Malaysian Airlines Analysis - Case Study Example

Business communication Contents Executive Summary 3 2.Situational Analysis 3 3.Communication Strategy 8 4.Summary (Desirable outcomes for the company) 11 5.Press Release 13 Reference List 15 Element A Company Name: Malaysian Airlines (MAS) To: Stakeholders From: Senior Communication Officer Re: Strategic Communication Plan Date: 16/1/15 1. Executive Summary The brand image of the Malaysian Airline System (MAS) is in real despair after the two consecutive historic falls in the recent past. The sequence of unending trail of losses started building-up in the year 2012, when the airline company began planning on restructuring its business plans. Then after, the two consecutive and mysterious cases of airline malfunction and devastation has put the image of MAS in total jeopardy. Most of the incidents have a close connection to communication-related crisis and lack of coordination at different levels. This essay makes an attempt to advise a strategic communication plan to rebuild the defamed image of MAS and increase customer trust and belief. Additionally, a press release has also been provided to publicise the message of the planned set of action and next course of action in rebuilding its brand image. 2. Situational Analysis To develop a strong corporate strategy, senior managers need to adopt a suitable methodology for creation of alternate strategies. This could be obtained through a thorough Situational Analysis. MAS will bridge the revenue and performance gap to regain the lost profitability. Company analysis - MAS have a strong foothold in the entire South, South-East, South-Asian and Kangaroo routes, other than the Middle-East. Other than, its home location in Kuala Lumpur, Malaysia, it also operates from its secondary hub in Kota Kinabalu (Gibson, 2014). Sources of Revenue- MAS have always been recognised as a provider of low-cost, safe and efficient air travel services to the customers. It has two of its subsidiary airline services in the name of Firefly and MASwings. MAS also draw revenues from non-airline oriented maintenance, repair and overhaul (MRO) of aircraft handling. MAS community’s Skytrax has been awarded with a 5-star status. Finally, engineering, hotel operations, reservation services, transportation, warehousing, retail and other tours and travel-oriented activities are the other service sectors of MAS (Finley, 2014). Customer Analysis – A survey on customer satisfaction of MAS using a sample size of 50 customers indicated that for MAS to develop and rebrand as a safe, efficient and cost-effective airline service, it would need to reconsider promotional package, reasonable pricing structure, readily product availability, interpreting customer needs and specifications, speed of customer service delivery and support services and bug fixations for mistakes made. Competitor Analysis – Majority of the customers of MAS are international flying customers and are expected to be high income, such as business travellers and people with high affordability. Product – Economy Class, Business Class and First Class are the three categories of flight services of MAS. Economy and Business class services are availed by domestic flying customers. Both the economy and premium class have bagged a lot of awards in product and service delivery. Price- The cost structure set by MAS is highly expensive as their cost and maintenance is on a high-end. If they want to maintain their customer segmentation, it will be reflected in their real prices. Place- MAS traverses a total destination of 118 domestic routes within Malaysia and 114 destinations in other countries across six continents. This adds up a total 88 destinations, providing the facilities of online booking and buying. Promotion – Through its promotional programmes, such as, Enrich Frequent Flyer, MAS practices a highly efficient customer retention strategy. The company promotes about this on its official website too and highlights on an extensive premium cabin class products and crew hospitality. Future Strategies – MAS has plans of expanding the passenger traffic in Asia Pacific, including its cargo base. The introduction of Firefly was a step in this direction. Against the identified broad situational analysis of MAS, the external and internal environmental details of the organization would be analysed to assess the strength, weakness, capabilities, resources and customers profile • SWOT Analysis SWOT analysis is compiled for the perusal of senior management and aids in strategic management decision making by enlisting the strength, weakness, opportunity and threat for benchmarking the present capabilities against industry standard approaches of performance and operations (Piercy and Giles, 1989). Strength MAS’s timely airline delivery service and excellent professionalism has established a brand image in the domestic as well as internal market. The airline company has bagged the 5-star global rank, with the rest of only four of them, by aviation-rating organization (Gibson, 2014). The recruited cabin and flight crew at MAS are provided excellent training which represents their strong hospitality consciousness and customer-friendliness. The range of delivery services expand beyond the aviation as well as non-aviation sectors. The geographical scale of MAS expands wide across from South and South-East Asia to, Middle-East and Australasia (Finley, 2014). Weakness The airline company faced a terrible financial loss of around $170 million between the year of 2012 and 2013 (Gibson, 2014). This decline in profit margin of the organisation has adversely affected the sustainability of the organisation (Finley, 2014). Cost set by the airline is found to be a bit more expensive than the other low cost competitors, such as AirAsia in Malaysia. With other low-cost