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BUSINESS INFORMATION ANALYSIS RESEARCH PROJECT (PART 1) - INVESTIGATION Student name: Hoang Thao Vy Nguyen (Vivian) - 00144334T Yat Fai Yeung (Tyler) - 00139240T Subject code: MGT303A Subject name: Business information analysis Date submission: July 15th, 2018 Lecture Name: Mr Brian Bailey Table of content Section 1: The business problem and research objectives 3-4 1.1 Research context 1.2 Research question 1.3 Research question Section 2: Literature search and review 2.1 Literature review findings 5-7 2.2 Literature review 8-9 Reference 10 COMPANY: MALAYSIA AIRLINES (MAS) Section 1: The business problem and research objectives 1.1 Research context · MAS is owned by the Malaysian government. It is an internationally known airline that delivers international flights with affordable prices (Malaysia Airlines, 2018) · The market of MAS mainly focuses in the USA, Europe and Asia-Pacific and this corporation is planning to expand the market to Australia (Malaysia Airlines, 2018) · The crash of MH17 contributed to decreasing ticket of prices of 33% and 500 employees resigned · This corporation has faced many internal and external problems before this crisis such as mismanagement and higher fuel prices. · After the accidents of MH370 and MH17, MAS admitted losses of $96.5 million and heavy damage on its reputation. · MAS cut the costs of labour on a long term basis, reducing flight networks and focusing on the Asian market in order to solve the cost structure problems. 1.2 Research questions 1. Overview of perspective of stakeholders towards MAS after the flight crash MH17 · To identify and understand the point of view of stakeholders after the accidents 2. Compile a competitive analysis of MAS · To apprehend the market information between MAS and its competitors 3. Investigate the mismanagement and communication factors which may cause and affect MAS negatively. · To understand the failures of MAS and support a strategy in the future 4. Plans to solve the union conflicts that the company is facing · To identify solution about the union conflict in order to increase all round operation quality 5. Reduce loss and increase profitability through plans · To identify marketing plans of MAS in order to regain the business profitability 6. Company rebranding and rebuilding brand image · To identify the reason of this action of how it can help the business 1.3 Research objectives · To improve the management system and communication between employees and managers · To recover MAS’s reputation and customer’s perception · To understand the issue and keep up the competitiveness of the market · To show the company wills to get back in the market · To understand and improve the financial situation of the company · To understand the importance rebuild brand image Section 2: Literature research and review 2.1 Overview of perspective of stakeholders towards MAS after the flight crash MH17 The crisis response of the Malaysia government was recovering the damaged plane and the bodies of the victims and investigation the reasons causing the accident. This was the most urgent and concerning problem. Identifying the causes and reducing the negative impacts such as MAS reputation and financial loss are the focusing problems of MAS management. After the accident, the employees lost trust in MAS management system and were concerned about working safety conditions in this company. There were many physical and mental impacts to occupants who attended the MH17 flight. A large number of occupants died and some of them were missing in the crash area. The trust of victim’s families and MAS customers dropped. Due to bad reputation and the loss of loyalty and trust from customers, this causes a 33% decline in ticket bookings and heavy financial loss. 2.2 Compile a competitive analysis of MAS The competitiveness of the market is a challenge to MAS and the Malaysian government due to this company being government owned. Singapore International Airways is the biggest competitor of MAS in the Asian market especially the high premium market. In addition, MAS also has a war price with Air Asia in the low-cost carrier market (Ali, 2016). The weakness of this corporation is that focusing on only the international routes does not create profit and satisfy customer demand. The limitation on domestic flights of MAS is a threat which decreases the revenue and creates an opportunity for Air Asia to enter the Malaysia market. In addition, this company has low entrance barriers which protect its market share in Malaysia. As a result, more competitors can enter Malaysia market and threaten MAS’s position. 2.3 Investigate the mismanagement and communication factor which may cause and affect MAS crisis This company had to face financial crisis for a long time before the crash of MH17. The managers of MAS believed that the main reason of being unable to make profit and pay its debt since 2010 is high cost of labour and landing fees. However, an official statement of the financial losses was revealed few weeks later that the main reasons were poor management and inefficient route network. This leads to losing trust and miscommunication between the manager and the employees. The operational environment of the airline industry faces unpredictable problems that could pop up so the management of airlines companies must ensure that they obey the pre-crisis safety and security procedures. All airlines also prepare a good management system to reduce threats and protect their brand’s image when accidents and crisis occur. However, when flight MH17 crashed, due to poor management system and miscommunication, MAS could not solve and handle the massive impacts (Adebayo, 2017). As a result, 500 employees resigned after the accidents due to lack of trust in MAS management system and unsatisfied working conditions. The negative effects of social media from the disappearance MH370 were not resolved causing the incidents of MH17 to reduce the reputation of MAS. 2.4 Plans to solve the union conflicts that the company is facing The company has completed a series of actions to the NUFAM (National Union of Flight Attendants Malaysia). Because of their action and illegal gathering, MAS suspended 10 NUFAM members in 2014. However, Farahtina Kassim, the strongest critic of the company, was sacked after the accident. The national letters about the issue was revealed to 30 NUFAM members a month later after the crisis (Zahiid , 2014). Due to the effect of the cash, the government was able to build a link with the company about its financial problems in order to maintain their national airline company operation and market advantage. This action leads to a company restructure and all employees are motivated to work more productively and show their best performance at work. 2.5 Reduce loss and increase profitability through plans After the flight crash MH17, the company has been struggling financial impacts and market discourage. The trust of customers was dropped and its marketing position has declined dramatically. The company has mainly focusing on cost controlling and increasing profitability in order to maintain the operation and regain the financial and market position. MAS also faces to some external issues such as rising fuel price, the strong competitiveness in the airline market, and currency fluctuations. Although the overall market situation is unstable, the company still retains a steady growth in following future by improving the technology. Through these series of enhancement the company is able to encourage and recover brand image to keep up the market in the future.(KLIA, 2017). 2.6 Company rebranding and rebuilding brand image MAS has plan to rebrand their company after the incidents, means to gain and rebuild a new brand image in order to re enter the market in a new brand. According to the company situation, rebranding will provide a better opportunity for the company to rebuild and renew fleet and operation style, “Like all international airlines, Malaysia Airlines needs to renew its fleet with modern jets to be competitive”. ( news.com.au, 2014) Although the company decided to rebuild their brand image but not changing it, still the planning and operations have worked significantly well in order to rebuild their brand and regain position in the market. Through its improvement planning the company has improve its efficiency of the fleet, increase the quality of customer service performance and develop a well organized management style in order to improve their profitability, the business has slowly gain back the market segment and slowly recover from the incidents. Literature review Research Questions Scope Bias Timeliness Explanation Gaps in knowledge Overview of perspective of stakeholders towards MAS after the flight crash MH17 1/3 2/3 0/3 There are some difficulties to collect an official document which mention the point of view of MAS stakeholders and also the timeline is unidentified. Yes, a primary data need to be conducted in order to provide an accurate information Compile a competitive analysis of MAS 1/3 1/3 1/3 Collect datas to understand what area the market segmentation, competitors strategy, target market, potential market etc... in order to understand the current situation of the market Yes, further market research and data analysis are necessary for a complete competitive analysis for the company Investigate the mismanagement and communication factors which may cause and affect MAS negatively 2/3 2/3 1/3 Investigate and find out the reason of inefficient problems and improve the operation performance