Mas Swot Analysis

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  • Topic: Airline, Malaysia Airlines, Singapore Airlines
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  • Published : January 2, 2013
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SWOT Analysis
Stake holder 1: Labor
Strength
In spite of internal challenges, there remain several assets in Malaysia Airlines (MAS) arsenal. This includes strong technical capabilities and MAS well-trained cabin crew who continue to win awards and is the hallmark of Malaysian hospitality, from year 2008 until 2011, MAS cabin crew ranked 1 and 2 only (Malaysia Airlines Business Plan, 2011). The crew’s dedication is to be credited for the strong brand equity continues to enjoy. Both at home and overseas, the Malaysia Airlines brand remains associated with their unique heritage and high-quality service. MAS' maintenance staff, flight operations staff and ground crew are world-class in their technical skills. Their strong safety record has much to do with MAS staff and crews' attention and capabilities. These skills are not just a source of strength for MAS, but also a potential source of revenue as MAS looks to broaden its business activities. Their cabin crew are highly trained and committed to excellent service (Malaysia Airlines Business Plan, 2011). The fact that MAS have low labor costs, a function of a comparatively low cost of living in Malaysia, is perhaps the most important 'building block' and something that Malaysia Airlines must strive to maintain (Exhibit 1). Malaysia does not have the large base of business traffic enjoyed by neighbors to the south and therefore it will be difficult to match them on absolute revenue performance. To be competitive, MAS must maintain a cost advantage (The MAS Way, 2006).

Weakness
On the other hand, even though Malaysia Airlines have low labor cost, effect from the good news behind the Asian economic recovery is that is has fueled strong traffic growth. The bad news is that it has put pressure on cost of living and labor factor costs. MAS’ labor costs have risen by 25% since 2003 with further increase requested by both suppliers and labor (The MAS Way, 2006). Opportunity

Based on The MAS Way: Turnaround Plan, Asian countries have 'pro-business' labor laws compared with other regions. While many Asian countries have strong unions, the labor law construct allows businesses much more flexibility in doing what they need to do to ensure their viability. The use of contract flight crews, tenure limits on customer service staff, and limits on labor flexibility (the ability to move from one job to another) are all freedoms that would not likely be possible in the West. The labor law construct in Asia (except, perhaps, in Japan) has allowed airlines to keep cost growth in check as revenues have grown. This is where MAS’ labor has the opportunity to move from one job to another job legally. Threat

According to Iskandar bin Idris, one of the Malaysian stewards who working with Singapore Airlines. He says that most of them prefer and will grab the opportunity to work with other Airlines company; this is because other Airlines, for example Singapore Airlines, they pay more that what MAS willing to pay. Stake Holder 2: Management

Strengths
MAS cannot achieve is strategic vision without first executing a fast and sustainable turnaround. Over the past 3 months, the MAS management team has developed a comprehensive and actionable plan to return the company to profitability and create a company that exceeds the expectations of its customers, employees and shareholders. In developing this plan, we built upon the Board's recent turnaround initiatives and we interviewed hundreds of employees, managers and customers to clarify our priorities, identify our constraints and understand what it will take to succeed. We also studied external case examples of airline turnarounds for insight into their key success factors. Learning from those discussions, we have designed a plan that is:

Fast and decisive
Our employees will focus on clear P&L results, not just activities. There is no time for projects with long lead-times that only pay off years down the track. We will build capabilities...
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