Group assignment the good, the bad, and the ugly of vietjet

MGT103 Group Assignment

Introduce Management (MGT103)

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Ho Chi Minh, 3rd July 2021

GROUP ASSIGNMENT
FPT University
Course: MGT103
Class: MKT1602
Group 2
Member’s information
Student Code

Full Name

SS160412

Hoàng Trung Kiên

SS160605

Nguyễn Phương Trang

SS160013

Nguyễn Nhã Quỳnh

SS160640

Lê Trung Tín

SS160688

Lê Văn Nguyên Khánh

SS160301

Bàng Kim Bảo Hân

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TABLE OF CONTENT
1. INTRODUCTION

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2. GOOD ACTION
2.1. Context
2.2. Specific Action
2.3. Explanation

2.4. Analysis of action
2.5. Affect related parties

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3. BAD ACTION
3.1. Specific Action
3.2. Explanation
3.3. Analysis of action
3.4. Affect related parties

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4. UGLY ACTION
4.1. Context
4.2. Specific action
4.3. Explanation
4.4. Analysis of action
4.5. Affect related parties

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5. CONCLUSION

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6. REFERENCES

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THE GOOD, THE BAD,
AND THE UGLY OF VIETJET
1. INTRODUCTION
VietJet Air is a minimal expense airline company based in Vietnam and also
provides consumer needs for goods and services using e-commerce platforms. They
are the first private airline to be established in Vietnam. They successfully got
announced as a member of the International Air Transport Association (IATA) and got
the IOSA Certificate.
Vietjet's campaign began in December 2011,with the help of their 3 principal

investors: T&C, Sovico Holdings, HD Bank they had successfully launched three
A320 planes serving in HCM City and Da Nang. After numerous attempts, they
successfully expanded their service across Asia in 2012.
Eventhrough Vietjet just established in 2012, there are a lot of good ratings
about Vietjet: AirlineRatings.com rated them as one of the top airlines in the world,
giving them a 7-star rating. Vietjet was previously promoted with the title “The best
low-cost airline in 2018 - 2019” by AirlineRatings.com Vietjet Air was named one of
the top 50 aircraft in the world for service in 2018 by Airfinance Journal Magazine.
They currently own 80 A320 and A321 airplanes, fly more than 385 flights per
day, and successfully transport more than 65 million passengers, with 105 domestic
and international flight routes to Japan, Hong Kong, China and other destinations.
Vietjet is also seeking to expand their flight network to cover Oceanic locations.
Vietjet Airways entered a long list of Vietnamese companies valued more than

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$1 billion after its initial public offering on the HCM City Trading Floor. Also it's worth
mentioning that the company's IPO had been the largest in Vietnam's history, with a
market capitalization of US$1.43 billion by the end of the day.
Their service benefits alot for their customers such as: cargo service, service
for luggage, service of seat selection, service for quick check-in, supportive service
for people with disabilities, service to make goods Tax-free.

2. GOOD ACTION
The definition for good action is a business or social initiative that helps both

the firm and the community. For a huge corporation, good works are more honorable
and influential, especially when it comes to promoting social welfare. And it would be
preferable if they emphasized national pride and cultural traditions, as well as
creating value for both the business and the impacted parties.

2.1. Context
The Central region suffered 13 consecutive tropical storms, causing the worst
floods and landslides in the past 100 years. Massive floods and landslides in five
central provinces of Vietnam have put more than 1.5 million children at risk of
disease, poor nutrition and developmental delays. At least 135,000 families have
been directly affected in some communes with flood water levels as high as 2m and
more than half a million people without clean water. As a result, nearly 1.2 million
students are currently absent from school and their education is disrupted. The
opportunity to immediately carry out relief operations is not much because another
storm is forecasted to come from similar waters and may make landfall in the coming
days.

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2.2. Specific Action
In the situation of complicated floods, individuals and organizations have made
great contributions to charity activities for disadvantaged people in the Central
region, Party and State agencies, organizations and social organizations have also
sent donations to the flood area and call for people to help the central region. But
because of difficult geographical conditions, there are many people who want to help

but do not know how. Vietjet has created flights to send people's clothes and food to
the central region. At the same time, it also helps passengers with flights to the
central region by reducing ticket prices and giving free returns.
Vietjet Air has launched the campaign “ Flights for love” to help the Central of
Vietnam.”

