Contents

Introduction...............................................................................................................................................3
Vision, Mission, Objectives, Core Values............................................................................................3
Pestel........................................................................................................................................................3
Five Forces...............................................................................................................................................5
Strength....................................................................................................................................................7
Core Competences:..............................................................................................................................10
Management tools.................................................................................................................................11
SWOT:.................................................................................................................................................11
TOWS:.................................................................................................................................................11
Business Strategy.................................................................................................................................12
Corporate-Level Strategies:.............................................................................................................12
SBU-Level Strategies:......................................................................................................................13
Strategic management plan.................................................................................................................14
Crucial factor for the Vietjet Air Strategic Management Plan's Effective Implementation:....14
Strategic Management Plan for Vietjet Air:...................................................................................16
Reference list.........................................................................................................................................17
Introduction
Vietnamese low-cost airline VietJet Air, commonly called Vietjet, is headquartered in Hanoi.
Being the first airline in Vietnam to be privately owned, the airline was founded on November
30, 2007. VietJet Air launched its maiden flight from Ho Chi Minh City to Hanoi on December
25, 2011, following a few early delays. When the airline carried its ten millionth and twenty-five
millionth passengers in December 2014 and December 2015, respectively, it achieved major
milestones. Nguyen Thi Phuong Thao has been the airline's president and chief executive
officer since December 2011 (Vietjet Air, 2023).

Currently, VietJet Air offers service to over 30 regional locations in Thailand, Singapore, South
Korea, Taiwan, Malaysia, China, Japan, Hong Kong, and Myanmar in addition to its domestic
destinations. With an average age of 3.3 years, its fleet consists of A320s and A321, aircraft.
The airline has received several honors both domestically and internationally. Sovico Holdings,
HDBank, individual stakeholders, and other organizational investors are the owners of VietJet
Air (Vietjet, 2023).

Vision, Mission, Objectives, Core Values

The vision of Vietjet Air is to grow into a global aviation conglomerate with a route network that
reaches every corner of the globe. In addition to developing and offering aviation services, their
goal is to become a well-known and reliable brand on e-commerce platforms by offering
consumer goods. According to VietJet Air (2024), their mission involves the operation and
development of domestic, regional, and international route networks; bringing about a
breakthrough in aviation services; popularizing aviation as a mode of transportation in Vietnam
and around the world; and bringing happiness and customer satisfaction by offering opulent,
above-and-beyond services, all while smiling warmly.

Aside from consistently focusing on creating and maintaining the best-in-class cost structure,
Vietjet Air's strategic goals and objectives also include growing the company in order to
increase productivity and service quality, revolving around its customer-focused strategy while
pursuing innovation and creativity, and digitalizing all of its available services and operation
protocols (VietJet Air, 2024).

Attractive pricing, happiness, safety, and punctuality are among Vietjet Air's core values. Their
corporate culture places a strong emphasis on being aware of one's surroundings, acting with
integrity and distinction, being creative, hardworking, resourceful, joyful, strong, and
enthusiastic. As a recognized IATA member with an IOSA (IATA Operational Safety Audit)
accreditation, they uphold strict safety and security requirements (VietJet Air, 2024).

Pestel
a. Political

In Vietnam, Vietjet Air works in a politically stable environment with supporting government
policies for the aviation industry. The promotion of tourism and international travel by the
Vietnamese government has been advantageous for low-cost airlines such as Vietjet Air (CAPA,
2023). Its activities, however, might be at danger from prospective changes in regulatory rules
or political unrest. Expanding Vietjet's market reach is mostly dependent on bilateral air service
agreements. These agreements provide Vietjet Air access to new foreign markets, which
presents significant development prospects and strengthens the airline's position as a leader in
the world (Vietnam Investment Review, 2022).

b. Economic

One major factor influencing Vietjet Air's performance is Vietnam's strong economic growth. The
demand for air travel has increased as a result of the expanding middle class and their
increased disposable money (World Bank, 2023). Vietjet's low-cost business model, which
strives to make air travel accessible to a wider populace, is ideally aligned with this economic
development. Fuel costs are still important, nevertheless, as changes in the price of oil globally
have a big effect on an airline's operational expenses (IATA, 2023). To reduce these risks and
preserve profitability, it's critical to manage a fuel-efficient fleet and put appropriate fuel hedging
techniques into place.

c. Social

Affordable air travel is in high demand in Vietnam due to the country's growing middle class and
rising disposable income (Nielsen, 2023). Vietjet Air is ideally positioned to benefit from this
demographic transition because to its affordable strategy. Additionally, post-pandemic travel
patterns suggest an increasing inclination towards low-cost travel, providing Vietjet Air with
additional chances to develop its clientele (McKinsey & Company, 2022). In the cutthroat
aviation industry, understanding and responding to these societal trends will be essential to
maintaining development and guaranteeing client pleasure.

