Group 2

• Trần Phát Kiệt

• Nguyễn Thanh Minh
• Đặng Lê Xuân Hoàng
• Trần Trí Dũng
• Trần Anh thanh
VIETNAM AIRLINES
TỰ HÀO - VƯƠN CAO
PP by: Trần Phát Kiệt
 Analysis
• Overview of Vietnam Airlines
Corporation
• External environment & Porter’s Five
Forces
• Internal environment
• Business strategy
Overview of Vietnam
Airlines Corporation

• Vietnam Airlines is the national airline of Vietnam, under the Vietnam

Airlines Corporation and was established in April 1993 under the
management of a board appointed by the Prime Minister of Vietnam.

• Its head office is located at two international airports, Noi Bai and Tan Son
Nhat. The airline specializes in domestic and international flights to
Southeast Asia, East Asia, Europe and Oceania, with an average of 360
flights. trips/day.
Overview of Vietnam
Airlines Corporation

• Vietnam Airlines makes a great contribution to the country's GDP. The

corporation holds up to 80% market share of domestic aviation market and
40% market share of tourists to Vietnam.

• On October 20, 2002, the airline chose the "Golden Lotus" symbol to
represent the airline, symbolizing the outstanding development with the
vision to become the leading airline in Asia.
 External
environment
• ECONOMICS
• POPULATION
• LAW&POLITIC
• TEACHNOLOGICAL
• ENVIRONMENT NATURE
• CULTURE & SOCIAL
• Porter’s Five Forces
ECONOMICS
Business activities of Vietnam Airlines are not ìmmune to
the influence of fluctuations in the economy, such as
factors such as GDP growth rate, Economic utilization rate,
tax policy, .... typical example

1. The government implements an inflation policy to reduce unemployment, leading to a high

average income of people leaving the country, so the demand for transportation and
transportation by air will also increase.

2. Vietnam's economy last year was affected by the Covid epidemic, which forced the transport
industry to suspend flights for a long time. And having to overcome many consequences after
the epidemic caused many difficulties.
 ECONOMICS
Not only that, since the past 1 year, the conflict between
Russia and Ukraine has greatly affected the economy, in
which the aviation industry has incurred "terrible" costs.

• Airlines operating air traffic routes through Russia are prohibited

• Flights to Europe and the US must reroute to avoid Russia via China, Kazakhstan or North
Africa.
• Flight time increases from 60-120 minutes for a flight to Europe and from 20-30 minutes for a
flight to the US
• Additional costs from 10,600-21,200 USD for flights to Europe and from 20,000-40,000 USD
 POPULATION
• The total population of Vietnam is about 96 million people
• Vietnam is the third most populous country in Southeast Asia
• 36% of the population lives in urban areas (about 34 million people in 2019). The
average age is 32.5 years old and has a high population growth rate.

People's demand for traveling and transporting goods is also higher,

creating favorable conditions for development
 LAW & POLITICS

The stability of the political system is one of the factors that

greatly affects the development of enterprises. Currently, the
political and legal situation in Vietnam is stable for businesses
to develop
Besides
• Vietnam Airlines is among the companies under the management of the
Government
• Has the advantage of being backed by capital, business protection, and financial
policies
 In addition, legal & political factors also depend on
the stability of other countries in the world. But the
current world political situation is very hot

• Political tensions between the US & China, the US

& North Korea have more or less affected the world
LAW & economic situation including Vietnam. Especially
POLITICS the war between Russia & Ukraine

• VNA 's flights were both prolonged and costly due to

the increase in petrol prices from the conflict , the
Hanoi - Moscow route could not be operated because
Russia was subject to US & EU sanctions .
 TECHNOLOGICAL
1. New technology application and
development.
2.Signing an expanded cooperation
agreement with Saber Group - a US
technology solution supplier in the
aviation field

In order to limit negligence and maximize safety for each flight

 TECHNOLOGICAL
• In addition, during the COVID-19 epidemic,
Vietnam Airlines has implemented application
solutions to reduce technology exposure such
as using self-check-in to avoid large crowds at
the airport such as: check-in online by phone...