2.3. Explanation
In order to share the difficulties and losses for the people in the Central Region
after the flood, General CEO Nguyen Thi Phuong Thao launched the campaign with
the desire to help the people there. Flooding is a serious problem in the country.
Vietjet became the first airline to act decisively and radically to help. This was a good
action at the time.

2.4. Analysis of action
By the parallel use of the two concepts Decision Making and Diagnostic
Organization. Vietjet became the first airline in donating and supporting the people.
At the same time, using the definition of Project Management, Vietjetair have strictly
followed the roles to materialize their plan.
Actions that benefit society:
To deploy resources, Vietjet Air President Nguyen Thi Phuong Thao was the
first to participate in the charity program. In the South, leaders also began to

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participate in charity activities, in the North, they also actively responded to situations

(with a total donation of 400,000,000 VND). They have started to carry out a number
of activities such as helping to free freight and prioritize the fastest transportation on
Vietjet Air flights departing from Ho Chi Minh City, Hanoi to reach people as quickly
as possible. (more than 24 tons of supplies and 2,000 support boxes for free), spend
a part of ticket sales to support people - for each ticket sold, they deduct 10,000 VND
to support the program. The airline also offers free air tickets to officials of the
Vietnam Fatherland Front at all levels and local People's Committees moving to and
from the Central region to carry out relief missions during this period. Create an
exchange policy for free airline tickets with unlimited number of times, only the fare
difference (if any). A representative of Vietjet Air said that right from the first day of
the flood, Vietjet Air launched the program "Swing wings with love, with Vietjet
regarding the central flood area", mobilizing all officers and employees to donate
money. Directly at all of the company's offices nationwide and internationally.
Donations will be given by a dedicated team of Vietjet Air to the people in the central
region.
Actions that benefit the company:
Building the brand "low-cost airline", Vietjet now continues to strongly reduce
prices to support people in the central region, while thoroughly promoting the
ticketing market and also bringing in a huge amount of profit.
Vietjet Air is one of the pioneering companies in supporting and helping the
people in the Central region. What makes the company able to act so quickly and
decisively is thanks to the two concepts of Decision-Making and Organization
Diagnosis. It is easy to see that the situation of storms and floods in Vietnam is not
unexpected. Therefore, Vietjet's Diagnostics Department has foreseen this risk and

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set up a number of campaigns and reports to ask for permission to keep a certain
source of money for bad cases. Through data analysis and identification, Vietjet has
been extremely successful in following the key steps in a diagnostic cycle including
goal setting, data collection, planning and execution. After identifying the target risk
as the upcoming flood season, the company simultaneously collected data and
analyzed - very essential as it can diagnose and plan growth, diversification the
analysis also shows the strengths as well as the weaknesses that need to be
eliminated for prevention. Because no company can afford to pay and create a
support campaign with a loss of money if they do not plan in advance.
It is also thanks to the analytical ability that Vietjet can come to the second
concept of Decision Making. Through reviewing the data and history of risk handling,
Vietjet conducts an internal assessment, considers whether the company has dealt
with the flood season and succeeded or failed. In addition, they also assessed from
external sources and found that this flood season is larger than previous years, the
damage will be more terrible. Only then can specific and effective decisions be
made.
After planning and making decisions, Vietjet acted as soon as possible so that
the campaigns could achieve maximum effectiveness as well as bring significant
benefits to the community.
By using a combination of two management concepts, diagnosis and decision
making, combined with a project management model. Vietjet was ready to lose a
huge amount of money to set up the campaign. This requires assertiveness and the
ability to take risks. However, Vietjet has been extremely successful in promoting the
brand. Because of the extremely difficult economic situation at that time, Vietjet was
the first airline to reduce ticket prices, which made people choose Vietjet more,

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promoting purchases by making each ticket beneficial for everyone in Central. It is by
hitting the customer's psychology that they want to do something useful for society.
In just a short time, Vietjet has earned profits as well as social benefits.