d. Technological

The aviation sector is changing as a result of advances in digital technology and e-commerce.
Vietjet Air can greatly improve customer satisfaction and cut costs by using digital technologies
for booking, customer support, and operational efficiency (Deloitte, 2023). Purchasing
technology that facilitates smooth travel experiences will give Vietjet Air a competitive edge.
Furthermore, it's critical to modernize the fleet. By introducing the newest, more fuel-efficient,
and less maintenance-intensive aircraft models, Vietjet Air can become known as a progressive,
environmentally conscious airline by increasing operational effectiveness and lowering
environmental impact (Airbus, 2023).

e. Environment

The aviation sector is becoming increasingly impacted by environmental rules and concerns. To
address the increasing demand from customers for environmentally conscious travel
alternatives, Vietjet Air has to invest in eco-friendly technology and embrace sustainable
practices in order to comply with these standards (ICAO, 2023). There are operational hazards
associated with the effects of climate change, such as unfavorable weather patterns and natural
disasters. To mitigate these risks and maintain continuous service quality, it is imperative to
develop comprehensive contingency plans and ensure infrastructure resilience (UNFCCC,
2022).

f. Legal
Vietjet Air must adhere to consumer protection legislation and aviation safety regulations.
Respecting both local and international aviation safety laws to the letter guarantees the
preservation of operating licenses and fosters consumer confidence (CAA, 2023). Maintaining
client satisfaction and averting legal concerns also depend on adhering to consumer protection
rules, especially when processing passenger complaints, cancellations, and compensation
(Vietnam Ministry of Transport, 2022). The necessity of strict legal adherence is highlighted by
the possibility of significant penalties and reputational harm from any noncompliance.

Three factors are crucial for Vietjet Air's future success, according to the PESTEL
analysis above are: Economic, Technology, and Environment

Vietjet Air is heavily dependent on Vietnam's economic growth. The demand for airline services
rises when the economy expands and more people can afford to travel. For Vietjet, which caters
to the middle class with its low-cost strategy, this is especially crucial. A strong market base is
made available for the airline to access by the population's increasing disposable income, which
supports both local and international expansion (World Bank, 2023). For Vietjet to succeed in
the long run, it will be essential to make sure it keeps serving this growing market.

The customer experience and efficiency can only be improved by adopting digital technologies.
According to Deloitte (2023), Vietjet Air may achieve improved service delivery and substantial
cost savings by integrating digital technologies including automated customer assistance,
mobile booking, and optimized operational processes. By embracing digital transformation,
Vietjet can maintain its competitiveness by satisfying the needs of contemporary travelers in
terms of efficiency and convenience. This technical advantage improves client happiness and
loyalty in addition to streamlining internal processes.

Growing regulatory demands and customer demand for environmentally friendly travel options
are making environmental sustainability more and more important. To lessen its impact on the
environment, Vietjet Air needs to invest in sustainable practices including utilizing aircraft that
uses less fuel and implementing environmentally friendly operating procedures (ICAO, 2023).
For dependable operations to continue, climate change consequences must be addressed via
preparation for extreme weather events (UNFCCC, 2022). In addition to guaranteeing regulatory
compliance, an airline's dedication to sustainability improves its standing as an eco-friendly
operator, attracting an increasing number of ecologically sensitive passengers.

Five Forces
Vietjet Air's market dynamics and competitive stance can be better understood by using Porter's
Five Forces framework to assess the industry's competitive forces.

a. Threat of New Entrants

Recent Changes: Historically, the airline business has faced entrance barriers because of high
capital needs, complex regulations, and well-established brand loyalty. The threat of new
entrants has increased, meanwhile, since low-cost carriers and recent technological
improvements have lessened restrictions. Furthermore, market disruptions brought forth by the
COVID-19 pandemic may present chances for new competitors to enter the industry (Dunn,
2023).
Expected Future Changes: As the world economy bounces back from the epidemic, possible
rivals may try to take advantage of new market trends and shifting consumer tastes, increasing
the risk of new entrants. Government programs to encourage competition and liberalize air
travel may also make it easier for people to enter the market.

Positioning of Vietjet Air: In Southeast Asia, Vietjet Air has already made a name for itself as
a leading low-cost carrier. Vietjet should concentrate on utilizing its strong brand reputation,
operational effectiveness, and economies of scale to preserve a competitive edge in order to
lessen the threat of new competitors. Additionally, by increasing client loyalty and market share,
ongoing innovation and difference in services might aid in preventing new competitors.

b. Bargaining Power of Suppliers

Recent Changes: Because there are fewer suppliers and airlines rely heavily on their products,
suppliers, especially aircraft manufacturers and fuel providers, have historically had tremendous
bargaining leverage. However, suppliers' bargaining strength has significantly decreased due to
the rise of new aircraft manufacturers and fuel technological breakthroughs (Jones, 2020).

