The airline is aiming to further implement innovative fuel optimization initiatives in addition to offering the highly fuel-efficient Airbus A350 aircrafts on the London route. - Influence of Climate Change How climate change will impact Mas Malaysia business model and supply chain. The neighboring countries of hers are; the Philippines, Indonesia, Vietnam, Singapore, Brunei, and Thailand. Most of the tourists are not interested in visiting countries that have threats due to political conditions. This can help Mas Malaysia to bring in more transparency and make supply chain more flexible. The top executives pondered various options, including a rebrand of the airline, a new discounted pricing structure to build volume, a private equity infusion, a merger and filing for bankruptcy. MAB joined one world in 2013, and after joining it the company began to offer the best connectivity with world-class journeys to over 1000 destinations across 150 countries and access to approximately 650 airport lounges globally. 4. PESTEL analysis airline industry can show how the financial situation of a nation can impact the airline industry: The sociological conditions of any state gravely impact the airline industry. Khazanah Mas's can make strategies based on the stable political environment. For example the power structure in US economy is slowly moving towards the older generation as that generation has higher disposable income compare to the younger generation. Stiff competition from LCCs and other players especially in the Asia region, 1. For example it has been extremely difficult for US companies to enter UK health market as UK health system is a nationalized system and everything goes through contracts at national level. This assessment tool is useful as a macro environmental tool to understand the performance of the firms and to monitor overall progress. Some of the political factors are governance system, democracy & institutions, military coup chances, probability of armed conflict, law and order in market etc. Malaysian Hospitality is world renowned, and Malaysia Airlines hospitality and services are world class, with its superior luxury and business class travel, Golden Lounge, In-flight offerings such as movies, TV, games, music, tasty in-flight meals and duty-free shopping. Many felt there was a need to transform the entire business model. - Attitude towards Health & Safety The attitude towards health and safety is often reflected in the quality of the products and cost structures of manufacturing processes. Malaysia Airlines Berhads vision is to become, An Airline of Excellence.. Environmental factors are fast gaining traction not only among consumers but also among regulators and policy makers. Thus significantly impacting the ability of Khazanah Mas's to build sustainable competitive advantage One way to start is by closely mapping the changes in consumer buying behavior and emerging value proposition. - Empowerment of Supply Chain Partners Khazanah Mas's should analyze areas where technology can empower supply chain partners. Use of data and predictive analytics, AI to boost revenue in airline industry, 1. Climate change and changing ecosystem is leading to the extinction of more than 20% of species on the planet by the turn of this century. Malaysia Airlines has also partnered with ReveMax and other tech companies to bring about digital transformation in the airlines and is also a part of the oneworld Member Airlines, an alliance of various airlines flying to more than 50 destinations. Proper strategies and plans can be very fruitful in this case. - Influence and Effectiveness of Environmental Agencies The role of environment standards enforcement agencies is critical in safeguarding norms. The PESTEL analysis of the airline companies can show how the external factors have affected them. If a company can secure a tie-up with the government, that can be highly beneficial for them. The number of passengers may decrease while the cost of raw materials may increase. India got its first airline in 1932. and its background in Malaysia, and a PESTEL analysis and Porter's Five Force analysis will also be included in this written assignment. You can use the following in your reference section in order to give credit to the source. But this strategy entails risks when interest rate will go up. Due to the pandemic, many countries have temporarily suspended flights from other countries. This can help Mas Malaysia in numerous decisions such as plant location, product development, and pricing strategy. Here are some issues which can directly impact the business of airline companies: A country's economic condition is directly related to the business operating within the country. Khazanah Mas's should build a strategy that can integrate societal values, infrastructure, and Khazanah Mas's business model. Recession and unstable economic conditions can severely affect the airline industry. Available at: https://notesmatic.com/airlines-industry-pestel/ (Accessed 21 June 2021). - Fiscal and Monetary Policies The Republican government tax break culture has increased the deficit and it can lead to fiscal trouble for the economy in coming years. Analyze the Khazanah Mas's external competitive environment to identify opportunities and threats. 