Scientific research report exploring the pestle analysis of vietnam airlines jsc from 2019 to 2021 in vietnam2

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES - INFORMATION TECHNOLOGY FACULTY OF BUSINESS ADMINISTRATION SCIENTIFIC RESEARCH REPORT Exploring the PESTLE analysis of Vietnam Airline

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES -

INFORMATION TECHNOLOGY FACULTY OF BUSINESS ADMINISTRATION

SCIENTIFIC RESEARCH REPORT

Exploring the PESTLE analysis of Vietnam Airlines JSC

from 2019 to 2021 in Vietnam

HCMC, August/2023

Abstract

This study is about the external factors that affected Vietnam Airlines from 2019 to 2021

by using the PESTLE framework The study gives the organization insightful information about the external environment and assists it in identifying trends and changes in the international aviation industry The purpose of this study is to adopt the PESTLE framework to identify barriers to Vietnam Airlines and provide recommendations for how companies can overcome them To do this, secondary research techniques such as database searches and previous studies were used to acquire data Using this technique, the research report can better achieve its stated goal of demonstrating the business's drawbacks and finding solutions After analyzing issues affecting Vietnam Airlines’ operations, the research also points out the challenging problems that the company has not yet solved, in addition to the achievements that Vietnam Airlines has achieved in the past three years This study is significant for the company because it aims to navigate Vietnam Airlines to improve productivity and recover from these difficulties

Keywords: PESTEL, Vietnam Airlines, Vietnam, aviation sector, COVID-19

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2.4.3 Analyze Marketing Mix 7P’s Strategy of Vietnam Airlines in Vietnam Market

5.2 Recommendations 20

List of tables and figures

Figure 2 Vietnam Airlines' Business Class (Vé May Bay Di My Hang Thuong Gia Vietnam

Figure 3 Vietnam Airlines' Premrum Class (Vietnam Airlines, 2019) - . 5 Figure 4 Vietnam Airlines" Eeonomy Class (Vietnam Airlines, 2019) - 5

Figure 6 Vietnam Airlines’ Market Growth 2019-2021 (Vietnam Airlines, 2020a, 2021,

Figure 7 PESTLE framework (Salem Alanzi, 2018), (Marmol & Feys, 2016), (Market Publishers, 2023) Q2 020102011101 1111 111111111111 1111 1111111111111 1111111111 111111111111 1 1kg 9 FIgure § Methods of data collection (Kumar & Ranjit, 20 l Ï) -.: 5255552 11 Figure 9 The number of domestic air passengers by month and year - 16 Figure 10 Environmental issues received the highest attention among people in Vietnam

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Chapter 1: Introduction

1.1 Rationale

Vietnam's aviation sector has experienced rapid growth due to economic prosperity and increasing earnings To address future challenges, touchless digital processes, AI, and machine learning will be adopted Airports and airlines must embrace these trends to enhance customer experience, efficiency, and future growth post-pandemic Vietnam Airlines, as the national carrier, operates a sizable fleet of about 100 aircraft on domestic and international routes

The PESTLE framework is essential for analyzing a firm's macro environment It helps researchers investigate political, economic, social, technical, environmental, and legal factors Besides, PESTLE analysis identifies external opportunities and threats, enabling adaptable tactics Adopting the framework aids in developing strategies to navigate external influences Vietnamese airlines benefit from assessing political, legal, economic, social, technological, and environmental factors This analysis helps Vietnam Airlines make strategic decisions, ensure compliance, guide pricing, and marketing, improve operations, and enhance customer satisfaction Understanding the external environment through PESTLE analysis boosts competitiveness

Research on Vietnam Airlines JSC includes studies like "Privatization of Vietnam Atrlines" by Nguyen The Bao Ngoc and the Strategic Analysis Report of VietJet Air by Bob Nguyen While VietJet Air's macro-environment was analyzed using PESTLE, there

is no research applying the PESTLE framework to Vietnam Airlines’ external environment 1.2, Aims

The goals of this research are to find and assess macroenvironmental elements that may affect Vietnam Airlines, as well as to examine the linkages between the PESTLE analysis and branding strategy

1.3 Scope

The research analyzes Vietnam Airlines JSC's marketing strategy in Vietnam from 2019

to 2021 The primary research method used is the secondary search, ensuring data accuracy and clarity

