RMIT International University Vietnam Bachelor of Business Program ASSIGNMENT COVER PAGE Strategic Management for Tourism & Hospitality

RMIT International University Vietnam Bachelor of Business Program ASSIGNMENT COVER PAGE Subject Name: Strategic Management for Tourism & Hospitality Subject Course: BUSM4572 Location where you study: Vietnam - Saigon South Title of Assignment: Assignment 3A - Strategic Management Group Report Student Name: Vu Hai Phong - s3748012 Do Linh Chi - s3751492 Nguyen Quang Hong Phuc- s3752084 Le Quang Kim Ngan - s3751591 Nguyen Nhu Phuong Anh - s3741039 Teacher’s Name: Nuno Ribeiro Group Number: Assignment due date: 21 May 2021 Date of Submission: 21 May 2021 Wordcount: 4476 EXECUTIVE SUMMARY The increasingly intensive and competitive tourism and hospitality industry in Vietnam created challenges for tourism/ travel corporations to define their brand positioning In order to be sustained within such a market, corporations are required to identify, analyze and develop the appropriate strategies from the internal and external environment of the industry if they want to be the market leader For the reason of examination on how a real-life business executes their strategic plans, Vietjet Air - a budgeted airline ranked 2nd in market share acquired in the Vietnamese aviation industry, will be chosen as the case study This report will demonstrate the factors of market analysis in both macro and micro environment surrounding the operation of Vietjet Air, using theoretical tools of STEEP (Social, Technological, Economical, Environmental and Political) and Porter’s Five Forces analysis model Moreover, the current strategies implemented will be described, analysed and evaluated for the case of Vietjet Air in all levels of corporation, business and functional, using Boston Consulting Group’s Growth-share matrix (BCG) and Porter’s Generic Strategies Then, new initiatives with detailed analysis on the beneficial contributions to Vietjet Air (in terms of corporate strategies and functional improvements) will also be presented Finally, the strategies recommended will be evaluated using Rumelt’s four criterias (Consistency, Consonance, Feasibility and Advantage) The report is utilizing strategic management journal articles, books, strategic management theories and business reports to strengthen the arguments stated Table of Contents I INTRODUCTION II MARKET ANALYSIS 1 MACRO ENVIRONMENT - STEEP ANALYSIS 1.1 Social 1.2 Technological 1.3 Economic 1.4 Ecological .2 1.5 Political MICRO ENVIRONMENT - PORTER’S FIVE FORCES .3 2.1 Threat of new entrants 2.2 Bargaining power of suppliers .3 2.3 Bargaining power of buyers 2.4 Threat of substitute products 2.5 Rivalry among existing competitors III INTERNAL ANALYSIS .4 RESOURCES AND CAPABILITIES .4 COMPETENCIES .5 IV STRATEGY ANALYSIS .5 CURRENT BUSINESS STRATEGIES 1.1 Corporate Level 1.2 Business Level 1.3 Functional Level NEW INITIATIVES AND IMPLEMENTATIONS 2.1 Corporate Level 2.2 Business Level 2.3 Functional Level V STRATEGY EVALUATION AND CONTROL 10 CONSISTENCY 10 CONSONANCE 10 FEASIBILITY 11 ADVANTAGE 11 VI CONCLUSIONS 11 VI REFERENCES .12 VII APPENDICES .17 I INTRODUCTION Being top aviation businesses in Vietnam, VietJet Aviation Joint Stock Company was the first-privately owned airline brand and started to serve diverse domestic offerings since December 2011 In response to fierce competition among various airline corporations such as strong rivals of Vietnam Airlines or new entrants of Bamboo Airways, its strategic business model ‘low-cost carrier’ (LLC) with the focus on middleincome class and first-time experience flying customers effectively creates competitive advantage for business growth Moreover, special features such as young, dynamic and expert at applying advanced technology in aviation service are also prescribed on the first day of establishment As a result, since a new generation aviation business like Vietjet who pioneers for developing new routes ranging from modern infrastructure, talent acquisition, service quality to head forwards green value for the community (Vietjet 2019), the title of ‘Asia Pacific Low Cost Airline of the Year’ by CAPA was given to Vietjet However, in the journey of ‘conquering the sky and bringing innovation to Vietnam’s aviation industry’, the impact of COVID-19 crisis poses threats to the sustainability of Vietjet, even worse on the edge of operation closure, and hindrance for further development It is fundamental for Vietjet, or any aviation corporations, to determine their comprehensive strategy to not only leverage competitive advantage, but also bear various sources of risks in the volatile aviation market This paper investigates macro- and micro-environment by STEEP, Porter’s five forces analysis, and brand portfolio by VRIN Framework which exhibits a comprehensive picture and