Expected Future Changes: Geopolitical developments, technological breakthroughs, and

market consolidation may have an impact on future shifts in suppliers' negotiating leverage.
Suppliers of alternative fuels and aircraft manufacturers may find their negotiating power
diminished by increased competition, while supply chain interruptions or geopolitical unrest may
have the reverse impact.

Vietjet Air's positioning: By preserving solid ties with a number of suppliers, negotiating
advantageous contracts, and looking into alternate fuel sources, Vietjet Air can lessen the
bargaining strength of suppliers. Furthermore, Vietjet Air can strengthen its negotiating position
and lessen reliance on particular suppliers by making investments in fuel-efficient aircraft
technology and fleet modernization.

c. Bargaining Power of Buyers

Recent Changes: With the growth of internet booking platforms, price transparency, and a
plethora of airline options, purchasers, represented by travelers and travel agents, now have
more negotiating leverage. Vietjet Air and other low-cost airlines have empowered customers
with flexible booking options and cheap pricing (Lee, 2023).

Expected Future Changes: As technology develops and customer preferences change,

purchasers should have more negotiating power. Convenience, service quality, and price
sensitivity will all continue to be important considerations when making purchases. Furthermore,
buyer bargaining power may be further impacted by travel habit changes and the post-pandemic
recovery.

Vietjet Air's positioning: The airline should concentrate on improving customer experience,
providing competitive pricing, and expanding its route network in order to stay competitive.
Investing in auxiliary services, loyalty programs, and digital marketing tactics can increase client
loyalty and lessen the effect of buyer bargaining power.

d. Threat of Substitutes
Recent Changes: Because there aren't many practical options for long-distance travel, the
threat of substitutes to the airline sector has been minimal. However, the possibility of
substitution has grown due to developments in high-speed rail and other forms of transportation,
particularly for short-haul routes (Wang, 2023).

Expected Future Changes: Government policies, environmental concerns, and technical

improvements may have an impact on future shifts in the danger of alternatives. The threat of
alternatives may increase as a result of ongoing investments in high-speed rail infrastructure,
movements toward remote labor, and rising environmental consciousness.

Vietjet Air's positioning: The airline should concentrate on improving its route network,
entering underserved markets, and providing seamless connections in order to counter the
threat of replacements. Stressing the special benefits of air travel—like its quickness, ease, and
worldwide connectivity—can aid in setting Vietjet apart from other forms of transportation.

e. Competitive Rivalry
Recent Changes: The emergence of low-cost carriers, market liberalization, and globalization
have all contributed to an increase in the level of competitive rivalry in the airline sector. Airlines
now rely heavily on price competitiveness, capacity growth, and route network optimization to
increase market share and sustain profitability (Jones, 2020).

Expected Future Changes: Industry consolidation, legislative changes, and modifications in

consumer behavior may all contribute to future changes in competitive rivalry. Competition may
become even more intense, particularly in important markets, as a result of the pandemic's
aftermath, the introduction of new rivals, and geopolitical developments.

Vietjet Air's positioning: The airline should prioritize operational effectiveness, cost leadership,
and distinctiveness in order to prosper in a fiercely competitive market. Vietjet can stay
competitive by consistently improving its route networks, fleet utilization, and auxiliary revenue
streams. Additionally, Vietjet's market position can be strengthened in the face of intense
competition by investing in customer loyalty programs, brand reputation, and high-quality
services.

Strength

a. Low-cost business model (V, R, I):

Vietjet Air is a low-cost carrier (LCC) that offers value to clients who are price conscious in both
domestic and international markets by providing inexpensive air travel (Pearson and Merkert,
2014). Due to its strict requirements for cost control and operational effectiveness, the LCC
model is rather uncommon and challenging to replicate (Flouris and Oswald, 2016). This
business model has been effectively applied by Vietjet Air, enabling it to remain profitable while
providing fares that are cheaper than those of full-service airlines.

High aircraft utilization, point-to-point route networks, single-class cabin arrangements, and
outsourcing of non-core services are just a few of the ways the airline has improved its
operations (Soyk et al., 2018). Vietjet Air is able to convey cost savings to its consumers in the
shape of cheaper rates because to these methods. Furthermore, because of their deeply
ingrained organizational structures and business models, legacy carriers find it difficult to
replicate the LCC model (Flouris and Oswald, 2016).

b. Young and fuel-efficient fleet (V, R, I):

The majority of Vietjet Air's aircraft are Airbus A320 and A321 variants, making it a modern,
youthful fleet. Because of the increased fuel economy and decreased maintenance costs, this
offers value in terms of cost savings (Belobaba et al., 2015). Additionally, by lowering emissions
and noise pollution, a new fleet improves the airline's environmental sustainability (Jiang and
Xu, 2017).

