2023

Strategic
Management
Strategic Tools for Air Blue

Intag HP
Air Blue Pakistan
1/1/2023
 Assignment 4

Group Member: Obaid Khan

Mohib Hussain Shah

Musanif Shah

Hamza Akhtar

Faisal Razim

Based on your SWOT and date from Input Stage, please prepare the following
matrixes:
1) TOWS Matrix
2) Space Matrix
3) BCG Matrix
4) Grand Strategy Matrix
Please note that there should be at least one paragraph (5-10 lines) after each
matrix that must interpret the data of concerned matrix.

1: Tows Matrix
Internal Factors
A. STRENGTHS:
I. Second largest air-carrier of Pakistan, enjoying almost 30 percent market share on
domestic routes.
II. Air blue is a Low-cost carrier (LCC)
III. 98 % punctuality of on-time flight departures.
IV. Innovative e ticketing and wireless check-in technologies.
V. Hub airport at Karachi

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B. WEAKNESSES:

I. Not having its own repair and maintenance facilities.

II. Small fleet of air crafts.
III. Two aircrafts are acquired on dry lease and one on wet lease..
IV. It connects only seven cities in Pakistan.
V. Very tight schedule of flights, which puts extra burden on pilots, cabin crew and
hostesses.
VI. Doing less on the advertising and promotion of airline.

 External Factors
External factors include Opportunities and Threats.

C. OPPORTUNITIES

I. Low fares enable market share growth.

II. Introducing new domestic and international routes like Gulf, UK, Jordan, India etc
III. The air transport sector of Pakistan would also get a boost from newly developed Port of
Gwadar in the Baluchistan province..
IV. Huge investment required for new entrants.
V. Excellent credit rating allows Air Blue to purchase its expansion strategy.

D. THREATS
I. Escalating jet fuel prices.
II. Low cost Chinese airlines planning to enter into Pakistan’s domestic air market.
III. High insurance costs for aircrafts and passengers.
IV. Establishment of Luxury Road Transportation.
V. Incapability of national airport runways to handle big crafts.

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Internal Factors
(IFAS)
External Factors
(EFAS)
Opportunities-O
O1. Low fares enable market share
growth.
O2 Introducing new domestic and
international routes like Gulf, UK,
Jordan, India etc
O3 The air transport sector of
Pakistan would also get a boost
from newly developed Port of
Gwadar in the Baluchistan province.
O4. Huge investment required for
new entrants.
O5. Excellent credit rating allows Air
Blue to purchase its expansion
strategy.
Threats-T
Escalating jet fuel prices.
Low cost Chinese airlines planning
to enter into Pakistan’s domestic air
market.
High insurance costs for aircrafts
and passengers.
Establishment of Luxury Road
Transportation.
Incapability of national airport
runways to handle big crafts.
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TOWS Matrix
Strengths-S
S1. Second largest air-carrier of Pakistan,
enjoying almost 30 percent market share
on domestic routes.
S2. Air blue is a Low-cost carrier (LCC)
S3. 98 % punctuality of on-time flight
departures.
S4 Innovative e-ticketing and wireless
check-in technologies.
S5. Hub airport at Karachi
SO Strategies
Utilize the low-cost advantage to further
expand market share by offering
competitive fares on new domestic and
international routes. (S1, 2: O1, 2)
Capitalize on the excellent credit rating to
secure investment for fleet expansion and
new route development. (S5:O5)
Leverage the hub airport at Karachi to
establish efficient connections with
emerging markets, such as the Gulf, UK,
Jordan, and India. (S5:O2)
ST Strategies
Mitigate the impact of escalating jet fuel
prices by implementing fuel-saving
measures; enhance cost management &
operational efficiency and exploring
alternative energy sources. (S1:T1)
Monitor and respond to the entry of low-
cost Chinese airlines by focusing on Air
blue’s competitive advantages, such as
punctuality, customer service, and
innovative technologies. (S2,3,4:T2)
Implement effective risk management
strategies to mitigate the impact of high
insurance costs.
Weaknesses-W
W1. Not having its own repair and
maintenance facilities.
W2. Small fleet of air crafts.
W3. Two aircrafts are acquired on dry
lease and one on wet lease..
W4 It connects only seven cities in
Pakistan.
W5 Very tight schedule of flights, which
puts extra burden on pilots, cabin crew
and hostesses.
W6 Doing less on the advertising and
promotionWO
of airline.
Strategies
Address the lack of repair and
maintenance facilities by forming
strategic partnerships or
outsourcing to reliable service
providers. (W1:O4)
Increase the fleet size to enhance
connectivity to more cities in
Pakistan,thereby expanding the
customer base. (W2,3:O1,2)
Improve advertising and promotion
efforts to create brand awareness
and attract more passengers.
(W6:O2,3)
WT Strategies
Collaborate with luxury road
transportation providers to offer
integrated travel solutions, combining
air and ground transportation for
added convenience.( W2,3:T3, 4)
Advocate for runway expansions or
seek partnerships with airports
capable of handling bigger aircraft.
(W3,4:T5)
Diversify revenue streams by offering
services(W5,6:T1,2)
Strategies:
SO Strategies