1.4 Significance of the study

This study analyzes the PESTLE factors affecting Vietnam Airlines from 2019 to 2021 A comprehensive analysis provides valuable insights into the external business environment, identifying opportunities and risks Based on the findings, strategic solutions enhance competitiveness, operational efficiency, consumer satisfaction, and overall effectiveness, contributing to long-term development in the dynamic airline sector

1.5 Structure

The research comprises five chapters, each with a distinct purpose Chapter | emphasizes the study's significance and scope Chapter 2 offers an overview of the company and defines framework concepts and theories Chapter 3 outlines the research methodology, design, and data collection techniques Chapter 4 discusses findings and their relation to the framework, analyzing company activities Chapter 5 provides conclusions and suggestions, summarizing key findings and offering recommendations for the company and future studies

Chapter 2: Literature review

2.1 Overview of the company

2.1.1 Brief information

In 1956, the Vietnamese government established the Civil Aviation Authority, launching Vietnam Airlines as the nation's flag carrier In addition to local travel inside Vietnam, Vietnam Airlines also offers international travel to destinations in Asia, Australia, Europe, and the Americas After two decades, Vietnam Airlines became the aviation industry leader

in Vietnam with various remarkable milestones (Vietnam Airlines, 2019b)

2016: Officially certified

as a 4-star international airline according to Skytrax standards

2020: Awarded the highest level, 5-Star, for COVID-19 Airline Safety

Rating from Skytrax

| the Vietnam Airlines and | the 10th member of the

| 2002: Introducing the 2014: Initial Public VND launched scheduled

new logo- the Golden Offering (IPO) at Ho Ch direct flights between

Lotus Minh City Stock Vietnam and the US

Exchange

2003; Receiving and 2015: Officially operating

operating the first Boeing under joint stock

(77, the modern aircraft ompany model

starting the fleet

modernization program

Vietnam Airlines became a state-owned air-transport company in 1993 Ten years later, it received and flew its first Boeing 777, which began its fleet renovation Vietnam Airlines joined IATA in 2016 and the Sky Team Alliance in 2010 In 2015, it became a joint stock company and the first Asian airline to use Airbus A350-900s Vietnam Airlines earned Skytrax 4-star certification from 2016 to 2018 and 5-star in 2020 for its COVID-19 safety rating

2.1.3 Mission, vision, and Strategy

2.1.3.1 Mission, vision

Vietnam Airlines’ mission is to be the leading aviation provider in Vietnam and the national airline, delivering high-quality services to customers It aspires to be a trusted and leading airline in Asia, offering safe and comfortable flights with thoughtfulness and care The airline fosters a friendly and professional work environment for employees to develop their careers, increase productivity, and take advantage of growth prospects Vietnam Airlines explores innovative strategies to reduce costs, increase revenue, and maximize profitability (Vietnam Airlines, 2022)

2.1.3.2 Development Strategy

Vietnam Airlines boasts a comprehensive route network, comprising domestic, international, regional, and intercontinental flights The carrier is expanding its domestic network with the addition ofnew hubs, such as Hai Phong, while Southeast Asia, Northeast

3

Asia, and the South Pacific are the main regions in its global network The airline has meticulously assessed and established a long-term strategic network for intercontinental long-haul flights It continues to evaluate new routes in Europe and America while maintaining operational efficiency (Vietnam Airlines, 2022)

2.1.4 Scope of operation

In addition to these core air transportation services, Vietnam Airlines also offers direct support services for air transportation This includes general aviation operations, commercial, tourism, and hospitality service The airline also provides ground-based technical and commercial services, including those at passenger terminals, cargo terminals, and parking lots at airports

2.1.5 Product or service concepts

Vietnam Airlines offers three main seating options: Business Class, Premium Economy Class, and Economy Class Business Class provides high comfort, convenience, and privacy but is the most expensive However, most customers like Premium Economy Class because it offers more seats at a reduced price Economy Class is the lowest price option with limited services and stricter ticket conditions Vietnam Airlines also offers freight services alongside passenger services

Figure 4 Vietnam Airlines’ Economy Class (Vietnam Airlines, 2019)

