Professional Documents
Culture Documents
AIRLINE
Table of Content
Pest Analysis
Political Factors
Economic Factors
Social Factors
Technological Factors
Competitors Analysis
Domestic Competitor
International Competitors of PIA
MARKETING MIX
•
PRODUCT
•
PRICE
•
PLACE
•
PROMOTION
RECOMENDATION
Decentralization
Strategic Business Unit
Employee Empowerment
Overhead Costs
Two-Way Communication
EXECUTIVE SUMMARY
In 1955 Pakistan international Air line formed. It is 16th largest airline in Asia, operating
scheduled services to 62 destinations through out Asia, the middle East, Europe and north
America, as well as extensive domestic network linking 24 destination.
PIA is a three star international airline. In our report we did SWOT analysis &PEST analysis on
PIA. We find as leading marketing position brand recognition, superior operating structure,
network presence, hub airport at Karachi & effective use of technology. We identify major
strength & weakness of PIA. Formulating on govt. rules, high depends on passenger’s revenues,
high debt & reliance on oil; prices are major weakness opportunities are like having max. Routes
and fleet, growth demand for low cost airline, customer loyalty, shifting customer need &
industry recovery & major threats are highinterest rate, accidents , strong competition by air
blue, interest & foreign currency exchange rate & decline in industry. In pest analysis we find
major govt. active role in increasing competition in airline industry, inflation rate, turning of
social environment of Pakistan. Innovation in technology & its impact on distribution & cost
from industry consolidation.
We make segmentation on the basis of Geographic basis, demographic basis, behavioral basis &
physiographic basis than we do the product evaluation. In it we tell core, actual & augmented
products of PIA. We do positioning of branding image of brand than tell about the product life
cycle. We select the target market on the basis of geographic,behavioral,demographic and
psychographic. We do the competitors analysis and study the strength and weakness of
competitor, advantages of competitor.
HISTORY OF PIA
After a short period of independence, Pakistan decided in 1951 that it needed a national flag
carrier airline; the government of the country accordingly established Pakistan International
Airlines (PIA) in this role, and on 25 May ordered three examples of the Lockheed L-1049C
Super Constellation four-engined airliner as the new operator's initial equipment. PIA flew its
first service with the Super Constellation on 07 June 1954 on the route linking Karachi and
Dacca
(now Dhaka), which were the main cities of the country's western and eastern halves, of which
the later is now Bangladesh. On 1 February 1955 the airline flew its first international service,
between Karachi and London via Cairo
On 11 March 1955 PIA formally took over the assets and routes of another Pakistani operator,
Orient Airways, which had in effect been part of PIA since October 1953. The consolidation of
the two airlines meant that PIA could enlarge its domestic network with 11 Douglas DC-3 and
two Convair CV-240 aircraft, which left the Super Constellation machines wholly free for
international services.
Modernization of the fleet used for domestic and regional operations was now a matter of high
priority, and in May 1956 the airline placed an order for three examples of the Vickers Viscount
815 four-turboprop airliner, the first of which was accepted in the UK on 2 January 1959 for a
debut in revenue earning service on the service linking Karachi and Delhi on 31 January 1959.
Further enhancement came in 1961 with debut of the Fokker F-27 Friendship twin-turboprop
type, of which the first was received on 3 January 1961. The availability of the F-27 for
operation
on the routes linking the major Pakistani cities freed the DC-3 fleet for use on new services to the
remoter parts of East Pakistan.
PIA was the first Asian airline with pure-jet aircraft, in the form of a Boeing 707-321 machine
leased from Pan American World Airways for use from 7 March 1960 on the London service
that was extended to New York on 5 May 1961. On 21 December 1961 PIA began to receive its
own jet aircraft when it took delivery of the first of three Boeing 720-040B aircraft, whose
availability permitted the operator to enlarge its international route network.
In 1963 PIA called off its New York service, but on 29 April 1964 became the first non-
communist
airline to operate a service to the Chinese city of Shanghai. A notable feature of PIA's domestic
routes in East Pakistan for some time was the helicopter services operated with Sikorsky S-
61N's. PIA ordered four examples of the Hawker Siddeley HS.121 Trident 1E to replace Vickers
Viscount 815s. First of these four Trident aircraft was accepted on 1 March 1966. The Trident
aircraft were later sold to the Civil Aviation Administration of China in 1970. In 1971 East
Pakistan secured its independence as Bangladesh, and PIA ceased operations to that country.
