(TIỂU LUẬN) STRATEGIC MANAGEMENT FOR TOURISM AND HOSPITALITY

STRATEGIC MANAGEMENT FOR TOURISM
AND HOSPITALITY
BUSM4572 - Semester 1, 2021

Assignment 3A - Strategic Management Group Report

Nguyen Thi Quynh Nhu (s3740838)
Nguyen Tra My Edwards (s3759026)
Group Members
Nguyen Khanh Huyen (s3794744)
Tran Giang Ngoc (s3802257)

Lecturer

Dr. Nuno Rebeiro

Class

Thursday 11:30 AM - 14:30 AM

Date of submission

21st May 2021

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Table of Contents
INTRODUCTION - 270w

4

MACRO ENVIRONMENT - 410w

4

1.1 Political Factor

4

1.2 Economic Factor

4

1.3 Social Factor

5

1.4 Technological Factor

6

1.5 Environmental Factor

6

1.6 Legal Factor

6

MICRO ENVIRONMENT - 350w

6

A. Threats of new entrants (Very Weak)

7

B. Bargaining power of buyers (Weak)

7

C. Bargaining power of suppliers (Moderate)

7

D. Threat of substitute products (Strong)

7

E. Rivalry among existing competitors (Weak)

7

CORPORATE’S SUSTAINABLE COMPETITIVE ADVANTAGES- 570W

8

1.1. Resources and Competencies

8

1.2. Tangible Resources

8

1.3. Intangible Resources

9

1.4. Core competencies

9

1.5 VRIN Framework

10

CURRENT STRATEGY IDENTIFICATION - 770w

10

Business Strategy

11

Different Level of Current Strategy

11

NEW STRATEGIC INITIATIVES - 683w

13

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Critique of current strategy

13

New Strategy

15

STRATEGY IMPLEMENTATION AND EVALUATION 800w(incl.risk)

17

RISK MANAGEMENT

17

CONCLUSION 330w

17

References

18

Appendix

24

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INTRODUCTION
The purpose of this report is to review the micro and macro environment of Vietnam Airlines
(VNA) within the aviation industry to evaluate the current strategy, discuss the current generic
type of business strategy; presenting a new strategy as well as evaluate its effectiveness in
achieving the organization objectives and implementing properly.
Vietnam Airlines (VNA) is the leading national airline in Vietnam. Before Covid-19 hit, in 2019
alone, the company projected the record revenue of 100,316 billion VND, exceeding 8.3% in its
annual plan and achieved its new record as the best performance ever (Vietnam Airlines 2020).
However, the COVID-19 pandemic has an unprecedented crisis to all airlines, VNA recorded a
loss of 10,676 billion VND, caused by total assets decreased by 17.6% with increasing major
debts and lower significant equity (TTXVN 2021). In such a context, it requires urgent
application of a series of policies to respond quickly to the new situation.
The outline of the report starts with a micro and macro environment analysis to identify the
trends and competitiveness within the aviation industry to develop strategic context. Through the
analysis, resources and competences of the organization that are likely to identify sustainable
competitive advantages to compete within the industry by using different frameworks. Therefore,
aligning with VNA's vision of the objective to rehabilitate the revenues and routes in 2023 and
developing a sustainable aviation company to 5-star by 2030, is a major difficulty that every level
of the organization needs to involve.
The results of the plan will favor the social and economic development of Vietnam, involving the
objectives of adopting both the Retrenchment strategy, applied for the short-term (2021 - 2023)

and Growth strategy, to be resumed from 2024 onwards.

MACRO ENVIRONMENT
The P.E.S.T.E.L framework by Aguilar is applied to demonstrate critical external factors that
intensely influence the tourism industry.

1.1 Political Factor
To help firms deal with the COVID-19 pandemic, the Government deducted revenue tax relief up
to 30% for middle and small businesses (Huy Thang 2021). The airline industry needs strong
support from the Government in terms of the post-recovery pandemic process since it is a pivotal
sector in the value chain (Minh Tuan 2020). .