Because it necessitates large capital expenditures and fleet renewal plans, maintaining a young
fleet is rather uncommon in the business (Belobaba et al., 2015). Financial restrictions often
force many airlines, especially in emerging economies, to employ older aircraft. Because it
requires long-term planning, financial discipline, and strategic connections with aircraft
manufacturers, Vietjet Air's capacity to consistently invest in new aircraft and retire older ones is
a valuable and hard-to-copy resource (Flouris and Oswald, 2016).

d. Strong domestic market position (V, R, I):

According to Soyk et al. (2018), Vietjet Air has developed a strong domestic market position in
Vietnam, which is an important and unique resource. The airline has used its low-cost business
strategy and wide domestic route network to take advantage of the rising demand for air travel
within Vietnam. In the local market, Vietjet Air has attained a level of brand awareness and
customer loyalty that can be challenging for rivals to match (Flouris and Oswald, 2016).

The airline has positioned itself as a champion of cost-effective travel for the Vietnamese
people, appealing to both leisure and business passengers as well as the nation's expanding
middle class (Soyk et al., 2018). Its domination of the home market offers a solid platform for
future development and foreign market expansion.

e. Ancillary revenue streams (V, R, I):

Vietjet Air has effectively created ancillary income streams, including in-flight sales of goods and
food and beverages, luggage fees, and seat selection fees. By augmenting the airline's primary
ticket revenue and increasing profitability, this diversified revenue model adds value (Warnock-
Smith et al., 2017).

Because it necessitates a careful balance between providing reasonable base prices and
earning additional money from auxiliary products and services, the ability to efficiently monetize
ancillary services is very unusual and challenging to replicate (Flouris and Oswald, 2016). This
has been made possible by Vietjet Air's creative product offers, focused marketing initiatives,
and flawless incorporation of supplemental services into the overall customer experience
(Warnock-Smith et al., 2017).

f. Strategic alliances and partnerships (V, R, I):

Vietjet Air has formed alliances and partnerships with a range of stakeholders, including as
other airlines, tourism groups, and manufacturers of aircraft. According to Floris and Oswald
(2016), these collaborations offer value to the airline by giving it access to resources,
knowledge, and market opportunities that would be challenging to come by on its own.

For instance, Vietjet Air and Airbus have long-term contracts for the purchase and maintenance
of aircraft, which enables the airline to negotiate advantageous terms and guarantee a
consistent flow of new aircraft (Soyk et al., 2018). In order to increase its route network and give
consumers smooth travel options, the airline has also established codeshare agreements and
interline relationships with other carriers (Warnock-Smith et al., 2017).

Building confidence, matching interests, and navigating intricate negotiations and contractual
arrangements are all necessary for developing and maintaining such strategic relationships,
which are extremely uncommon and challenging to replicate (Flouris and Oswald, 2016).

Weaknesses

a. Limited international presence (R, N):

In contrast to other regional and international carriers, Vietjet Air has a comparatively small
international footprint, although holding a strong position in the Vietnamese home market (Soyk
et al., 2018). The airline's main priorities have been short-haul international services within
Southeast Asia and a few Asia-Pacific and European destinations.

Vietjet Air may find it difficult to enter long-haul foreign markets and have a greater global
presence because of things like fierce rivalry, obstacles to regulation, and the requirement for
more resources and competencies (Flouris and Oswald, 2016). In the aviation sector, this
shortcoming is not especially uncommon or non-replaceable, either, as many carriers have
comparable difficulties when growing globally.

b. Dependency on a single type of aircraft (R, N):

The majority of Vietjet Air's fleet is made up of Airbus A320/A321 models, which are excellent
choices for short- to medium-distance travel (Belobaba et al., 2015). This makes maintenance
and operations easier, but it also means that there is only one kind of aircraft, which could not
be suitable for all routes or markets that call for different sizes of aircraft.

Vietjet Air may be able to better balance capacity and demand on particular routes by
diversifying its fleet with different kinds of aircraft (Flouris and Oswald, 2016). Nonetheless,
given that many airlines, particularly low-cost carriers, frequently standardize their fleets for
operational efficiency, this issue is somewhat prevalent in the business. Furthermore, the airline
has the option to diversify its fleet in the future if necessary, so it is not an irreplaceable
vulnerability.

c. Possible obstacles related to regulations (R, N):

Vietjet Air may have regulatory obstacles or limitations in some markets due to its low-cost
carrier status, particularly in relation to labor rules, consumer protection, and environmental
regulations (Warnock-Smith et al., 2017). Even though the airline has taken the initiative to
address these issues, different jurisdictions can have changing regulatory regimes.

As Vietjet Air grows its overseas operations, it may face difficulties navigating complicated
regulatory environments and guaranteeing compliance with local laws and regulations (Flouris
and Oswald, 2016). However, since all airlines are required to abide by pertinent legislation in
the markets they operate in, Vietjet Air is not the only one with this issue. There are other
alternative approaches that can be used, like interacting with local government agencies,
organizing campaigns, and modifying company procedures to adhere to particular laws.

d. Limited brand recognition abroad (R, N):

Although Vietjet Air enjoys great consumer loyalty and a strong brand presence in Vietnam,
there's a chance that its brand recognition will be limited abroad, especially outside of Southeast
Asia (Soyk et al., 2018). It can be difficult to develop a devoted customer base and raise brand
awareness in new countries, particularly when up against more established carriers.

