First Progress Report
Discuss about the Pakistan International Airlines Market Aspects.
From the report, it was understood that Pakistan International Airlines focused on the safety of passengers and made sure to utilize its strengths properly for ensuring successful business functioning. The industry and competitive analysis was done with the use of SWOT framework, Porter’s five forces and PESTLE analysis framework, which determined the strengths, weaknesses, opportunities and threats along with the external forces affecting the business processes. The company gained a huge market share in the domestic market, due to which, the brand image strengthened and services were delivered at affordable prices. The company though suffered issues like old aging fleet, lack of effectiveness of loyalty programs and ineffective brand promotions. One of the major threats was the negative perception of people related to terrorism in the country, which made the business face loss sometimes too. The political instability caused due to poor laws, lack of security resulted in fewer people availing the services from Pakistan. The capital income had increased and thus investments were not up to the mark as well. It was important to introduce new international destinations and ensure protecting the environment to become socially responsible too. The competition was though low and the airline monopoly made the bargaining market limited. The E-business strategies were though beneficial for creating an online presence and gained more exposure, which drew in more clients to avail the services of PIA. Internet played a pivotal role in managing the e-ticketing process and allowed the customers to reserve tickets with ease. The E-business strategies facilitated automated check-in and ticket booking process, which was hassle free and less costly in terms of delivery of quality service flights in Pakistan. It created convenience for people to book tickets online furthermore brought instant activation of travel insurance policies to the Pakistan’s travel and tourism industry with the help of a more streamlined and time saving process for the travel agents. The corporate vision of PIA was to become world class airline exceeding customer expectations through dedicated employees Committed to excellence, but with the instable political conditions and rise of terrorism activities, there were lack of networks, brand recognition and negative brand image. The beliefs of the company were not managed properly, which created a bad working conditions and negative culture, which deteriorated the business performance too. The corporate communication was established by making PIA interact with the different business stakeholders and even managed public relations to create a sustainable position in the marketplace. To overcome the issues faced by the company, the shareholders were provided with information about the significance of making investments, which improved the financial condition of PIA and enhanced the brand image and identity too. The general public was not much assured of getting the right services from the company because of the threats faced by the company. The company thus made sure to allocate budget properly with the management of interest rates and inflation rates to ensure that cheaper travelling services were delivered to the clients, both for domestic and international fleet services.
Second Progress Report
There are 4 important competitors in the Pakistani aviation industry. However, major share of the flight business is conducted by the Pakistan International Airlines. I suppose that having a dominant presence in Islamabad as well as Lahore, the PIA have the facility of controlling the majority of the share of cargo business. However PIA devotes about 70% of its resources over domestic business. By this means they control about 10.5% of the GDP of the country. However, at present new domestic airlines like Indus Air have emerged who would attempt to deliver service at lower air fare to the customers. In my opinion, it would incur loss for PIA if they enter in to market competition with the new market entrants. Hence I would suggest that Pakistan develop the PIA as the frontline international aviation organization of Pakistan.
I see ample possibilities for PIA to emerge as a major international air Ferrier for Pakistan and the whole of Southern Asia. Pakistan is a major airway for communication with Middle East and the Asia-Oceania belt. The PIA have a multilingual on-board task force that helps in catering service successfully to global passengers. Other important possibilities that I suppose might be beneficial for the successful emergence of the organization are its subsidized air fare and the high level of government protection that the company receives. However, I feel that the company runs old and ageing fleets because the operational cost are becoming high. The quality of food served and the customer management policies of the company should be more professionalized.
The major share of the ticket booking is done manually by the attendants at the air stations. However, majority of the domestic flight stations of Pakistan are run by private agencies, which control the ticket booking facilities also. They demand incentive shares on everyday bookings of PIA. I have identified that due to the diligent web tracking and cybercrime in Pakistan the people are feared to book tickets online. Online flight bookings that are done online are majorly conducted by third party vendors and brokers. This is why the company should look up to establish direct flight booking websites that uses safe interfaces for monetary transactions. Besides, I feel that the company should also introduce an indigenous mobile application that would provide all sorts of details to the customers regarding flight service as well as provide an option of safe thicket booking.