position of Vietjet’s resources and competences in the domestic aviation sector Following, current strategies under three levels namely corporate, business and functional level will be respectively presented with the support of Boston Consulting Group’s Growth-share Matrix (BCG) as a tool to signal which markets Vietjet decided to focus on, but from there, some underlying strategy issues are also under justification Hence, new initiatives and implementations will be appropriately proposed for Vietjet to reinforce brand development and sustainable competitive advantage in the future Finally, all the proposed strategies implementation will be evaluated based on four criteria of Rumelt evaluation approach to ensure the alignment with Vietjet’s initial missions II MARKET ANALYSIS Macro Environment - STEEP Analysis 1.1 Social Addepalli et al (2016) argued the social dimensions of demography and behavioral factors strongly influence customers' willingness to purchase flights for their travels Vietnam’s population is projected to reach 120 million people by 2050 (World Bank 2021), along with the fact that millennials and generation Z are shaping the consumption behaviours and beliefs for airlines products of Vietjet (Garikapati et al 2016) Despite the potential offered by the market, customers’ diverse behaviors and preferences still creates major challenges for the airline industry generally and Vietjet particularly (Teichert, Shehu & Wartburg 2008) 1.2 Technological With challenging requirements for the highest level of safety insurance, as no minor errors regarding human injuries, technical problems or natural disastrous consequences are allowed, Lee & Mo (2011) believed technology advancements can help the aviation industry to diagnose and prevent potential issues to bring security to flights Technology also contributes to the convenience enhancement for passengers through the establishment of electronic tickets Functioning similarly to the regular paper ticket (Chen 2007), e-tickets bring additional values - a reduction in potential lost or ticket damage for customers and cost-saving benefit for airlines (Galang 2012) Technology implementation also changes the way passengers conduct their check-in process at airports At Changi Airport, customers can the baggage drop by themselves, using the automated system and facial recognition technology provided (Rajapaksha & Jayasuriya 2020) This technology implementation allows customers to avoid long waiting lines at airports to check-in Conclusively, technology implementation, which provides a blend of a consistent passenger experience, becomes a fundamental strategy for airline businesses to manage, including Vietjet (Mclvor et al 2003) 1.3 Economic The aviation industry is strongly influenced by the economic status, caused mainly by the Gross Domestic Product (GDP) growth rate (that impacts on the consumers’ spending willingness) Despite the positive Vietnamese GDP statistics in 2019 (261.92 billion dollars) (Trading Economics 2019), COVID-19 struck the global economy entirely, where most industries were heavily impacted (Dezan 2020), especially tourism and travel industry Although it may seem pessimistic for airlines, Nordea Trade (2021) predicted Vietnamese economy will bounce back post-COVID, thanks to the appropriate governmental strategies to monitor the national GDP growth As soon as travel activities resume, low-cost carriers (LCCs) like Vietjet are projected to obtain the most opportunities from the market Filled with price-sensitive passengers, the market under COVID-19 impacts are likely to witness more of these customers that both leisure and business travelers were choosing LCCs to save money (Teichert, Shehu & Wartburg 2008; Mason 2005) Hence, a brighter future is yet to come and LCCs like Vietjet should be prepared to capture upcoming chances 1.4 Ecological The most significant environment-related problem caused by the airlines is greenhouse gases released by aircraft engines that trap terrestrial radiation and chemically active gases and eventually increase global temperature (Lister et al 1999) or leave heavy casualties on the climate and ozone level (Capoccitti, Khare & Mildenberger 2010) On the other hand, typhoons, floods and storms are common negative impacts of natural factors (Qui 2020), which create risk on flight safety and economical damage for airlines as it delays flights As climate change is created by aviation activities (airline engines release), many airlines including Vietjet established action plans to optimize aircraft carrying capacity and fuel consumption to reduce exhaust emissions (Vietjet 2019) 1.5 Political Despite having a favorable political condition in Vietnam, with special attention to boost the aviation industry development by 2030 (Das 2018), limitations in investment policies, for example 