Malaysia Airlines essay assignment sample help

Question: Write an essay on Malaysia Airlines. Answer: Malaysia Airlines is the national airlines of Malaysia whose flights have connectivity from Kuala Lumpur to destinations all around Oceania, Europe, and Asia. The headquarters are located at Kuala Lumpur International Airport (Dale et al. 2016). Despite winning numerous awards from the aviation industry, the airline had been struggling to cut its cost in order to compete with the upcoming airlines that portray themselves as low cost carriers in the region since the early years of 2000. In 2014, the company, unfortunately, lost two of its aircraft- Flight 17 and Flight 370 in less than five months of the difference in time which has dealt a huge blow in the face of the company, crippling it with various kinds of financial troubles and also ushered in the process of renationalization of the company. It has been stated by a lot of business analysts that the Malaysia Airlines are on the verge of a downfall which must immediately be taken care of by the management if they want their company to win back its reputation and position in the global market (Dixon 2014). The environmental and competitive Analysis of the Malaysia Airlines will be evaluated with the help of Michael porters five forces model. Competitive Rivalry This signifies the number of competitors and capability in the market. If there are numerous competitors offering almost the same kind of products and services, the market attractiveness will be reduced. The Airline industry is highly competitive in nature due to some reasons which include the threat of low cost airlines and the strict regulations pertaining to the safety of the passengers which leads to excessive operating expenses (Homosombat et al. 2014). The Malaysia Airlines faces acute competition from Air Asia, Malindo Air, Tiger Air, etc. A major point to be noted is that the fixed cost of production is exceptionally high in this industry which makes it difficult to leave the industry because the players might be under long-term agreements of the loan. The competition is, however, lessened by the exclusive brand identity of Malaysia Airlines, which offers its customers the best hospitality services. Threat of new entrants Attractive markets lure new entrants into the industry, which eventually decrease profitability. The Airline industry has a massive barrier to the entry of new players in the market. The company cannot easily leave the business arena once it has made an entry, or it will lead to huge losses. The new entrants mainly focus upon inviting customers to its side and building their loyalty towards the company(Dhandapani and Upadhuyla 2015). The Malaysia Airlines had always enjoyed brand recognition among its customers until the MH370 and MH 17 tragedy that hit people all around the world. The company needs to revive its image as soon as possible to win back its customers. The threat from the low cost carriers is a constant to the Malaysia Airlines. A new entrant into the industry, Malindo Air is posing a difficult challenge to the Malaysia Airlines. Malindo Air attracts customers by offering them appreciable services at low costs. Bargaining power of buyers In the airline industry, the bargaining power of the buyers is driven by the size of the buyers in the industry in numeric terms (Dixon 2014). It is also driven by the significance of each individual customer in the market and the cost which the buyer has to pay when he switches from one company to the other. The buyers of Malaysia Airlines can be classified into the following type of travelers: a) Business Travelers b) Budget Travelers c) Pleasure Travelers The Malaysia Airlines face a huge challenge to attract budget travelers when compared to enticing the pleasure and business travelers towards their Airlines. The Malaysia Airlines can enhance loyalty among their customers by initiating frequent flyer incentives which will refrain them from switching to other Airline Companies in the market. Threat of Substitutes Going by Michael Porters five forces model, it is the threat of substitutes that constructs the competitive framework of an industry. The substitutes with reference to Malaysia Airlines could be a car, train, bus, or even a cruise that the customers can take to reach their destination. But these substitutes can only be a threat to Malaysia Airlines when domestic flights are concerned. When overseas traveling come into question, Airplanes are the most convenient and time-saving option among all the choices available to the customers(Grunig and Kuhn 2015). However, with the development of technology in today's era, the consumers have an option not to travel at all. Businessmen, especially, in this case, opt for video conferencing sitting at their office, hence saving a lot of time and money in traveling. Bargaining power of suppliers In an airline industry, it is often easy for the suppliers to escalate their prices. This is possible due to the following reasons: The number of suppliers that are available in the industry for each significant input required; The uniqueness of service or product that is supplied; The concentration of suppliers; The cost paid by the company to switch suppliers (Dhandapani and Upadhuyla 2015). The bargaining power of the suppliers is not so strong in case of fuel since the price is set and regulated by the Malaysian Government. There are presently two aircraft manufacturing companies which are competing against each other- Boeing and Airbus. Since the Malaysia Airlines are Boeing's client, it automatically has increased its airline prices. It is difficult for Malaysia Airlines to switch to another company since it involves high costs and also that its staff is acquainted with Boeing's airplanes. The power of powers is not a negative one in the case of Malaysia Airlines depend on only one manufacturer(Dale et al.2016). Consequences of Malaysia Airlines Current Performances Malaysias national airline had reported a loss of Five Hundred and Seventy-six Ringgit in the July to