2. Social factors such as demography trends, power structure in the society, women participation in workforce etc have immense impact over not only the country's economy but also on workforce talent availability and level of consumer demand. If the legal system is not strong then Mas Malaysia can face numerous challenges from consumer petitions to shakedowns from authorities. 2020 in order to break the COVID- bondage (Tang, 2020; Shah, et al., 2020). - Likelihood of Technology Disruption If the country is hub of technology companies then there is a high chance of technology disruption among various industries. As the aviation business can be profitable in the long term, the government may want to invest. Neeraj Pandey and Gaganpreet Singh are affiliated with National Institute of Industrial Engineering (NITIE). - Independence of Judiciary and Relative Influence of Government The judiciary independence often reflect both strength and credibility of the institutions in the country. - Democracy & Other Democratic Institutions According to Nabil N. El-Hage, Leslie S. Pierson the democratic institutions are needed to be strengthened further so that business such as Khazanah Mas's can thrive in an open, transparent and stable political environment. Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. Many external factors contributed to this situation. Malaysia Airlines (MH) has collaborated with Japan Airlines (JL) since July 25, 2020 to further optimize the convenience of travelling between Japan and Malaysia, allowing customers to benefit from more flight choices. This report is shared in order to give you an idea of what the complete Key Performance Indicators (KPI's) Report will cover after purchase. Nabil N. El-Hage, Leslie S. Pierson (2018), "Malaysia Airlines (A) Harvard Business Review Case Study. - Recycle Policies What are the recycle policies in prospective market and how Mas Malaysia can adhere to those policies. 'A PESTLE analysis of the aviation industry', notesmatic, [online]. Bank Simpanan Nasional (BSN) currently is one of the major financial organizations in . One way to start is by closely mapping the changes in consumer buying behavior and emerging value proposition. - Level of Social Concerns & Awareness in Society Higher level of social concerns in the society often result higher consumer activism and pressure from non-governmental organizations, & pressure groups. How it impacts the demand in the economy. - Types of Immigration & Attitude towards Immigrants Given the latest developments such as Brexit and Immigrant detention on Southern border of United States. Use EdrawMax Online to create a PESTEL analysis diagram, or create any other diagram with ease! Should Khazanah encourage job and route cuts at MAS, and how would the government react to them? These four external environment forces are political/legal segment, economics segment, sociocultural segment, and technological segment. Enter the email address you signed up with and we'll email you a reset link. Established player in Asian region catering to large number of destinations, 1. Political Landscape Malaysia has well-developed foreign relations through bilateral agreements and trade treaties. International Journal of Business Economics and Management Research, HUMAN RESOURCE PRACTICES IN INDIAN HOTELS: A STUDY OF BUSINESS & OTHER HOTELS IN DELHI (NCR, THE EXTERNAL ENVIRONMENT AND ITS EFFECT ON STRATEGIC MARKETING PLANNING: A CASE OF STARBUCKS MALAYSIA, BUILDING HIGH PERFORMANCE TEAMS-A TQM APPROACH AT BHEL, HYDERABAD, RISK OF OBSOLESCENCE OF SYSTEM IN INDIAN BANKS, MAKE IN INDIA BIG BOOST TO TOURISM AND HOSPITALITY, EMPLOYEES PERCEPTION TOWARDS ORGANISATIONS DEVELOPMENT PRACTICES- A STUDY OF INDIAN FIVE STAR HOTELS, STRATEGY AND 'STRUCTURE' WHICH COMES FIRST, STUDY OF FACTORS AFFECTING ENTREPRENEURIAL INCLINATION AMONG UNIVERSITY STUDENTS, THE IMPACT OF AMNESTIES ON NON-PERFORMING LOANS IN NORTHERN CYPRUS, EFFECT OF MANUFACTURING PLANNING OBJECTIVES AND CONTROL SYSTEMS OF MULTINATIONAL ENTERPRISES IN NIGERIA, EFFECT OF MANUFACTURING PLANNING OBJECTIVES AND CONTROL SYSTEMS OF Mas Malaysia needs to be careful about building marketing strategy that is dependent on Purchase on Credit consumer behavior. - Inequality Index / Ranking on Gini Index Gini Index and level of inequality are a great barometer for harmony and development of a society. Khazanah Mas's can borrow cheaply under such circumstances. 