Introduction
Thai Airways is a renowned International Public Company headquartered in Bangkok, Thailand. The airline organization was formed in 1961 and operated mainly from the Suvarnabhumi Airport. The company offers air transportation services, including cargo, passenger, and mail services. Furthermore, it provides catering and technical and ground customer support. The Airways offers international and domestic flight services (“Marketresearch.com,” 2022).
For the company to remain competitive in the growing aviation sector, management must perform a systematic analysis using different frameworks. To make an effective and reliable decision, BCG and Ansoff Matrices will identify and examine current and potential strategies that can enhance its competitive advantage in the airline industry.
The BCG Matrix Analysis
To remain relevant in the airline industry, Thai Airways must properly understand its product portfolio based on the following two perspectives: market growth and market share. For proper insight, the BCG matrix framework effectively analyzes the company’s product portfolio by dividing it into four main categories: stars, dogs, cash cows, and question marks. Each group has unique implications for investment, allocation of resources, and overall profitability (Heiets, Oleshko, and Leshchinsky, 2021). Therefore, Thai management needs to balance properly between the portfolios to enhance its sustainability in the market.
The Stars
Normally, stars entail products and services with a high growth rate and larger market share. Considering the current Thai operations, international flights can be grouped in this class following their high revenue. Thai management must consider investing in international transportation that traverses major renowned destinations, including North and South America, Europe, and Australia. By allocating more resources to the stars, the airliner will generate more profit in the market, leading to its sustainability.
The Dogs
Based on the BCG Matrix tool, the category of dogs is considered products and services that have less market share and do not grow rapidly. Thai Airway provides different services, including catering and aircraft maintenance. These groups of products have limited market growth, implying that investing in them does not earn the firm adequate income. Following their slow growth rate, the business organization should consider restructuring the category or stop allocating resources toward their operations. The approach will enable the firm to spend the capital in more productive areas, thus generating more revenue.
The Cash Cows
The cash cows category encompasses products and services that grow slowly yet have a high market share. Based on Thai products, such as passenger transportation that covers both domestic and international, have a significant market share. Since the flights are steadily generating cash for the company, Thai Airways needs to continue allocating more resources in the category to enhance its efficiency. This approach will ensure the firm has more local and regional flights, increasing profit.
The Question Marks
Based on the BCG Matrix framework, question marks encompass products that are fast growing; however, they have low market share. Considering the operations of Thai Airways, it should consider having flight destinations to various locations in Africa and South America. In addition, the company should improve its presence in the cargo sector. The market is fast growing and has the potential to generate high revenue for the firm. Thai Airlines should allocate resources to the abovementioned areas to enhance its overall profitability in the aviation industry.
Ansoff Matrix Analysis
Ansoff Matrix framework is an essential strategic analysis tool that focuses mainly on identifying potential areas for a firm’s growth. The Matrix allows the management to identify approaches such as market development, market penetration, product advancement, and diversification. Normally, there are varied levels of risks and rewards associated with each of the mentioned four strategies. Thai Airways should effectively evaluate possible uncertainty and the degree of change required.
Market Development
The market development approach encompasses the aspect of entering new markets while providing products and services. Thai Airways has the potential to expand its routes to cover various destinations across the globe (Ab Yajid, Shukri, and Khatibi, 2020). The management should consider establishing flight paths in major cities in the country, its neighboring nations, and other continents. This aspect will enable the airline to have a large market in the industry, hence improving its income.
Market Penetration
In order to enhance its market penetration in the industry, Thai Airways should provide several flights, especially in the existing market. The approach will enhance its presence, which is important for marketing the company. In addition, the business organization should partner with its peers in the market by engaging in passenger connections in different airports in the region (Chang, Lee, and Wu, 2019). The strategy will enable the company to develop a strong customer base, which is vital for promoting its competitiveness in the market.
Product Advancement
The aviation industry is currently competitive, and for firms to thrive, they have to improve their products. Thai Airways can achieve this aspect by investing in inflight entertainment services. For example, for long hours of flight, the firm should install Wi-Fi and screen devices that can be managed independently by the passengers (Park et al., 2019). Furthermore, the strategy should be accompanied by a proper arrangement of seating to create enough legroom to enhance comfort.
Product Diversification
Product diversification is essential to an approach that allows business organizations to remain competitive in all aspects of operations. Thai Airways should consider investing in cargo transportation (Ayasanond, 2019). Following the increasing international trade, the sector will be able to attract more customers, leading to increased revenue. Furthermore, it should consider launching flights in new areas, including Africa, to enable it to diversify its market share in the industry.
Conclusion and Recommendation
Based on the analysis of Thai Airways using BCG and Ansoff Matrices, the company should employ the following strategies to enhance its sustainability in the aviation industry. First, it should invest more in international flights covering Europe and America to increase its revenue stream. Second, it should expand its cargo transportation to allow it to tap profit from the sector. Lastly, the company should invest heavily in inflight entertainment practices. Since passengers have the ability to choose from different airlines, it is necessary to have in place aspects that make clients comfortable, especially during long flights.
Reference List
Ab Yajid, M.S., Shukri, S.M. and Khatibi, A. (2020) ‘Expansion strategies for achieving competitiveness among airline companies in Malaysian territory,’ Systematic Reviews in Pharmacy, 11(1), pp.761-769. Web.
Chang, Y.C., Lee, W.H. and Wu, C.H. (2019) ‘Potential opportunities for Asian airports to develop self-connecting passenger markets,’ Journal of Air Transport Management, 77, pp.7-16. Web.
Park, E., Jang, Y., Kim, J., Jeong, N.J., Bae, K. and Del Pobil, A.P. (2019) ‘Determinants of customer satisfaction with airline services: An analysis of customer feedback big data,’ Journal of Retailing and Consumer Services, 51, pp.186-190. Web.
Ayasanond, C., 2019. Business Strategies for Enhancing the Competitiveness of Thai Air Cargo Supply Chain Management. In International Academic Multidisciplinary Research Conference in Japan 2019 (pp. 365-373). Web.
Heiets, I., Oleshko, T. and Leshchinsky, O., 2021. Airline-within-Airline business model and strategy: case study of Qantas Group. Transportation Research Procedia, 56, pp.96-109. Web.
Marketresearch.com (2022) Market research. MarketLine. Web.