1.2 Economic Factor
Tourism is ranked 4th in terms of the country's GDP contribution. In 2019, the GDP was high
compared to other countries , although the slow growth in the first quarter of 2019.
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The trade war between the U.S and China brings Vietnam certain chances and challenges
regarding labor force upskilling and infrastructure enhancement. National income is another
aspect, in 2008, there were 20.5 million domestic travel trips, then enormously reached 80
million in 2018, whose main objectives are the Vietnamese’s growing middle class (World Bank
2021).

1.3 Social Factor
As for demographics, there were 96.5 million people in 2019, 55% under 35 years old, which is
highest among neighboring countries with similar income levels (World Bank 2021). The
psychology and behavior of Vietnamese people mainly concentrate on quality, brand attributes
and good purchasing experiences. Digital behavior regarding multi-channel and omni-channel

and young customers’ demand for quality require effective loyalty programs.
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1.4 Technological Factor
Several projects such as Metroline, upgrading and constructing inner-city highways (Xuan Tung,
Thu Dung & Duc Phu 2020), the opening of high-speed train 320km/h (Vietnam News 2021) are
other cheaper and speedy transports alternatives that can be formidable rivals for the airline
industry. In addition, the Government attempts to industrialize the economy with such
technological innovation and start-up support (Vietnam Briefing 2020), to help improve
customer’s journeys, yet the digital transformation stands at the infancy stage (Deloitte 2020).

1.5 Environmental Factor
Industrial development along with travel rampant has seriously caused environmental pollution
and natural resources damages (Ai Vuong 2016). Another drawback comes from lacking longterm vision related to the policymaking process as well as concern towards environmental issues
(Tuan & Rajagopal 2019). .

1.6 Legal Factor
Vietnam has a friendly border since the Government is willing to provide visas for almost all
countries globally. However, the impacts of COVID-19 resulted in the restriction of the
international flight that seriously affected Vietnam Airlines business. Besides, to encourage
tourism purposes, many banks have offered loans for tourists.

MICRO ENVIRONMENT
Porter's Five Forces model will be used to identify and analyze the five competitive forces that
shape every industry and aid in determining an industry's weaknesses and strengths.

A. Threats of new entrants (Very Weak)
Despite being ranked third in the Asia-Pacific region for quickest development, Vietnam's

aviation industry is deemed low entry due to high entrance barriers, such as economies of scale,
high capital costs, and a limited supply of suitable locations, which limit new entrants. The
government has taken attempts to ease the requirements for entering the aviation industry;

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nevertheless, due to the severe laws prohibiting outside investors from owning aircraft, these are
largely domestic competitors.

B. Bargaining power of buyers (Weak)
As a full-service airline with a 4-star service rating, Vietnam Airlines targets customers who are
not price-sensitive and are willing to pay more for excellent service. The concentration of a big
group of consumers, such as tour operators, domestic/international hotel or convention
organizers, and the prevalence of poor profit margins are not included in this analysis. As a result,
customers have little or no control over pricing changes.

C. Bargaining power of suppliers (Moderate)
Vietnam Airlines' main suppliers include aircraft (Boeing, Airbus, etc.) as well as smaller
providers in the area of food and beverage, human resources,etc. The choice of aircraft suppliers
requires the prestige of demonstrating product certification. However, the low cost of switching
raw materials, market availability, and rivalry makes suppliers' bargaining leverage low to
moderate.

D. Threat of substitute products (Strong)
Air travelling becomes one of the major modes of transport which brings about many customer
segments and they tend to be price sensitive. The threat of substitute products is high due to the
fact that the switching cost is low, which means passengers can switch to other low-cost airlines
such as: VietJet, Pacific Airlines and Jetstar.

E. Rivalry among existing competitors (Weak)
Service is a highly competitive industry where the boundary between product differentiation is
hard to define. Currently, in the domestic market, Vietnam Airlines has 4 main direct competitors
including: Vietjet Air, Jetstar Pacific, Bamboo Airways and VASCO, in which, VietJet Air is
considered the main competitor with 43% market share. Hence, the rivalry among existing
competitors for Vietnam Airlines is medium to high.