However, given that many airlines, even low-cost carriers, encounter comparable difficulties
when entering new markets, this shortcoming is neither especially uncommon nor non-
replaceable (Flouris and Oswald, 2016). To boost brand recognition and draw in new business,
Vietjet Air can use a variety of branding and marketing techniques, including collaborations with
regional travel agencies, focused advertising campaigns, and digital platform utilization
(Warnock-Smith et al., 2017).

Core Competences:

a. Low-cost business model:

Vietjet Air's capacity to run a successful low-cost carrier (LCC) model is one of its key
competencies. The airline has proven to have a thorough understanding of and a successful
application of the low-cost carrier (LCC) model. This model entails optimizing a number of
operational aspects, including point-to-point route networks, single-class cabin configurations,
high aircraft utilization, and outsourcing non-core activities (Soyk et al., 2018). The ingrained
business strategies of legacy carriers and the systematic effort needed to demonstrate this
competency make it valuable, uncommon, and challenging for competitors to replicate.

b. Fleet management:
According to Belaboba et al. (2015), one of Vietnam Jet Air's fundamental competencies is the
ability to keep a young, fuel-efficient fleet. According to Floris and Oswald (2016), this
competency entails long-term planning, budgetary restraint, and strategic alliances with aircraft
manufacturers. Because it requires large capital investments and fleet renewal methods, it is
unique in the industry, important in terms of cost savings and environmental sustainability, and
challenging for competitors to easily copy.

c. Ancillary revenue maximization:

One of the airline's main competencies is its capacity to profitably manage ancillary services,
like in-flight sales, luggage fees, and seat selection fees (Warnock-Smith et al., 2017). This skill
entails finding a middle ground between providing reasonable base tariffs and bringing in extra
money from add-on goods and services. The seamless integration of supplementary services
into the client experience and the unique methodology needed make it important for boosting
profitability, rather rare, and challenging for competitors to copy.

Competitive Advantages:

a. Cost leadership: Compared to full-service airlines, Vietnam Jet Air has a considerable cost
advantage due to its low-cost business model and effective operations (Pearson and Merkert,
2014). Because of its cost leadership, the airline is able to offer lower fares, which appeals to
passengers who are price conscious and helps it to compete successfully in both domestic and
international markets.

b. Strong domestic market position: According to Soyk et al. (2018), Vietnamjet Air has a
competitive advantage because to its strong domestic market position in the country. The airline
has succeeded in gaining consumer loyalty, brand awareness, and a thorough grasp of the
dynamics of the regional market. This benefit offers a strong platform for future development
and global market expansion in addition to a devoted clientele that can be used to generate new
sources of income.

c. Strategic alliances and partnerships: Vietjet Air has a competitive advantage thanks to the
alliances and partnerships it has formed with a variety of stakeholders, such as aircraft
manufacturers, travel agencies, and other airlines (Flouris and Oswald, 2016). By these
alliances, the airline is able to expand its market reach and operational skills by gaining access
to resources, knowledge, and opportunities that would be challenging to acquire on its own.

d. Environmental sustainability: According to Jiang and Xu (2017), Vietnam Jet Air's youthful
and fuel-efficient fleet not only saves money but also helps the environment. Using this
advantage, the airline may position itself as an eco-friendly and responsible option, appealing to
consumers who care about the environment and possibly earning a competitive edge in regions
where sustainability is a top priority.

Management tools
SWOT:
An effective method for strategic planning is the SWOT analysis, which identifies both internal
and external opportunities and risks in the market (Fleisher and Bensoussan, 2015).

According to Pearson and Merkert (2014), Belobaba et al. (2015), Soyk et al. (2018), Vietjet
Air's low-cost business model, ancillary revenue streams, Warnock-Smith et al. (2017), low-cost
business model, young and fuel-efficient fleet, and strategic partnerships and alliances are
some of the airline's strengths.

Its weaknesses include a narrow global reach (Soyk et al., 2018), dependence on a certain
model of aircraft (Belobaba et al., 2015), possible legal issues (Warnock-Smith et al., 2017), and
a low level of global brand recognition (Soyk et al., 2018).

Potential opportunities for Vietjet Air include growing demand for air travel in emerging markets
(Soyk et al., 2018), entering into new international markets (Warnock-Smith et al., 2017),
partnering and entering into codeshare agreements (Flouris and Oswald, 2016), and advancing
technology in aviation and customer experience (Belobaba et al., 2015).

Threats include fierce rivalry between legacy and low-cost airlines (Pearson and Merkert, 2014),
volatile fuel and exchange rates (Flouris and Oswald, 2016), security concerns and geopolitical
unrest (Soyk et al., 2018), and modifications to laws and regulations pertaining to the
environment (Warnock-Smith et al., 2017).

