1

International Business strategy

of VIETJET AIR in Indonesia
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Group Members
Nguyễn Xuân Trường– 720H1627
Võ Hiếu Khang – 720H1548
Lương Thanh Sơn - 719H1109
Cao Minh Nghĩa - 720H1570
Trần Tín Nghĩa 720H1571
Bùi Như Thuỳ - 718H2027
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INTRODUCTION &
01 COMPANY INFOMATION
DIFFERENTIATION
PESTEL
05 STRATEGY
02 ENVIRONMENT
BUSINESS MODEL
POTER’S FIVE 06 CANVAS
03 FORCES MODEL

04 VALUE CHAIN 07 MODE OF ENTRY

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INTRODUCTION &
COMPANY INFOMATION
International Business strategy of VIETJET
AIR in Indonesia
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The importance of
International business

For businesses,
International business also increases
competition in domestic markets and
introduces new opportunities to foreign
markets.

-> International Business Strategy is an imperative for

sustained competitive advantage.
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Challenges of International
Business

Language Barriers
Cultural Differences
Managing Global Teams
Currency Exchange and Inflation Rates
Nuances of Foreign Politics, Policy, and
Relations.
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Why do we need International

Business strategy ?
Global brand recognition Global customer satisfaction Competitive advantage by location
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COMPANY INFORMATION

VietJet Aviation Joint Stock Corporation,

Vietnam's first private airline is called, was founded in
Vietnam and sometimes known by the names VietJet
Air or VietJet. VietJet offers consumer demand for
goods and services through e-commerce technology
applications in addition to providing air
transportation.
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COMPANY INFORMATION

The airline was honored by AirlineRatings, a

prestigious unit specializing in assessing world aviation
safety and services, in the Top 10 safest low-cost airlines
in the world in 2022 out of a total of more than 385
global airlines.
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COMPANY INFORMATION

MISSION
Customer-focused and efficiency-based

VISION
To be a healthy and long-lasting company

CORE VALUE
Safety – Fun and Friendly - Affordable price - Punctuality.

TAGLINE
“Fly into the future with us”
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Analyzing PESTEL
environment
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POTENTIAL
EMERGING
MARKET
OVERVIEW OF THE ECONOMIC
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ENVIRONMENT OF INDONESIA
Indonesia, a country of 277 million people, is Southeast Asia’s
largest economy with a GDP of 4,023 billion of USD in 2022

Logistics cost varies between 25%-

30% of the GDP in Indonesia, as
compared to developed economies,
where it is below 5% of the GDP. Even
neighboring countries, like Malaysia,
incur half the cost as a percentage of
GDP for logistics expenditure

The Indonesian freight and logistics

market are anticipated to register a
CAGR of 9% during the forecast
period of 2020 - 2025
 PESTLE ANALYSIS 14

POLITICAL ECONOMIC
Relying on International Policies
• GDP: 16th world’s largest
Political instability Economic growth
• Imports & Exports: with
Indonesian Foreign Policy, as a

P E
many countries
member of the G20, ASEAN • Fuel Price fluctuates

SOCIO-CULTURAL
S
Demography: has a high standard of living, education,
healthcare system,
Social challenges: gradual increase of aging population
and high urbanization by migration from rural areas
 PESTLE ANALYSIS 15

TECHNOLOGICAL
• Fuel-efficient engines and airframes
• Security check technologies
LEGAL

T L • The legal system is heavily

reliant on statutory laws
• Restrictions on mergers

E
• Preferential airport rights
for some domestic carriers
ENVIRONMENTAL
• Noise pollution controls
• Energy consumption controls
• Facing environmental challenges: deforestation,
water pollution from industrial waste and sewage, air
pollution from carbon emissions in urban areas.
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Analyzing Poter’s
Five Forces Model
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FIVE FORCES

01 Potential new entrants

02 Subsitute products of services

Industry
competitors 03 Bargaining power of buyers

04 Bargaining power of suppliers


FIVE FORCES
Potential new entrants
High capital requirement
Government restriction is less as industry is globally driven
Routes and take-off slots were mostly grabbed by the big
operators, and the industry was strictly regulated.
Requires good technology and systems
Requires good relationships to have access to other distribution
channels
 Threat of the new entry is moderate to high
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Industry competitors
Vietjet Air faces intense competition
from Indonesia Airlines ( Garuda, Air
Asia, Batik Air, etc)
 Competition in the industry is
high
Substitute products of services
Availability of the substitutes is high
Price of substitutes is variable
Quality and performance of the substitutes is high
Switching cost is high
 Threat of substitutes is moderate to high.
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FIVE FORCES
Bargaining power of buyers
Numbers of the customers are high.
Switching cost is low.
Price Sensitivity is high.
Buyer’s ability to substitute is high
Size of each customer order is medium to large.
Buyer’s information availability is low.
A number of Freight forwarders and clearing agents are high. Bargaining power of suppliers
 Bargaining power of Buyers/customers is high Number of the suppliers is high.
Price factor of the suppliers is high.
Profit of the suppliers is less.
Switching cost of the supplier is high.
Operating cost is high.
 Bargaining power of suppliers is low.
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Value Chain
 VALUE CHAIN 21

VIETJET delivered the support fast freight forwarding activities based on the
development of technology and the Internet