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CORPORATE’S SUSTAINABLE COMPETITIVE ADVANTAGES
1.1. Resources and Competencies
Resources can be defined as stocks of tangible and intangible assets available for the company,
whereas competencies are routines for the deployment of resources (Galavan 2015). They
represent the main source of competitive advantage and profitability for any enterprise that can
enable businesses to drive the industry and to compete with its products and offering to
customers needs (MBA Skool Team 2020).
This section uses one of the most cited models of the resource-based view of the firm, VRIN
model, to describe how Vietnam Airlines can achieve sustainable competitive advantage through
resources that fulfill certain criteria (Salminen 2017). Resources can create a competitive
advantage, but they must be scarce, distinctive, non-tradable, inimitable, durable, idiosyncratic,
and non-substitutable (Pearson, Pitfield & Ryley 2015, p.179-189).

1.2. Tangible Resources
Capital
Vietnam Airlines, 86% owned by the government, using various capital sources to ensure
sufficient provision of financial resources for investment needs (Reuters Staff 2020). Due to the
global crisis brought by the COVID-19 pandemic, Vietnam Airlines recorded a net loss of $453

million in the first 9 months of 2020. However, Vietnam's National Assembly approved a plan to
increase the capital of state carrier Vietnam Airlines following the coronavirus pandemic by

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purchasing new shares from the country's flag carrier via its State Capital Investment Corp
(SCIC) (Reuters Staff 2020).
Modern aircraft
Vietnam's largest airline fleet
In its journey to become a 5-star airline, Vietnam Airlines successfully flew its first Boeing 78710 Dreamliner, one of Asia's youngest and most modern fleets capable of performing efficiently
and effectively while providing exceptional passenger comfort and amenities advanced
technology (Vietnam Airlines 2019).
Advanced Technology
The airlines also introducing the ecoDemonstrator program which aimed to solve contemporary
issues and create safer and more sustainable flights by using less noise reduction technology, UV
lights technology to sterilized aircraft cabins and cockpits to deal with the COVID-19 pandemic
and sustainable fuels that can reduce CO2 emissions by up to 75% (Vietnam Airlines 2018).

1.3. Intangible Resources
Brand Reputation
Vietnam’s aviation industry is primarily driven by two main types of airlines which are full cost
and low-cost airlines. Vietnam Airlines is the largest full - cost airline in Vietnam, providing
large, complicated operations with numerous staff and different types of aircraft to support both
domestic and international flights (Mai & Le 2014).
Service quality
The brand Vietnam Airlines after ten years of membership in Skyteam is similar to other airlines
in the region, which also have positive changes to service quality. Vietnam Airlines, in particular,
was recognised as a 4 - star airline by SkyTrax for four consecutive years from 2016 to 2019 due

to its consistent service level (Vietnam Airlines 2020).

1.4. Core competencies
Pearson, Pitfield and Ryley (2015, p.179-189) stated that resources which meet all four
requirements of VRIN are considered core competencies and sources of sustained advantage.
Digital transformation
Vietnam Airlines is continually seeking a transformation to a digital airline to improve service
quality and customer experience as a step in becoming a 5 - star airline. Specifically, the business
leverages the development of ICT in Vietnam to digitize flight management documents, artificial

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intelligence (AI) and Big Data in business, operations, and fleet management and applies
automation and customization to enhance the customer experience (Vietnam News 2019).
Self-training transshipment program
One of the most outstanding advantages of Vietnam Airlines is the ability to localize the pilot
training program by launching its first simulator complex in Vietnam, allowing the brand to take
the initiative in training, ensuring that pilots meet the safety criteria. This self-training
transshipment enables saving up to 285 billion in 10 years (Vietnam Airlines 2018).

