BSM7054

S T R AT E G I C
MANAGEMENT
A S S I G N M E N T:
M A L AY S I A A I R L I N E S B E R H A D
Mohammad Faizal Abdullah
1221404715
2

CONTENTS
o Introduction

o Internal Factor Evaluation (IFE) Matrix

o External Factor Evaluation (EFE) Matrix

o Competitive Profile Matrix (CPM)

o Recommended Potential Strategies

o Advantages and Disadvantages

o Best Strategy Should be Implemented

o Action Steps
 INTRODUCTION
Malaysia Airlines Berhad (MAB) is the national flag carrier airline of Malaysia.
Malaysia Airlines has its headquarters in Kuala Lumpur International Airport
(KLIA), which is the main hub for its operations. The airline has historically
offered domestic and international flights, serving major cities worldwide. Over
the years, Malaysia Airlines has strived to provide high-quality services, aiming
to be a leading airline in terms of customer experience, safety, and efficiency.
 M A L AY S I A N
H O S P I TA L I T Y
5

H I STO RY

1937 1947 1963 1971 2015

Malayan Airways MAL begins MAL becomes Malaysia Airlines is MAS ceases
Limited (MAL) commercial known as incorporated and operations..
incorporated. services with a Malaysian Airways named as Malaysia Airlines
flight from Limited. Malaysian Airline Berhad (MAB) is
Singapore to System (MAS). formed and
Penang via Kuala commences full
Lumpur and Ipoh. airline operations.
6

C H A L L E N G E S FA C E D B Y
MAB
Economic Competition Tragedies
Fluctuations
o Oil Price Volatility o AirAsia Group – Malaysia o Flight MH370
o Economic Downturns low-cost carrier Disappearance (2014)
o Singapore Airlines – o Flight MH17 Shootdown
o Currency Exchange Rates
reputable airlines (2014)
o Global Events and Crises
o Thai Airways – Another
o Labor Costs major player in SEA
o Changing Consumer o Emirates – long-haul routes
Preferences competitor
7 I N T E R N A L FA C T O R
E VA L U AT I O N ( I F E ) M AT R I X
Strengths Weight Rating Weighted Score
Well-recognized brand with a long history in
S1 0.08 3 0.24
the aviation industry
Established and extensive route network
S2 0.10 4 0.40
(domestic & international)

S3 High-quality service and hospitality 0.12 4 0.48

Hub at KLIA with connections within Asia

S4 0.05 3 0.15
and other parts of the world
Oneworld Alliance membership with access
S5 0.04 3 0.12
to a vast network of destinations
Cargo operations for freight and logistics
S6 0.07 3 0.21
services

S7 Skilled and experienced workforce 0.10 4 0.40

8 I N T E R N A L FA C T O R
E VA L U AT I O N ( I F E ) M AT R I X
Weaknesses Weight Rating Weighted Score
Struggled with financial difficulties for an
W1 0.10 1 0.10
extended period

W2 Labor disputes and legacy labor agreements 0.06 2 0.12

Challenges in optimizing its routes to

W3 0.08 2 0.16
maximize profitability

W4 Older aircraft in its fleet 0.08 1 0.08

W5 Image repair and trust-building 0.12 1 0.12

TOTAL 1.0 2.58

9 E X T E R N A L FA C T O R
E VA L U AT I O N ( E F E ) M AT R I X
Opportunities Weight Rating Weighted Score
O1 Growth in the Asia-Pacific market 0.12 4 0.48

O2 Tourism promotion in Malaysia 0.10 3 0.30

O3 Strategic partnerships with other airlines 0.10 3 0.30

Collaboration with the Malaysian

O4 government on policies that support the 0.08 3 0.24
aviation industry
Robust health and safety measures, like the
O5 0.10 4 0.40
COVID-19 pandemic
10 E X T E R N A L FA C T O R
E VA L U AT I O N ( E F E ) M AT R I X
Threats Weight Rating Weighted Score
T1 Intense competition in Asia 0.10 2 0.20

T2 High operating cost 0.12 1 0.12

T3 Economic downturns 0.10 2 0.20

T4 Reputation and safety concerns 0.10 1 0.10

T5 Regulatory changes 0.08 2 0.08

TOTAL 1.0 2.42

 C O M P E T I T I V E P R O F I L E M AT R I X
(CPM)
Malaysia Singapore
AirAsia Thai Airways
Critical Success Airlines Airlines
Weight
Factor
Rating Score Rating Score Rating Score Rating Score