TOWS:
Combining recommendations for potential strategic alternatives with the results of the SWOT
analysis, the TOWS matrix is a tool for strategic planning (Weihrich, 1982). It offers a
methodical way to determine tactics depending on how internal and external variables interact.

SO Strategies (Strengths-Opportunities) leverages the low-cost business model and strong

domestic market position to expand into new international markets with increasing demand for
air travel, and also exploiting strategic partnerships and alliances to gain access to new markets
and resources for international expansion.

ST Strategies (Strengths-Threats) could include leveraging the young and fuel-efficient fleet to
mitigate the impact of fluctuating fuel prices and environmental regulations, as well as
leveraging the strong domestic market position and ancillary revenue streams to maintain a
competitive advantage in the face of intense competition from other carriers.
WO Strategies (Weaknesses-Opportunities) invests in fleet diversification and technological
advancements to improve customer experience and meet a range of market needs, as well as
addressing the airline's limited international presence by forming partnerships and codeshare
agreements to expand the route network and increase brand recognition in new markets.

WT Strategies (Weaknesses-Threats) adjusts business practices to comply with regulations in

various markets and working with local authorities to proactively address potential regulatory
challenges. Additionally, exploring opportunities for fleet diversification or strategic partnerships
with aircraft manufacturers could help mitigate the risks associated with relying solely on one
type of aircraft.

Vietjet Air can create strategies that use its strengths to seize opportunities, mitigate
weaknesses by seizing opportunities, use strengths to defeat threats, and lessen the impact of
weaknesses and threats on its operations by completing a SWOT analysis and applying the
TOWS matrix (Weihrich, 1982).

Business Strategy
Corporate-Level Strategies:

1. Growth Strategy:
a. Market Penetration: Leverage Vietjet Air's strong domestic market position in Vietnam to
further increase market share through aggressive marketing campaigns targeting different
customer segments, such as business travelers and leisure travelers. Offer competitive pricing
strategies, including promotional fares and bundled deals, to attract customers from
competitors. Enhance customer loyalty programs by providing rewards, personalized
experiences, and value-added services to retain existing customers and incentivize repeat
business. Expand the airline's route network within Vietnam to cater to underserved regions and
capitalize on the growing demand for air travel.

b. Market Development: Expand into new international markets, particularly in Southeast

Asia and emerging markets with growing middle-class populations and increasing demand for
air travel, such as India, China, and other Asia-Pacific regions. Capitalize on Vietjet Air's low-
cost business model and operational efficiency to offer affordable fares and tap into these
growth markets. Leverage strategic partnerships and alliances with local tourism organizations,
travel agencies, and other airlines to gain access to new markets and distribution channels.
Conduct thorough market research to identify the most promising international routes and tailor
services to meet local customer preferences.

2. Vertical Integration Strategy:

Explore opportunities for vertical integration by establishing strategic partnerships or
acquisitions with companies in related industries, such as ground handling services, aircraft
maintenance, or tourism organizations. This strategy can help Vietjet Air gain control over its
supply chain, reduce costs, and enhance operational efficiency. For example, partnering with
ground handling service providers can streamline airport operations and improve customer
experience, while collaborating with aircraft maintenance companies can ensure timely and
cost-effective maintenance of the airline's fleet. Additionally, partnerships with tourism
organizations can enable Vietjet Air to offer integrated travel packages and capture a larger
share of the tourism market.
3. Corporate Restructuring Strategy:
Evaluate the potential for corporate restructuring by diversifying into complementary
businesses or adjacent markets, such as cargo operations, private jet services, or hospitality
services. This strategy can help Vietjet Air leverage its core competencies and mitigate risks
associated with overreliance on a single business segment (the passenger airline business). For
instance, expanding into cargo operations can provide an additional revenue stream and
optimize the utilization of aircraft capacity. Venturing into private jet services could cater to the
growing demand for luxury travel and open new market opportunities. Furthermore, diversifying
into hospitality services, such as owning or managing hotels or resorts, can create synergies
with the airline's existing operations and offer customers a more comprehensive travel
experience.

SBU-Level Strategies:

1. Cost Leadership Strategy:

Preserve and enhance Vietjet Air's low-cost leading position in the aviation sector by
consistently streamlining operations and capitalizing on its low-cost company strategy. Put
procedures in place that will improve operational efficiency, such as increasing aircraft use,
streamlining operations, and optimizing flight routes and timetables. Encourage staff to find and
carry out cost-saving ideas by fostering an environment of cost consciousness and continual
improvement across the entire company. Utilize the young and fuel-efficient fleet of the airline to
save operating expenses and enhance environmental sustainability. Investigate strategic
procurement and sourcing opportunities as well in order to bargain for advantageous terms with
vendors and suppliers.