SUPPORT ACTIVITIES FIRM INFRASTRUCTURE

HUMAN RESOURCE MANAGEMENT

MA
RG
TECHNOLOGY DEVELOPMENT

IN
PROCUREMENT

INBOUND OPERATIONS OUTBOUND MARKETING SERVICE

IN
LOGISTICS LOGISTICS AND SALES

RG
MA
PRIMARY ACTIVITIES
 VALUE CHAIN 22

PRIMARY ACTIVITIES

INBOUND Extensive network to support fast freight forwarding activities

LOGISTICS Advanced information technology system

Have partners to connect and support with them in Asia

OPERATIONS and the funding round with financial is quite well

Online booking for both Passenger and Cargo Transportation

OUTBOUND
The air freight industry revolves around providing a good customer
LOGISTICS
experience and reliability
VIETJET has a continuous marketing campaign (sport
events, sponsoring contracts with others famous people)
MARKETING AND SALES Utilizing social media and other platforms to reach target
customers ( hold around two-half of monthly revenue)

The company provide a high quality after-sale support services to meet

SERVICE customers’ satisfaction and to support anything customers ask for.
SUPPORT ACTIVITIES
VALUE CHAIN 23

High-quality data servers, communication channels, provides many ways

FIRM to connect.
INFRASTRUCTURE Departments like management, finance, legal, etc., to keep the company’
service operational.

HUMAN
RESOURCE Employees are motivated through generous benefits and incentives
MANAGEMEN The company is known for taking care of its workforce  a key reason
for a low turnover rate of employees
T

TECHNOLOGY VietJet Air uses various types of technology to minimize the cost and to
DEVELOPMENT run the business efficiently

The airline establishes close and tight business relationships with two
PROCUREMENT leading aircraft manufacturers that are Airbus and Boeing.
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DIFFERENTIATIO
NSTRATEGY
 COMPETITIVE ADVANTAGES - DIFFERENTIATION 25

Some of the advantages of differentiation strategy used to increase competitiveness:

TECHNOLOGY PERSONNEL SERVICE

DIFFERENTIATION DIFFERENTIATION DIFFERENTIATION

- Applying digital • Standard Delivery

technology into customer
services.
- Employing advanced
navigation technology
Managing the quality of
employees can provide • Fast Delivery
satisfaction to customers • Super Fast Door – to –
door Delivery
 VRIO ANALYSIS 26

Resource Valuable Rare In-imitable Organized Value

Competitive
Digital Technology Parity

Advanced Navigation
Unused
Technology

Flight Rental Temporary

High Customer
Temporary
experience level

Competitive
Fast shipping Parity

Relative service quality

Sustained
and reputation

Professionally Competitive
trained staff Parity
 External Opportunities Threats
environment • Indonesia has invested more in logistics • The competitive environment in the aviation
27
industry. industry is increasingly fierce
• Indonesia's geographical location is • Increasing aviation fuel prices
very convenient for transporting goods Currency Fluctuations
Internal from Southeast Asia to Northeast Asia, •
and other countries. • Not be successful in increasing fares
Environment
• Launch of new routes
Strengths S-O S-T
• Market share growth increases Offer promotions to stimulate market Change to fit the local culture
rapidly year by year demand
• Famous for its strong marketing Establish a team of marketing specialists.
activities
• High Quality after-sale support
• Strong fleet operations

Weaknesses W-O W-T

• Most of the revenue comes from Learn from the past mistake from the other Brand positioning in line with target customers
flight rental airlines.
Reduce aircrafts’ rental
• Lack of scale
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BUSINESS MODEL
CANVAS
KEY KEY ACTIVITIES VALUE CUSTOMER CUSTOMER SEGMENTS
PARTNERS Air Freight PROPOSITIONS RELATIONSHIPS 29
- People who want to have
Aircraft Carrying passengers “Safety – Fun Feedback a cost-saving flight to
Manufacturing and Friendly - Customer care call center another destination
companies Affordable price – - People who need a quick
Other airlines Punctuality “ and convenient
KEY RESOURCES
partners (SKY transportation of goods
Aircraft
team) domestically and
Staff
OTHER Advanced software internationally
AIRPORT solutions for flight
management and CHANNELS
MANAGEMEN operation
T UNIT management Hotline & Email
Website Vietjetair.com
Offline and online
buying tickets channels
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MODE OF ENTRY
Detail Plan
• Aim to expand and widen VIETJET AIR’s reputation all over Garuda
Indonesia, Air Asia, Batik Air, etc
1. Marketing project
2. Building “online booking” software and website project
3. Conduct promotion project
Recommend mode of entry
• The control and resource commitment
of risk and return of franchising and
joint ventures is placed in the middle
• Franchising is the best
recommendation
• Investors and the company will enjoy
benefits such as low costs, limited
business risks, intensive training
support, brand recognise, lower failure
rate, built-in costumer base ... Also this
mode help company has high entry
speed, which very important in entry
strategy
 Recommend mode of entry
Project timeline
Task Timeline
first 6 last 6 First 6 Last 6 First 6 Last 6
months of months of months of months of months of months of
2023 2023 2024 2024 2025 2025
Marketing VIETJET
AIR brand in
Indonesia
Building “online
booking” software and
website

Conduct promotion
strategy to stimulate
demand
Recommend mode of entry
Financial plan

Marketing Project 5.000.000 USD

Software and Website 5.000.000 USD
Project
Promotion Project 5.000.000 USD
Total budget 15.000.000 USD
THANKS!
For Listening