The airline's fleet and network were both reduced, but the service to New York was resumed in
1972.
The first wide-body airliner used by PIA was the McDonnell Douglas DC-10-30 three-turbofan
type, which the airline first received on 1 March 1974. A pair of Boeing 747-282B four-turbofan
aircraft (initially leased from TAP Air Portugal) followed in April 1976, and on 3 March 1980 the
airline accepted its first Airbus A300B4-203 two-turbofan type. In 1985 PIA became the first
Asian operator of Boeing 737-300 aircraft, a total of six Boeing 737-300s were ordered to
replace
ageing Boeing 720B aircraft. PIA received first of its six Airbus A310-308 aircraft on 25 June
1991 from Airbus Industrial.
In the first half of the year 1999, PIA acquired five Boeing 747-367 aircraft (initially leased from
Cathay Pacific) for its European and North American destinations. In 2002 PIA signed an
agreement with Boeing Company for the biggest aircraft deal in the history of PIA. After a dry
spell of 10 years, PIA ordered new aircraft - 8 wide-body aircraft from the Boeing 777 family for
its long-haul flights. The airline accepted delivery of its first Boeing 777-240ER aircraft at
Boeing
Field in Seattle, USA, on 29 January, 2004. On 2 November, 2005, PIA signed an agreement
with
Avions de Transport Regional (ATR) of France to purchase seven brand new ATR 42-500 turbo
prop aircraft. These new 48-seater ATRs will replace PIA's ageing fleet of Fokker F-27s on
airline's domestic and regional route network. On May 31, 2006, PIA received its first ATR 42-
500
in Toulouse, France. The remaining six ATR 42-500s were delivered to the airline between 2006
and 2007.
currently the mainstays of PIA's medium- and long-haul operations, with feeder, local and
regional services provided by the Boeing 737-300 and ATR 42-500.
Vision
PIA vision is to be a world class air line meeting customer expectation through excellent
services on time performance, innovative products and absolute safety
Mission
•
Employee team will contribute towards making PIA a global air line of choice
through Offering quality customer service & innovative product
To provide further develop safe efficient adequate economical and properly coordinate
domestic as well as international air transport system .
To operate any air transport service or any flight by air craft for a commercial or other
purpose and to carry all forms of aerial work.
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
activity of a kind which the corporation has power to carry out
VALUES
Customer Expectations
PIA is the most trusted name in the industry. The reason of its goodwill is according the
expectation of their customers that PIA has fulfilled always. By providing competitive tariff,
extensive care, convenience to their valued and potential customers.
Service
PIA aims at providing valuable and unique services to its customers. They are more personalized and
courteous to their customers. The services are valuable and rare; this is the reason why customers trust
PIA.
Innovation
PIA currently has a number of 43 fleets and aims at increasing this numbers to 53 by the next
few years. PIA is adoptive to changes and believe in innovation that’s create new ideas and
translating these ideas into action.
Reliability
PIA is the most experience airline with its service with more than 53 years. This has built
in PIA has become the most reliable airline. PIA is known for its loyalty and consistency.
Safety
The most challenging responsibility of any organization is to provide complete
satisfaction to its employees and customers together. This satisfaction rewards
favorable and easy working conditions. The in-flight services are customers friendly and
the organizational the organizational environment is also employees oriented.
Cohesiveness
PIA has 12 departments working in their own direction and also provides a number of
services including speedex courier service, catering etc. The most impressive part is
these all department and services are integrated in a cohesive way .
SWOT ANALYSIS
A.STRENGTHS
PIA is one of Pakistan’s leading air carriers, with more than 800 daily flights. Around 150,000
passengers a month fly on PIA, making it one of the major operators in the domestic
market in terms of passenger kilometers. PIA international market share was 48.4%, In
the Domestic market, its market share was 65%. On a system-wide basis, PIA market
share was 48% at the end of year 2009.
Its strong market position is driven by consistently low fares as well as reliable service,
frequent and convenient flights, use of new technologies like e-ticketing and self check-
in terminals, comfortable cabins and superior customer service.
BRAND RECOGNITION
PIA has high brand recall. It is recognized by travelers all over the country. PIA is a
national airline, operating passenger and cargo services covering eighty-two domestic
and foreign.