Brand Image 0.15 3 0.45 4 0.60 4 0.60 3 0.45

Route Network 0.13 4 0.52 3 0.39 4 0.52 3 0.39

Service Quality 0.12 3 0.36 2 0.24 4 0.48 3 0.36

Fleet Efficiency 0.12 3 0.36 4 0.48 4 0.48 3 0.36

Cost Efficiency 0.13 2 0.26 4 0.52 3 0.39 2 0.26

Market Share and Growth 0.13 3 0.39 4 0.52 3 0.39 2 0.26

Innovation and Technology 0.10 2 0.20 4 0.40 3 0.30 2 0.20

Alliance and Partnership 0.12 4 0.48 2 0.24 3 0.36 3 0.36

TOTAL WEIGHTED SCORE 1.00 3.02 3.39 3.52 2.64

12
RECOMMENDED
P O T E N T I A L S T R AT E G I E S

S2-W3-O3- W1- S3-W4- S5-O3 S6-W1-

T3Route network T2reduction
Cost T4
Fleet Strengthening T3
Diversification
optimization & efficiency modernization alliances and into related
improvement partnership sectors
 A D VA N TA G E S A N D
D I S A D VA N TA G E S
Cost
Route Fleet Strengthening Diversificatio
Reduction &
Network Modernizatio Alliance & n into Related
Efficiency
Optimization n Partnership Sectors
Improvement
- Focus on profitable - Improve profitability - Reduce operating - Expand the route - Diversify revenue
Advantages

routes & reduce - Cost savings costs network streams

unprofitable ones throughout the - Enhance passenger - Lead to code-sharing - Reduces dependence
- Improve efficiency, organization comfort and attract agreements and shared solely on passenger
reduce cost & enhance - Enhance more customers services travel
network performance competitiveness - Reduce environmental - Enhances global - Synergies airline and
impact presence without the related businesses.
need for extensive
investments.

- Lead to job losses and - Impact on employee - Involves significant - Differences in service - Risky and requires
Disadvantages

potential backlash morale capital expenditure quality with partners expertise.

- Limit airline’s global - Might affect service - Transitioning to a new may arise - Managing diverse
present quality fleet can be logistically - Limit strategic business lines can be
- Intense competition - Balancing cost complex and time- flexibility complex.
on key routes reduction without consuming - Competing airlines - Success in related
compromising safety & - Potential write-offs may seek similar sectors may not be
quality is challenging older aircraft partnerships, guaranteed.
 B E S T S T R AT E G Y
SHOULD BE
IMPLEMENTED
Route Network Optimization
Malaysia Airlines should thoroughly analyse its route
network to identify profitable routes and consider
reducing or adjusting unprofitable ones. This strategy
can help improve cost efficiency and route profitability.
 ACTION STEPS
Data Collection and Analysis: Route Evaluation:
• Gather historical data on passenger demand, route • Evaluate each route's financial performance, including
performance, load factors, and revenue for all current routes. revenue, costs, and profitability.
• Collect data on competitors' routes, market share, and pricing • Consider factors such as route-specific operating costs, fuel
strategies. expenses, aircraft utilization, and passenger yield.
• Analyze the data to identify trends, seasonality, and the overall
performance of each route.

Market Analysis: Route Classification:

• Conduct a comprehensive market analysis for each route, •Classify routes into categories, such as "core routes" (high-
considering factors like passenger demand, competition, and profit, high-demand), "mature routes" (steady performance),
potential for growth. and "underperforming routes" (low-profit, declining demand).
• Identify high-demand routes with potential for increased
profitability.

Underperforming Route Review: Scenario Modeling:

• Focus on underperforming routes and assess the reasons for • Use scenario modeling and sensitivity analysis to assess the
their poor performance. Is it due to competition, high operating impact of route adjustments on the airline's financial
costs, or other factors? performance.
• Evaluate whether route performance can be improved through • Consider different scenarios, such as route consolidation,
marketing, schedule adjustments, or partnerships. frequency changes, or seasonal adjustments.
 ACTION STEPS
Adjustment or Elimination: Optimize Schedules:
• Based on the analysis and scenario modeling, make informed • Adjust flight schedules to optimize aircraft utilization and
decisions about which routes to adjust or eliminate. connect routes more efficiently.
• Consider factors like demand forecasts, competition, and • Ensure that connections between routes are convenient for
strategic importance when making these decisions. passengers.

Capacity Planning: Marketing and Sales Strategies:

• Review aircraft capacity and fleet utilization to match it with • Develop marketing and sales strategies to promote profitable
route demand. routes and attract passengers to newly optimized routes.
• Consider using different aircraft types on routes to maximize • Consider pricing strategies and promotions to stimulate
efficiency. demand.

Implementation Plan: Monitoring and Evaluation:

• Create a detailed implementation plan with timelines for route • Continuously monitor the performance of the optimized route
adjustments, schedule changes, and marketing campaigns. network.
• Assign responsibilities to teams or individuals responsible for • Evaluate the impact of route changes on revenue, load factors,
executing the plan. and profitability.
• Be prepared to make adjustments as needed based on ongoing
performance data.
THANK YOU
Mohammad Faizal Bin Abdullah
[email protected]
y