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

Untitled MGT103 Group Assignment Introduce Management (MGT103) 0 0 Ho Chi Minh, 3rd July 2021 GROUP ASSIGNMENT FPT University Course MGT103 Class MKT1602 Group 2 Member’s information Student Code Full[.]

MGT103 Group Assignment

Introduce Management (MGT103)

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

TABLE OF CONTENT

1 INTRODUCTION 3

2.5 Affect related parties 8

3.4 Affect related parties 12

4 UGLY ACTION 14

4.5 Affect related parties 18

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

$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

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

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

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,

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

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

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

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