1. The BP Healthcare and Enrich by Malaysia Airlines partnership cares for all Malaysians wellbeing - https://www.malaysiakini.com/announcement/568903, 3. INTRODUCTION OF PESTEL ANALYSIS For the development of any country many factors plays vital role. I have used them in a lot of my personal research work.-Mudassir KhanAccounting and Business, Melbourne Polytechnic, Here the research is to-the-point, no beating round the bush. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. The human resource significantly contributes in the development of Hotel Industry. If you want to know more about how to make a PESTEL analysis diagram in EdrawMax Online, just check this PESTEL guide, it may help you to create diagrams without efforts. - Time Taken for Court Proceedings Even if the country has best of the laws, it doesnt mean much if they cant be enforced in a timely manner. Prior to this, a US$392 million loss, as well as the inability to compete with lower-cost carriers, had posed a great challenge to MAS. Thus significantly impacting the ability of Mas Malaysia to build sustainable competitive advantage Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. Khazanah Mas's should consider demographic trends before new product developments and integrate features that cater to this segment. Malaysia Airlines reported a Net Loss of Tax of RM433 million in 2012 compared to a Net Loss of RM2.52 billion registered for the 12 months ended 31 December 2011. Environmental factors are fast gaining traction not only among consumers but also among regulators and policy makers. Available at: https://pestleanalysis.com/pest-analysis-for-airline-industry/ (Accessed 21 June 2021). Civil society groups are influential not only in policy making but also in building a society wide narrative. The SWOT analysis for Malaysian Airlines is presented below in a matrix followed by the detailed analysis report: This is the sample complete report which will give you a glimpse of what your complete report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. Political environment and other factors not only impact the cost of doing business but also long term sustainability. Different countries have different attitude towards health and safety so it is better for Mas Malaysia to conduct a thorough research before entering the market. Some of the technology trends that are impacting the macro environment are developments in artificial intelligence, use of machine learning and big data analytics to predict consumer behavior, growing importance of platforms over service providers etc. For example Trump not standing by US commitments created an environment of uncertainty. - Laws regarding Monopoly and Restrictive Trade Practices As a new player Khazanah Mas's shouldnt be worried about the monopoly and restrictive trade practices law. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. In highly hierarchical societies the power of decision making often reside at the top. 1190 Words; 5 Pages; Decent Essays. However, we may send you emails on our new reports and solutions. They may get stuck in legal proceedings. For international flights, the regulations are strict, and this situation may lead an airline to push for more amenities to keep up with the competitors. Airlines are reducing their carbon emissions in response to climate change risks, Malaysia Airlines Berhad Porter's Five Forces Analysis, Malaysia Airlines Berhad Value Chain Analysis, Malaysia Airlines Berhad Covid-19 Impact Analysis, Malaysia Airlines Berhad Segmentation, Targeting and Positioning (STP) Analysis, Malaysia Airlines Berhad Ansoff Matrix Analysis, Malaysia Airlines Capital V Cayman Limited, Malaysian Airline System Berhad (Italy, Singapore, Australia). Choosing the vision, mission and the reason of existence for Mas Malaysia. Malaysia Airlines (A) case study (referred as Khazanah Mas's for purpose of this article) is a Harvard Business School (HBR) case study covering topics such as Finance & Accounting and strategic management. The purpose of this research is to examine the effects of external environment pertaining to the marketing strategy of Starbucks, a coffee chain in Malaysia. STEP 5: PESTEL/ PEST Analysis of Malaysia Airlines Case Solution: Pest analyses is a widely used tool to analyze the Political, Economic, Socio-cultural, Technological, Environmental and legal situations which can provide great and new opportunities to the company as well as these factors can also threat the company, to be dangerous in future. The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as Khazanah Mas's. Malaysia Airlines Berhad (MAB) is a flag carrier airline based in Sepang, Malaysia. The recent era of economic depression shook all industries and airlines' industry was no exception. This can help Khazanah Mas's in numerous decisions such as plant location, product development, and pricing strategy. 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