September quarter of the years 2014. The loss was even bigger in the previous year amounting to Three Hundred and Seventy-five Million Ringgit. The revenue of the company also fell drastically from 12.1% to 3.33 billion ringgit. The reason behind being the missing episode of Flight 370 and Flight 17 has scared the passengers and has been keeping them away from boarding the Malaysia Airlines. The company had been making a financial loss each year since 2011. Christophe Mueller, the Company's executive, had announced in May 2014 that the company is technically bankrupt. The reputation of the company has suffered a huge blow after the Flight 370 and 17 misfortune as the people consider the name of Malaysia Airlines synonymous with death and tragedy (Grunig and Kuhn 2015). The company has to come up with effective and strategies and plans to revamp the company altogether to cover up the losses and win back customers before its too late. The internal analysis of the Malaysia Airlines can be conducted through a SWOT analysis and McKinsey 7s Framework: SWOT Analysis Strengths: The Malaysia Airlines enjoy high brand recognition in the domestic as well as in the global market. The company has always tried to maintain high standards with respect to its service across all its operating segments. As far as the Personnel of the airlines is concerned, they are representatives of friendliness and hospitality. In 2010, it was awarded three prestigious awards by World Travel Awards, United Kingdom(Chang and Lee 2016). The Malaysia Airlines has a well-organized management structure. The Malaysia Airlines fleet is also one of its kind with AVOD facility even in economy classes. Weaknesses: When compared to other airline companies, Malaysia Airlines travelling tickets are more expensive than what its competitors cost. Air Asia had completely taken over its domestic routes. The revenue of the company has been low with the profit margin coming to 2.3 percent which is below the average of the industry which is 4.9 in the year 2011. Such a margin puts the company in a state of competitive disadvantage. Employee inefficiency was reported recently which lead to 1.3 billion ringgit worth loss in the year 2012 due to poor maintenance, route and repair planning. The sales and distribution, pricing and planning departments also face many troubles with respect to efficiently operating its business. The company is also suffering from the lack of brand presence (Homosombat et al. 2014). Opportunities: The opportunities lie in enhancing the satisfaction of the customers with respect to the change in their preferences. The customers prefer low cost carriers and decent in-flight services. They try to get the best deals in terms of traveling cost. In accordance to keep up with the competition from Air Asia, Malaysia Airlines has introduced Firefly Airlines, which helped the company regain its domestic customers to a considerable extent (Mehdi 2015).Malaysia Airline has strong brand recognition in the Asian continent. Favorable opportunities also lie in improved fleets with respect to fuel efficiency, better technology, and outstanding in-flight services. Threats: The changes in the economy probably pose a huge threat to the airlines in various aspects. Global economic changes are likely to effect Malaysia Airlines pertaining to the connections it has across the planet. The unpredictability calls for detailed planning of its operations by the management of Malaysia Airlines to be prepared for the alternative situations that may arise. Intense competition is also a potent threat to the company as it is not the sole Airline company operating in the South East Asian region. The main competitors are Air Asia, Thai Airways, Milando Air and Jet star. Political unrest and terrorism are also causing a downward shift in the level of tourism and ultimately in the revenues of the airline(Nel 2014). McKinsey 7s Framework: Strategy:Malaysia Airlines follows an extensive strategy which aims to sustain earnings and ensure high level performances of each unit involved in the operation of the company. The Malaysia Airlines adopted a strategic move in the year 2002, which regained the airlines position in terms of powerful financial standings(Myhre and Pilskog 2014). It also aims to contribute to the socio-economic development in the South East Asian region by indulging in Corporate Social Responsibility activities. Structure:The Organizational structure of Malaysia Airlines is a Bureaucratic one similar to that of a pyramid where the board of directors is at the top of the management structure and the sequence of commands pass through various departments and its employees. There are different levels of hierarchy, which reflect the status of the authority. The management director has control over a span of operations and thus is often is into a lot of pressure(Mehdi 2015). Systems: The employees of the Malaysia Airlines work according to a given schedule which is assigned according to the tasks to be undertaken by the respective departments. The supervisor prepares the required database for the airplanes, the destination and departure points, time of the operations, and other specific information(Ostelwader et al. 2015). Shared Values:The Malaysia Airlines prioritizes the safety of its passengers above all. It considers the well-being and comfort of its passengers as its greatest responsibility. The employees of the Malaysia Airlines across all departments ensure that they pay attention to every detail that ascertains the safety of its customers (Rothermel 2015).Apart from the safety of the passengers, the employees also make sure that all the operations are carried out in time, abiding by the deadlines assigned to them. Style:Idris Jala, the CEO of the Malaysia Airlines follows the pertinent management guidelines similar to the game of impossible. This means that he sets unachievable targets so that he has to fight the fear of disappointment and failure. He is of the opinion that the leaders should be more focused towards the actions rather than