 Utilize the low-cost advantage to further expand market share by offering competitive fares on
new domestic and international routes. (S1, 2: O1, 2)
 Capitalize on the excellent credit rating to secure investment for fleet expansion and new route
development. (S5:O5)
 Leverage the hub airport at Karachi to establish efficient connections with emerging markets,
such as the Gulf, UK, Jordan, and India. (S5:O2)

ST Strategies

• Mitigate the impact of escalating jet fuel prices by implementing fuel-saving measures; enhance
cost management & operational efficiency and exploring alternative energy sources. (S1:T1)
• Monitor and respond to the entry of low-cost Chinese airlines by focusing on Air blue’s
competitive advantages, such as punctuality, customer service, and innovative technologies.
(S2,3,4:T2)
• Implement effective risk management strategies to mitigate the impact of high insurance costs.

WO Strategies

• Address the lack of repair and maintenance facilities by forming strategic

partnerships or outsourcing to reliable service providers. (W1:O4)
• Increase the fleet size to enhance connectivity to more cities in Pakistan,thereby
expanding the customer base. (W2,3:O1,2)
• Improve advertising and promotion efforts to create brand awareness and attract more
passengers.(W6:O2,3)

WT Strategies

• Collaborate with luxury road transportation providers to offer integrated travel

solutions, combining air and ground transportation for added convenience.( W2,3:T3,
4)
• Advocate for runway expansions or seek partnerships with airports capable of
handling bigger aircraft.(W3,4:T5)
• Diversify revenue streams by offering services(W5,6:T1,2)

Interpretation:
The most suitable TOWS strategy for Air blue Pakistan would depend on various factors,
including the company's goals, resources, and market conditions. However, based on the
provided information, a potential TOWS strategy for Airblue Pakistan could be to pursue a
combination of SO and WO strategies. By leveraging their strengths in being a low-cost carrier
with innovative technologies, Air blue can capture new market share by introducing new

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domestic and international routes. They can invest in expanding their fleet, establishing repair
and maintenance facilities, and increasing advertising and promotion efforts to support these new
routes and attract more customers. This strategy would capitalize on the opportunities in the
market and address some of the weaknesses identified.

2. Space Matrix
The Space Matrix is a strategic management tool that helps analyze and visualize the strategic
position of a company. It combines four dimensions: Financial Strength (FS), Industry
Attractiveness (IA), Environmental Stability (ES), and Competitive Advantage (CA). It is four-
quadrant structure which specify whether aggressive, defensive competitive or conservative
strategies are most suitable for a given organization, company or business.

A. Financial Strength (FS):

I. Strong revenue growth and profitability in recent years.
II. Healthy cash flow and liquidity position.
III. Efficient cost management practices.
IV. Low debt-to-equity ratio.
V. Ability to secure funding for expansion and modernization.

B. Industry Attractiveness (IA):

I. Growing air travel demand in Pakistan.
II. Increasing tourism opportunities in the region.
III. Government support and favorable policies for the aviation sector.
IV. Limited competition in certain routes or market segments.
V. Potential for international expansion and partnerships.

C. Environmental Stability (ES):

I. Political stability and supportive regulatory environment.
II. Favorable macroeconomic conditions and GDP growth.
III. Stable fuel prices and availability.
IV. Low natural disaster risks in the operating regions.
V. Positive industry trends and technological advancements.

D. Competitive Advantage (CA):

I. Strong brand recognition and customer loyalty.
II. Modern fleet with advanced technology and fuel efficiency.
III. Extensive domestic and international route network.
IV. High-quality customer service and on-time performance.
V. Skilled workforce and effective human resource management.