30% of low contribution of foreign capital and slow issuing of licenses, created barriers for foreign investments to flow into Vietnam (VOV 2019) Besides, since COVID-19 pandemic is well-controlled by implementing appropriate social distancing measures, the government is encouraging domestic travel demand to stimulate and accelerate the needs of domestic travels, including flights to help the industry to rebound (Constantin, Francois & Le 2021; Vietnam News 2020) Micro Environment - Porter’s Five Forces 2.1 Threat of new entrants Massive operating cost and initial capital investment are some hindrances for new aviation entrants Examining the case of VietStar as a new domestic airline, VND700 billion and complex endorsement procedures are required by Vietnamese government (Shira 2018) Moreover, when investigating the business license of Vietjet (Vietjet 2018), it stated their authorized capital was more than VND5000 billion The financial barrier to entry is, therefore, incredibly high that eventually leads to low level of new entrants threats 2.2 Bargaining power of suppliers As being operated in a unique industry, Vietjet only has two options to purchase their aircrafts from two major producers and suppliers - Boeing and Airbus (Vietjet Air n.d.) With limited sources of aircraft producers in the market, Vietjet needs to build and maintain a close relationship with these manufacturers on long-term, billions USD worth contracts, as they planned to update their fleet with 200 jets to adapt with increasing customer demands and ensure flight safety Eventually, long-term agreements with these manufacturers ties their relationship with each other and Vietjet has to rely on Boeing and Airbus for their aircraft manufacturers Therefore, the suppliers’ bargaining power is remarkably high 2.3 Bargaining power of buyers Despite the rising number of passengers, customers only have limited choice, as each airline defines their brand names and development strategies differently If customers are highly price sensitive, they are likely to choose brands that follow the cost leadership practice to lower the flight ticket price Compared to other airlines, Vietjet and Jetstar Pacific are the only two LCCs operating in the market that budget travellers can choose from Moreover, despite the factors of price, flight delays and safety, switching costs in the Vietnamese aviation industry are low, meaning that customers can constantly switch from one airline to another depending on their demands The buyers’ bargaining power is therefore considered as low 2.4 Threat of substitute products Many substitutes threatening air travelling are road transportations (cars and public buses), trains and cruise ships Customers will choose the appropriate means of transport based on their budget, travel distance and travel time that leads to convenience during the trip However, for long-distance and timesaving travel, the choice of Vietjet is over other alternatives Positioned in the market as LCC, Vietjet can easily gain market share and acquire customers from other means of transportation Hence, the convenience and reasonable price offerings helps Vietjet to sustain and compete within the travel industry and lower the threat of substitutes 2.5 Rivalry among existing competitors Positioned at the second place regarding market share in the Vietnamese aviation industry, after the pioneer corporation Vietnam Airlines, Vietjet is currently facing an emerging intensitivity in competition since the new entrant of Bamboo Airway Unfulfilled aspects of Vietjet such as superior serving standards and flights’ punctuality can be competitive advantages of other brands The market share of Vietjet is potentially threatened by Bamboo Airway or Vietnam Airlines as these competitors pursue full-service strategies to directly compete with low-cost carriers like Vietjet Hence, the competitive rivalry between airlines is classified as high III INTERNAL ANALYSIS Resources and Capabilities A set of tangible resources to assist Vietjet in gaining low-cost position in Vietnam’s aviation market Apart from effective aircraft financing schemes, or comprehensive cash-flow management as Vietjet’s financial strengths, other physical and technological resources respectively, such as huge investments in building hangers within a fleet of 75 aircrafts and application of advanced technology into customer service, and flight schedule optimization, also contribute to the airline’s development Besides, having 5,092 total number of talented, qualified and enthusiastic human resources and strong brand value are also fundamental factors to the sustainable development of Vietjet Generally, there are three core resources of Vietjet including training and talent development; brand value; and technology and innovation that provides potential for competitive advantage