Strategy

1. Positioning themselve as a high-class airline (Product)

Compared to its biggest competitor in the market, Vietjet Air, Vietnam Airlines has a
better advantage when it is called the "Vietnam national airline". This is a great
advantage in attracting customers to their services, it positioning itself as a national
brand, along with being accompanied by high quality.

Moreover, as a high-class airline, building the image of Vietnam Airlines is also

different than other low-cost airlines. Vietnam Airlines and women wear long dresses
(Ao Dai) and men wear gile with yellow-blue tones with elegant colors, creating
sympathy with customers even with foreigners when looking at it also see something
"very Vietnamese" . Doing so shows that Vietnam Airlines' marketing strategy has a
vision when positioning itself as a high-end company. This is the advantage that VNA
has to compete in the context of the aviation industry being a "hot" industry in Vietnam.

2. Distribution agents nationwide

As of December 2016, Vietnam Airlines' PSA and BSP agents are 10,240 ticket offices.
In addition, Vietnam Airlines' distribution channel also focuses on applying the
technology to its ticketing process to provide the best experience to its customers. The
company has opened sales on the Website with the interface and the easiest way to buy
tickets for customers. Furthermore, it also links well-known travel websites with
millions of users like Traveloka or Booking ... to make it easy for customers to access
their flights, as well as to buy tickets easily.

3. Communication, PR build "clean" image (Brand)

Newspaper advertising is a tangible advertising medium aimed at

the segment of business travelers, often using big newspapers with a nationwide
distribution such as Labor, Youth ...
In addition, overseas VNA uses large newspapers in key markets: Ashahi, Goodweeken,
Travel Trade ... Advertising on television is to make short commercials to introduce
images of the company.

Advertising via the Internet plays an important role in the overall strategy of VNA
today. Through its official website, in addition to the purpose of introducing products, it
also helps provide customers with information about the entire process of using the
service, steps to implement and regulations.

4. Product Strategy

In general, the major product of VNA is passenger. The core products inclue fight
routes, avaible seats, etc. The secondary products include ground service and in-
flight service in which the ground service is tickets revervations, check-in, etc and
in-flight is the provision of beverage, meals and entertainment facilities, children-
travel-alone care during the flight. VNA has been upgrading and diversifying the
services such as providing traditional food which is highly appreciated by
foreigners. VNA is building a standardized service system to improve the service
quality from booking to providing special meal on demand.

5. Price Strategy
Different pricing strategies are suggested to suit the market positioning for different
segments.
With respect the company ‘s current competences, “good value” pricing strategy
deems to be appropriate for the targeted “ international leisure and economy”
segment. The rationable behind this strategy is that the pleasure travelers are often
price conscious and stronger airlines such as Thai Airways, Korean Air…. Have
used price as form of competition.
For the Domestic Leisure and Economy segment, an “economy” pricing stragety is
suggesested to capture the huge potential of the domestic transport market. By
focusing on the minimum required services and deploying technology such as
online booking, e-ticketing, the airline can lower operating costs and then reduce
prices to make air travel more affordable. This also hepls VNA to fulfill its
obligation as an frastructure service. The current duopoly system will prevent the
airline from any price war.
Despite being a secondary target, business segments (domestic and international)
are often big spender and not price-conscious as their travels are reimbursed by
their companies. Thus medium price, together with medium quality as dicussed in
service product tacties, will offer the basis “medium value” pricing strategy. Many
world class carriers such as Cathay Pacific, Singapore Airlines, Air France, etc
which is widely known for differentiation advantage, however pursue a focused
differentiation strategy in their “Vietnam niche” by offerig limites differentiated
service on routes from or to Vietnam. A key advantage of VNA versus its
competitors on the international segment is the link with domestic network.
Currently VNA follows its competitors’ pricing practice of varying prices on
international routes according to seasonality. However, one-tier pricing strategy is
used in the domestic market regardless of seasons, time of travel… It is suggested
that VNA introduces pricing flexibility in the domestic market in order to better
manage demand and supply an optimize the total yield. Low price may be offered
in periods or times of low demand to encourage passengers to travel, while higher
margin can be carned during peak season. Under the flexible pricing system, the
airline needs to develop appropriate restrictions such as advanced booking,re-
scheduling,and extended stay… this would help to discourage the business travelers
to travel on cheaply fares so that the airline can ensure that as much capacity as
possible is used by the most profitable segments. The company can communicate
fare information via its website. Marketing division needs to work with Operations
division to introduce yield managament which is to obtain the best possible yeild
over tiem from each available unit of capacity and return from some perishable
capacity units.
Furthermore, holiday packages that VNA develops in cooperation with partners can
use a bundling pricing strategy to promote both VNA services and Vietnam
tourism.
 SWOT
1.StrengthofVietnamAirlines:
-Vietnam Airlines has many wide bodies, the carrier is adding narrow bodies to strengthen
its network in China, India and Myanmar and many other countries in Asia.
-As a national airline, it has strong brand name in domestic and regional CLMV
(Cambodia, Laos, Myanmar and Vietnam). Leading on the straight routes: Vietnam-
Europe, Vietnam-CLM and domestic. Route network extends nationwide and worldwide
with combination of government.