2.5. Affect related parties
The campaign has motivated other businesses to participate, motivating them
to participate in the work of helping people in the central region, creating benefits for
the community as well as customers of Vietjet. At the same time, this campaign
demonstrates the traditional spirit of Vietnam of always helping each other. Bring
benefits to Central Vietnam, improve many lives and overcome difficulties. Vietjet
has also built a good image and brand name. Become an airline with brand
recognition up to 98%.

3. BAD ACTION
A bad act of a business is defined as an act that negatively affects the interests of
related parties (partners, competitors, customers, etc) and the interests of the
business itself (image, revenue, reputation, etc). Bad actions can bring short-term
benefits to the business but will have long-term consequences.

3.1. Specific Action
At the beginning of 2020, the public was agitated and angry about the ticket
sales policy that Vietjet Air misappropriated the ticket money of customers by
opening and selling many flights to collect customers’ money. Vietjet Air canceled the
flight when the flight date was near. After that, they set up a new flight with a different
time frame, code, with a higher price.

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3.2. Explanation
Vietjet announced that: “Vietjet has urgently adjusted the flight schedule,
increased chartering of hired aircraft, to serve the needs of customers. However, due
to the delay in the delivery time of the aircraft by the manufacturer and the strategic
partner, it still affects the operation of the company. Several other flights were
affected.’’ However, there are many things that mention the opposite. Thus, the
cancellation is according to Vietjet Air's schedule, so when the flight is canceled, the
airline has an obligation according to the provisions of Clause 5, Article 145 of the
Law on Civil Aviation of Vietnam, implemented in 2014, In the case that due to the
fault of the carrier, the passenger has been confirmed to have a seat on the flight but
cannot be transported or the If the flight is canceled or the flight is delayed for a long
time without prior notice by the carrier, the carrier is responsible for performing the
obligations specified in Clauses 3 and 4 of this Article and must pay an advance
compensation amount which is non-refundable for passengers.

3.3. Analysis of action
This decision of Vetjet was made based on steps in Rational of Decision
Making. To begin with, Vietjet made its first step, which is recognizing and defining
the decision situation. Because of the Covid-19 virus, the government has brought
out the policy of social distancing. The amount of international flights and domestic
flights decreased abundantly. This makes people unable to join the flights as
regularly as before. In December of 2019, more than 45,000 flights were canceled or

delayed. Vietjet has more than 23,000 delayed flights. In addition, Vietjet has to pay
for other maintenance costs. VietJet has 75 A320, A321 aircraft, it is estimated that
the amount it has to pay can be up to about 20 million USD/month.
Secondly, Vietjet identified their alternatives. Vietjet’s possible alternatives: plan

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up a marketing campaign and make the customer pay extra for the booked flight. If
Vietjet wants to plan up a marketing campaign, creating promotions is worth
considering. For example, Vietjet can create some discounts on the price of their
flight tickets. In addition, Vietjet can do some advertising in order to attract more
customers. For instance, Vietjet can bring their image to televisions to attract
people’s attention. One the other hand, Vietjet can make the customer pay extra for
the booked flight. The scheme is to sell tickets at a cheap price, then close to the
flight time, cancel the flight and set up a new flight in the same time frame with a
higher price. Customers can only choose to add money for a new flight instead of
waiting for a refund and book another airline's flight.
The third step is to evaluate these alternatives. First, Vietjet has to think about
the marketing campaign. Planning up marketing campaigns can attract new
customers. This may increase the number of customers that use Vietjet’s services.
However, this can lead to some negative consequences. Social distancing is a
substantial problem for Vietjet. In Vietnam, people do not even want to go out
because of the social distancing policy. Moreover, the government also reduced the
amount of flights on every airline. Furthermore, costs for marketing campaigns such
as advertising and promotions,etc, will increase input costs and reduce output

profits. In addition, Vietjet has to evaluate the action of making the customer pay
extra for the booked flight: This is an optimal solution in the short term. Businesses
will not have to spend a lot of money for flight cancellations, but they will gain more
profit from the extra money that customers must pay for new flights in the same time
frame. Customers only have two options: the first is to accept the extra cost for the
new flight at the same time, or the second is to cancel the ticket and pay a larger
amount for another airline’s flight and wait for the refund from Vietjet. However, the