Regarding capabilities, the use of VRIN framework will examine whether Vietjet’s core resources will meet the requirements (valuable, rare, inimitable and non-substitutable) to attain sustainable competitive advantage or not Competencies Based on the above evaluation of Vietjet’s three key internal competencies, it is evident that proficient Human Resource and Technology advancement have created two significant competitive advantages that will help Vietjet sustain in the competitive and dynamic airline industry Whereas, strong brand value is only considered as a short-term competitive parity as it is easy to be followed and would constantly need consistent effective marketing strategies to maintain IV STRATEGY ANALYSIS Current Business Strategies 1.1 Corporate Level Corporate level strategy is formulated for business operations in which its variety of business units work together to encompass specific organization goals (Bogomyagkov & Machulskyi 2012) Based on Boston Consulting Group’s Growth-share Matrix (BCG) , Vietjet can be categorized as Star level due to its market dominance with high growth rate of 21.4% in revenue compared to 2018 and high domestic aviation market share at 42.83% in 2019 (Figure 1) The growing business is attributable to effective strategies implementation in ancillary management, cargo transportation and inflight service improvement (Vietjet Air 2020) Indeed, by following low-cost carrier (LCC) as its primary sustainability-centred business model, Vietjet was ranked 12th globally for its revenue acceleration on top of total aviation industry The corporate strategies are also reflected in Vietjet’s mission which focuses on building the Corporate Culture as an identity and trust to all stakeholders Its values are to propose ‘flight dream’ for all passengers with its super-economical price-saving strategy and bring innovation to Vietnam’s aviation industry Evidently, Vietjet implemented growth strategy when it exploits the efficiency of international routes by flight network expansion over 30% (Vietjet 2019) In 2019, it successfully expanded the trademarks to Southeast Asia and Northeast Asia with 139 routes comprising 44 domestic routes and 95 international routes, leading to a global coverage of 70 destinations However, the uncertainty of dynamic environment would pose threats to Vietjet’s sustainable corporate strategy, which is exemplified by the impact of COVID-19 crisis on the whole market (Mastrogiacomo 2020) The pandemic forces the closure on airline operations, no expanding international routes and government’s restrictions for flight travel demand According to the Civil Aviation Administration of Vietnam (CAAV), Vietnam’s aviation industry is experiencing an economic downturn with a decline of 46% in volume of flight passengers (Figure 2) and huge revenue loss of $1.3 billion Therefore, some approaches are crucial for corporate level to minimize the risks of bankruptcy whether Vietjet is incapable of covering huge operation costs to maintain the business 1.2 Business Level Vietjet offers competitive advantages in product and service differentiation, and continuously makes innovations in building a New Age Airline model ‘low cost but superior service quality’ that meet the diverse needs of customers Based on the low-cost business model, Vietjet’s leading position in cost per unit ASK is associated with the offerings of specific features such as operating short-haul routes, cost control and web-based distribution channel According to Porter’s Generic Strategies, Vietjet adopted costleadership approach to gain a strategic edge in the competitive aviation market Under cost structure, cost control in major expenses such as fuel, aircraft rental and maintenance is an indispensable factor to generate competitive advantages over other competitors Particularly, with a reduction of 3%-5% of total cost in fuel saving, technical cost, pilot and cabin crew expenses, its increasing operational efficiency is more strengthened by these cost-saving programs (Vietjet 2020) Regarding Vietjet’s customer segment, 30 percent of Vietjet’s passengers are first-time air travellers To develop and nurture valuable resources and capabilities, Vietjet invested in establishing an e-commerce model platform and software solutions for flight management (e.g., AMOS, AIMS, AirFase, etc.) Additionally, Vietjet is striving for strategic sustainable growth in which material management and fuel efficiency are optimized to mitigate environmental impacts through different practices For example, Vietjet deploys AMOS Software to detect the rate of material disposal and signs waste treatment agreements with suppliers to comply with legal requirements on environmental projection Consequently, Vietjet was recognized as pioneers in heading towards a green future and natural resource preservation