Marketing decisions are influenced by both internal and external environmental dynamics that directly impact the success of such decisions. Some of these environmental dynamics include competitors, suppliers, customers and any absolute advantages a company has. This essay identifies and discusses internal and external environmental factors that directly influence the marketing decisions of Malaysian Airlines.
The Porter five models seek to identify the environmental conditions and forces from different work structures, and how these parameters influence the success of a business. The model further explains the threats involved in the fulfillment of various goals and strategic plans set by a company. A critical analysis of competitors; their objectives, strategies, weaknesses and strengths vis a vis those of the Malaysian Airlines is essential in making informed marketing decisions that would benefit the airline. Some of the major competitors of Malaysian Airlines are Singapore Airlines, Air Asia, Emirates and Etihad (Douglas, 2014). This competition has forced Malaysian Airlines into a battle for survival especially after the loss of MH17, compounding a financial problem that had already started off prior to this incident.
Malaysia Airlines operates two main airlines as a substitute and corporate recognition; Firefly and MASwings with which have a specific timeline and operation. Firefly focuses on the flights operating across Penang and Subang International Airports, (Lewin &Massini 2011). Firefly focuses on the tertiary cities while MASwings specifies in the flights within the inter-Borneo. Air Asia which is a major competitor also serves clients along similar routes and this is a major challenge that Malaysian Airlines has had to grapple with.
Some of the strengths that Malaysia Airlines exhibit include a robust technological impetus and a huge government ownership that guarantees financing in cases of low liquidity (Douglas, 2014). In the event that the company needs to embark on infrastructural development, the government can provide financing. This is unlike other competitors such as Emirates and Etihad that are privately owned and may lack flexibility when it comes to access to financing.
Malaysia Airlines experienced a major setback in 2014 following the crash of MH370 on what was a suspected terrorist attack by Malaysian radical Islamists (Mendick, 2014). This incident cast a shadow on an airline that was already struggling with the mysterious disappearance of MH17 earlier the same year. The terrorist attack affected not only the confidence of customers in the airlines, but also dented further the image of the airlines in the public eye. Additionally, the minority shareholders, through the government initiative, were to be considered as part of overcapacity and restructure of the airline (Kaiser 2014). This incident has caused the airline loss of clients and loyalty from different shareholders. The partnerships have deteriorated due to mistrust in the same approach.
Market Size and Share
According to a Centre for Aviation assessment (2015), Malaysian Airlines had 285000 domestic seats weekly which represented a meager 1% drop the previous year. Its competitor Air Asia decreased its capacity and consequently the domestic market share by 4%, indicating that Malaysian Airlines still remained a dominant player in its domestic market. However, the international market share of the company decreased following a reduction of the airlines international capacity by 9%. Some major destinations such as Kunming, China were suspended and this affected the market size of the company (CAPA 2015).
Porter Five Model and Malaysia Airline
- Supplier Power
Assessing the number of suppliers with an essence of driving the prices up, would promote the competitive obligation for the airline, through the customers that understand the effectiveness of communication and further promotion and objectivity. In addition, the strength considered to control other airlines such as Singapore Airlines or Garuda Indonesia, will depend on