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 Valuation for Space Matrix for Airblue Pakistan

Internal Strategic Position External Strategic Position

-6 worst -1 Best (+1 worst, +6 Best)

Competitive Advantage Industry Strength

Factors Ranking Factors Ranking

Strong brand recognition and customer -4 Growing air travel demand in Pakistan. 6
loyalty
Increasing tourism opportunities in the 5
Modern fleet with advanced technology -3 region.
Axis and fuel efficiency
Extensive domestic and international -1 Government support and favorable 3
X
route network. policies for the aviation sector.
High-quality customer service and on- -2 Limited competition in certain routes or 5
time performance. market segments.
Skilled workforce and effective human -2 Potential for international expansion and 4
resource management. partnerships.
23/5
-12/5 Average IS: + 4.6
Average CA: -2.40
Total Axis X score = 2.2
(+1 worst, +6 Best) -6 worst -1 Best

Financial Strength Environment Stability

Factors Ranking Factors Ranking

Strong revenue growth and 6 Political stability and supportive -5
Axis
profitability in recent years. regulatory environment.
Y
Healthy cash flow and liquidity 5 Favorable macroeconomic conditions -4
position. and GDP growth.
Efficient cost management practices.
Stable fuel prices and availability. -5
4
Positive industry trends and -2
Low debt-to-equity ratio 4 technological advancements.
Ability to secure funding for expansion 5 Low natural disaster risks in the -2
and modernization. operating regions.
24/5 -18/5
Average FS: 4.8 Average ES: -3.60
Total Axis Y score: 1.20

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 Graph

Interpretation:
According to the SPACE Matrix, Air Blue Pakistan falls into the aggressive quadrant. This
implies that Air Blue should pursue an aggressive strategy that leverages its competitive
advantage and focuses on capturing the market opportunities provided by industry attractiveness.
It should continue to strengthen its financial position, maintain environmental stability, and
emphasize its competitive advantage to gain a competitive edge in the market. Focus on
leveraging strengths to pursue growth opportunities aggressively. This could involve
expanding the fleet, adding more routes, and increasing marketing efforts to gain a larger market
share. Focus on stability and minimizing risks. This could involve managing costs effectively,
monitoring fuel prices closely, and ensuring compliance with safety regulations.

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 3. BCG (Boston Consulting Group) matrix:
The BCG matrix, also known as the Boston Consulting Group matrix, is a strategic management
tool used to analyze a company's portfolio of products or business units. It categorizes these
products or business units into four quadrants based on their market growth rate and market
share: The four quadrants are Stars, Question Marks, Cash Cows, and Dogs.

Relative Market Share Position

Mediu
High m Low
1.0 .50 0.0

Star Question Mark?

II I
High • Airblue is the second largest air carrier in • Small fleet of aircraft.
+20 Pakistan, with a 30% market share on • Two aircraft acquired on dry lease and
domestic routes. one on wet lease.
• Airblue has a 98% punctuality rate for • Tight flight schedule.
on-time flight departures. • Huge investment is required for new
• It has innovative e-ticketing and wireless entrants, which poses a barrier to
check-in technologies.
Industry

competition.
• Introducing new domestic and
international routes
Mediu
m
0
DOG
Sales Growth Rate

Cash Cow
IV
III
• Not having its own repair and maintenance
• Airblue is a Low-cost carrier (LCC). facilities.
• Hub airport in Karachi. • It connects only seven cities in Pakistan.
• Huge investment is required for new • Very tight schedule
entrants. • Doing less on the advertising and promotion
• High insurance costs for aircraft and of the airline.
passengers. • Escalating jet fuel prices.
Low • Chinese airlines planning to enter Pakistan's
-20 domestic air market.

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1. Stars: High Market Growth Rate, High Market Share
Stars represent businesses or products that have a high market growth rate and a high market
share. They have the potential to generate substantial revenue and profits. In the case of Airblue
Pakistan, the following factors can be considered as Stars:

• Innovative e-ticketing and wireless check-in technologies.

• 98% punctuality of on-time flight departures.
• Airblue's position as the second largest air carrier in Pakistan with a 30% market share on
domestic routes indicates a high relative market share.
• Introducing new domestic and international routes like Gulf, UK, Jordan, India, etc.,
presents opportunities for market growth.

2. Question Marks (Problem Child or Wild Card): High Market Growth Rate,
Low Market Share
Question Marks represent businesses or products with a high market growth rate but a low
market share. They require careful consideration and investment to determine whether they will
become Stars or Dogs. n the case of Airblue Pakistan, the following factors can be considered as
Question Marks:

• Small fleet of aircraft.

• Two aircraft acquired on dry lease and one on wet lease.
• Tight flight schedule.
• Huge investment is required for new entrants, which poses a barrier to competition.

3. Cash Cows: Low Market Growth Rate, High Market Share

Cash Cows represent businesses or products with a low market growth rate but a high market
share. They generate steady and significant cash flow. In the case of Airblue Pakistan, the
following factors can be considered as Cash Cows:

• Airblue is a Low-cost carrier (LCC).

