Assignment question

The students are required to choose a company and have a brief introduction of the chosen company. By using the company as example, the students are required to do a SWOT analysis of a company. Company Malaysian Airlines is chosen as a company in this assignment. Malaysia Airlines is the flag carrier of Malaysia. The airline starting the operating early in 1937 but only after 10 years next they can really started the operating of airline. The airline first flight was a charter flight from British Straits Settlement of Singapore to Kuala Lumpur on 2 April 1947 using an Airspeed Consul twin-engine aircraft. Their headquarters now was located at Sultan Abdul Aziz Shah Airport in Subang. Malaysia Airlines operates flights from its home base, Kuala Lumpur International Airport and its secondary hub in Kota Kinabalu. They are using this type of aircraft; Airbus A330-200 and A330-300, Boeing 737-400,800 and 400/400. Malaysia Airlines operates a fleet of aircraft with two cabin and three cabin configurations. Malaysia Airlines B777-200ER fleet has a two configuration which is Golden Club Class and Economy Class. Its B747-400 fleet has a three-cabin configuration, also including First Class. Malaysia Airlines premium cabins and Economy Class have been giving numerous awards for excellence in product and service delivery. Malaysia Airlines also practised the online booking and buying to make their purchasing way easier for passenger. With this online purchasing, the passengers need to fulfil their details like the destination they want to go and the departure place they want. The payment will be settling via the online banking. SWOT Analysis • Strength Strengths reflect Malaysia Airlines (MAS) competencies and capabilities of their core business which differentiate the company itself with other service company based on value, price and services. As we have reviewed and analyzed the strength of MAS, there are some sub points that can show the sequences of the strengths in Malaysia Airlines. Personnel Malaysia Airlines is one of the service companies that established for more than 70 years and its brand image has been highly recognized. Malaysia Airlines had put their full effort on their branding and publicity and it have revolved primarily around flight crew, different with most other airlines which tend to emphasize aircraft and an extensive route network. Malaysia Airlines have their own branding strategy that involves its flight attendants to promote the airline. This strategy seeks to portray cabin crews of Malaysia Airlines as representative of Malaysian hospitality and friendliness. During the late 1990s to year 2007, Malaysia Airlines has been decided to use the “Going Beyond Expectations” slogan to brand itself internationally by heavily promoting its service excellence. In a way to transform their business plan Malaysia Airlines have come out with the new branding strategy slogan which is

“MH is Malaysian Hospitality”. It is to emphasize the hospitality of its cabin crew instead of the airline’s extensive network and its premium cabin and economy class cabin products. To ensure the customers are having the best service experience by all the crew and staff, Malaysia Airlines runs a training program for cabin and flight crew. The airline holds a lengthy record of service and best practices excellence, having received more than 100 awards in the last 10 years. The most notable ones include being the first airline with the "World's Best Cabin Crew" by Skytrax UK consecutively from 2001 until 2004, "5-star Airline" in 2005 and 2006, as well as No.1 for "Economy Class Onboard Excellence 2006" – also by Skytrax UK. Management Malaysia Airlines have strong and well designed organizational structure. Its talented management team always plays the most important role in planning and controlling every single action in their service system to perform the best brand experience. Although Malaysia Airlines management had face difficulties and losses in several times, the management team always have their own strategies to make sure that they are able to take this challenge as their opportunity to enhance their reputation and quality of the service. On 1 December 2005, Idris Jala has been appointed as the new CEO to execute changes in operations and corporate culture. Under his leadership, Malaysia Airlines unveiled its Business Turnaround Plan (BTP) in February 2006 which highlighted low yield, an efficient network and low productivity. Apart from airline services, Malaysia Airlines is also involved in cargo and maintenance services. It has operations in six continents and covers over 100 different locations. It shows that Malaysia Airlines is a service company that has strong platform in the business industry. • Weaknesses A company’s weaknesses are the things it does not do well or that other companies are doing better. From our evaluation, we found that although Malaysia Airlines had its humble beginning in the golden age of travel but this company is still having some weaknesses as what every business have. Offerings As we know Malaysia Airlines or better known as MAS is one of service companies that providing airline services to its customers. On the other hand, Malaysia now needs to compete with other 2 airline companies in Malaysia, Air Asia and Berjaya-Air. Both companies providing different kind of services with their customer’s different needs. Despite the fact where Malaysia Airlines does provides domestic and international flight services, majority of the customers of Malaysia Airline are international flight customers. If we compared with other airline companies, the cost offered by Malaysia Airlines is more expensive than others. As a 5 stars airline company, the costs needed for the maintenance and convenience by Malaysia Airlines are quite high. Thus, it will effect the real cost that will be purchased by the customers. It is actually show that Malaysia Airlines have a certain target market with high income. Based on some research that we have made, the cost of