2.1.6 Competitive advantages

Vietnam Airlines possesses competitive advantages in Vietnam's aviation market As the largest airline, it enjoys a market advantage, a larger customer base, and effective competition Its excellent customer service has garnered loyalty and attracted new customers Joining SkyTeam has strengthened its global position and brand recognition 2.1.7 Overview of market share, revenue

4%

= Vietnam Airlines = Vietjet Air = Bamboo Airways = Jestar Pacific = VASCO

Figure 5 Vietnam Airlines' Market share (Nguyên Phương Linh, 2021)

In 2019, VietJet Air had 44% of the market, Vietnam Airlines had 35%, Jetstar Pacific 11%, VASCO 4%, and Bamboo Airways 6% Vietnam Airlines topped the Vietnamese airline industry in 2020 with 40%, while VietJet Air's share dropped from 43% to 35% Jetstar also fell one spot with 7% Bamboo Airways grew 7% annually, while Vietnam Airlines and Vietnam’s market share dropped to 37% and 33%, respectively Bamboo Airways grew by 19% of the market share (Nguyén Phuong Linh, 2021)

80,000 60,000 40,538

2.1.8 Company's problem

Vietnam Airlines faces challenges impacting its operations and profitability COVID-19 caused major financial losses in 2021, leading to staff reductions, salary cuts, and cost reductions Fluctuating fuel prices, currency exchange rates, and economic conditions also affect the airline's finances and profitability

2.2 Concepts and definitions

2.2.1 Political Factors

Political considerations are government regulation and its effect on the economy or business Legislation along with economic policies are illustrations of government factors (THE UNIVERSITY OF SYDNEY, 2023)

2.2.2 Economic Factors

Economic considerations have immediate effects on a company's long-term market prospects Economic conditions can influence how an enterprise markets its products or the system of supply and demand (THE UNIVERSITY OF SYDNEY, 2023)

2.2.3 Social Factors

Factors like culture and demographics can influence the industry's landscape by impacting peak purchasing times, consumption trends, and preferences for living arrangements (THE UNIVERSITY OF SYDNEY, 2023)

2.2.4, Technological Factors

Technological variables might have a rapid or passive effect on an industry While technology will have a greater impact on industries than others, technological advancements may have an impact on the market, customer choices, and purchasing power (THE UNIVERSITY OF SYDNEY, 2023)

2.2.5 Environmental Factors

Environmental variables involve all aspects of the physical environment as well as general rules for protecting the environment (THE UNIVERSITY OF SYDNEY, 2023) 2.2.6 Legal Factors

Legal issues can have an impact on both the inside and outside environments of a business (THE UNIVERSITY OF SYDNEY, 2023)

By using the model, managers identify macroeconomic factors for business development, considering opportunities and risks These factors have some uncertainty linked to them Furthermore, managers can generate various scenarios based on these uncertain variables, allowing for better predictions of the future As a result, this assists in making well- informed decisions in the present that are in line with future objectives (Salem Alanzi, 2018),

2.3.1.2 Political Factors

Political trends in a country, such as government pressure and monetary policies, influence companies that set up operations there Decisions made by established governmental agencies can directly affect a company's day-to-day operations, finances, and social outlook (Salem Alanzi, 2018)

Companies deciding to establish a presence in a country are significantly influenced by its current political trends, encompassing government regulation and monetary policies Decisions from established governmental agencies directly impact a company's day-to-day operations, finances, and social prospects (Salem Alanzi, 2018)

Understanding population features is vital to grasp purchasing behavior and enter a market successfully Companies must consider historical background, customs, religion, and socio-cultural influences, including fashion, media, and communication techniques, to comprehend individual needs (Salem Alanzi, 2018)

Professionals improve processes across locations Changes may not impact the target market, but some could revolutionize social norms Learning from the Internet revolution, managers anticipate acceptance Researching and innovating in the core business is vital for success Continually challenging products and processes drives customer acquisition and progress (Salem Alanzi, 2018)

Environment and sustainable development are crucial topics of conversation in the twenty- first century Climate change, growing pollution, varying waste sorting practices among countries, and other related issues now concern an increasing number of people (Salem Alanzi, 2018)

Staying updated on labor laws and trade regulations in the country of operation or establishment is crucial Varying legislation in various locations makes this approach effective in safeguarding the company against legal risks and ensuring optimal operations within legal boundaries (Salem Alanzi, 2018)

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