Strategy Formulation of Biman Bangladesh Airlines Ltd. SIM: 501 (Fundamentals of Strategic Management)
Submitted to:Dr. M A Mannan Professor
Submitted by:Md. Shahidul Islam ID: 210 MBA, 13th Batch Stream: SIM
Department of Management Studies University of Dhaka
April 12, 2012
Table of Contents Particulars SWOT Analysis: An Introduction SWOT Analysis Workshop Work Plan Industry & Organizational Profile International Airlines Industry Bangladesh Airlines Industry Elements of Internal and External Environment List of Internal Strengths & Weaknesses List of Opportunities & Threats SWOT Format Strategy Formulation References Page No. 3 4 4 4-8 8 8 9 9 10 11 12 14
SWOT Analysis SWOT analysis is a strategic planning method used to evaluate the Strengths, Weakness, Opportunities, and Threats involved in a business. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.
Strengths: characteristics of the business, or project team that give it an advantage over others
Weaknesses: are characteristics that place the team at a disadvantage relative to others
Opportunities: external chances to improve performance (e.g. make greater profits) in the environment
Threats: external elements in the environment that could cause trouble for the business or project
Conducting a SWOT analysis involves a seven steps process, which are illustrated in the following chart:step 1 prepare a workplan for conducting the SWOT analysis
prepare an organizational profile of the selected organization identify and prepare a list of possible internal environmantal elements which are relevent to the selected organization prepare a list of internal strength and internal weakness on the basis of the identified elements in step 3 identify and prepare a list of external environmantal factors which are likely to haveprofound impact on the organization prepare a list of general environment releted opportunities and threats and industry releted opportunies and threats prepare a SWOT format
SWOT Analysis Workshop SWOT analysis of the Biman Bangladesh Airline Limited will be conducted following the mentioned seven steps. The report is based on secondary data and it also contains hypothetical information regarding the organization.
Corporate Profile of Biman Bangladesh Airlines limited Biman Bangladesh Airlines is the flag carrier airline of Bangladesh. Its main hub is at Shahjalal International Airport in Dhaka, and also operates flights from Shah AmanatInternational Airport in Chittagong, earning revenue from the connecting service to Osmani International Airport in Sylhet. Biman's operations are assigned the IATA airline code BG and the ICAO airline code BBC, while its call sings is BANGLADESH. The carrier provides international passenger and cargo service to Asia and Europe, as well as major domestic routes. It has air service agreements with 42 countries, but flies to only 18. The airline was wholly owned and managed by the government of Bangladesh until 23 July 2007, when it was transformed into the country's largest public limited company by the
Caretaker Government of Bangladesh. The airline's headquarters, BalakaBhaban, is located in Kurmitola, Dhaka. Created in February 1972, Biman enjoyed an internal monopoly in the Bangladesh aviation industry until 1996. Presently Biman has two 737-800, four DC10-30, three A310-300 and three F28-4000 aircraft in its fleet. Biman is in the process of procuring more new generation aircraft such as Boeing 777-300ER, 787-8 and 737-800 for its fleet. Biman operated flights to 29 international destinations as far away as New York City to the west and Tokyo to the east. The airline has suffered heavy financial losses, and has a reputation for poor service because of regular flight cancellations and delays caused by its ageing fleet. Annual Hajj flights, transporting non-resident Bangladeshi workers and
migrants, and the activities of its subsidiaries, form an important part of the carrier's business. Under Skytrax's five-star rating systems, Biman merits two stars. The carrier is currently facing competition from local private airlines & some international carriers, which offer greater reliability and service standards, which is experiencing an 8% annual growth rate, owing to a large number of non-resident Bangladeshis. Since becoming a public limited company, the airline has reduced staff and begun to modernize its fleet. Biman has made a deal with Boeing for 10 new aircraft, along with options for 10 more. VISION To establish Biman Bangladesh Airlines Limited in the aviation market as a world-class airline. MISSION To provide safe, reliable, efficient and economical air transport services and to satisfy customers expectations while earning sustainable profit and continuing to be a caring employer.