programs To ensure the results aligned with the interests of multiple business units, business-level strategy is accountable for transferring the idea from corporate level, in which Vietjet determines which market the corporation should be in, into specific action for the functional level (Seifzadeh 2017) Despite the efficiency of cost leadership strategy as a competitive advantage to attract potential customers, their strategy for managing customer retention is relatively unclear and inadequate leading to ineffective brand loyalty (Nguyen 2020) Brand loyalty is described to be the level of likeliness for when customers choose to stay with a consistent brand without shifting to another one as they are satisfied and have certain trust for that brand (Bloomer & Kasper 1995) Hence, there is a need for Vietjet to develop business strategies focusing on this concern to foster its long-term business development 1.3 Functional Level It is vital for any aviation business to establish a comprehensive strategy for research & development, operation, marketing, finance and human resources, thereby always focusing on the core activities transparently (Holbeche 2009) In the application of advanced technology to anticipate and control operation issues, especially safety management, Vietjet is attempting to standardize and automate its operational system As a result, the technical reliability index of Vietjet reached 99.64% among the best operational safety in airlines field (Vietjet 2020) In terms of financial activities, Vietjet approaches longterm capital mobilization through diverse capital source channels such as International Long-term Syndication or Domestic Business bonds Furthermore, various measures are implemented to optimize capital and monitor debts, for instance, renegotiation of time payment with suppliers, continuous cash-flow forecasting and derivative financial instruments Business results of Vietjet prove its financial capabilities when being recognized in top 50 enterprises with most effective financial management and high-rated EBITDA margin Within the use of ticket discount strategy (0VND tickets and low-price tickets for empty seats) to acquire customers and broaden marketing system, Vietjet’s marketing functions create word-of-mouth effects through real-case customer experience and amplified advertising Therefore, its marketing strategies succeed in gaining potential first-time customers to experience flight service, which creates a foundation for brand awareness and contribution to brand loyalty (Anal 2020) Meanwhile, for human resources (HR) development, appropriate remuneration policies and mechanisms are implemented to build a wellbeing and professional working environment Training programs and policies are fostered to improve the competencies of employees, which were evidenced by thousands of training hours for all level-based employees with Aviation Academy model implementation and Airbus support Due to the high-quality aviation top-notch talents, Vietjet is always considered in the top 100 best workplaces in Vietnam, according to Anphabe and Intage Market Research Company New Initiatives and Implementations 2.1 Corporate Level The occurrence of Covid-19 with its economic impacts is an alarm bell for Vietjet to consider a safer strategy instead of Growth strategy Thus, Stability strategy would be an ideal tool for the corporate to maintain a stable status to thrive during economic uncertainties of the global dynamic market (Alshawabkeh et al 2019) In other words, adopting the Stability strategy means Vietjet will need to slow down the growth and remain steady operations (Al-Durra & Jaradat 2014) Specifically, to approach, there are two key activities that help Vietjet run cautiously and still receive a moderate growth rate (Singh 2012) Firstly, since traveling is still restricted and flights cannot occur as frequently as before, air cargo can be a potential service for Vietjet to focus on executing Cargo transportation is recorded to be in constant demand during this corona pandemic (Choi & Park 2020) Particularly, Vietjet can utilize its aircrafts to carry essential medical equipment or supplies, vaccines to fight against the historical pandemic (Li 2020) (Figure 3) Therefore, Vietjet would be able to not only maintain gradual growth but also build a positive image of a supporting, dedicated airline during difficulties to attract potential customers for post-Covid period (Sun et al 2021) Secondly, Vietjet can optimize time to improve and advance internal structure, training programs or facilitate infrastructure adjustment (ACI 2020) As a result, Vietjet can have a stronger and better appearance to prepare for the possibility of booming travel demand in the post-pandemic recovery 2.2 Business Level At a business level which emphasizes the importance of strong loyalty