1. IDENTIFY THE STRATEGIES USED BY THE GIVEN COMPANY.

Philippine Airlines (PAL) used the strategies of market penetration and horizontal
integration, as we all know PAL is the one of biggest company running for a long time in
the airline industry in the Philippines. Company, must prepared this kind of strategies
than the others. Because PAL Philippine Airlines focus on how to dominate the local and
international services and in terms of localization, demographics, target costumers and
also the cost benefits projections, Philippine Airlines (PAL) Process the increasing of
market shares and expanding the integrated level of the supply chain and within the same
industry and it is an example of horizontal integrations.

2. EXPLAIN HOW IT WAS APPLIED AND IT ADVANTAGES:

Horizontal integration applied and it advantages in Philippines airline

- Scales of economies: Pal Philippines airlines can achieve the higher quality of services
that can be good to the company to reach the consumer satisfaction in terms of services,
accommodation’s at lower cost.
- Increased the Differentiation: Phil airline will able to offer more services and
features to costumers neither local nor international flights.
- Increased Market: Phil Airline will be become bigger because some investors are
interested to invest to Philippine Airline to become more powerful company and also
Pal airlines have more budget to innovate all the facility or upgrade the operation
system to satisfy all the costumers.
Market Penetration Applied and it advantages
- Penetrating Pricing Phil airline set a price and quality services at lower cost than
other competitors, Phil airline engage the seasonal promo every year that can be
attract to consumer behavior.
This two strategies helps Philippine Airline to achieve all the goals especially the mission
and vision and to patronized the quality of services that can be offer to all consumer and
to reach it satisfaction.

3. DETERMINE THEIR SWOT, AND SUGGEST IMPROVEMENT

STRENGHTS
• Service - The Company provides a customer centered services with innovative facilities
that strengthen the company’s total image.
• Workforce - The company’s human resources is hospitable, approachable, caring and
friendly that easily response to the needs of its customers.
• Network - Through diverse destinations the company continues to augment its market
share on the airline industry in the Philippines.
• Competitive Fare - The rates offered by the Philippine Airlines are considered
competitive and attractive to its target market.
• Excellent Records - The Company continues to conduct & maintain safe and reliable
flight operations. The welfare and protection of the passengers is one of its priorities that
is why they maintain a descent records with regard to the security of its passengers.
• Modern Facilities - The facilities of the company are world class that easily response
to the demand of its passengers such as: PAL Inflight Center (IFC) and Data Center
Building.
• Strong Alliance with Big International Airlines - The PAL alliances include
Malaysian Airlines, Emirates Airlines, Cathay Pacific, Qatar Airways, Royal Brunei
Airlines, Gulf Air, Etihad Airways, and Vietnam Airways. The following alliances are
essential to strengthen their international destinations.
• Maintain Good Relationship with Employees - Since Airlines is a service oriented
company it continues to maintain good relationship with regards to its employees.

WEAKNESSES
• Not Specific Vision Statement - The Company doesn’t have a specific vision
statement.
• Not Organized Website - Philippine Airline’s website is not organized because the
website can still have more improvements
• Higher Maintenance Cost - The company acquires new aircraft and flights to meet the
demands of its passengers that is why it has higher maintenance cost compared to other
domestic airlines.
• Inadequate Corporate Social Responsibility - PAL Medical Travel Grants are
PALF’s only program for humanitarian and social development assistance. These enable
indigent Filipinos to go for medical treatment as charity or service patients for serious
health conditions. It lacks CSR on environment as well as on education.
• Absence of Research and Development Department - The Company lacks research
and development department that is useful in conducting new programs development and
in monitoring the competition in the airline industry in the Philippines.
• Insufficient Promotion and Marketing Efforts - The Company lacks innovative
promotion and marketing efforts that could maintain and attract new passengers.
Compared to other leading domestic airlines, PAL’s promotion and marketing effort is
considered weak.

OPPORTUNITIES
• Increase in International Market - Since PAL offers international destination, an
increase of international market will probably increase its revenues.
• New Destinations - PAL may increase its destinations domestically or internationally
depending on the existing demand of passengers available.
• Research Development - It has been a big trend for large companies to have a research
and development department.
• Technological Advances - Due to advancement of the technology nowadays the
company may utilize it as one of its competitive advantage to other domestic airlines.
• Internet Advertising - People use internet worldwide and a great way of
communicating is through the web, utilizing the internet could expand the reach of PAL
to its potential passengers. This could help the company to attract new customers and
update the current situation of the company.
• Emerging trends among companies in building public image - A good public image
results good profit. Building a good public image in the industry can establish a
competitive advantage that could be used as an instrument to lead the industry it belongs.
• Increasing number of Overseas Filipino Workers - There has been an increase in
opportunities abroad and it brings a positive atmosphere for airline industry since
Overseas Filipino Workers board airplanes to go to other countries.
• Increasing environmental awareness - Environmental awareness has increased due to
the effects of the Global warming that threaten the lives of many people. The Airline
industry could innovate planes that are environment friendly to respond the need for
environment preservation.

THREATS
• Global economic downturn - Global crisis has significant impact on the airline
industry. Global economic downturn means less demand for air travel that lead to a
possible loss for the airline industry.
• Strong Competition - There has been a stiff competition in the airline industry in the
Philippines. Moreover, threats also increase due to the emerging substitutes and new
entrants.
 • Government Intervention - New regulations for the airline industry could possibly
hamper its operations. Thus, these may lead to a decrease in the industry’s revenue.
• Airline security cost have increased - Due to security threats, governments have
added rigorous security requirements and procedures that airline companies should
comply.
• Fuel price fluctuations - Unstable fuel price in the world market leaves airline
companies susceptible to operating losses.
• Hedging Currency risk - Due to price fluctuations in the market, airline companies are
forced to enter into hedging agreements which makes them vulnerable to losses.
• Terrorism attacks - The possibility of terrorism attacks could lead to a conclusion that
security procedures implemented by the company are not stringent enough which may
lead to having a bad public image.
• Natural Calamities - Fortuitous events such as earthquakes, volcanic eruptions,
weather disturbances, epidemics and other diseases may impede the company’s
operations.
• Global Warming - Increasing problems due to global warming can lead to a decrease
in travel operations.

4. REVIEW IF THE VISION AND MISSION STATEMENTS ARE ALIGNED TO

ITS STRATEGIES.

VISION
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