1.5 VRIN Framework

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CURRENT STRATEGY IDENTIFICATION
The airline industry has suffered tremendous changes in past decades. Thus, firms need to pursue

appropriate strategic management to achieve competitive advantages to survive in the industry
(Teece, Pisano & Shuen 1997).

1. Business Strategy
Differentiation
There are three generic strategies proposed by Michael Porter to gain significant competitive
advantages. Differentiation was implemented by Vietnam Airlines, the strategy concentrates on
offering unique and high-quality products and services at premium prices (Akan et al. 2006).
Specifically, VNA upgraded their services by providing the extra service seats 1 and advanced
aircraft with a new generation fleet 2 (VNA n.d.). Moreover, the airlines highlight Vietnamese
cuisine as a hallmark of VNA flights, newly-designed tableware, as well as offering pajamas,
blankets, and bed linen to bring the best comfort and luxurious experience on those long-haul
trips (VNA n.d.). Most importantly, to become a digital airline leader, VNA has strenuously
worked on applying modern technologies. Skywise 3 , Oracle cloud 4, and new versions of mobile
applications with more advanced features 5 (Vietnam Investment Review 2019). Additionally, the
strategic strength of VNA falls for 75% support of the Government (Pearson et al. 2015).
Focus cost
Apart from the differentiation strategy, VNA pursues the focus cost regarding its adoption of
Jestar Pacfics (Pacific Airlines) to tackle the threat of low-cost rivals in Vietnam (CAPA 2015).

2. Different Level of Current Strategy
Corporate Level
According to Carman & Langeard (1980), the growth strategy focuses on the expansion of new
products and markets, which is the main desire of VNA at this level. With the ambition to
become the digital leader airlines along with the highest level of service, the firm looks for the
proper progress of technology in its operation and business activities, upgrade customer
satisfaction and derive 5-star airlines (VietnamPlus 2019).
Business Level
At this level, Vietnam Airlines indicates approval for its functional level strategies. The firm has
worked with R&D, HR and Marketing Department and gradually approached its goal by the

application of new technologies, and the great enhancement of customer satisfaction during the
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flights, consequently, recevied three honoured awards and ranked 4-star as one of the best 20
airlines on Skytrax for its services (Nguyen 2019).
Functional Level
This level incorporates the activities and subfunctional activities to achieve the goals. According
to the framework of Ansoff’s growth strategies, product development emphazing on presenting
new products to existing market to boost market share (Hussain et al. 2013), and VNA literally
applied this concept.

Figure 4: Ansoff’s growth strategies

R&D Department
To achieve its goal, Vietnam Airlines added the VNPay QR code mobile application 6 (Nguyen
2019). Cyber security, development of services including e-payment are other main focuses.
Moreover, the firm enabled the e-documents and e-flight folders 7 (Vietnam News 2019), and
collaborates with VNPT Service Provider Group to develop the leading technologies to resolve
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the digital transformation issues (Ngoc Lan 2019). Additionally, the firm represents the airlines
to work with partners from IATA 8 on a digital health passport 9 project to manage travel health
credentials (VietnamPlus 2021).
Marketing Department
Besides product innovation, Vietnam Airlines emphasized on enhancing their services by
launching a new international campaign “Reach Further” to exhibit the carrier’s fleet and

ultramodern features to deliver superior flying experiences (Marketing 2015).
HR Department
Improving service along with nurturing the core competencies of human resource, Vietnam
Airlines has intensified its training and development programs for all staff and cabin crew
(Nguyen 2019). Specifically, in 2019, “Changing The World '' workshop 10 (Pham 2019), safetysecurity training courses with IOSA standards and English courses were also provided (VNA
2019).

NEW STRATEGIC INITIATIVES
1. Critique of current strategy
To assess whether VNA’s strategy is suitable for the current day, the Balanced ScoreCard is used.
It is a tool for strategic management which determines if an organization’s business practices
correspond with its vision and strategies (Grigroudis et al. 2012).