to acquire sustainable sources of customers to return for their services/products (Miller 2017), what Vietjet needs to improve is to upgrade its brand loyalty Thus improving the customer database system and rewarding programs would be recommended for Vietjet Approaching a suitable customer base system is the first suggestion to increase Vietjet customer acquisition Accordingly, customer relationship management (CRM) would be a great support since the application of customer data combined with technology will help tighten the relationship and increase loyalty from customers (Salah & Mohamed 2019) To further develop its CRM, Vietjet can consider the CRM Value Chain model originated by Michael Porter with stages, each with key activities (Figure 4) (Buttle 2001) Thus, Vietjet can offer its customers better customized services (e.g text message reminder of the date time and gate number, top suggestions of preferred on-flight services) The second strategy for customer retention is to advance loyalty rewarding programs with airline credit cards (Chun & Boer 2021) Although Vietjet is now selling a membership card called ‘Power Pass’, the price and benefits of these Passes are quite incompatible (Figure 5) (Vietjet Air n.d.) One solution to increase the cards’ attractiveness is miles rewarding system, counting the miles that customers have traveled as points to trade for special service rewards (e.g free upgrade to higher class seats, free meals, or luggage limit etc.) (Saxon & Spickenreuther 2018) Additionally, to engage travelers post Covid time, Vietjet should innovate more rewarding methods for loyal customers in its database (e.g bonus miles) (Baldanza 2021) 2.3 Functional Level The problems that Vietjet is facing in functional level are lack of qualified human resources to match international standards (VNS 2014), occurrence of flight delay and cancellation (Chau 2014) and inappropriate marketing campaign (Nguyen & Freed 2017) 2.3.1 Human Resources To mitigate the difficulties in HR shortage, the recruitment process should firstly be approached and fostered The selection and recruitment process is emphasized to help businesses achieve competitive advantage by choosing the right talents and putting them in the right position to maximize their potential (Bratton & Gold 2017) It is crucial for Vietjet to have a competent recruitment team to actively seek and attain suitable talents in the wide labor force today via all available platforms (e.g University connection, job websites, etc.) (Figure 6) (Alola & Alafeshat 2019) Subsequently, Vietjet should provide additional training based on competency-based training model (CBT) to examine all employees’ performance and update extra skills/knowledge (Gibbs, Slevitch & Washburn 2017) 2.3.2 Operation To tackle the issue of frequent delay or cancelled flights, Vietjet’s first concentration should be on reviewing the strategy for the operation system Specifically, it can also consider the Time-Based Separation (TBS) system, a model using time division to manage the flight arrivals to adjust to weather conditions (i.e strong winds) (Figure 7) (Peters & Choroba 2013) This system is proved to successfully accelerate air traffic and reduce delay rate caused by weather issues (Shand 2016) Furthermore, Vietjet should reinforce the compensation system with different methods designating for different situations These methods can vary from verbal (e.g., sincere apology announcements, messages) or non-verbal (e.g extra drinks/snacks on-flights) actions to refunding actions depending on what causes the situation (Flightright n.d.) As a result, customer satisfaction would be elevated as they can feel appreciated and respected by the airline 2.3.3 Marketing Vietjet should always pay close attention to keep up with more positive marketing strategies and avoid controversial ones For instance, conducting green marketing campaigns can also be an effective strategy to help airlines build a sustainable reputation among its customer market (Mayer, Ryley & Gillingwater 2014) Therefore, Vietjet can start to invest in campaigns that support environment protection (e.g using aircraft with less harmful fuels, etc.) (Figure 8) to increase the trustworthiness of its customers as a green and sustainable business (Shaw 2011) V STRATEGY EVALUATION AND CONTROL To discover whether the proposed strategy is appropriate for a company development or not, it is crucial that company leaders have the ability to evaluate the effectiveness of strategy approaches and its alignment with business goals and objectives (Rumelt 1998) However, since most evaluation approaches are confusing and complex, many companies face difficulties in assessing business strategies (Rumelt, Schendel, & Teece 1994) With the aim of simplifying the evaluation process, the Rumelt evaluation approach is applied