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    PIA Analysis

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    PIA

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    PIA Analysis

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    108 views21 pages

    Pakistan International Airlines, Pia: Strategic Report

    Uploaded by

    Muhammad Awais
    PIA Analysis

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 21

    PAKISTAN INTERNATIONAL

    AIRLINES, PIA

    STRATEGIC REPORT
    VISION STATEMENT

    ‘’PIA aims to carve the utmost flying experiences consistently.’’


    MISSION STATEMENT

    ‘’To set the standard of excellence for flying across the globe by
    always striving hard to provide unmatched services to all our
    prestige guests when it comes to safety, entertainment and
    punctuality and the most state of the art airplanes gives us an extra
    edge to meet our customer needs consistently and to grow more’’
    COMPONENETS OF MISSION STATEMENT

    CUSTOMERS .
    • People who want their flying experience to be memorable each time.

    SERVICES .
    • Taking guests from one destination to another with safety, punctuality and entertainment.

    TECHNOLOGY .
    • State of the art airplanes.
    …
    PHILOSOPHY .
    • organization believes in giving utmost flying experiences on consistent basis to the guests and by
    reaching out an extra mile to meet their needs.

    SELF CONCEPT .
    • The determination to set excellence standards covers the self-concept aspect.

    CONCERN FOR GROWTH .


    • That part consistency shows that the organizations survival and profitability depends upon it, if we
    lose we will lose it all.
    …
    PUBLIC IMAGE .
    • That their needs will be met and for that the organization is willing to take an extra mile.

    MARKET .
    • Across the globe.
    STRATEGY FORMULATION

    • IFE
    INPUT STAGE • EFE
    • CPM

    • SWOT
    • SPACE
    MATCHING STAGE • BCG
    • IE
    • GRAND STRATEGY

    DECISION STAGE • QSPM MATRIX


    INPUT STAGE
    INTERNAL FACTOR EVALUATION MATRIX:
    STRENGHTHS
    Point to point frequency 0.07 3 0.21
    Broader target market 0.08 3 0.24
    First movers (experience advantage) 0.02 4 0.08
    Brand Image 0.2 4 0.8
    Huge destination coverage 0.04 4 0.16
    State to the art fleet 0.07 4 0.28
    Financial resources 0.08 4 0.32
    Competitive staff 0.02 3 0.06
    Monopoly 0.06 3 0.18
    WEAKNESSES
    Corruption 0.05 2 0.1
    Dysfunctional structure 0.04 2 0.08
    Strong domestic competition with airlines 0.04 1 0.04
    Non professionalism 0.05 2 0.1
    Strong union hold 0.04 2 0.08
    Bad allocation of resources 0.05 1 0.05
    Government influence 0.06 2 0.12
    Over staffing 0.05 1 0.05
    Low awards and appraisals 0.04 2 0.08
    Debt 0.05 1 0.05
    …
    EXTERNAL FACTOR EVALUATION MATRIX:
    OPPORTUNITIES WEIGHTS (W) SCORE (S) W*S
    • Subsidy on oil prices 0.04 4 0.16
    • Ability to have maximum fleet and route 0.03 3 0.09
    • Increasing number of airports 0.05 4 0.04
    • Air crashes of other airlines 0.2 4 0.08
    • Changing customer trends 0.03 3 0.09
    • Low cost barriers 0.07 3 0.21
    • Industry recovery predicted 0.08 4 0.32
    • Better recruitment policy 0.06 3 0.18
    • Globalization of speed-ex 0.05 3 0.15
    THREATS
    • Increase in interest rates 0.05 2 0.1
    • Increasing oil prices globally 0.04 3 0.12
    • New entrants 0.04 2 0.08
    • Inflation 0.05 2 0.1
    • Privatization 0.06 3 0.18
    • Terrorism threat 0.05 3 0.15
    • Time consumed by embassy for the visa 0.04 2 0.08
    • Devalue of currency 0.07 1 0.07
    TOTAL 1 46 2.2
    …
    COMPETITIVE PROFILE MATRIX:
    PIA Air Blue
    FACTORS Weight Score W*S Weight Score W*S
    (W) (S) (W) (S)
    Advertising 0.05 2 0.1 0.05 1 0.05
    Market Share 0.30 3 0.9 0.30 2 0.60
    Safety 0.10 3 0.3 0.10 2 0.20
    Punctuality 0.15 4 0.6 0.15 2 0.30
    Fare charges 0.05 1 0.05 0.05 3 0.15
    Customer Expectations 0.10 3 0.3 0.10 2 0.20
    Management 0.05 2 0.1 0.05 1 0.05
    Reliability 0.05 3 0.15 0.05 1 0.05
    Resources 0.10 4 0.4 0.10 2 0.20
    Technology 0.05 4 0.2 0.05 2 0.10
    TOTAL 1 30 3.1 1 17 1.9
    MATCHING STAGE