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refund period is not instant, so instead of paying a larger amount for another airline's
flight, customers often choose to pay a smaller amount for a new flight with the same
time frame as Vietjet. However, this solution carries risks in the long run. Using this
action will often reduce customer loyalty and negatively impact brand value.
Next, Vietjet selected their best alternative. During the period of social
distancing and government restrictions on flights, the second solution will bring
more benefits to business. Because of social distancing, investing in marketing plans
to increase customer demand will not be highly effective due to the fear of
contracting the Covid-19 virus during the flight. The cost of the marketing campaign
is also very large. This is low efficiency and expensive. In contrast, Using the strategy
of selling tickets with a low price and then cancelling the flight when it is close to the
flight day to sell new tickets at a higher price would be effective even though the
number of customers is low. This is because Vietjet’s target customers are people
who really need to join the flights. They are willing to pay more money to use Vietjet’s
services.

The next step of Vietjet is to implement the chosen alternative. The
implementation process includes 6 steps. To begin with, Vietjet made specific plans
( implementation process, risk response plan, implementation cost, legal, ...) , and
distributed them to relevant developments to coordinate implementation. Secondly,
Vietjet started selling tickets with preferential prices. The third step is to issue a
cancellation close to the date the flight takes off. Next, Vietjet saled new tickets at
the same time slot but at a higher price. The following step was that Vietjet got profit
from the extra money customers pay for new flights. For customers who cancel
tickets: the amount paid for the canceled flight will be directly deducted from the fare
for the next purchase (within 360 days) or refunded within 90 days. Finally, the

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departments coordinate to control the situation, evaluate the effectiveness of the
implementation plan.
The bad of the action is clearly proof in the evaluating process, which is the last
step. Insurance is required to prove that the chosen alternative has served its
original purpose. Vietjet compares the result with the two original goals. Short-term
goal is to quickly increase the revenue of Vietjet in the pandemic time. Side by side,
the long-term affection is that this action from Vietjet is not against the law but it
created a bad image of Vietjet to the public. This had decreased the amount of loyal
customers and potential customers of Vietjet. Therefore, the revenue would be
decreased in long-term business.

3.4. Affect related parties

Consequences in Internal Environment:
The first audience affected are the owners (Business Owners). Vietjet's actions
have had a negative impact on Vietjet's image, and at the same time reduced the
value of Vietjet's shares. This directly affects the owner's assets. Same as the
owners, the assets of the board of directors are affected because they are the
owners of the shares.
The next affected object is employees. When the incident happened, Vietjet's
staff, especially the Customer Service department, were seriously affected, they had
to deal with thousands of calls from customers. In addition, the Public Relations
department also had to work harder than usual because of pressure from the
management and the press. Employees face the challenge of balancing business
profitability and customer satisfaction.
Consequences in External Environment:
The first is the impact on competitors. This bad action causes customers to lose
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confidence in Vietjet, leading to the decision to choose to use another company's
services. This bad image adversely affects Vietjet in particular and the aviation
industry in general. People may lose their trust in other companies such as Vietnam
Airlines, Jetstar Pacific, Bamboo Airways,...
Customers are affected because they are the ones who pay to buy the
organization's products or services. The cancellation of tickets close to the flight time
affected the schedule they had planned. In addition, customers will have to pay extra
money to take the same flight. Vietjet's solution and refund process do not satisfy
customers.

Moreover, when demand for flights decreases, the number of flights also
decreases. Therefore, the brand will cut production costs, affecting the supplier's
revenue.
In this case, the regulatory agencies are most affected because they have to
come up with a solution for the bad action of Vietjet. In addition, Interest groups can
apply consider- able impact by utilizing the media to consider Vietjet's actions to
protect consumers' interests.
This action also created an impact on strategic partners. Because of the Action,
customers would lose their trust in Vietjet and other companies in avigational
industry which lead to a decrease in the number of people buying flight tickets on
online platforms. These platforms, which are strategic partners of Vietjet, will lose a
substantial number of customers.