• apply technology on flights to serve the

entertainment needs of customers such as
listening to music, reading newspapers....
 Environmental
nature
OPPORTUNITY
• Favorable geographical position on the edge of Southeast Asia
• Located in the middle of the international air route connecting east to west, north
to south
• Suitable for building a route network between the US and Australia with short
flights in Southeast Asia and inland of Vietnam
THREAT
• Every year, our country encounters many big and small storms, which greatly
affect the flights of businesses, causing a lot of economic damage.
 CULTURE &
SOCIAL
• Vietnam is a country with a diverse and
advanced culture.
• Preserving national cultural identity
and absorbing the cultural quintessence
of humanity

Thanks to that, Vietnam's tourism is on

the rise, helping VNA expand the
market to welcome international
customers to Vietnam.
Porter’s Five
Forces
 1.Current Competitors
Vietnam Airlines' industry competitors include Vietjet
Air, Jetstar Pacific, Bamboo Airways, and Vietravel
Airlines.The biggest competitor is Vietjet Air

• Vietjet Aviation Joint Stock Company is Vietnam's first private airline. Vietjet is an official
member of the International Air Transport Association (IATA) with an Operational Safety
Certificate (IOSA).
• Vietjet is ranked the highest in the world for aviation safety with 7 stars by AirlineRatings.com,
a prestigious organization specializing in evaluating safety and products of global airlines.
• Vietjet is operating 76 aircraft with 139 routes including 48 domestic routes throughout
Vietnam and 95 international routes. With a plan to develop a wide network of routes
throughout the Asia-Pacific region
• Vietnam Air Travel Joint Stock Company This is the first airline based at Phu Bai airport, Hue. The
Prime Minister of Vietnam approved the investment policy of Vietravel Airlines and started operating
commercial flights from January 25, 2021.
• The goal of this airline is to be fast. quickly complete the domestic flight network in Vietnam. Next
will be international routes to Northeast Asia .

Although Vietravel is not yet comparable to VNA, it will be a strong candidate

after a few years
2 Threats from
substitute products

 For long distances, the plane is still the most efficient means of transport.
Therefore, the threat from Vietnam Airlines' substitute products is negligible.
 3 Power supplier
Supplier power to Vietnam Airlines is below average because Vietnam Airlines is a national airline with
strong potential and priority. Important impacts on the manufacturing industry, such as price pressure
on raw materials almost insignificant material.

- Some prominent suppliers are member units of Vietnam Airlines such as:
1. Goods Forwarding Company Limited (VINAKO)
2. Noi Bai Commodity Services Joint Stock Company (NCTS)
3. Tan Son Nhat Cargo Service Company Limited (TCS)
4. Vietnam Airlines Catering Company Limited (VACS)
 4 Power of the customer
Customers are divided into 2 groups:
+ Individual customers
+ Corporate customers
Both groups put pressure on businesses in terms of price,
product quality, accompanying services, and they
themselves are the drivers of competition in the industry
through purchasing decisions.
In order to attract customers to VNA, they have launched the following segments:
• For individual customers:
VNA has forms of customer support such as:
+ For early and late evening flights, VNA will reduce the price compared to the usual 30% for the
route Hanoi - Ho Chi Minh City
+ 15% discount from the economy class ceiling price prescribed by the State for the elderly,
Vietnamese citizens over 60 years old when buying domestic flight tickets……..etc
• For corporate customers:
Cooperate and develop with other airlines such as Japan Airlines.....
5 Threats from new entrants

The threat from new entrants to

Vietnam Airlines is not high because
the aviation industry requires huge
investment capital. Only a few large
corporations are likely to become
competitors to Vietnam Airlines such
as Vingroup, Truong Hai THACO,
SaiGonTourist, etc.
 Internal
environment
+ Finance
+ Human resources
+ Business culture
+ Research & Development
+ Marketing
+ Manufacturing&Technology
 FINANCE
• According to this airline's report, Vietnam Airlines achieved VND 29,943 billion in revenue after
the first 6 months of 2022, an increase of 2.1 times the same period last year, but a net loss of VND
5,237 billion. Undistributed profit after tax as of June 30 is negative 28,904 billion dong, equity is
also negative 4,897 billion dong.