living in Malaysia is not really high compared to other country like Japan. There just a few groups of people in Malaysia who can effort to pay for the cost to fly because of the high rate of airlines tickets. Personnel Every business may go through many losses and difficulties in related industries. Malaysia Airlines is providing services that need a big capital to run its business effectively. Thus, the risk that might be happened in the future is too high. From our evaluation on Malaysia Airlines, the management team has set their objectives clearly and has the best strategies to obtain their objectives but at the same time, they did not know exactly how to implement the strategies effectively. That is why Malaysia Airlines has met many difficulties and losses in their business and need to turnaround the business to recover the problems and sometimes it needs high turnover rate among employees. Several weaknesses in airline operations were identified as the causes of the RM1.3 billion loss. These included escalating fuel prices, increased maintenance and repair costs, staff costs, low yield per available seat kilometer ("ASK") via poor yield management and an inefficient route network. Another factor for the losses was high operating costs. Malaysia Airlines substantially lagged its peers on yield. Some of this gap is due to differences in traffic mix, (less business traffic to and from Malaysia than to and from Singapore), but much of it was due to weaknesses in pricing and revenue management, sales and distribution, brand presence in foreign markets, and alliance base. Moreover, some weaknesses that have occurred in the operation of their services are caused by some underdeveloped channels and distribution system. It is because Malaysia Airlines need to expand their business widely throughout the region. Beginning in 2008, the airline operates new destinations, with Macau and Yogyakarta being the latest additions to its list of destinations. Besides, this service airline company growth postrecovery because of the trimming of the airline since year 2000. Opportunities Opportunities are the openings in the industry which could be utilized by the company in order to make it much more favorable in the market. The areas of opportunities are higher customer satisfaction and the changes in customer preference. Changes in customer preference Customers have different needs and desires in term of purchasing. It is because of the factors like demographic, psychographic, and geographic factor. In a way to obtain a certain objective, Malaysian Airlines should be able to introduce a new concept of flying with Malaysia Airlines. It is because customers are human beings that can easily having a change in their life. They can be influenced by many aspect of their life including the way of their lifestyle. Due to that, Malaysia Airlines is continuously innovating all aspects of their services and products in their transformation journey to be a Five-Star Value Carrier. Based on the survey and research that have been done by their team, Malaysia Airlines is introducing hot meal boxes which offer favourites such as nasi lemak and nasi goreng kampung as well as the introduction of new varieties in a move to respond to •

customer preferences while continuing to optimize aircraft utilization in line with its Business Transformation Plan. In addition, Malaysia Airlines has more menu options available and customers can now choose between an Asian or western meal. A total of 37 menus are on offer over an 8 week cycle rotation to ensure that frequent travelers will be able to enjoy a variety of meals. New offerings include nasi impit with lontong, black pepper chicken balls with spaghetti, and waffles with fruit fillings. A permanent feature of this new menu is the option of western meals. Passengers will continue to enjoy unlimited in-flight beverages such as coffee, tea and fruit juices. New kiddy and special meals including vegetarian are also progressively being developed and will be introduced by the end of this quarter. • Threats Threats are the elements from outside of the organization which could have negative effect on the company. There are some threats that will affect Malaysia Airlines such as economy, competitors, terrorism, and technology. Economy Changes in economy will directly affect every business positively and negatively in many aspects. If the economy are having crisis, it will affect the whole business globally. As one of the company airlines, Malaysia Airlines has many connections through out the world and it will give a big impact to the company if there are any changes in economy level. Thus, it is important for the organization to prepare some alternatives to overcome this problem because these unpredictable problems may occur anytime. Terrorism Terrorism is leading to decrease tourism and confidence in the airlines. It might happen in many ways of terrorism either in certain countries or it might happen in the plane itself. As example, we know that Malaysia Airlines flies to 88 destinations. In cooperation with code-share partner airlines, the airline serves more than one hundred destinations worldwide. If there is terrorism happen in the area of Southeast Asia, Malaysia Airlines need to stop their flight destination to the Southeast Asia for a certain time. It is because it will be too dangerous to the people and the whole crew as well as the plane. At the same time it will decrease the confidence in the airlines.

SWOT analysis allows us to examine the current position of the company and the external environment. In this assignment, we can know the strength, weakness, opportunity, and threats of Malaysia Airline. Thus, MAS can use its strengths which are the good human resource and superior management style to overcome the weaknesses of the company. Besides that, MAS also need to be more prepare for the dynamic changing of external environment.

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