4. UGLY ACTION
An ugly action of business is described as an activity which is conscious, systematic,
and ethically reprehensible .These acts provide the benefits that companies desire

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and assist businesses in achieving their objectives, but they also leave them with
disadvantages in all aspects.

4.1. Context
On January 26, Vietjet Air announced that it would send a special plane to
Changzhou to welcome the national team back home half a day earlier than planned.

With the request from Vietjet, the Vietnam Football Federation sent an official letter
to the General Department of Physical Education and Sports, requesting to cancel
the flight ticket for the Shanghai - Hanoi route previously booked at Vietnam Airlines.
The players in the U23 Vietnam team will have to move earlier than expected
and have a shortened rest time to recover after the dramatic final match in extreme
weather conditions. In the same extreme, they were almost exhausted physically.
That situation makes them feel tired and in need of rest. Witnessing the scene of a
forest of people stretching up to 30km with colorful flags waiting for Vietnam U23
players to return from Noi Bai airport, you will see the longing, hope, joy... of the
fans. That is the beginning of the UGLY of Vietjet Airways.

4.2. Specific action
As usual, every time there is a special event, Vietjet often puts sexy bikini
beauties on the plane to perform to welcome visitors, which is quite meaningful.
Model Lai Thanh Huong dressed sexy, walked around hugging members of the U23
Vietnam team on the plane booked by the airline. Classic and pompous in a foreign
land, the players are especially embarrassed to turn away, not wanting to be
disturbed, which is actually an image that makes "half of the world" extremely angry
to the belief. The news is criticism on social networks, especially showing more
clearly how delicate criticism on social media is for that unprofessional act of Vietjet.

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4.3. Explanation
In fact, Vietjet wants to celebrate the glorious victory that the national team

brought home. The fact that a model dresses sexy, walks around, and hugs the
shoulders of the members of the U23 Vietnam team on the plane is really offensive,
not suitable for Vietnamese culture and way of thinking.
First, not the right time. With the miraculous feat of reaching the final of the
Asian U23 Championship, the coaching staff and the boys of the U23 Vietnam team
have become heroes in the hearts of millions of Vietnamese. Fans' hearts were
devoted to U23 Vietnam members on social networks. Those sensitive images are
making fans feel uncomfortable and even offensive to them. And of course they will
not easily ignore that incident, thereby creating a wave of criticism on newspapers
and social networks.
Secondly, the main character is the U23 players of Vietnam after a series of
stressful matches, both mentally and physically are in a very tired state,
accompanied by a little regret for losing the championship in the final minutes of
injury time of the match. At that time, their biggest wish was to quickly return to meet
their family, to join in the wonderful atmosphere with the fans back home with their
glorious victory in the snow and rain match at Truong Chau.

4.4. Analysis of action
During the process, Vietjet has recognized and defined the decision situation.
Decision making can refer to either a specific act or general process. The decisions
made when Vietjet decided to release these ads. It is important to create
assessment criteria in order to compare and pick the best alternative. The fact that
Vietjet congratulates them shows that Vietjet has done a good deed - A marketing
strategy that makes a good corporate image. Because this action was carried out the

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wishes of Vietnamese people that football players went to Vietnam by the national
airline. Vietjet demonstrates fan responsive methods to win customers' trust. Vietjet's
selection evaluation method has research and foresight to the media. Among many
options to branding such as storytelling, leverage images of high influencers,
enhance the attractiveness of the crew, take advantage of the images of politicians,
increased services at the transit airport, using robots, leveraging the diversity of
communication platforms,… To emphasize the business's identity, all companies
focus on generating media content that is completely delivered through social media.
The heat of beauty is something that can resonate in the media segment. This led
Vietjet to choose a way to increase the attractiveness of the crew so potential
customers would notice them. When Vietjet evaluated alternatives,they found that
having an attractive crew would bring many benefits to them. To select the best
alternative, Vietjet has reviewed and selected their strengths - Their crew are young,
professional, and eager. Their target audience is young, dynamic people who often
travel, so they choose the marketing plan of enthusiastic and hot young people .
Media has a great influence on all social issues. Communication affects the
perception of customers, from perception to the attitude and buying behavior of the
public. When a customer's behavior or word of mouth is repeated over and over, it
will become a routine and become habits. Customers will think about Vietjet first
when they intend to travel by air. Consequently, Vietjet will have more profit from
ticket sales and services at the flight lounge. Vietjet chooses an explosive option that
can bring high communication efficiency.
However, Vietjet's communication strategy made a big mistake. At the time of
considering the options, Vietjet did not carefully choose the option that brought a
high communication effect but left a negative impression for the community. This