theories relating to work. He follows the model of situational leadership which outlines the importance of the know-how factor. If a person knows how to deal with a situation, he will be able to come out of any adversities (Myhre and Pilskog 2014). Staff: The staff at Malaysia Airlines at the ground level, as well as in-flight attendants, is highly efficient in carrying out their responsibilities. They are heavily trained before they start their actual job. This gives them enough knowledge about the responsibilities that they are supposed to undertake so that they do not make mistakes while the discourse of their work (Rothermel 2015).The staff at the Malaysia Airlines are also aware of the work ethics and try their best to abide by them. Skills:The employees at the Malaysia Airlines have been appreciated by its customers for having good communication skills. They are always ready to listen to the queries, suggestions, and grievances of the customers. They are highly professional in their attitude towards handling the issues that appear during the discourse of their job (Ostelwader et al. 2015). Observing the current financial and organizational condition of the Malaysia Airlines, the one probable way it could revive its brand positioning in the minds of its customers is by breaking away from its present industry to new market opportunities. If the company makes use of its current resources that are available in approaching a new market rather than wasting them in the present business structure, it will prove to be a lot beneficial to the company. Malaysia Airlines with regard to the above strategy, can follow Mullins Seven Domains model which analyses new business opportunities (Sohel et al. 2014) When entering a new market, in which a company has no previous knowledge or experience, many risks are involved. The Malaysia Airlines has already been suffering huge losses since years and hence if it enters new territories without proper evaluation of the scenario, the whole existence of the Malaysia Airlines could be at risk. The airlines need to examine the strategies in a proper manner before investing money and expertise into it. Switching to a new industry and exploring new market opportunities is the last resort of Malaysia Airline for which the strategies need to be implemented carefully so that the past mistakes are not repeated, and the new venture proves to be profitable for the company. Market attractiveness at the macro level: This domain focuses on measuring the attractiveness of a market scenario keeping a macro perspective. Malaysia Airlines should consider the whole market, for instance, how big the market is with respect to the demand of that product or service, what is the value of sales and how many quantities of the units are sold. The company should analyze the probable growth of its new venture under the given market conditions. For instance, if Malaysia Airlines want to expand its operations towards the hotel industry, it should study well the demand that is prevalent within the customers, the value of the sales, etc. before venturing into the industry. Malaysia Airlines should evaluate its each step before entering a new market territory because it had already been suffering huge losses and had been on the verge of obsolesce. The Malaysia Airlines also need to study the demographic, the socio-cultural stimulations, the economic conditions of the market sector, the natural and the regulatory trends which are prevalent in the proposed new industry which the Malaysia Airlines is about to enter (Teh and Corbitt 2015). These are the most important factors which should be included in the considerations while planning to expand or enter new market territories. Market attractiveness at the micro level Malaysia Airlines if it enters a new market is not likely to love up to the demands of everyone in the market. The smartest way is to chalk out a particular segment of customers and direct all its sources towards them (Singh 2013). While measuring the market attractiveness at the micro level, it would be advisable for the Malaysia Airlines to ask themselves the following set of questions. Which is the segment, which is likely to benefit the most from the new business adventure which the Malaysia Airlines is about to undertake? How is this product or service different from the others that are already available in the industry. What are the recent trends that are developing in the industry and whether the new line of products and services offered by the Malaysia Airlines cater to them? To evaluate the market attractiveness at the micro level, Malaysia Airlines will have to gather quantitative as well as qualitative data. The customers need to be spoken to about the likes, dislikes and expectations that they keep pertaining to the industry. A quick analysis of the rival companies with respect to how superior or better they are in providing the services better than Malaysia Airlines, how fast, better or cheaper do they offer the same services in the price the customers are ready to pay. This will help Malaysia Airlines to construct a business which stands out among the rest of the companies operating in the market(The and Corbitt 2015). Industry Attractiveness at the Macro level This strategy suggests using Michael porters five forces model in order to access factors which might effect the profitability of the new line of business which the Malaysia Airlines are about to venture into. The company should first ask itself whether it is technically convenient to enter into this industry. If it is an easy task, the company will be facing a huge number of competitors in no time at all. The main aspect of this domain is to look at the competition that exists in the industry (Bazargan et al. 2015). If the pattern of market rivalry fierce or a civilized one. Whether the companies are stealing business ideas from each other is another point, which must be considered. The Malaysia Airlines will have to closely study its rivals in order to understand the type of industry it is about to operate in. Special