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(Figure 5. Balanced Scorecard, Bigliardi & Bottani 2010)
Vision and Strategy
To maintain the no. 1 position of a national flag carrier and become a leading digital airline in
Asia (VNA 2019).
● Financial perspective: Increase shareholders’ investment values.
● Customer perspective: Offer high quality and diverse services to meet customers’
expectations.
● Internal Business Processes perspective: Moving towards digital transformation to
enhance business operation.
● Learning and Growth perspective: Continue to deliver 4 – star services and strive for 5 star standards.
Strengths
There is consistency between VNA’s vision and its internal business processes, which
emphasizes on the business’s continuous effort to apply technology to enhance efficiency and to

offer greater customer service, implicating that the firm is very customer – oriented. VNA also
leaves itself room for growth, as it aims to achieve 5 - star standards. These ambitions are
supported from the financial perspective, where VNA gets the government's support as it is 86%
owned by the government (VNA 2016).
Limitations
In the domestic (Vietnam) market, VNA’s succeeds with its differentiation strategy, but in the
regional (Asia) market, VNA still struggles with differentiation because compared to other Asian
airlines like Japan Airlines, Cathay Pacific, Thai Airways, Malaysia and Singapore Airlines, VNA
is rated 3* only, while the others are rated 4* and 5* (Pearson et al. 2015).
Furthermore, the growth strategy alone is not suitable for the current situation where Covid 19 is
still prevalent. With closed international flights, the domestic market becomes fiercer and VNA
has to compete not only with low - cost airlines but also with trains and buses (Nguyen 2021). In
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2020, VNA’s revenue fell 59%, flights decreased by 48% and passengers dropped by 51% (Thuy
2021). Hence, there is a need for a complimentary strategy.

2. New Strategy
Although the firm needs restructuring, it still expects to make profit as of 2023 and resolve all
losses by 2025 (Thuy 2021). Thus, VNA should adopt both the Retrenchment strategy, applied
for the short-term (2021 - 2023) and Growth strategy, to be resumed from 2024 onwards.

Retrenchment
Corporate level: For the next 3 years, VNA should implement retrenchment, which is to reduce
the level or the size of operations to prevent corporate value loss. It is suitable for a turbulent
environment with negative economic conditions, low ROI and unstable markets. (Ung et al.
2016).
Business level: Retrenchment consists of asset retrenchment (divestitures, closing and laying off)

and cost retrenchment (reducing marketing expenses, salaries, administrative and other indirect
costs) (Morrow et al. 2004). This will help VNA to reduce business complexity and become agile
when responding to environmental changes.
Functional level: VNA should continue taking these following downsizing actions to increase
business efficiency. In terms of finance, divesting a part of the firm’s investment capital at highly
efficient businesses in the aviation industry to improve the firm’s finance and get support from
the government for selling additional shares to raise capital (Thuy 2021) and increasing liquidity
via more bank loans (Flight Global 2021). Regarding logistics, they should negotiate with
suppliers for late payments (Flight Global 2021) and boost cargo transport (Giang 2020). As for
operation, remodeling production and modifying business scale (Giang 2020). Lastly for human
resources, reorganizing labour and adjusting salary policies (Giang 2020).

Growth
Corporate level: Considering VNA’s goals for 2025, the brand should maintain the market
positioning of the best airline in Vietnam and continues to strive to be a 5* digital airline.

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Business level: The firm should continue streamlining processes through technological
innovations while transitioning from 4 – star to 5 – star standards by utilizing its competitive
advantages analysed earlier and generating new USPs.
Functional level: Once the pandemic is controlled and the aviation industry gets back to normal
operation, VNA should learn from other 5 - star airlines and adopt these new tactics and
measures:
The Emirates provides customers with hygiene kits and protective gear for cabin crew and
aircraft disinfection (The Emigrates Group 2021). Likewise, Garuda Indonesia and Singapore
Airlines with exemplary hospitality delivered by excellent frontline staff and consistent onboard
product standards; and Japan Airlines’s Economy Class elevated with comfortable seats and inflight entertainment (SkyTrax 2020). Besides, Etihad Airline introduces multi-lingual Wellness

Ambassadors offering 24/7 customer support on travel health, wellbeing and sanitation. These
services are available on web chat and email (Future Travel Experience 2021).

