DUY TAN UNIVERSITY

The SouthStar Management Institute (SMI)

GROUP ASSIGNMENT

VIETNAM AIRLINES CORPORATION

Instructors: Dr. Regina Kalangeg Puma-at

Ms. Ho Bach Thu Nguyen
Class code: MGT 403 AU
Students:
1. Bùi Bảo Ngọc – 27204747819
2. Nguyễn Thị Thanh Nhàn – 27204747863
3. Lê Phạm Tuyết Nhi – 27212153311
4. Ngô Văn Quý – 27213123224
5. Đỗ Nhật Thành – 27214702817
6. Bùi Thị Phương Thanh – 27202251454
7. Phạm Ngọc Thương-27204730964

Đà Nẵng – 2024
I. INTRODUCTION:
Vietnam Airlines was born in the early days of Vietnam's civil aviation
industry in 1956. With a small fleet, the airline made its first domestic flight. In
1993, the airline was officially established and became a major air transport
business unit of the State. In 1995, Vietnam Airlines Corporation was born,
connecting 20 different aviation businesses. For more than 2 decades, Vietnam
Airlines has contributed significantly to the development of Vietnam's aviation
industry and the country's socio-economy.
Company name: Vietnam airlines corporation
Location: Head office at 200Nguyen Son Street, Bo De Ward, Long Bien
District, Hanoi, Vietnam.
Mission: Vietnam Airlines aims to provide the safest and highest quality
aviation services to its customers.
Vision: Vietnam Airlines envisions itself as a leading airline in Asia,
representing the dynamic growth of Vietnam's aviation industry.
Core Values: Vietnam Airlines has established five core values that guide its
operations:
 Safety
 Customer-Centric
 Employee Value
 Responsibility
 Creativity
Vienam Airlines provides products and services such as:
 Passenger transportation: domestic and international flights
 Economy, Deluxe Economy and Business class service
 Freight transportation services
 High-class dining, lounge and customer care services
II. PESTE ANALYSIS OF VIETNAM AIRLINES:
 PESTE (Political, Economic, Sociocultural, Technological, Environmental)
analysis for the external analysis of Vietnam Airlines because it provides a
comprehensive framework to evaluate the macro-environmental factors that can
significantly affect the company’s strategy, operations, and competitive
landscape. In conclusion, PESTE analysis provides a structured way to
understand how external factors - outside the company’s control - can impact
Vietnam Airlines. It helps the company align its strategy to tackle risks and
capitalize on opportunities, making it a robust tool for understanding the
airline’s macro environment.
1. Political:
a. State Ownership:
Vietnam Airlines is 86% owned by the Vietnamese government. This close tie
to the state offers stability in terms of policy direction, financial aid, and
favorable access to infrastructure.
b. Bilateral Air Service Agreements (BASA):
Vietnam has signed multiple BASAs with countries like Japan, South Korea,
and the EU. These agreements enable Vietnam Airlines to expand flight routes
and compete in international markets.
c. ASEAN Open Skies Policy:
Vietnam’s participation in ASEAN’s Open Skies agreement allows Vietnam
Airlines to expand its routes in Southeast Asia without restrictions.
 Effect on Vietnam Airlines: State ownership offers financial stability, but
the airline must adhere to governmental priorities, which could limit its ability to
innovate independently. BASAs enhance international route options but also
invite competition from foreign airlines.
2. Economic:
a. Macroeconomic Situation:
The macroeconomic situation in Vietnam greatly affects the operations of
Vietnam Airlines. When the economy grows, the demand for air travel usually
increases. According to the World Bank, Vietnam's GDP has seen stable growth
in recent years, leading to more people having the ability to spend on services
like travel and air transport.
b. Inflation and Fuel Prices:
Inflation is another crucial factor impacting Vietnam Airlines. When inflation
rises, the operating costs of airlines also increase, particularly fuel prices. Global
crude oil prices can fluctuate significantly, directly affecting the airline's
operating costs. For example, in 2022, oil prices surged due to geopolitical
conflicts and global supply issues, leading Vietnam Airlines to adjust ticket
prices to compensate for rising costs.
c. Tax Policies and Government Support:
Tax policies also play an important role in the operations of Vietnam Airlines.
Tax incentives or financial support from the government can help the airline
alleviate financial burdens and invest in expanding its fleet or improving
customer service. For instance, during the COVID-19 pandemic, the Vietnamese
government implemented various support measures for the aviation industry to
help airlines like Vietnam Airlines overcome difficulties.
3. Social-Cultural:
The social-cultural factors encompass the values, beliefs, customs, and
behaviors of a community or society. These factors can strongly influence how
businesses operate, especially in the airline industry like Vietnam Airlines.
a. Travel and Tourism Habits:
Vietnamese people are increasingly inclined to travel more, both domestically
and internationally. The rise in average income has led many families to choose
airplanes as their primary mode of transportation. Vietnam Airlines needs to
leverage this trend to optimize services and offer attractive tour packages.
b. Friendliness and Hospitality:
Vietnamese culture is characterized by hospitality and friendliness. This
influences how Vietnam Airlines staff serve passengers. Good customer service
creates a positive impression of the airline, thereby enhancing customer loyalty.
c. Religions and Festivals:
 Major festivals like Tet (Lunar New Year) and Hung Kings' Commemoration
Day often lead to a surge in travel demand. Vietnam Airlines must plan ahead
for these periods to meet passenger needs.
Tet (Lunar New Year): This is the most significant holiday in Vietnam when
millions of people travel back to their hometowns or go on trips. Sudden
increase in ticket demand, especially for domestic flights. The company must
ramp up flights and staff. Ticket prices often rise due to supply not meeting
demand. A special strategy is needed to manage passenger flow and maintain
service quality.
4. Technological:
a. Aircraft technology:
Innovations in aviation, such as fuel-efficient and quieter aircraft, provide
Vietnam Airlines with a competitive edge.
b. Digitalization:
The trend of digital transformation in operations, ticketing, and customer
service is rapidly changing the aviation industry. Arrange many self-service
check-in kiosks at airports, use new mobile application versions with many
modern and easy-to-use features, helping passengers quickly search for flights,
book tickets online, look up itineraries, and update promotional programs, apply
many payment methods using new technology platforms.
c. Cybersecurity:
Ticketing systems and customer information require high levels of
cybersecurity, as cyber-attacks are on the rise.
5. Environment:
a. Climate change:
May cause extreme events such as storms, floods, and droughts, and these
changes may disrupt Vietnam Airlines' operations. Affects operations, increases
fuel costs
b. Environmental pollution:
Facing pressure to minimize the environmental impact of CO2 emissions.
 c. Greening Trend and Environmental Protection Law Integration:
The increasing awareness of climate change among consumers has led to a
growing concern regarding the environmental impact of services, which is
reflected in the implementation of environmental protection laws aimed at
regulating greenhouse gas emissions and promoting the use of biofuels.
III. VRIO ANALYSIS OF VIETNAM AIRLINES:

Resource or Valuable Rare Costly to Organized Competitive

Capability Imitate to capture Implication
value

1 State ownership Yes Yes Yes Yes Sustainable

and Government Competitive
Support Advantage

2 Brand Yes Yes Yes Yes Sustainable

Reputation Competitive
Advantage

3 Skyteam Yes Yes Yes Yes Sustainable

Alliance Competitive
membership Advantage

4 Human Capital Yes No No Yes Temporary

(experienced Competitive
pilot and staff) Advantage

5 Geographical Yes No No Yes Temporary

location Competitive
Advantage

6 Fleet of modern Yes No No Yes Temporary

aircraft Competitive
Advantage
 7 Loyalty Yes No No Yes Competitive
Program Parity

IV. RECOMMENDATION FOR VIETNAM AIRLINES:

Focus on customer experience: Prioritize passenger comfort, convenience,
and satisfaction by investing in technology, staff training, and personalized
services.
Invest in developing specialized human capital such as pilots, engineers,
technicians, ...
Optimize route network: Expand to high-growth markets while strategically
adjusting flight frequency based on demand and seasonality.
Embrace digitalization: Leverage technology to streamline operations,
enhance customer engagement, and improve decision-making through data
analysis.
Sustainability as a core value: Integrate environmental responsibility into all
aspects of the business, from operations to marketing strategies.
Develop a data-driven approach: Utilize data analytics to inform route
planning, pricing strategies, and marketing campaigns to maximize efficiency
and effectiveness.