attention needs to be paid to the buyers and suppliers of the industry. An evaluation needs to be done regarding their power in the particular business arena. The terms and conditions that they set before the company in question makes a huge impact on its operations and eventually its profitability. There is also a threat from the substitutes, which needs to be kept into consideration. The Malaysia airlines will need to evaluate its new line of business very carefully before it looks for new market opportunities. It needs to set itself differently from its competitors in the market so that it makes an identity of its own in the minds of its customers which will also ensure brand loyalty on the long run. Sustainable Advantage Once The Malaysia Airlines has looked up at the probable new industry from the macro level, it will become imperative on it to examine the industry very closely. This can be done by starting off with conducting a USP analysis of the company itself. USP stands for Unique Selling Proportion, which sets the company in question apart from the others in the market or the industry. What special attributes of the products or service offered by the company are unique enough to appeal to its customers. The factor which matters here is that the company should not be only having a USP, but also should know how to sustain it to ensure long term profitability (Rotharmel 2015). The next step is to identify the new Companys core competencies. The core competencies refer to the development of a unique expertise in spheres that re important to the target market. Due to this, the company will be able to reap advantages and rewards that come as a result of this expertise(Sukri et al.2014). The Malaysia Airlines will be able to develop new skills that pertain to the new market opportunities that they are looking for, which will complement its core skills and competencies. The company will command respect in the new market territory by the customers as well as the competitors in the long run. Aspirations, Mission and Propensity for risk In this domain, The Malaysia Airlines are going to analyze the commitment of the Company and its team to farewell in the new business or market territory. The Company will have to introspect whether they are passionate enough to go along with the idea. If the answer is positive, they will have to further reconsider as to why they are passionate towards it (Nel 2014). What are the company's values and goals and how do they align with the products and services offered by the company? This can be better understood by considering the following questions: With respect to the mission of the business endeavor: Is the company aiming to cater to a particular market? Or is the company wants to sell a particular product? Is the company really passionate about its business idea? With regard to the willingness of undertaking a risk: Is the company willing to risk its capital and for how long? Is the company willing to risk the level of control of its business venture? Is the company willing to compromise the time spent with family and friends for the sake of the business mission? Critical Success Factors It can become really exhaustive for the Malaysia Airlines if it is trying to get everybody to work towards the company mission especially when it is entering a new market arena. It is important for the company in such a situation to concentrate on its core essentials. This is where the Critical Success Factors can prove to be helpful. These factors determine the most important tasks that are to be carried out if the Malaysia Airlines are to achieve Success in the new market territory. This will help constructing a benchmark to help the company measure the success of its new business project (Alessandri and Seth 2014). The company will also need to study which decisions will bring them extraordinarily high profits or polish their performances even when the rest are not faring well. The final step is to study the skills and knowledge of the staff and team that Malaysia Airlines has put together to ensure that the company is strong on the skill front and can live up to the defined Criti cal factors for success. The Test of connectedness This domain concentrates on the companys connections and how significant are they for the success of the company. First of all, the vendors and suppliers need to be taken into account. The rapport and relationship that Malaysia Airlines will share with these people is going to matter a lot. If the relationship is good, it will bring positive results for the company and vice versa. The next step will be to prioritize the distributors and customers on the basis of their potentials. This will indicate how much the company can capitalize on the relationship with the buyers and suppliers in the new market scenario (Abdi et al. 2014). Finally, the Malaysia Airlines will have to consider whether it knows any of its competitors in the market, and if the answer is in positive, how can this probably help or impede with the Malaysia Airlines decision to break away from its current business to a new market arena. If the competitors in the field, can further prove to be friends in the future also needs to be considered. Conclusion: The Malaysia Airlines has been battling with high costs and low financial leads since the past few years. Moreover, the tragedy which struck the whole world when Flight MH370 and MH17 went missing, it took the company by a storm. Since then, there has been a drastic decrease in the number of passengers, which compelled the company to shed its employees on a large scale, resizing its fleets and desperate attempts at negotiating contracts with the customers. It is apparent that the company is facing a downturn, and a probable solution to this could be breaking away from its current business and look for business opportunities in new market arenas. The Malaysia Airlines can follow Mullins seven model to work successfully in a market territory which is completely new to the company. 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