PIA has earned the number one ranking in customer satisfaction. This strong market
position gives the company a scale advantage and helps it strengthen its brand image.
SUPERIOR OPERATING STRUCTURE
PIA has maintained its position as the low cost carrier. It has been first class Pakistani
airline to use the latest technology. Factors’ contributing consists of different series of
Boeing and Airbus and an efficient, high-utilization and point- to-point route structure.
Flying one type of aircraft significantly simplifies scheduling, maintenance, flight
operations, and training activities. PIA has continually achieved high asset utilization
and employee efficiency. Superior operating structure serves as the primary competitive
advantage of PIA.
NETWORK PRESENCE
PIA enjoys a strong network in key domestic and international destinations. The
company’s network includes three the major airports in Pakistan, as well as major
international airport such as Dubai International Airport. Having a strong network means
that PIA can generate traffic feed for both its domestic and international Flights.PIA
network is spread in 24 destinations on domestic bases and 38 destination on
international basis.
B. WEAKNESSES
FORMULATION OF GOVT. RULES
The Basic flaw of this organization is its consolidation that is centralized system. The
key policies, strategies and set of laws are designed by the upper management. The
centralized system is one of the biggest obstacles of long term success of PIA. PIA
centralizes structure lead to barrel between different level of management, decreased
motivation, hard access to information.
DEBT
PIA has a significant amount of 68817616 PKR debts in 2009 . Current and future debts
could have important consequences for stakeholders of the company. For example,
debt could impair PIA ability to make investments and obtain additional financing for
working capital, capital expenditures, acquisitions or general corporate or other
purposes. Debts could also put PIA at a competitive disadvantage to competitors that
have lesser debt and could also increase the company’s vulnerability to interest rate
increases.
C. OPPORTUNITIES
HAVING THE MAXIMUM ROUTE AND FLEET
PIA is having the maximum route and fleet domestic and international destinations
network in Pakistan as compared to its Competitors. Route and fleet expansion will
positively impact the company’s operations by increasing revenues.
and services to frequent travelers. Such schemes encourage repeat travel on PIA, as
passengers seek to accrue the benefits given to regular travelers. This enables the
airline to retain customers and reduce costs, as it does not have to spend money
targeting new customers to replace those lost to other airlines.
INDUSTRY RECOVERY
Market analysts believe that the global airline industry will experience an upturn in
fortunes over the next few years. This represents an opportunity for PIA, as it could
generate increased revenues and command market share if it capitalizes on increases
in demand.
D. THREATS
HIGH INTEREST RATES
The past few years have seen State Bank of Pakistan impose high as well as low
interest rates to check inflation and the over heating of Pakistani economy. Inflation in
Pakistan may see another raise in the short-term.
ACCIDENTS
There had been five accidents with PIA listed as below:
Pakistan International Airlines Flight PK 705 was a Boeing 720 – 040 B that crashed
while descending to land on Runway 34 at Cairo International Airport on May 20, 1965
resulting in 119 fatalities.
Pakistan International Airlines Flight PK740 was a Boeing 707-340C that crashed after
]takeoff from Jeddah International Airport on November 26, 1979. All 156 aboard were
killed.
Pakistan International Airlines Flight 268 was an Airbus A300B4-203, registration AP-
BCP, which crashed on approach to Kathmandu's Tribhuvan International Airport on
PIA Flight 554 is the flight number of a Pakistan International Airlines (PIA) Fokker
F27 that was hijacked on May 25,1998. The flight started its journey at Gawadar in
Baluchistan after originating in Turbat, and was flying to Pakistan's southern port city of
Karachi. The aircraft was carrying 24 passengers and 5 crew members.
• Pakistan International Airlines Flight 688 (PK688, PIA688) was scheduled to operate
from Multan to Lahore and Islamabad at 12:05 pm on July 10, 2006. It crashed into a
field after bursting into flames a few minutes after takeoff from Multan International
Airport. All 41 passengers and four crewmembers on board were killed.
PIA has to continuously ensure utmost safety and security of its passengers. Accidents
can adversely affect customer confidence in PIA and result in declined revenues
intensifying competition.
STRONG COMPETITION BY AIRBLUE
PIA is now competing against carriers such as Airblue and Shaheen Airline. PIA
remains Airblue’s strongest competitor because of the huge market it has gained over
time, strong brand
image
and
customer
loyalty.