2. Differentiation Strategy:
a. Service Differentiation: To set Vietjet Air apart from the competition, improve the in-flight
experience by delivering new auxiliary services, premium offers, and increased facilities. This
may entail providing improved in-flight entertainment systems, better dining services, upgraded
seating options, and special lounge access for high-end patrons. Additionally, make use of
digital technology to offer seamless and customized travel experiences. A few examples of
these include in-flight connectivity services, digital boarding passes, and smartphone check-in.
Vietjet Air can draw clients that appreciate improved travel experiences and are prepared to pay
more for extra services by providing distinctive services.

b. Environmental Sustainability: Use the airline's modern, fuel-efficient fleet to establish its
reputation as an airline that cares about the environment and draw in eco-aware passengers.
Incorporate environmentally friendly procedures into all aspects of the airline's operations, such
as programs for recycling and waste reduction and the purchase of sustainable aviation fuels.
Engage in environmental certification programs and work with industry associations and
regulatory bodies to advance sustainable aviation practices. Promote Vietjet Air as a green
airline that is dedicated to lowering its carbon footprint and encouraging environmentally friendly
travel.

3. Focus Strategy:
a. Geographic Focus: In Southeast Asia, where the airline has made significant inroads,
concentrate on bolstering Vietjet Air's position and market share in the home Vietnamese
market as well as a few other foreign markets. Invest money and resources to improve the
airline's operations, reputation, and patronage in these important markets. Adapt service
offerings and marketing tactics to the unique requirements and preferences of consumers in
these markets.

b. Customer Segment Focus: Tailor services and offerings to specific consumer segments,
such as budget-conscious vacationers or business travelers, based on their individual needs.
Continue to highlight pricing, efficient airline schedules, and alluring vacation packages for
budget-conscious leisure tourists. Provide upscale services to business travelers, like priority
boarding, special check-in desks, and in-flight work facilities. Develop customized marketing
campaigns and loyalty programs by utilizing data analytics and customer insights to gain a
deeper understanding of the preferences and habits of each target category.

4. Partnership and Alliance Strategy:

Strive to establish strategic alliances and partnerships with airlines, travel agencies, and aircraft
manufacturers in order to gain access to new markets, resources, and expertise. Work together
with aircraft manufacturers to negotiate advantageous terms for fleet purchase and upkeep,
guaranteeing a consistent flow of up-to-date, fuel-efficient aircraft. Join forces with travel
companies and tourism associations to offer packaged travel deals and open up new markets.
To increase the airline's reach and give consumers smooth travel options, codeshare
agreements and interline alliances should be established with other airlines.

5. Regulatory Compliance Strategy:

Dealing with potential regulatory issues ahead of time by working with local authorities,
modifying company procedures to adhere to laws in various markets, and keeping a close eye
on and reacting to regulatory changes. To guarantee compliance with labor laws, consumer
protection regulations, environmental regulations, and security protocols, establish specialized
teams or departments that will stay up to date on regulatory advancements in the aviation
business. To keep informed and have a voice in establishing industry standards and practices,
cultivate close ties with regulatory agencies and trade groups. To recognize and reduce
possible regulatory risks, put in place strong risk management frameworks.

Strategic management plan

Crucial factor for the Vietjet Air Strategic Management Plan's Effective Implementation:

Strong Leadership and Commitment: The senior management team of Vietjet Air must
demonstrate strong leadership and commitment for the strategic management plan to be
implemented successfully. To guarantee that everyone in the organization is on board with and
dedicated to carrying out the plan, the leaders must successfully convey the vision, goals, and
tactics to all members of the organization.

Organizational Culture and Change Management: It might be difficult to implement new tactics
when they necessitate organizational changes. Vietjet Air needs to cultivate a culture that
welcomes innovation and change. To minimize resistance and enable seamless transitions, it is
imperative to use effective change management strategies, such as employee training,
communication, and incentive programs.

Financial Commitment and Resource Allocation: Sufficient financial, human, and other resource
allocations are required for the strategic management strategy. In order to assist the
implementation of numerous initiatives, Vietjet Air must make sure that resources are distributed
effectively and that budgets are in line with strategic priorities.

Operational Excellence and Continuous Process Improvement: These are essential

components of strategies including cost leadership, service differentiation, and regulatory
compliance. To ensure that these goals are implemented successfully, Vietjet Air should
concentrate on improving operational efficiency, streamlining processes, and cultivating a
culture of continuous improvement.

Strategic Alliances and Partnerships: Establishing strategic alliances and partnerships is

essential for initiatives like route network expansion, vertical integration, and market
development. To take advantage of their resources and knowledge, Vietjet Air has to find and
build solid partnerships with possible partners, including aviation manufacturers, travel
agencies, and other airlines.

Agility and Adaptability: The aviation sector is dynamic, and things can change quickly in the
market. Vietjet Air needs to continue being flexible and nimble, keeping an eye on the outside
world and modifying the strategic management plan as needed. Sophisticated risk management
techniques and backup plans are necessary to navigate unknowns and take advantage of new
opportunities.