    MATCHING STAGE

    SPACE GRAND
    BCG SWOT IE
    MATRIX STRATEGY
    MATRIX MATRIX MATRIX MATRIX
    SPACE MATRIX

    INTERNAL STRATEGIC EXTERNAL STRATEGIC POSITION


    POSITION
    Y- AXIS FINANCIAL POSITION (FP) STABILITY POSITION (SP)
    ROI = +2 Barriers to entry = -1
    ROE = +2 Inflation = -4
    Liquidity ratio = +3 Technology Advancement = -3
    Leverage ratio = +1 Competitive pressure = -6
    Working Capital = +1 Poor law and order situation = -4

    FP+SP = -1.8 Average = +1.8 Average = -3.6


    X-AXIS COMPETITIVE POSITION (CP) INDUSTRY POSITION (IP)
    Market share = -3 Growth potential = +3
    Huge fleet = -1 Fuel price stability = +1
    Service quality = -4 Government support = +5
    Direct flight = -2 Entry-exit barriers = +5
    Management Experience = -1 Financial stability = +2
    Average = -2.2 Average = 3.2
    CP+IP = +1
    …
    BCG MATRIX

    DESTINATION INDUSTRY MARKET PROFIT % PROFIT


    GROWTH SHARE
    LHR-KHI 19% 1.00 50 50/100 =50%

    LHR-ISB 10% 0.65 10 10/100 = 10%

    KHI-DUBAI -9% 0.44 5 5/100 = 5%

    ISB-USA 16% 0.75 35 35/100 = 35%

    TOTAL 100
    …
    INTERNAL EXTERNAL (IE) MATRIX

    The IE matrix is based on the following two criteria:

    • Score from the EFE matrix is plotted on the y-axis i.e. 2.2
    • Score from the IFE matrix is plotted on the x-axis i.e. 3.08

    IE RESULT:
    Having a look at the graph of IE MATRIX on the next page, PIA falls in the 4th cell which
    suggests grow and build strategy for PIA so the strategies available for them are,
    intensive integrative strategies and intensive market penetration, market development
    and product development.
    …
    SWOT MATRIX
    STRENGTHS-S WEAKNESSES-W
    1. STRONG BRAND 1. HIGH MAINTENANCE COSTS
    2. MONOPLY AT HAJ FLIGHTS 2. OVER STAFFING
    3. GREATER ACCESS TO DESTINATIONS WORLD WIDE 3. CORRUPTION
    4. FINANCE W.H.O GOVERNMENT 4. UNION HOLD
    5. HUGE JET FLEET 5. LOW MOTIVATION OF EMPLOYEES

    OPPORTUNITIES-O SO WO
    1. USE OF ALTERNATIVE FUEL (S4, O3), Acquire Shaheen airways to get its share. (W1, W4, W5, O3), Merger could be a way to get rid of
    2. INCREASED TRAVELLING IN ASIA aging crafts resulting in high maintenance costs, new
    (S3, O5), Focus on the Asian market more to benefit from
    3. MERGER AND ACQUSITIONS employees coming over would help the existing
    increasing demand and wider access to worldwide
    4. NEW DESTINATIONS employees in getting motivation and to weaken the
    destinations.
    5. GLOBALIZATION OF FED-X union hold.
    (S4, S2, O1), Make the haj flights more profitable by saving
    on fuel costs.

    THREATS-T ST WT
    1. FOREIGN EXCHANGE RISK (S4, T3), the threat of poor security situation in our (W2, T5, T2), Introduce culture of merit in HR
    2. WORLD WIDE WEAK ECONOMIC country can be overcome by adding advance practices.
    CONDITIONS security systems and equipment.
    3. TERRRORISM
    4. INNTENSE COMPETITION (S1, T4), Marketing the strong brand name properly
    5. POLITICAL INTERFERENCE can reduce the competition.
    GRAND STRATEGY MATRIX

    • With reference to BCG matrix the growth rate of the four destination routes are as
    follows:
    • DESTINATION GROWTH RATE
    • LHR-KHI 19%
    • LHR-ISB 10%
    • ISB-USA 16%
    • KHI-DUBAI -9%
    •
    • And the competitive position with reference to space matrix is -2.2
    …
    Rapid Market Growth

    Quadrant 2 Quadrant 1
    LHR-KHI 19%
    LHR-ISB 10%
    ISB-USA 16%

    Strong
    Weak Quadrant 3 -2.2 Quadrant 4 Competitive
    Competitive
    KHI-DUBAI -9% position
    position

    Slow Market Growth


    THE END

    QUESTIONS AND QUERIES

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