options available, MAS might lose out on making a mass appeal of getting customers with varied financial backgrounds (Gibson, 2014). The two consecutive mishaps of a missing airline and missile firing of MH370 and MH17 aircrafts have put the brand name of MAS as a globally standard airline, is in question (CAPA Centre for aviation, 2015). Opportunity Firefly has been introduced by MAS as a test-bed of MAS community low-cost airline. The quantum of people travelling to Asia Pacific is increasing daily. As a result, MAS has a tremendous potential of increasing revenue by expanding its operations there. With the growth of business opportunities and increase of purchasing power of the people from China, Japan, India and Middle-east, more and more people are preferring luxury class flights as offered by MAS (Finley, 2014 and Gibson, 2014). Threat There is an intense competition from other internationally acclaimed airlines and new start-up operations in Asia and Middle-East, such as, Thai Airways, British airways, Singapore Airlines, Air Asia. The privet jet facilities provided by various multinational organisations are reducing the numbers of business travellers through the general airlines. Terrorism and political issues present a grim problem to the geopolitical scenario in many countries. Flying to 88 destinations in close cooperation with code-sharing partner airlines, the company has been flying to 100 destinations world-wide. In case of any occurrence of terrorism in the South-east and Malaysia region, the industry would be vividly affected (Finley, 2014; Gibson, 2014). The fuel prices of most airlines are affected by government rules and regulations. This is one of operating expenditures of the airlines company. Thus, government rules and regulation can affect the profit margin (Malaysia Airlines, 2012). While SWOT has helped analyze the business unit of MAS, from a macro-perspective of the economy, it is necessary to study the Political, Economic, Social and Technological (PEST) environment of Asia, as a whole. This would be performed using PEST analysis technique. Political – In the Asian perspective, government policies are drivers for success. Nowadays, the trend of privatization and deregulation is on a rise. Open-skies agreements in some countries have, for example, welcomed private airlines. In 1997, Malaysia signed the open-skies agreement with US expanded the travel market, creating a competitive and a challenging atmosphere for MAS to operate (Malaysian Airlines, 2012; Mann 2014). Economical – There are two major determinants of airlines industry on economy. The Asian countries are geographically dispersed with a large population. With rising growth of the economy, trade barriers and legal sanctions have become welcoming to more businesses in the region. As economists predict Asia to be ranking the global economy, a rapid growth of aviation industry has led MAS to reconsider its pricing structure. In Asia, 35% of the population below the age of 25 and more than 55% belong to the age-group of 35. With a rise in the population of middle-income group, the overall disposable income and the number of business class travellers is on a rise. This presents an opportunity for the growth of MAS (Malaysian Airlines, 2012; CAPA, 2015). Social and Cultural – As passengers became more willing to forego on their requirements for food and other conscious luxury decisions, the price of tickets became an important consideration for budgetary specification. Hence, more and more low cost carriers (LCC) started entering the Asian markets to offer the option of travelling at a fairly low cost. MAS has a tough competition from other LCCs entering the newly expanding market in Asia with the competitive low-cost strategy (Malaysian Airlines, 2012; CAPA, 2015). MAS was usually following a customer segmentation by targeting only the high-premium business-class travel paying for the luxury and service quality for price that need to be reconsidered Technological – The technologically advanced services of internet telephony and deployment of other telecommunication channels for procuring MAS products are an important determining factor in building sales. With time, the dependency on e-commerce and internet-based platforms, including making reservations for a tour online, helps airline industries to draw revenue from subsidiary revenue sources. As more and more people in Asia and other emerging markets become technologically-dependant for airlines reservation and holiday planning, MAS could expand revenue from multiple channels. Additionally, the operational costs could also be curtailed, such as commissions and taxes, by being technologically-advanced (Malaysian Airlines, 2012). 3. Communication Strategy Every functional area in an organization must respond to constantly changing and adaptive environment for improvement and overall effectiveness. In all this, transparent communication plays a very important role in interpreting strategies and gauging stakeholder communication. Jesper (2014) had stressed on the need for the management to know the communication channel well in order to lead to excellence. In fact, the entire scope of strategic communication spans across a thought process of studying the organizational problems and evaluating the practice using a strategic approach. Managers need to think out-of box and be innovative to adopt risky strategies. MAS should adopt a strategic communication strategy. It should follow accordingly. Identifying the target audiences and gathering information about them - This will help in deciding the primary and selective demands for the company. Customers are avoiding MAS for travel nowadays, despite the constant rise in the number of travellers en-route towards south-east and middle-eastern regions. This has affected the profit