International Airlines is encountered with a severe and
strong challenge with many renowned international names. Due to fierce competition and
rising oil prices, international aviation industry regulations and some internal factors such
as human resource issues of over recruitment, de-motivated employees, mismanagement
of resources both in case of manpower and other resources, aged fleet, corruption and
lack of accountability PIA is facing a deep financial crisis. It is losing its market share
both in international market and domestic circuit. The present report is written about the
current situation of PIA and future plan of action for PIA. PIA is three stars International
Airline. In our report we did SWOT analysis and PEST analysis on PIA, identify major
strength we find as leading market position, brand recognition, superior operating
structure, network presence, hub airport at Karachi, and effective use of technology.
Formulation on GOVT rule, High dependencies on passenger revenues, high debt, and
reliance on oil prices are major weakness, opportunities are like having MAX route and
fleet, growth demand for low cost airline, customer loyalty, shifting customer needs and
industry recovery, and major threats are high interest rates, accidents, strong competition
by Air blue, interest and foreign currency exchange rates, and decline in industry. In
PEST analysis we discover major Government’s active role in increasing competition in
the airline industry, inflation rate, turning of social environment of Pakistan liberal with
the new regime. The report comprises of three sections. First section introduces the
organization and gives an overview of Pakistan aviation industry. The second section
focuses on determining the problems areas and describing it. The third part of the report
calls for the immediate changes that are required to make in PIA in order to take out
some better performance from the national flag carrier. It describes the department wise

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strategies internally as well as strategies to face external threats such as rising oil prices
and providing better services in a competitive environment. We recommend PIA for
better service to decentralized its management system, develop SBUs, adopt transparent
promotion polices, employee empowerment to increase the employee motivation and
moral. Try to decrease its overhead cost, adopt effective marketing policy, two way
communication and TQM. Upgrade its fleet; purchase new Airplane with twin engines
these will reduce the operating cost of PIA. Improve control over fares. Hire the services
of IT specialists; improve service standards focusing on quality.

INTRODUCTION:

Pakistan International Airlines is the national flag carrier, and as a symbol of National
pride. PIA head office is located in Karachi Airport. Principal activity of the PIAC is to
provide air transport services (passengers and freights). In addition, the corporation is
engaged in providing engineering, training, and other allied services. PIA play vital role
in the growth of GDP as well as earn sufficient foreign exchange for the country. It
became member of IATA (International Air Transport Associations) and commercial
operation as a scheduled carrier for passenger and cargo transportation. Pakistan
International Airlines Corporation (the Corporation) was incorporated on April 18,1956
under the Pakistan International Airlines Corporation Act, 1956(PIAC Act, 1956) and its
shares are quoted in all the stock exchanges of Pakistan.57 % shares held by Government
of Pakistan, and rest of 43 % shares held by Financial Institutions, Investment
Companies, Individuals, Joint Stock Companies, Foreign Companies etc. As the
government is the principal owner of the airline so the government selects the Board of
Directors and the Chairman/CEO. PIA operates in two major markets; Domestic and
International. Pakistan International Airlines faces competition with not only
international airlines but also with local airlines on the various routes to the Middle East
and the Gulf. Problem is the PIA is getting losses for many years. No serious effort is
done to get out it from losses. During the last year Pakistan International Airlines (PIA)
has stained a loss of PKR13.4 billion ($207.5 million). Operationally, it was also
blacklisted by the European Union during the year, which hit its bottom line along with
its prestige.

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Total Number of Employees

There are total 18,500 employees working in Pakistan International Airport (PIA) which
includes Board of Directors, Corporate secretary, Head of Internal Audit, Executive
Management and Auditors under different departments.
Nature of Business
The nature of Pakistan international airlines are transport & services though air, and by
road
Ownership
They are semi- government organization. That is 80% government & 20 & private.

MISSION / VISION STATEMENT, EXTERNAL

ASSESSMENT

Vision

“PIA’s vision is to be a World class airline, meeting customer expectations through

excellent services, on-time performance, innovative products and absolute safety”

Mission

Employee team will contribute towards making PIA a global airline of choice through:

 Offering quality customer service & innovative product.

 Using state-of-the-Art Technologies.
 Ensuring cost effective measures in procurement and operations.
 Developing safety culture.

This mission statement addresses following core points of nine point mission statement
analysis

 Product and or service

 Technology
 Philosophy
 Self-concept
 Concern for people

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 Concern for survival growth and profitability

Goals and objectives:

According to PIAC Act 1956, following are the main objectives of PIA Corporation.
 To provide and further develop safe, efficient, adequate, economical and properly
coordinated domestic as well as international air transport system.
 To operate any air transport service or any flight by aircraft for a commercial or
other purpose, and to carry all forms of aerial work.
 To acquire, own, run, manage or participate in the running management of, any
hotel or business connected therewith.
 To provide for the instruction and training in matters connected with aircraft or
flight by aircraft of persons employed or desirous if being employed either by the
corporation or by other person.
 To promote any organization outside Pakistan for the purpose of engaging in any

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