• The market capitalization of Vietnam Airlines has decreased by nearly 36% compared to the
beginning of the year to 32,900 billion dong, near lowest level since January 2017

The financial picture of Vietnam's aviation is very negatively affected when the
international market is still limited due to Covid. In addition, the high price of jet fuel due
to the conflict between Russia and Ukraine also causes Vietnam Airlines to have a
"headache".
 Human resources
Vietnam Airlines' workforce has grown in quantity and quality, basically meeting
production and business requirements:
• Vietnam Airlines has rapidly rejuvenated and improved the professional expertise
of the workforce, especially are special workers such as pilots, flight attendants,
engineers and technicians who are focused on development.
• Aviation technicians, flight attendants, and management staff are all well-trained,
have strong political will, enthusiastic dedication to the aviation industry.
 Business culture
The philosophy in the strategy of Vietnam Airlines is to harmonize business activities
with the interests of shareholders, to meet the needs of economic development of the
country. Vietnam Airlines always commits to:
• Accompanying, transparently disclosing information with shareholders.
• Maintain and further enhance open dialogue channels with shareholders.
• Organize safe, quality and effective business activities and always ensure the
interests of all parties.
 Research & Development
Vietnam Airlines has two active research centers with 02 main specialized
departments: Technology & Management Solutions Department and Science &
Technology Service Department, with 20 staff and technicians.

The research center has the role of advising and assisting the board of directors and
the general director. Along with that, the center is also responsible for proposing
solutions in technology - management for application in the aviation field and
providing services for production and business activities of the company.
 Manufacturing&Technology

Vietnam Airlines invests heavily in technology, including:

• Promote online check-in via website or mobile applications.
• Arrange many self-check-in kiosks at airports.
• Using new versions of mobile applications with many modern and easy-to-use features,
helping passengers quickly search for flights, book tickets online, …
• Applying many payment methods using new technology platforms such as QR code
payment, SOFORT Banking online payment,...
 Marketing
Regarding marketing activities in the strategy of Vietnam Airlines, this airline has
developed and implemented the following outstanding marketing strategies.
• Brand positioning as a premium airline.
• Distributor nationwide.
• Communication and advertising aim to build a "clean" image

+Sponsor flights for important events of the country: Women's Summit, APEC
,
Summit, Vietnamese Culture Day abroad bringing football players home...
...
+Communication through the press: using major domestic newspapers such as
Youth Newspaper, Lao Dong Newspaper, ... and major foreign newspapers such as
Travel Trade, Asahi, Good Week, etc.
STRATEG
• EFE
• IFE Y
• SWOT
• SPACE
• Quantitative Strategic
Planning Matrix (QSPM)
 the external factors Weight Rating Weighted rating
EF    

E
  OPPORTUNITY      
1 The domestic and foreign tourism 0.09 3 0.27
market is developing.

2 Access to a high-quality workforce. 0.05 2 0.1

3 The geographical location of Vietnam 0.09 4 0.36
is favorable.
4 Modern and diverse aircraft lineup. 0.05 2 0.1
5 Vietnam joined the WTO. 0.07 3 0.21
  CHALLENGE      
1 Competitors: Vietjet, Bamboo,,… 0.07 3 0.21
2 Pressure from suppliers 0.05 2 0.1
3 The cost of both materials increased. 0.05 2 0.1
  TOTAL     1.45

CONCLUDE: Total=1.45  average response

 With a weighted score of 1.45, we can see that under the impact of the above mentioned external
factors, VNA has worked and operated effectively but not optimally.
 Internal factors Weight Rating Weighted rating
IFE  
  OPPORTUNITY      
1 Financial capacity to bear the risk. 0.08 4 0.32

2 It is a strong brand that many people 0.09 4 0.36

know.
3 Professional and dedicated staff. 0.09 4 0.36

4 Building company culture, creating a 0.06 4 0.24

civilized working environment.

5 The member units provide a full range of 0.06 3 0.18

necessary services: petrol, food, ...