Final Report
There are some major loopholes that the company should attend to, in order to develop the quality of service and match the standard of the major airlines of other countries. Smaller air ferrying companies that have emerged in Pakistan are providing elegant services. PIA needs to elevate their standards also. Namely, the quality of service and flight attendance that the customers of business class of PIA get is poor. The food grade and quality as well the requirements of the individual customers’ are not catered to thus I personally feel that the company should appoint more staff tom solve the problem. The control of the upper management of the service section employees should also be strengthened.
Industry overview
Pakistan has number of airlines present in the country so that it can provide the travellers enough opportunities to travel to their destinations. Companies such as Pakistan International Airlines (PIA), Shaheen Air International Limited (SAIL), Indus Air and Air Blue Limited (AL) have been operating in the Pakistani market (Hussain 2016). Out of these airlines, it can be seen that the majority of the shares in the market are held by Pakistan International Airlines and has a monopoly on the domestic aviation sector that is present in the country. After the open skies policy was adopted in the country in the year 1990, it was seen that there was an increase in the licenses for new airliners who wanted to start their operations in the country (Ali, Dey and Filieri 2015).
PIA is also the leader of the market with respect to the shares that are present in the market along with the distances covered and the number of carriers that are present in the company. The company also consists of 39 fleets out of which 24 airplanes are operational in nature. The fleet includes airlines such as Airbus 310-300, Boeing 747-367, Boeing 737-300, Boeing-340 and Boeing 777-240. With the help of these airplanes, the company is able to meet the request of the customers as well (Berghofer and Lucey 2014). The company also operates in 34 international and 24 domestic destinations, which has helped them in gaining the maximum number of shares in the market. Currently, the company is in a financial turmoil, as it has been incurring losses and at the end of the financial year of 2013, it was seen that the net loss of the company amounted to $33.2 billion. This was due to the lack in the management skills and the operational capabilities, which prevented in making better rate of returns (Henatabadi 2013).
Competitive analysis
This part will be explained with the help of the SWOT analysis so that the strengths, weaknesses and the opportunities can be identified. This will help the management in utilizing the resources that are present to the fullest extent so that the company can revive itself. Apart from this analysis, the PEST and Porter’s Five Forces will also be conducted so that the external environment that is present in the country can be analyzed. This will help the company in understanding the effect that the external environment creates on the smooth functioning of the company.
Strengths
The company is one of the highest shareholders of the airlines market that is present in the country. The increase in the market share of the company has enabled them in expanding their operations in a proper manner. Another strength is that the company is one of the oldest in the country that has enabled them in increasing the image of the brand among the customers as well. This has helped in providing subsidized fares to the customers so that they can be loyal towards the company (Grant 2016).
Weaknesses
The major weakness of the company is that it lacks the promotional strategies that will help in increasing the attraction of the customers towards the products. The fleet of airplanes that are present needs to be renewed as well so that the cost of operations can be lowered to a great extent. Another weakness of the company is that the loyalty programs that are present are not being utilized in a proper manner (Shariatmadari et al. 2013).
Opportunities
The company can increase its market penetration since it is one of the largest operational companies in the Pakistan market, which will help them in increasing the rate of revenues as well. Another opportunity is that the subsidized fares that are being provided by the company will allow in increasing the competitive edge over the rival companies that are present (Rezaei, Fahim and Tavasszy 2014).
Threats
The major threat for the company is that most of the customers are of the perception that the country supports terrorism, which is creating a problem for the company to operate in a full-fledged manner. Another thing is that the instability that is present among the government of the country makes it difficult for the expansion due to the various rules and procedures that are present. The strategies that are taken up by the rival companies is also hampering the reputation of the company in the market (Grant 2016).
Political
The country has seen some stability in the political scenario in the recent years, which has helped in increasing the rate of investment in the airlines market. This will help the companies in expanding its operations in a proper manner. The change in the government has helped in changing the owners of the business as well, which has =created a greater impact on PIA as well. Another scenario is that the defense ministry in the country has allowed planes to fly smaller routes within the city, which has helped in increasing the reach of the customers as well (Holloway 2017).