PIA has started new low-fares subsidiary “PIA Express” to stop the Airblue market share
growing to fast. Moreover, major legacy airlines have been focusing on restructuring
costs, which has improved their competitiveness. With costs restructured, the legacy
airlines are becoming more formidable competitors in terms of increasing capacity,
matching prices and leveraging their frequent flier programs. Increasing competition
could adversely affect the company’s margins.
\
INTEREST AND FOREIGN CURRENCY EXCHANGE RATES
Fluctuating foreign currency exchange rates can have a significant impact on PIA’s
earnings. For example, as PIA is providing its services to the UK. Negative or positive
effects arise from exchange rate movements as change in expenses. Strengthening of
foreign currencies against the British Pound will positively impact PIA and vice versa.
PEST Analysis
POLITICAL FACTORS
Political factors always have a great influence on the way businesses operate in the
airline industry and the spending power of customers. In recent years it has been
observed that government played an active role in increasing competition in the airline
industry. A number of new airlines such as AirBlue and JS Air have been awarded
licenses to enter the domestic market. Pakistan has achieved some political stability in
recent years. If the management of PIA believes that the present government will
perform well (consistently), then there will be more investment in the form of purchase
of new airplanes and latest technology. The over all industry will grow resulting in more
luxurious and comfortable flights. With the military takeover government policies have
become more liberal.
ECONOMIC FACTORS
Currently, Airlines industry has three major players: Pakistan International Airlines, an
Air blue, Aero Asia and Shaheen Airlines. Their target market includes domestic
travelers as well as Pakistanis living abroad particularly in the UK and USA. These
countries have strong economies coupled with high purchasing power. Customers’
purchase behavior depends very much on prices of the competing airlines as well as
services offered. As inflation rate is unstable in Pakistan, spending power of consumers
has effected in the long term. In fact growth in Pakistani economy has resulted in an
increase in spending power
and has a positive impact on a airline industry.
.
Economically, the new millennium has been highly volatile; the September 11 attacks
revolutionized the whole world. Consequently, there was a global depression in the
North America, South America, Australia and Europe. However, in Asia especially
Pakistan the effect in the short term was otherwise. The economy began to boom
because of greater remittances from abroad and whole sum immigration by expatriates.
As a result, demand for air travel in South Asia rose .
Economic conditions of Pakistan are however improving. PIA has cost a advantage over
its competitors because of its newly acquired, improved, long distance aircrafts from
Boeing’ which give longer range and better fuel economy than any other jet currently
produced. This cost advantage is a barrier to entry for new firms. However, this cost
advantage will not be significant on domestic routes.
SOCIAL FACTORS
The social arid cultural influences on business vary from country to country. The social
structure of Pakistan is closely tied. The trend is now changing as the general public is
educated and is pursuing professional goals. Customers are more aware of market
conditions and available options and want to get best value for their money. They spend
considerable time and money on entertainment hence increasing the need of in-flight
entertainment systems. Also, word of mouth has a significant impact in the use of airline
services.
The social environment of Pakistan is turning liberal with the new regime. The initiative
to automate check-in and ticket booking process might not be very popular with the
general public (even educated population) is still technology averse. E-ticketing might
also face significant challenges as consumers are generally reluctant to provide their
credit cards information over the phone and the internet. The consumers, however,
have a warm reaction to the prospect of less costly but quality service flights.
TECHNOLOGICAL FACTORS
Technology is vital for competitive advantage and is a major driver of the airlines
industry. Major technological changes are taking place in the airlines industry with
innovations in the reservations and booking systems. In-flight entertainment systems
and auto check in counters are two examples of such innovations. Internet plays a key
role in e-ticketing as consumer can easily reserve tickets or check the status of the
flight. A key issue will be the extent, to which technological advancements (such as
Internet) impact distribution and cost synergies from industry consolidation, can offset
upward pressures on costs. PIA has always led the path of technological innovations by
introducing new technologies ahead of its competitors such as its auto check-in
counters which has helped it gain market share. It was the first airline in Pakistan to
install Sabre system followed by the market leader.
Hierarchy
Market Segmentation of PIA
Demographic Segmentation of PIA:
•
Income Segmentation
Occupation Segmentation
Geographic Segmentation
In this segmentation PIA focuses both on segments
Domestic
International
Behavioral Segmentation
Occasion segmentation
Hajj’s Occasion.