margins, lowering the share price (Jansen, 2014). Therefore, new communication strategies need to attract new travellers, frequent domestic as well as international, investors, travel agencies and new investors and large number of skilled employees who parted ways from the company due to the market forces. The message should come clear to the audience that the airlines company is trying to rebuild its lost glory and engage the stakeholders at different stage. Clearly laying out the objectives of the communication strategy and the activities planned - The objectives must be consistent, quantifiable and attainable as MAS needs to decide how to share information and learn from the past experiences. The SMART goal setting model offers the most effective tool to achieve the most realistic organizational strategic goals in a consistent manner (Fall, 2004). Setting specific goals, instead of a generic one, would help MAS to communication its marketing plans in a very specific manner (Alan, Elwyn and Thomas, 2014). The ultimate plan is to increase more awareness about the latest structural modifications or safety measures or future predictions and welcome more trained personnel and investors back to the company. A measurable goal would require collecting background information of target audience in order to determine if the goals are measurable. Accordingly, the impact of could be assessed. Rather than setting an ambition and huge target, it would be advisable to split the entire communication plan into small attainable targets for ease of achievement Finley, 2014 and Gibson, 2014). Realistic goals are more result-oriented and rigorous. For this, communication message and channels of media and timeframe need to be well-decided. This would help in conveying the message through a proper media across a targeted audience (Finley, 2014, Gibson, 2014). Recommended Communication Messages and Channels In rebranding and marketing planning, the role of Social Media is extremely important. The management of MAS has decided that they would be sharing grief, words of encouragement and extending support through the identified digital channel. This channel of communication would be significantly helping MAS in moving its brand image forward. For example, the message of #staystrong campaign on Twitter has been conveying similar messages (Mann, 2014). Similarly, the company has started to rebuild its image by saying lines that tough times do not last, tough people do. In this direction, International Business Times has already confirmed MAS’s success of communication messages and the communication channel of social media platform for official message announcements. The company is highly focussed on its tagline, “Our Strength Is You” and wishes to continue #flyinghigh strategy through the process of reconstruction. Te internal plans of reduce staff numbers and curbing flights to unprofitable local routes would be conveyed through the in-house communications, intranet and other intra-mail communication networks, board meetings, annually published company reports (Mann, 2014). It has also been found that billboards are the most effective outdoor communication medium, other than television and radio. Nowadays, newspapers and other external print media might not be effectively invasive. In all this, social media is a cost-effective and highly public message communication channel to rely. Planning on communication content and media for communication – The success of any communication channel is in conveying and receiving the rhetoric logically across the intended audience. (Herbert, Daniel and Barry, 2007). Information on new safety implementation plans, employment motivation plans, competitive analysis and range of offerings need to be conveyed across a reliable media tool, for example, social network platforms, newspapers or any other form of advertising, such as personal selling or sales promotion, for the identified audience and the scheduling frequency. For the in-house communications, intranet and other intra-mail communication networks could be deployed for conveying messages to its employees. Regular publication and transparent reporting would disseminate organizational performance related information to the stakeholders (Gibson, 2014). All this could be substantiated with press-releases, circulation of minutes of board-meetings and annual reports. The following is a Gantt Chart representation for the marketing plan of 2 months for MAS to rebuild its brand image by the following approaches. The week-wise distribution has been shown as below: Identifying the target market ( 3 weeks) – To identify the prospective target markets for exploring and expansion Deciding the content (3 weeks) – News on safety measures and new technological developments to be conveyed through print, digital and word-of-mouth form of advertising. Hiring the content team (1.5 weeks) – An experienced team of content media generation should be internally deployed within the company. Choosing the appropriate channel (1.5 weeks) – Once the messages have been decided, the channels need to be identified. Cost assessment (3 weeks) - Budgeting and resource allocation need to be planned. Implementation (3 weeks) – This involved the actual action on-ground. Monitoring and Evaluation (4 weeks) – The success of the implementation need to be evaluated to track its reach and scale. Marketing Communication Gantt Chart 4. Summary (Desirable outcomes for the company) The ultimate motive of the strategic communication plan is to revitalise the dying image of MAS in the eyes of its stakeholders and rebuild its global image as of world-class standards. Understanding the strengths, weaknesses, capabilities and threats, a SMART effective communication procedure will help elevate the brand image in the eyes of customers, investors, employees (past and present). MAS would perform a thorough market analysis and survey to monitor the success of the implemented action plans among investors, customers and specific destination passengers. The buyers evaluate the price they pay for the products they purchase. Therefore, MAS needs to have an efficient plan of product promotion and publicizing. In order to evaluate the success of communication channels, the focus and cost-effectiveness would be derived out of a cost-benefit analysis at the end of the drive and each month end cycle. Internally, the management will have to start identifying the most efficient of the employees and recruit them to improvise on communication plans for the company. Their appraisal and performance enhancement will keep MAS in the stride of effectively communicating about its strategies from time to time. The market share prices will also generate a complete picture of the revenue enhancement after the campaign. The balance sheet and operation costs would reveal the ideal figures, including the traffic for publicised reservations and holiday packaged deals. Element B 5. Press Release Press Release No:xxxvii Date: 16 January 2015, Malaysia For more information, please contact: MAS Communications Department Tel No: + Email: xxx@malaysiaairlines.com Strategic Plans for Rebuilding the Malaysia Airlines mage Malaysia Airlines is ready to undertake a strategic step to revamp its image in the global aviation world by adopting key organizational modifications, such as plans on safety and smart weather predictions, probable electric failures and bug fixation. It also wants to increase the trust among its employees and imbibe more motivation to excel as a taskforce. All these strategic planning approaches would help accrue revenue to invest in further development of aircraft technologies. The current situation has generated an extreme consciousness among the management of Malaysia Airlines, as a globally acclaimed airline company, in reviving its lost glory. The idea is to generate an effective and robust communication process and scheduled flight operations. These strategies will help elevate the status and recover the former reputation. The top management of the organisation is sensitive to the tastes and preference of its target audience and the newly identified ones. A diligent analysis of all target audiences and a thorough planning of how the safety messages would be conveyed across trusted media channels deliberates a solid consciousness on their behalf. A close attention towards the investigation of what went wrong and what to learn from the mistakes is being strictly adopted. A gap is indicative in the area of communication error and crisis management. That is the reason that the management has entrusted the communication department with the task of properly communicating the changes to be implemented. The management is concentrating on extensive research and development to introduce innovative and safe design facilities for its flyers. By hiring a proficient talent pool through its rigorous staffing policy, appropriate staff-training procedures are being planned out. The navigation system and flight operations would be further improved through better design and safety features. Wireless flight monitoring systems and communication channels between the pilot and navigation department would help improve flight operations. There would also be massive improvements in the black-box designs through an efficient team of aeronautical engineers and technicians for all domestic and international flights. The airline company has plans to ramify across the whole of Asia and Pacific region. This covers a total of 114 geographical destinations across six continents with the help of more than 100 aircrafts. Malaysia Airlines plans to regain the previously awarded status of a five-star aviation company and diversify to other channels of non-aviation and hospitality sectors to build a global brand image. ### Reference List Alan, D., Elwyn, J. and Thomas, A., 2014. Corporate strategy development via numerical situation analysis, Benchmarking: An International Journal, 21(4), pp.619 - 633. CAPA Centre for aviation, 2015. Malaysia Airlines. [online] Available at: [Accessed 15 January 2015]. Fall, L. T., 2004. The Increasing Role Of Public Relations As A Crisis Management Function: An Empirical Examination Of Communication Restrategising Efforts Among Destination Organisation Managers In The Wake Of 11th September, 2001. Journal of Vacation Marketing, 10(3), pp. 238-252. Finley, R., 2014. Crisis Communication And Resilience: What’s Next For Malaysia Airlines? [online] Available at: [Accessed 16 January 2015]. Gibson, A., 2014. Is rebranding the answer for Malaysia Airlines?. [online] Available at: [Accessed 16 January 2015]. Herbert, S., Daniel, J. R. and Barry, R. A., 2007. Developing A Strategic Profile: The Pre‐Planning Phase Of Strategic Management, Business Strategy Series, 8(3), pp.162 – 171. Jansen, B., 2014. Hard for Malaysia Airlines to survive after two disasters. [online] Available at: [Accessed 15 January 2015]. Jesper, F., 2014. The power of strategic communication in organizational development. International Journal of Quality and Service Sciences, 6(2/3), pp. 124 - 133. Malaysia Airlines, 2012. Malaysian Airline System Berhad: Annual report. [pdf] Malaysia Airlines. Available at: [Accessed 15 January 2015]. Mann, R., (2014). Malaysia Airlines Leans on Social Media After Twin Tragedies We are able to begin the healing process in a small way. [online] Available at: < http://www.adweek.com/news/advertising-branding/malaysia-airlines-leans-social-media-after-twin-tragedies-159441> [Accessed 23 January 2015]. Piercy, N. and Giles, W., 1989. Making SWOT analysis work. Marketing Intelligence & Planning, 7(5/6), pp. 5-7. Read More