Economic
The capital income of the country has decreased to a great extent, which has led to the loss of the overall economy as well. The decrease is due to the rate of inflation that is present along with the lower rate of foreign exchange that has resulted in decreasing the buying power of the customers. The rate of interest of the banks in Pakistan is also high, which has led to the low turnout of investors (Vellas 2016).
Social
Most of the customers are aware of the conditions that are present in the market and wants to get the best values for the money that they are spending. The satisfaction from the services that are being given to the customers is also one of the competitive advantages. The society in the country is also turning liberal, which has helped in the process being automatic in nature (Holloway 2017).
Technology
The airlines that are present in the country are also taking up technological advancements such as the process of automation, which has helped in increasing the profit levels as well. The internet has helped in the introduction of e-ticketing system so that the passengers can book their ticks online (Vellas 2016).
Bargaining power of suppliers- The bargaining power is high due to the presence of competitors in the airline industry such as Airbus, Boeing and Public air travel. The oil companies are also giving their services on credit to PIA and the defense ministry has made rules and regulations regarding the aviation system (Shaw 2016).
Bargaining power of customers- The bargaining power is low due to the monopoly that is present in the airline sector. The level of competition is also very low with competitors such as only Air Bus. There has been decrease in the number of flights due to the perception that the country supports terrorism activities (Wiegmann and Shappell 2017).
Threat of substitute products- This threat is lower in nature due to the fact that the passengers prefer travelling through the airline mode rather than taking the sea route or any other substitute (Graham 2016).
Threat of new entrants- This type of threat is low in the market due to the fact that the international destinations from the country are mainly covered by one company that is PIA, which has given them the monopoly power. The market that is present in the country is also very limited that has restricted the bargaining power to a great extent (Shaw 2016).
E-business strategies refer to the short-term and long- term business goals, which involve proper skilled planning. It is a part of the corporate strategy and business plan of Pakistan International Airlines (PIA). The e- business strategies of PIA is associated with other plans of marketing as well as organizational and IT strategic plans. With continuous evolvement in the internet, most of the online businesses have settled in few particular categories of e- commerce (Ali, Dey and Filieri 2015). It is important to choose perfect e-business strategies for the company, which involves effective decision- making by the management. PIA is intended to provide the best customer experience with good service delivery, innovation in their products and services, cohesiveness, reliability, integrity and safety. By making the most use of their e- commerce, PIA wants to grow, develop, expand and earn maximum revenue by providing best services to the customers.
According to Díaz and Martín-Consuegra (2016), planning forms the basis of making effective business strategies. Research has shown that PIA does not depend solely on a single department for their planning activities but take opinion from all the departments. It helps them in gathering information from the entire organization to look for the demands of the customers. Their interdependent management framework has planned to expand in a new area, which was not served before by taking help from the Marketing department. This particular department with their strong networking has found out about the number of passengers in the target market to implement Fleet Planning according to the number of passengers. Moreover, the organization has coordinated with the finance department in order to find out if there are sufficient funds are available for carrying out the online business in a successful manner. Evans et al. (2017) stated that they have unique strategies of dividing the actual goals into sub- goals to attain them with effective planning and supervision. The R&D of PIA is constantly working to identify the new areas, which were not served earlier in order to get hold of potential target market. The work of R&D is to make fresh plans to serve the new areas with better services. The management of PIA considers demographic dynamics, class and standard of target market and growth expectation while making strategies. It is the responsibility of the marketing department to promote the online business of PIA in the target area by using various marketing tools. For instance, outdoor advertising and print media is used as marketing tools for promoting PIA. They keep in mind different factors for planning the objectives and then set strategies to achieve those. Fleet management is involved in the process of making decision regarding the purchase or hire of aircrafts. The organization always uses the strategies of consulting with the marketing department along with finance and R&D to make any important decision. They go for processes that are more economical in order to save money to invest in other purpose (Gupta and Narain 2015).
