MAS Blue Sky Strategy

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Project Team

KJ0810358 AYESHA AHMED

KJ0810438 OSMAN BIN DAWATAN

KJC0850091 CHIN PEK YUEN

KJC0850092 HOR WAI MUN

KJC0850122 SAMUEL LAI SIEW WENG

KJC0850138 RITZERAYNN BIN RASHID

KJC0850186 SHAZLINA BINTI HUSSIN


Agenda

• Introduction of Malaysia Airlines
• The market (IATA)
• Business Turnaround Plan 1
• Business Transformation Plan 2
• External Matrix
• Internal Matrix
• External-Internal Matrix
• SWOT
• Alternative Strategy
• Quantitative Strategy Planning Matrix
• Blue Sky Strategy
• Questions and Answers


Introduction
• Malayan Airways started in 1937 when Straits Steamship Co.,
Singapore joined Ocean Steamship and Imperial Airways (British)
• First operate airline from Kuala Lumpur to Singapore, Ipoh and
Penang in 1937
• Awarded Cumber Batch Trophy for zero accident record in 1957
• Malayan Airways converted to Malaysian Airways in 1963 after
established Malaysia (Peninsular Malaysia, Singapore, Sabah &
Sarawak)
• Malaysian Airways converted to Malaysia Airlines due to political
differences between Kuala Lumpur and Singapore in 1972
• Malaysia Airlines expanded network to 47 overseas destinations
between 1980s and 1990s
• Malaysia Airlines suffered losses RM 260 million in 1997 (Asian
Financial Crisis)
• Malaysia Airlines enjoyed profit RM 461 million in FY2003/2004
• Malaysia Airlines reported losses RM 1.3 billion in 2005 resulted
Dato’ Sri Idris Jala was appointed as CEO to bring back profitability


The Market (IATA)


Dato’ Sri Idris Jala Initiative


Business Turnaround Plan 1 – Dato’ Sri Idris Jala


Business Turnaround Plan 1 – Dato’ Sri Idris Jala

Malaysia Airlines won many awards based on BTP 1 initiative

• 5 Star Airline Awards 2007 - Skytrax

• World’s Best Cabin Staff 2007 – Skytrax

• Best Airline Cabin Service Worldwide 2007 - Smart Travel Asia

• 2nd Best Economy Class Service 2007 - Skytrax

• 3rd Best Economy Catering 2007 - Skytrax

• 4th Best First Class 2007 - Skytrax

• 4th Best Business Class 2007 - Skytrax


Business Transformation Plan 2 – Dato’ Sri Idris Jala


External Matrix
Key Factors Weight Rating Score
External Opportunities

Continuously demand growth 0.20 4.00 0.80
Academic & Training expansion 0.18 3.00 0.54
Aircraft maintenance & service
expansion 0.09 3.00 0.27
Subtotal 0.47 10.00 1.61
External Threats
Fluctuation of fuel cost 0.25 4.00 1.00
Foreign currency fluctuation 0.15 2.00 0.30
Strong competition from low cost
carrier worldwide 0.13 3.00 0.39
Subtotal 0.53 9.00 1.69
Total 1.00 19.00 3.30


Internal Matrix
Key Factors Weight Rating Score
Internal Strengths
Innovative business strategy plan 0.20 4.00 0.80
Strong commitment by stakeholders to
support BTP 0.08 4.00 0.32
Global serving customers over 100
destinations worldwide 0.05 3.00 0.15
Capability serve 40,000 passengers daily 0.08 3.00 0.24
International recognization of quality service
(World Best Airline Crew 2008) 0.15 4.00 0.60
Subtotal 0.56 18.00 2.11
Internal Weakness
High maintenance cost for old aircraft. 0.25 4.00 1.00
Low margin 0.10 1.00 0.10
Underutilization of fleet management 0.09 3.00 0.27
Subtotal 0.44 8.00 1.37
Total 1.00 26.00 3.48


Internal-External Matrix (IE)


Strengths-Weakness-Opportunities-Threats Matrix
(SWOT)
Strengths Weakness
1. Innovative business strategy plan 1. High maintenance cost for old
Strong commitment by stakeholders aircraft.
to support BTP 2. Low margin
2. Global serving customers over 100 3. Underutilization of fleet
destinations worldwide management
3. Capability serve 40,000 passengers
daily
4. International recognization of quality
service (World Best Airline Crew
2008)