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strategy ignores an important cultural factor that any marketer must worry about
when entering a new market on the scale of a country. Vietjet’s strategy violates
morality, pure customs and traditions. This is a very important issue, especially
Southeast Asian countries like Vietnam. In social life, there are many issues that
have not been regulated by the law. There are actions that are not prohibited by law
but are still considered immoral, contrary to pure customs and traditions and
condemned by society because pure customs are a very important measure in
society, preserving a good lifestyle, moral conception and social order. This plan is
ugly because it uses a bad image (hot flight attendant), leading to people having a
bad impression and will not choose Vietjet to accompany their flights.
On the media side, the press always captures important events from small
events to big impact events. Vietjet is building its bad reputation with domestic and
international tradition. Vietnam is a country with beautiful customs and habits dating
back thousands of years and the bikini outfit of Vietjet's flight attendants is not
suitable for Vietnamese customs and traditions.

4.5. Affect related parties
The first effect is the image aspect of the company. This caused the company's
brand to face many obstacles. The event created a lot of controversy in the media.
Vietjet was fined 40 million VND and received a written warning for violations by the
government.
As for the company's partners, receiving a lot of criticism has made partners
have a different view of Vietjet. Partner corporations will not appreciate the value and
potential of Vietjet. The entire staff of a company's advertising department can be
held responsible for advertising content because of the lack of professionalism and

mistakes in the strategy. This has made Vietjet unprofessional in organizing and

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building strategies. For the partners, to doubt and not appreciate the company's
business strategy and direction. Vietjet will lose the opportunity to cooperate with
potential partners to develop. Vietjet will lack investment capital from those partners.
Vietjet used to be a good company in Vietnam so customers will be unsatisfied
if there is any ugly action. This content is not suitable for the viewers. Some people
will take this as a reason to criticize Vietjet's advertising department. Customers will
look for better choices and Vietjet may lose a number of potential customers.
For competitors in the same class, this could be a good opportunity for
competitors such as Vietnam airline or Bamboo Airways. More specifically, as
mentioned, customers tend to look for better options. After the Vietjet’s scandal,
customers are looking for other professional image brands. Taking advantage of that
opportunity, the company's competitors will offer better incentives or services to meet
their needs to attract a large number of customers. Increase your chances of getting
more potential customers in the future. In addition, other competitors can cooperate
with major partners that Vietjet has lost the opportunity to cooperate with.

5. CONCLUSION
To sum up, for an action to be considered good, it must meet the criteria of the
company's interests and bring benefits to society. In this case, Vietjet anticipated
risks and prioritized social welfare as an important mission. However, making wrong
decisions have created bad action for Vietjet and left a huge damage on the

reputation, revenue of Vietjet in particular and the whole aviation industry in general.
They were criticized for their profit-maximizing strategy of canceling flights and
replacing customers with higher-priced tickets. It can be said that one wrong step in
the process of decision making can lead to a bad action. On the other hand, the ugly
action occurred when Vietjet was taking The National football team back home but in
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a wrong way. Exploiting the most popular topic of a nation is good but Vietjet used
the image of models dressing inappropriately has ruined the whole campaign, which
results in getting criticized on many public communications.

6. REFERENCES
GOOD
● Vietjet Air provides free transportation of relief goods and gives tickets to
officials to flood areas. Available at:
/>● Vietjet Air offers free unlimited ticket exchange for customers going to the
Central region. Available at:
/>● Airlines "energize" the central region - Nhan Dan Newspaper. Available at:
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