  CHALLENGE      
1 Service and ticket prices are still high. 0.09 3 0.27

2 There is no strict management with flight 0.05 2 0.1

crews.
  TOTAL     1.83

CONCLUDE: Total=1.83  average response

With a total weighted score of 1.83 we can see that under the impact of the above mentioned internal
factors, VNA has made good use of the support from the state to operate an efficient apparatus but will
react slowly when facing foreign companies. Low cost private airline.
 Opportunities (O) Threats (T)
1. Make good use of State support 2. make
1. Slow response to low-cost airlines

SWOT
good use of domestic economic factors
3. Satisfy the needs of 2. The application of scientific achievements is
customers quite fully limited 3. Additives to the
4. Make good use of Vietnamese socio- provider 4. has not yet attracted
cultural factors large corporate customers

Strengths (S)
S+O S+T
1. Low-life fleet of aircraft 2.
+ Coverage of flight network (3g, +Add fare segment for budget customers
Highly qualified technical workforce internet…) to increase customer (S4+S5+T1) + Discount
3. High level of safety experience –(O1+O3+S5+S4) + PR programs for potential customers
in mining 4. The system of agents advertising (O1+O3+S1+S2+S3) (T1+T4+S4+S5) + Sponsor
selling tickets between seats is relatively + Training and retraining of human flights for big events: APEC……
large 5. High resources (O1+O2+O4+S1+S2) (S3+S4+S5+T4)
mining seat coefficient

Weaknesses (W)
1. The fleet is still small compared to W+O W+T
foreign competitors 2. service quality is not Calling for investment & development
high 3. The flight network is not yet capital based on the prestige of being Solutions for international airline
covered 4. VNA's supported by the State (o1+o3+w1+w3) alliances
financial potential is limited and unstable
 SPACE Strategic location inside
  Competitive advantage (CA)
Horizo 1. The route NORTH SOUTH axis is
ntal the route with the largest volume in
axis the world.
2. Modern technology.
3. Leading market share on domestic
routes (57%) and from Vietnam to
other countries.
4. The fleet is always renewed.
 -2.25
  Financial Strength (FS)
Vertical 1. The Government has approved a
axis financial support package of State
shareholders for the corporation with
a scale of VND 12,000 billion.
2. Using investment capital for
aircraft and equipment worth tens of
billions of dollars.
 +3
  Outside strategic location  
  Industry Strength (IS)  
-3 1. National airline with strong +3
  brand name in the region.  
  2. Convenient geographical  
  location. +3
-1 3. Growth potential: Stable  
  sales of trade and services. +2
-3 4.Effective use of resources:  
  focus on human resource  
  training. +2
-2  2.5
  Environmental Stability  
(ES)
+3 1.Stable political and legal -1 Based on the SPACE matrix analysis, we have the
  regime.  
  2. Competitive pressure with -2 coordinates (0.25;1.33)
  other airlines (Vietjet,   Vietnam Airlines is an enterprise with a stable
  Bamboo, ..).  
+3 3. The inflation rate is stable -2 financial foundation and is always supported by the
around 4-5%. State. With few products but good service quality, it
-1.67 still creates a competitive advantage. VNA is in the
attack box on the matrix, so most of them The tactics
are mainly offensive.
 Rating Capital investment, equipment, Market expension
QSPM marketing
Main Factor   AS TAS AS TAS
The domestic and 3 2 6 4 12
foreign tourism market
is developing.  Based on the QSPM
Access to a high-
quality workforce.
2 3 6 2 4
matrix, we see that the
Modern and diverse
aircraft lineup.
2 4 8 4 8 market expansion strategy
It is a strong brand that 4 3 12 4 16 will be suitable for VNA
many people know.
Professional and 4 3 12 3 12
because it has all the
dedicated staff. necessary elements from
Building company 4 3 12 4 16
culture, creating a
civilized working
the analysis of the
environment.
matrices.
TOTAL     56   68

NOTE: AS- Attractiveness Score

1-Not attractive 2-Less attractive 3-Pretty attractive 4-Very
attractive
Thank you!