Opportunities Threats
1. Continuously demand growth (more 1. Fluctuation of fuel cost
customers travel on air & many 2. Foreign currency fluctuation
bankrupt airlines) 3. Strong competition from low cost
2. Academic & Training expansion carrier worldwide
3. Aircraft maintenance & service
expansion


SWOT - Develop Alternative Strategies
SO Strategies WO Strategies
1. Continuous Malaysian Hospitality 1. Maximization load factor by closely
(S1, S2, S3, O1, O2) monitor seat ticket sales (W2, O1)
2. Revival Information System to 2. Systematically plan the flight
facilitate sales and marketing (S1, schedule to ensure fuel cost
S2, S3, S4, O1) efficiency (W1, W3, O1, O3)
3. Restructure marketing and
communication (S1, S2, S3, S4,
O1)
4. Upgrade knowledge centre into
technical service provider (S1, S4,
O2)
ST Strategies WT Strategies
1. Increase load factor using carrot 1. Establish Risk Management
and stick approach (e.g. offer Division to specialist hedge cost
discounted seat to attract customer (W2, T1, T2)
visit its website for sharing and
communicating) (S1, S3, T3)


Quantitative Strategic Planning Matrix (QSPM)


BLUE SKY STRATEGY – A SUBSET OF BTP2


BLUE SKY STRATEGY
Overview
The exploration of maximize utilization of current resources in the
competitive marketing with creation of creativity innovation and a
subset of BTP 2 that creates the competitive force to strengthening
the current situation towards the same goals.

Value of Blue Sky
• Branding the value of the company

• Locate the competition irrelevant

• Unify the resource for efficient productivity

• Evaluate the key index for continuity improvement


BLUE SKY STRATEGY – Branding Malaysian Hospitality


BLUE SKY STRATEGY – Branding Malaysian Hospitality
Publicity Malaysian Hospitality
- Offer brand sponsorship to international mass communication media
Example, Triumph in the Skies is story telling about Solar Airways

Branding eco-friendly
- Installing winglets on Boeing 737s and 757s to save fuel and reduce
emission (Continental Airlines)
- Use biofuel for Airbus A380 to further save fuel
- Use carpet from InterfaceFlor because 100% cycable and less
maintenance and cleaning

Corporate gift
- Continuing communicate the brand between MAS and customers


BLUE SKY STRATEGY – Information System Collaboration



Kiosk
- Set up kiosk machine at high traffic of customers to drive sales
Example, CIMB – Oldtown White Coffee
- Offer the convenient or purchase air ticket
- Communicate to customers about events and promotion


Online partnership
- Advertise at high traffic visitors to communicate about MAS Portal
and Mobile Service
- Target online website is google.com and facebook


BLUE SKY STRATEGY – Revitalization Marketing &
Communication


BLUE SKY STRATEGY – Revitalization Marketing &
Communication
Business partnership communication
- Working together with merchant bank to drive sales and brand
communication. Example, HSBC Platinum for MAS 1st Class Ticket

Educational value
- Invite academic centres to share the strategy management
- Openly encourage schools visit to promote MAS Hospitality

Seasonal sale
- Offer low fare and discounted fare to drive sales and load factor
- Improve cashflow and reduce borrowing to finance the business

Transactional analysis
- Analyze customer demographic and traveling experiences to fulfill
the expectations
- Forecast sales growth, improve marketing mix, gauge income level


BLUE SKY STRATEGY – Transform Technical Knowledge
Centre


BLUE SKY STRATEGY – Transform Technical Knowledge
Centre
Upgrade to technical college
- Apply education license to venture new business
- Providing quality worker
- Qualification expansion from diploma to PhD
- Act as Government’s premier aviation lab for R & D purposes
- Become self-financing centre

Education diversification
- IATA Quality and Safety Standard should be offered to GLC
- Collaboration with specialize academic centre for innovative
qualification. Example, Bachelor of Hospitality and Tourism

Communication language centre
- Offer affordable language courses (Malay & English)
It is similar of The British Council function and business


BLUE SKY STRATEGY – Loyalty Program Expansion


BLUE SKY STRATEGY – Loyalty Program Expansion

Recruitment drive
- To get new customer
- Grads Loyalty Program – University orientation day
- Enrich Loyalty Program – television commercial on aircraft
- Loyalty Service Centre at airport

Publicity and awareness
- Animation commercial at Internet media (The Star, Tourism Office,
facebook, youtube, etc)

Customer traveling analysis
- Continuing communicate with loyalty customers about marketing mix

Prioritize promotion and offer
- Card holder will be prioritized for pre-booking


THANK YOU


MAS Blue Sky Strategy

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