STRATEGY IMPLEMENTATION AND EVALUATION - 800w
Each service organization has its characteristics, therefore, many approaches are drawn from a
variety of disciplines. Using Okumus et al., (2010) school of thought, the Configuration
Approach reflects the complexities and dynamics of the strategy process that need to be
thoroughly understood, a cluster of interconnected structures, linked processes, and mutually
dependent practices that is best viewed systematically. Analyzing the position of Vietnam
Airlines in the market, based on the BCG matrix, VNA is gradually step-by-step turning from a
star to a cash cow, to eliminate the possibility of low growth in the domestic market, analysis of
internal context and operational process are under investigation.
Internal context (org structure, culture and leadership)
In the internal context, the distribution of power and the dominant organizational dimension are
the two main criteria that differentiate the typical configurations (Janićijević 2017). Vietnam
Airlines has a large hierarchy organizational structure, the implementation of strategy needs to
align the organization structure to business strategy. The individuals are responsible for
developing and deploying the strategy and monitoring results. VNA has a general meeting of
shareholders where the Board of Directors (BOD) will directly Receive instructions from the
executive board to implement a strategy to deal with a huge capital loss situation. Regarding the
experience, skills, and competencies needed to execute the strategy, the CEO and Execute
Management are responsible for managing different departments, the need to adapt quickly and
strategically is essential for success in a high-performance organization (Figure 6).

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VNA’s starting point as a Full-Service Airline Carrier (FSC), the company organization structure
characterized by hierarchical and vertical whose functional and divisional departments are

separate, designed to align experts in the respective fields, where individuals perform tasks where
they are most proficient. However, VNA structures can experience the “silos”effect and often fail
to communicate or coordinate effectively, cross-functional can be difficult to promote, especially
resistant to change (SHRM n.d.). With centralized decision-making, VNA can take advantage of
economies of scale and centralized purchasing functions. To execute the short-term strategy, the
corporate needs to look into the positions where unnecessary resources are excluded for longterm benefits.
Culture exercises an indirect form of control, Vietnam Airlines’ organizational culture is mainly
based on the Clan as well as the Hierarchy culture model. It wants to continue to strengthen the
Clan and Adhocracy culture model, limited Hierarchy culture model (Nguyen 2017). With a
general rating of 3.917 / 5 points, the company values employees well-fair and provides benefits
to maintain the company’s cohesiveness and solidarity.
Vietnam Airlines’ corporate cultural values have been nurtured over our 25 years of development,
its target is to become the Favourite Workplace in Vietnam (Vietnam Airlines n.d.). To preserve
and promote cultural strengths at the workplace, Vietnam Airlines has launched a series of
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cultural programs such as Safety Culture, Office Culture, Four “Xin” (please) – Four “Luôn”
(always), Accelerating improvements Faster and Higher as the basis of employees’ work ethics,
attitudes, and behaviors. The focus is on communicating messages on corporate value to
customers and shareholders through promotion campaigns containing strong brand images.
Operational process (operating planning, resource allocation, people, communication and
control)
New service standards are frequently updated, following guidelines from Vietnam’s authorities
such as the Ministry of Health, the Civil Aviation Administration as well as the International Air
Transport Association (IATA), and SkyTeam Alliance's Skycare & Protect (VNA 2021). VNA’s
strategic network will continue to develop its route network departing from Ha Noi - Da Nang Ho Chi Minh City and promote new hubs and coordinate with JPA and VASCO in product
offerings.
VNA's business activities mainly focus on developing service centers and upgrading to 4 - star