However, the organization faces certain issues while planning and implement the strategies in the practical life. When PIA started their online business for the first time, they were suffering from lack of online identity verification. Their portal was not well developed and the customers were unaware of the authenticity and there were not much information conveyed to the customers through the portal. Again, there are too many rival companies of PIA in the highly competitive world, who have initiated online businesses as well. Therefore, PIA needs to amend their strategies of e-business in order to cater to the needs of the customers otherwise, they might face difficulty to survive in the market (Min and Joo 2016). Even though PIA managed to develop their online portal but they failed to maintain customer loyalty to certain extent. They were facing challenges in retaining their loyal customers, as they were not being able to trust the online business f the organization. Lack of trust was followed return and refund on the part of the customers. This has affected the online sale of products and services of PIA as most of the customers turned way to the services of the competitors. They could not provide something new and innovative, which would attract the customers away from the customers (Saleem, Zahra and Yaseen 2017). Therefore, they required to think of alternatives, which will help to build trust and create customer value. Their pricing strategy could be amended by enhancing the value of products and service delivery. To make a strong base in the competitive market they needed to overcome the issues and attract the customers with modified management strategies.
Pakistan International Airlines has always proved to be a source of recreation and money for everyone. The management of the company has designed the corporate culture in such a way that the people who are engaged in working with the organization and also the people who travel with the organization enjoy a pleasant experience. The agents, the suppliers, the customers and other people involved in the business are always compensated accordingly. Apart from this the insurers, the politicians and also the employees who work for the company are fairly compensated accordingly. The management of PIA is driven by the highest standards of corporate governance and social responsibility. The mentioned Airlines Company of Pakistan is a company owned by the Government and thus it is more likely inclined to satisfy the different customers, partners, suppliers, communities and the employees. The management has designed a range of initiatives for making a positive impact on the services that they provide to the customers of the organization. The company practices active corporate citizenship by means of social services, support for different kinds of non-profit organizations, support for the different types of employees and many more as such. The government has appointed a committee that decides and implements the best practices that is best suited for the organization.
Some of the main social Services of the organization are as follows;
- Helping IDP’s- The Company is committed to help the distressed and the people who are neglected in the society. It contributes to the society by learning and experiencing from different situations and then addressing them on their own. They have helped lots of children and families during the unrest in the northern part of Pakistan. Apart from these large volumes of relief goods were transported to these people during times of distress.
- Boy Scouts Associations- The PIA Boy Scouts Association is based on a scouting program for young boys and lies on the principles of value of the scout program and laws.
- Support for Non Profit Organizations-The Company being a responsible one helps the Non Profit Organizations by various means. They provide relief materials, provide sponsorship moneys to different social events and also help some NPO’s to raise funds.
- Training and Education-The Company has a dedicated training center for its employees and other staffs where they are taught the basics of the trade and the ways by which they must handle customers and present themselves before them. The training courses help the employees to be responsible employees.
The company has been going through serious problems nowadays which have downgraded their performance. The main issues are flight delays and regular cancellations which has almost become a norm with the airlines. PIA is also suffering from a severe financial crisis. The company is in immediate need of need of new airplanes to replace their age old and tested fleet. However the lack of funds has crippled their position and they are forced to continue with the old ones which have led to the delays and cancellations. There are lots of different cultural issues that are faced by the organization. The corporate cultural issues are such a issue. The main cultural issues of the company are as follows;
- Rules and Regulations breach- There have been numerous instances where “PAKISTAN INTERNATIONAL AIRLINES”have failed to operate according to the rules and regulations of the different countries where they fly. The management must make it a point to ensure that the company operates according to the rules and regulations of the host country.
- Contract breach- The Airline management must take care of the different contracts of the airports. However in recent times they have failed to adhere by such policies. This has often led to serious issues and the Airport authorities along with the government of the host countries are seriously thinking about cancelling the license of PIA to operate in these airports.
- Avoiding the customer’s point of view- The Customers must be the first and last preference of the company as because it is the customers who provide the company their required profit. The company in recent times has failed to manage the grievances of the customers and thus have faced negative reviews from them.