• Hub airport in Karachi.
• Huge investment is required for new entrants.
• High insurance costs for aircraft and passengers.

4. Dogs (Low Market Share, Low Market Growth):

Dogs represent businesses or products with a low market growth rate and a low market share.
They may not generate significant profits and require careful evaluation. In the case of
Airblue Pakistan, the following factors can be considered as Dogs:

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 • Not having its own repair and maintenance facilities.
• It connects only seven cities in Pakistan.
• Very tight schedule of flights, which puts extra burden on pilots, cabin crew, and
hostesses.
• Doing less on the advertising and promotion of the airline.
• Escalating jet fuel prices.
• Low-cost Chinese airlines planning to enter Pakistan's domestic air market.

Interpretation:
Airblue Pakistan adopts. However, considering its position as a low-cost carrier (LCC) and the
focus on low fares to enable market share growth, Airblue might adopt a strategy focused on
market penetration. This strategy aims to increase market share within existing markets by
offering competitive pricing and expanding service offerings. Strategy: Stars have high growth
potential and should receive investment to maintain or increase their market share. Airblue
should continue to focus on these routes, invest in fleet expansion, and capitalize on the
opportunities for growth. Dogs have low growth potential and market share. Airblue should
evaluate these routes' profitability and consider either divesting or finding ways to improve their
performance. It should also address the threats by finding cost-saving measures and focusing on
other areas of growth.

4. Grand Strategy Matrix:

The Grand Strategy Matrix is a strategic management tool used to evaluate and classify an
organization's strategic position in terms of its market growth rate and competitive position. It
helps in determining the appropriate strategies that a company should pursue based on its current
situation. All organizations (or divisions) can be positioned in one of four quadrants. Based on
two evaluative dimensions: Competitive position & Market growth.

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 Grand Strategy Matrix
RAPID MARKET GROWTH

Quadrant 1 (Grow &Build)

Quadrant II (Hold & Maintain)
• Introducing new domestic and
• Second largest air carrier of Pakistan, international routes like Gulf, UK,
enjoying almost 30 percent market share Jordan, India, etc.
on domestic routes.
• Low fares enable market share
• Airblue is a Low-cost carrier (LCC).
growth.
• 98% punctuality of on-time flight
• Excellent credit rating allows Airblue
departures.
to purchase its expansion strategy.
• Innovative e-ticketing and wireless
check-in technologies.
• Hub airport in Karachi.

WEAK STRONG
COMPETITIVE COMPETITIVE
POSITION POSITION
Quadrant III (Harvest& Divest)
• Not having its own repair and Quadrant IV (Protect)
maintenance facilities.
• Low-cost Chinese airlines
• Small fleet of aircraft.
planning to enter Pakistan's
• Two aircraft acquired on dry lease
domestic air market.
and one on wet lease.
• High insurance costs for aircraft
• It connects only seven cities in
and passengers.
Pakistan.
• Establishment of luxury road
• Very tight schedule of flights, which
transportation.
puts an extra burden on pilots, cabin
• Incapability of national airport
crew, and hostesses.
runways to handle giant crafts.
• Doing less on the advertising and
promotion of the airline.

SLOW MARKET GROWTH

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 • Introduce new domestic and international routes
• Enhance onboard services
• Increase market share through promotional activities
• Explore new business ventures outside aviation industry
• Invest in repair and maintenance facilities
• Expand fleet of aircraft
• Capitalize on low fares and market growth potential
• Increase market share by capturing a larger customer base
• Explore new revenue streams beyond aviation
• Strengthen brand loyalty through loyalty programs
• Diversify into related sectors, such as travel and tourism.
• Explore new business ventures outside aviation industry.

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Interpretation:
Based on the Grand Strategy matrix, Airblue Pakistan should focus on the strategies in
Quadrant I (Grow and Build) and Quadrant II (Hold and Maintain) to leverage its
strengths, opportunities, and protect against potential threats. Airblue Pakistan should consider
adopting strategies such as market development by introducing new domestic and international
routes, product development by enhancing onboard services, market penetration by increasing
market share through promotional activities, and diversification by exploring new business
ventures outside the aviation industry. Investing in repair and maintenance facilities, expanding
the fleet of aircraft, improving advertising and promotion efforts, and seeking partnerships with
other service providers can address some of the weaknesses identified. It is important for Airblue
Pakistan to capitalize on low fares and market growth opportunities while managing threats
through collaborations, fuel-efficient options, brand loyalty, and exploring new revenue streams.

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