Domestic products are differentiated (ClassC,GLPprogram).

-Service system is synchronized, various and less dependent on suppliers.
-The fleet is continued to innovate, increase competitive advantages and leading
development trend of technology compared with competitors.
2.WeaknessofVietnamAirlines:
-The main weakness of Vietnam airlines is the miss management. The management of
Vietnam could never worked independently since the government owned type of
organization with having inevitable government influence in almost enact and every
corporate aspects of this organization and always there was pressure from outside to
entertainpersonalinterest.
-Even from the very initial period Vietnam could not be able to recruit or deploy the right
professional person for the right place to achieve it is desired objectives. This unavoidable
government influence .As a consequence Vietnam Airlines has reached at this measurable
stage with aging fleet and burden of debts.
-At the same time considering the global standard of International Airlines, Vietnam
Airlines is lagging behind. The staffs are not provided with modern technologies like
Computer, internet facilities etc. Therefore, information flows, faster customer services are
not ensured fromthepartofemployees.
-Average revenue in international routes is still low due to the proportion of people who
have high income is low. Quality service is still low compared with large firms in the
region. Competitive ability is not high on international market. Fixed cost remain high and
financial capacityislimited.

3.OpportunityofVietnamAirlines:
-The market is based on labor traffic, retuning residents, business travelers, medical
purpose and tourists. The cargo market based on RMG, leather goods, medicine,
perishables. In terms of cargo, the perishables are mostly dependent on Airline services
and also demanded for the RMG.
-In 2013, Vietnam Airlines joined in Skyteam - air alliance, so the international route
network to be broader.
-Vietnam has advantageous geographic location. Located between North East Asia,
Southeast Asia, Europe, South Pacific and China so it is gateway of the regions.
-The growth of tourism industry is increasing quickly. 
-Vietnam is an attractive investment location (in 2012, Vietnam is ranked 11th in the
world).
-High population level and GDP is forecasted to continue to grow with an increase of over
5%/year.
-Guests to / from Vietnam continue to grow at an average rate of 10% / year (as predicted
byIATA).

4.ThreatsforVietnamAirlines:
-In the nations which are destination of Vietnam Airlines, politic and economic situation
are volatile.(Thailand,France...)
-The macroeconomic risks still exist such as high inflation, local currency devaluation and
highfuelcosts.
-Fierce competition from traditional airlines and the world's largest LCC, especially in the
domesticregionaland(Europemarket).
-Airport infrastructure does not keep pace with the development requirements of aviation;
the number of aircraft parking at the airport grounds HAN, SGN is limited.
-Specialized Aviation Labor scarcity, especially pilots, technicians.