Eid’s Occasion.
New Years’ Occasion.
Loyalty Status
Social Class
Tourists
Religious Travels
Pakistani Expatriates
Introduction
Growth
Maturity
Decline
Competitor’s entry
Increase in investment
Expense increase
Financial performance
The profitability of PIA is published in the 2009 annual report with figures in millions of
Pakistani Rupees.[17] The following table gives the key financial results for the end of
year
period of the financial year. PIA explains that the loss was caused by two factors: the
weakening of the Pakistani rupee and the rise in crude oil prices during 2009.
International 48.4 %
Pakistani expatriates when step in the PIA plane they get they homely feelings
because of the national airline which plays a role of ambassador.
Positioning of PIA
PIA’s existing Positioning Strategy
Currently PIA positions itself within the following positioning strategies and technologies and
highly equipped engineering.
Positioning by attributes.
Positioning by Attributes
Positioning by attributes
In this strategy PIA positions itself in the mind of the consumers as the reliable air
transport service provider. Because from all the airline companies of the world PIA has
the least crash rate. By positioning ther eliability attribute of the airline in the minds of
the consumers, people prefer to travel from PIA. Because of the safety attached with
the PIA.
Attribute of safety is also associated with the airline as PIA has the following
certifications
.
PIA express”
• “
This facility is available in Business Plus, Economy Plus & Economy C lass.
No meals.
From the Demographic Segmentation, PIA is targeting the income and occupation
oriented people. The classification of both categories is as follow.
Income Segmentation
From income segmentation of PIA, those who falls under the category of upper class and
upper middle class.
Occupation Segmentation
From occupation Segmentation that PIA is taking in to account, there are two main sub
heads of working class and business class. The working class includes all those who
are working as an employee inside and outside the country. In business class all those
people are included who are having business.
Geographic Segmentation
of PIA. All the audience from the domestic and international regions are included. In
domestic people within the country are included and people residing outside Pakistan.
From the Behavioral Segmentation PIA‘s target audience is categories as follow.
In the occasion based market segmentation of PIA
.
Behavior segmentation
Hajj’s Occasion.
When Hajj operation in going all those people flying from different cities of Pakistan to
Saudi Arabia for the performance of Hajj.
Eid’s Occasion.
When Eid occasions are near people within the cities and outside the country move to
their homes for having Eid Occasion together with family.
.
Loyalty Status.
PIA gives different benefits to the fliers. But all those who travel a lot get the benefit of
frequent fliers which carries few discount rates on the tickets. To such audience PIA not
only gives the discount facility but also the facility of pick and drop to them.
From the Psychographic Segmentation of PIA, the target audience of PIA will be the
following.
Psychographic segmentation
Social Class
In Social Class PIA targets the tourists, religious travelers and Pakistani Expatriates.
Tourists
All the tourists from different regions of the country or from different countries come to
Pakistan for tourism purpose or go outside the country. Because PIA is having highest
rate of linking the remotes areas of Pakistan.
Religious Travels
All the religious travelers for example people going for Hajj etc are targets over here.
Pakistani Expatriates
As PIA is a national flag carrier airline that’s why people residing outside the country
feel a unique sort of feeling to get into the National Airline. PIA is not just and Airline but
also acts as the ambassador of Pakistan in the whole world.
Competitors Analysis
Competitor analysis in marketing and strategic management is an assessment of the
strengths and weaknesses of current and potential competitors. Created by Michael
Porter competitor analysis focuses on four key aspects: competitor's objectives,
competitor's assumptions, competitor's strategy, and competitor's resources and
capabilities.
Pakistani expatriates when step in the PIA plane they get they homely feelings
because of the national airline which plays a role of ambassador.
Domestic Competitor
Within the country PIA has Airblue as a competitor.A irblue is a private airline based in
Karachi, Pakistan. It is a scheduled domestic and international airline operating 30 daily
services linking seven domestic destinations and international services to Dubai and
Manchester. Its main base is Jinnah International Airport, Karachi. Airblue was the first
airline in Pakistan to introduce e-ticketing, wireless check-in and self check-in kiosk
facilities.