Talent Management and Employee Engagement: Vietjet Air personnel' abilities and dedication
are critical to the strategy's successful execution. The airline needs to make investments in
employee training, talent management, and engagement programs to make sure that its
workers are motivated and have the skills needed to support the strategic objectives.

Performance Measurement and Monitoring: To track advancement, pinpoint areas for

development, and make data-driven decisions, a strong system of performance measurement
and monitoring must be established. Key performance indicators (KPIs) that are in line with
Vietjet Air's strategic objectives should be defined, and the efficacy of the company's initiatives
should be routinely monitored and evaluated.

Sustainability and Corporate Social Responsibility: Vietjet Air needs to include sustainability and
corporate social responsibility (CSR) ideas into its strategic management plan in order to project
an image of being an ecologically conscious airline. This entails putting eco-friendly procedures
into action, developing projects for sustainable aviation, and interacting with stakeholders to
further sustainable development.

Continuous Learning and Innovation: Vietjet Air needs to promote a culture of continuous
learning and innovation in order to be competitive. The airline ought to support innovation,
embrace cutting-edge technologies, and foster a culture that fosters the generation of fresh
concepts and creative fixes.
Strategic Management Plan for Vietjet Air:

Strengthen Domestic Market Leadership: Through customer loyalty programs and focused
marketing activities, increase market share in the Vietnamese domestic market. Increase the
number of routes in Vietnam to cover underserved areas and take advantage of rising demand.
To keep prices competitive, improve cost control and operational efficiency.

Increase Global Presence: Explore untapped global markets in Southeast Asia and developing
economies where air travel is becoming more and more popular. Use strategic alliances and
collaborations with regional airlines and travel agencies to open up new markets and distribution
avenues. Adjust services and offerings to accommodate cultural quirks and local client
preferences.

Enhance Customer Experience and Service Differentiation: To set Vietjet Air apart from the
competition, introduce premium offerings, enhanced amenities, and new ancillary services.
Utilize digital technologies to deliver smooth and customized travel experiences. To encourage
customer engagement and retention, spend money on loyalty and customer relationship
management systems.

Pursue Operational Excellence and Cost Leadership: Constantly improve operational efficiency,
streamline procedures, and optimize operations. Utilize the young and fuel-efficient fleet of the
airline to save operating expenses and enhance environmental sustainability. Encourage a
constant improvement and cost-conscious culture across the entire company.

Develop Strategic Alliances and Partnerships: Form strategic alliances with aircraft
manufacturers to negotiate advantageous conditions for the purchase and upkeep of Vietjet Air
fleet. Join forces with travel companies and tourism associations to offer packaged travel deals
and open up new markets. In order to increase the route network and offer seamless travel
options, establish codeshare agreements and interline alliances with other airlines.

Ensure Regulatory Compliance and Environmental Sustainability: Deal with potential regulatory
issues ahead of time by working with local authorities and modifying company procedures to
adhere to laws in other regions. To support sustainable development, put eco-friendly
procedures into effect, look into projects for sustainable aviation, and interact with stakeholders.
Market Vietjet Air as a green airline dedicated to lowering its carbon footprint by taking part in
environmental certification initiatives.

Foster Innovation and Continuous Improvement: Promote an environment that fosters the
creation of fresh concepts and creative solutions, accept evolving technologies, and encourage
experimentation. Invest in R&D to investigate novel ways to improve customer satisfaction,
environmental sustainability, and operational effectiveness. To keep a competitive edge, keep
an eye on market dynamics and industry changes constantly and adjust Vietjet Air tactics as
necessary.
Implementation Plan:

 Create a specialized strategy implementation team to handle the planning, directing, and
monitoring of the strategic initiatives' implementation. For every strategic goal, create
comprehensive action plans, schedules, and resource allocations that include precise
deadlines, benchmarks, and performance metrics.

 Organizing systems, procedures, and structures should be aligned to support the

strategic plan's implementation. Any necessary modifications should be made to allow
for efficient cross-functional cooperation.

 To promote buy-in and guarantee openness, share the strategic management plan with
all relevant parties, such as staff members, business partners, and clients. Use change
management techniques to decrease resistance to change and promote seamless
transitions, such as employee training, communication campaigns, and incentive
programs.

 Provide comprehensive performance monitoring and reporting systems to monitor

advancements, pinpoint opportunities for enhancement, and make informed decisions
based on facts.

 Review strategy on a frequent basis and tweak it as needed to reflect shifting

organizational priorities, opportunities, and market conditions.By promoting employee
involvement, identifying and rewarding creative solutions, and funding R&D projects,
Vietjet may cultivate a culture of ongoing learning, innovation, and progress.

 Maintain awareness of market trends, legislative changes, and sustainability initiatives

by interacting with industry associations, regulatory agencies, and stakeholders. Then,
modify approach as necessary.

 Maintain momentum and morale by celebrating milestones and accomplishments and

keeping all stakeholders informed about progress, successes, and difficulties on a
regular basis.

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