to assess the proposed new initiatives based on four criteria including consistency, consonance, feasibility, and advantage Consistency The outbreak of Covid-19 has been shifting the aviation market towards ‘new normal’ conditions Vietjet claimed to join the fight against the negative impacts of the epidemic along with Vietnam government and residents (Bangkok Post 2020) During the pandemic period, the company has operated rescuing flights that help thousands of people from affected countries Remarkably, Vietjet has been certified with the highest international standard for Covid-19 compliance, fulfilling seven criteria consisting of sufficient information on Covid-19 procedures on digital platforms, adequate mask provision for passengers and protection equipment for the flying crew (Vietnam News 2021) Therefore, it is obvious that the recommended strategy - Stability strategy is applicable for Vietjet at the current time to boost the brand image Besides, eco-friendly reputation marketing is also an effective way to enhance credibility and trustworthiness 10 Consonance As mentioned in the Micro & Macro Analysis, the negative impacts of the pandemic on the Vietnam economic status are obviously considerable with the unavoidable decrease of GDP (Trading Economics 2019) However, Vietnamese economy has been predicted to bounce back after COVID-19, which opens up potential opportunities for Vietjet to thrive in the market Indeed, the airline has earned $3 million profits despite headwinds caused by COVID-19, making it one of the few airlines worldwide that managed to prevent reducing the workforce (Nguyen 2021) These achievements have reflected the high ability of budget Vietjet to adapt with changing external factors To maintain and enhance the outstanding performance of Vietjet in this situation, the Stability strategy, which ensures a moderate growth rate, would be an ideal choice Feasibility For further growth and development, it has been recommended for Vietjet to apply CRM to maximize customer loyalty by offering better services to customers Yet, the appliance might put heavy pressure on Vietjet’s operation due to HR shortage and adequate training programs Fortunately, in the mentioned recommendation, these difficulties can be overcome by fostering the recruitment process to choose the right talents for suitable positions and providing additional training based on competency-based training models (CBT) to optimize their potential Advantage As a budget airline, the competitive advantage of Vietjet is the low-cost service, guided by the costleadership approach, which helps it account for 44% of Vietnam aviation market share However, according to Nikkei Asia (2019), the launching of the third low-cost airline in Vietnam, Bamboo Airways, was the signals for fiercer competition in the nation’s skies Therefore, despite being the largest budget airline, Vietjet should capture other values to enhance competitive advantage such as superior serving standards and flights’ punctuality to remain in its position Hence, the proposed implementations above are rational for the company to accomplish VI CONCLUSION To conclude, this report conducted an insightful analysis of both the external and internal environment of Vietjet, a well-known LCCs airline in Vietnam Results carried out provide knowledge on the competitiveness of the business environment and the nature of the industry using Porter’s Five Forces and STEEP model, respectively Vietjet deploys its competitive advantages on the low level of threat of substitute products, risk of new entrants and bargaining power of buyers, along with the preferable conditions of the macro environment to overcome difficulties in the intensive rivalry between airlines in 11 Vietnam Being classified as a low-cost carrier with enormous potential to be further developed, Vietjet is identified as a Star in the BCG matrix However, several issues require Vietjet to adjust their strategies and adapt with the contemporary situations, especially the unexpected occurrence of COVID-19 New initiatives are recommended for the case of Vietjet to handle the economic impacts of the global pandemic (e.g., implement stability strategies focusing on the internal improvements and business-switch to cargo services), enhance customer retention rate through loyalty programs and develop proper HR training policies to meet the service standards CSR activities on transforming brand image to an eco-friendly pioneer are suggested broadening the awareness towards a green corporation Finally, Rumelt’s fourcriteria framework is adopted to assess the effectiveness and liability of the new initiatives This report is valuable for future research on the 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Dezan Shira & Associates 2020, ‘Assessing Vietnam? ??s Economic Prospects for Foreign