Skytrax standards to differentiate services from low-cost (LCC) and hybrid airline competitors.
In terms of short-term strategy, staff cuts are implemented on all foreign pilots and flight
attendants. All employees have to reduce wages, policies for employees working voluntarily
without pay, on rotational leave, or part-time. Instead of giving Tet bonuses in cash, many
Vietnamese airlines have switched to giving Tet bonuses to employees in kind, such as air tickets
and vouchers to encourage employees' morale.
To execute the long-term strategy, VNA uses a combination of solutions including increasing
owner’s equity, mobilizing capital from capital markets, and utilizing the Sale and Leaseback
(SLB) structure, VNA also restores its financial investment portfolio to focus capital on its core
business. In its long-term investment strategy, VNA improves the capacity of aircraft operation
and maintenance, as well as IT infrastructure. Spend 50% of the investment capital on the fleet
and 50% on other aspects.
In communicating the strategy, executive management level delivers purpose to stakeholders,
current situation, what we are trying to achieve through the actions. In the situation where we
need to recover our loss. A strategy map provides the visual foundation of a business strategy. It
provides the means by which a business can communicate its strategic plan to customers,
employees and stakeholders.

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Figure 7: Strategic Mapping for VNA and Balance Score Card modeling business
Adapted from Teixeira (2018).

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RISK MANAGEMENT

CONCLUSION
This report analyzed the macro and micro environment around VNA, investigated the business
competitive advantages and the firm’s current strategy, suggested new strategies for VNA to
adopt, and provided insights about how VNA can implement and evaluate new strategies. The
macro environment which was analyzed according to the PESTEL model shows that Vietnamese
businesses get government’s support with tax reduction policy; positive economic growth and
growing middle class while facing challenges including the high expectations of young
customers; competition from a smarter transportation system; prolonged pollution; and restriction
in travel policies due to the pandemic. As for the micro environment, applying Porter’s 5 forces,
VNA benefits from low threat of new entrants, low bargaining power of buyers, moderate
bargaining power of suppliers, high risk of substitute and medium high competition with LCC.
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VNA’s current strategy is differentiation, charging high prices for 4 - star services combined with
the growth strategy with the aim to upgrade from 4 to 5 star. This strategy is consistent with the
firm’s technological innovation and has succeeded in VN, but compared to other Asian airlines,
VNA’s is rated lower. The growth strategy by itself is not suitable for the current Covid situation.
Therefore, 2 strategies were proposed: retrenchment (downsizing and streamlining resources and
processes) for the short term (2021 – 2023) and growth (2024 onwards) to continue the goal of
becoming a digital 5 – star airline. During strategy implementation, the board of directors will
initiate changes and communicate with the CEO and Execute Management department. Although
having a hierarchical structure which can be challenging to coordinate between all departments,
VNA still benefits from economies of scale. For strategy evaluation, VNA can use the Balanced
Scorecard framework to make sure business actions are aligned with objectives of financial,
customer, internal processes and growth perspectives. It is also important to identify and measure
business, legal, competition, information and internal risks so that all 3 levels of business
strategies can respond promptly to environmental changes.

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Appendix
1. Extra service seats: these seats are provided to fit the oversized passengers.

2. Advanced aircraft: new generation fleet that reduced consumption, carbon emission,
noise pollution, and application of SAFRAN fuel-efficient software (VNA n.d.)

3. Skywise: ‘Skywise is the first-of-its-kind open data platform developed by Airbus for the
aviation industry. By making the right information available at the right time, Skywise

provides invaluable insights from the massive amounts of data that was previously locked
in corporate and functional silos’ (Vietnam Investment Review 2019, para. 9).

4. Oracle cloud: Designed by Oracle to ‘deploys flight analysis systems effectively, and a
data analysis system on the Salesforce’s cloud platform to make market analysis and trade
reporting’ (Vietnam Investment Review 2019, para. 10).

5. New mobile application features: ‘enabling passengers to quickly search for flights and
itineraries, book tickets online, and use digital map positioning at nine domestic airports
and 58 international airports’ (Vietnam Investment Review 2019, para. 13).

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