First airline in Pakistan and only the third carrier in the region behind Emirates
Airline and Royal Jordanian to introduce the latest self service check-in facilities
at Jinnah International Airport, Karachi
Thai Airline
Etihad Airways
Qatar Airways
Singapore Airline
Marketing object
Product
The product is any things which have both favorable &unfavorable that a person
receives
in exchange. Most products we think are physical but it also include services. PIAC is
also providing services to the nation, which can be categorized as follow
Seat services (for passengers)
Space services (for cargo)
Intangibility
Services provide by PIA are intangible. Unlike physical product, they can not seen ,
tested , heard or smelled before the purchase. To reduce the uncertainty, the buyers will
look for signs and evidence of service quality. They will draw interface about the
quality of service from place, people, equipment, communication material symbols and
price that they will see.
PIA task is to manage the evidence to tangibles the intangible.
Inseparability
Services are typically produces and consumed at the same time. If the service is
rendered
by a person, than the person is a part of service. Since the client is also present as the
service is being produced.
Variability
Services are highly variable, as they depend on who provide them, when and when and
where they are provided. Services firm can take two steps towards quality control. The
first step is investing in good personnel selection and training. PIA spends a large sum
of money to train their employees in providing good service. Second step is monitoring
customer satisfaction system and PIA doesn’t monitor customer satisfaction properly.
Perishability
Services can’t store and they have no self life. When demand fluctuates, service fires
have difficult problems, like PIA has to apply much more equipment because of peak
period demand on a specific route than it would, if demand, was even throughout the
year.
PIA uses following strategies for producing a better match between demand and
supply.
Differential pricing to shift some demand from peak to off peak period.
Non peak demand can be cultivated
Reservation system is one way to manage the demand level, and PIA employee
extensively
Peak time efficiency routines are introduced. Employees perform only essential tasks
during peak periods.
Shared services are developed by interline agreements.
Price
A profit organization faces the task of setting a price on their product and services. Price
is the amount of money that customer willing to pay for the services. How are prices
set? PIA set their prices on the basis of two type of situation.
Domestic routes
International routes
Domestic routes
Prices for domestic route are fix by the government of Pakistan for PIA. The cost plus
method is used to set the price at domestic level. The PIA management estimates the
price by using following 6 steps.
Selecting the price objective
Determining the demand
Estimating costs
Analyzing competitor price and offers.
Selecting a price method.
Select the final price.
International routes.
The price for international routes is set by international air travel association (IATA).the
IATA doesn’t allow any discount on any international routes. Ticket show the full pries
for the route while air lines charge discounted fare by cutting their share of profit.
However, PIA establishes the pricing strategies on different international routes keeping
in view the following points .
Competitor price
Cost of operation
Higher prices
Shoulder prices
Low prices
Place
Marketing channels can be viewed as sets of independent organization involved in the
process of making a product or service available to use. A distribution system is a key
resource. PIA has partially owned distribution system.
Level of channel
According to our opinion, PIA uses two level of channel which are as follow”.
IATA agencies
There are 30 IATA approved agencies which deal with PIA.These agencies can also be
stocked and sell tickets of other airlines. Commission of these agents is as follow,
International sector = 9%
Domestic sector=5%
Promotion
PIA is not invested much in this area. They just use brochures, news paper & some T.V
commercial when peak season is not there. Agents play an important role in promotion
as they convince traveler to travel through pia. Some brochures, are listed below
PIA offers more flights to Jeddah in may, june and july for umra.
These additional flights will not only provide more travel option to umra pilgrims
but also enable more people to perform the holy ritual
No checked in baggage
Condition apply
Book international or domestic flights as early as possible because the earlier you
buy, the cheaper you fly.
Condition applies.
Buy one ticket and pay only 50% for your companion
PIA offers the free pick and drop service from your door to airport.
This offer will be offer only for Business class
These products are said to have high profitability, and require low investment for
the fact that they are market leaders in a low-growth market. This viewpoint is
captured by the founders themselves thus:
The cash cows fund their own growth. They pay the corporate dividend. They
pay the corporate overhead. They pay the corporate interest charges. They supply
the funds for R&D. They supply the investment resource for other products. They
justify the debt capacity for the whole company. Protect them (Henderson 1976).
.
Stars
Stars are leaders in high growth markets. They tend to/should generate large
amounts of cash but also use a lot of cash because of growth market conditions
Based on these assumtions Pakistan international airline classified as a cash cow because it
does have a high market share which is 67% in domestic air line and 30% internationally and
low business growth opportunity.
Our recommendation.
This strategy is applicable when
Decentralization
Employee empowerment