- Cultural Mismanagement- The employees of “PAKISTAN INTERNATIONAL AIRLINES”are facing issues while managing foreign customers and thus the company has seen a dramatic fall in the number of International Customers selecting the organization for travel.
Corporate Commu8nication is one of the main elements of the business and the organization gives utmost importance to the following to ensure the smooth running of the business. The management of Pakistan International Airlines has a dedicated communication team that has been appointed to carry on smooth and unhindered communication between the company and the investors, customers or the shareholders of the organization.
- Communication with Stakeholders- The communication with stakeholders is utmost important as the company informs them about the different problems or the different decisions and takes their consent on each such occasions. They are communicated through board meetings or letters which makes it easier for them to get a clear and transparent view of the different ideas and decisions of the company.
- Communication with employees- The employees are again communicated through the communication team and they are informed about the policies and rules of the company in the training sessions and also communicated at their workplace.
- Communication with customers-The customers are communicated through different advertisements and different media releases. The communication is important for the organization to establish an effective relation with the customers.
References
Ali, F., Dey, B.L. and Filieri, R., 2015. An assessment of service quality and resulting customer satisfaction in Pakistan International Airlines: Findings from foreigners and overseas Pakistani customers. International Journal of Quality & Reliability Management, 32(5), pp.486-502.
Berghöfer, B. and Lucey, B., 2014. Fuel hedging, operational hedging and risk exposure—Evidence from the global airline industry. International Review of Financial Analysis, 34, pp.124-139.
Díaz, E. and Martín-Consuegra, D., 2016. A latent class segmentation analysis of airlines based on website evaluation. Journal of Air Transport Management, 55, pp.20-40.
Evans, S., Vladimirova, D., Holgado, M., Van Fossen, K., Yang, M., Silva, E.A. and Barlow, C.Y., 2017. Business model innovation for sustainability: Towards a unified perspective for creation of sustainable business models. Business Strategy and the Environment, 26(5), pp.597-608.
Graham, A., 2016. Airport strategies to gain competitive advantage. In Airport Competition (pp. 109-122). Routledge.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Gupta, M. and Narain, R., 2015. A fuzzy ANP based approach in the selection of the best E-Business strategy and to assess the impact of E-Procurement on organizational performance. Information Technology and Management, 16(4), pp.339-349.
Holloway, S., 2017. Straight and Level: Practical Airline Economics: Practical Airline Economics. Routledge.
Hussain, R., 2016. The mediating role of customer satisfaction: evidence from the airline industry. Asia Pacific Journal of Marketing and Logistics, 28(2), pp.234-255.
Jenatabadi, H.S., 2013. Impact of economic performance on organizational capacity and capability: A case study in airline industry. International Journal of Business and Management, 8(17), p.112.
Min, H. and Joo, S.J., 2016. A comparative performance analysis of airline strategic alliances using data envelopment analysis. Journal of Air Transport Management, 52, pp.99-110.
Rezaei, J., Fahim, P.B. and Tavasszy, L., 2014. Supplier selection in the airline retail industry using a funnel methodology: Conjunctive screening method and fuzzy AHP. Expert Systems with Applications, 41(18), pp.8165-8179.
Saleem, M.A., Zahra, S. and Yaseen, A., 2017. Impact of service quality and trust on repurchase intentions–the case of Pakistan airline industry. Asia Pacific Journal of Marketing and Logistics, 29(5), pp.1136-1159.
Shariatmadari, M., Sarfaraz, A.H., Hedayat, P. and Vadoudi, K., 2013. Using SWOT analysis and SEM to prioritize strategies in Foreign exchange market in Iran. Procedia-Social and Behavioral Sciences, 99, pp.886-892.
Shaw, S., 2016. Airline marketing and management. Routledge.
Vellas, F., 2016. The international marketing of travel and tourism: A strategic approach. Macmillan International Higher Education.
Wiegmann, D.A. and Shappell, S.A., 2017. A human error approach to aviation accident analysis: The human factors analysis and classification system. Routledge.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