The airlines Reservation and Departure Control System and other communication systems are fully computerized. Biman is now striving to make the airline more attractive to its valued passengers by fixing priority on providing more comfort and maintaining schedule regularity. Biman does entire maintenance work on its F-28 aircraft. Biman is also doing C-check, Dcheck on DC10-30 and A310-300 in its hangar complex at Dhaka.
Checks, repair and maintenance of one DC10-30, one wide bodied Boeing and two F-28 aircraft can be done simultaneously there.Biman is in the process of procuring more new generation aircraft such as Boeing 777-300ER, 787-8 and 737-800 for its fleet. In addition to its own aircraft, Bimans ground-handling unit also provides support to Singapore Airlines, Thai Airways, Malaysia Airlines, Qatar Airways, Emirates, Kuwait Airways, Oman Air, Saudia, Gulf Air, PIA, Indian Airlines, Dragon Air, Druk Air, etc.at HazratShahjalal International Airport,Dhaka.
HUMAN RESOURCES AND ORGANIZATIONAL STRUCTURE The human resource is of consists of the countrys most experienced and expert people although the appointment in the top level management is highly politically influenced. Therefore, the person who does not have proper experienced and expertise in the airline business are appointed in the top. This is one of the major of the employee dissatisfaction and airlines poor performance. The Manpower status of Biman Bangladesh Airlines Ltd as of June 2010 is given belowEmployee Level MD & CEO Executive Director Cockpit Crew General manager & Equivalent Dy. General Manager & Equivalent Manager/Asst. manager/officer & Equivalent Staff Total 1945 2824 336 381 --2281 3205 701 25 -726 Permanent -03 132 13 30 Contractual 01 03 14 01 01 Casual -----Total 01 06 146 14 31
ORGANOGRAM The organization is extremely red taped and bureaucratic causing delayed and costly decision making and inefficiency in operation.
Board of Directors
MD & CEO Directorates
Administra tion GM DGM Manager Asst. Manager Officer Jun. Officer Supervisor Assistant M.L.S.S
Customer Service Planning
Flight Operation Planning
Store & Purchase
Marketing & Sales Planning
FIXED ASSET LESS DEORECIATION The asset of the airline is adequate in relevance of other local airlines. Moreover the government always remains as the helping hand of the organization in crisis period as it the sole national flag carrier. But proper transparency is not maintained in their regular operation like maintenance and procurement of aircraft, which costs extra money of the airline. Amounts in Tk. 2009-10 Biman Bangladesh Airlines (BBA) Biman Poultry Complex (BPC) Biman Flight Catering Center (FCC) 15,803,855,303 1,215,958,206 192,239,779 2008-09 16,154,051,948 1,214,724,483 195,892,076
FLIGHT Biman Bangladesh Airlines basically provides two categories of services: Domestic flights: Currently Biman has the following domestic flights: Sylhet Chittagong Coxs bazaar International Flights: Bangladesh Biman provides 51 departure and 51 arrival fights per week. It has the following International flights from Dhaka to: Abu Dhabi Delhi Jeddah London Riyadh Bahrain Bangkok Calcutta Katmandu Rome Hongkong Dubai Karachi Kualalumpur Brussels Singapore New York Doha Paris Muscat Mumbai Frankfurt Kuwait Tokyo Yangoon
Element of Internal and External Environment The elements of internal and external environment that most probably impact the organizations performance and profitability are given in the following table: Internal Environmental Elements Human Resources Management Physical & financial Resources Technological Resources Organizational culture External Environmental Elements General environmental elements Economic Environment Political Environment Demographic Environment Socio-cultural Environment Industry environmental elements Competitors Substitute product New entrants
List of internal Strength and Weakness Based on the internal factors selected above, a list of internal Strengths and Weakness is prepared below:
Strengths and Weakness
Related Internal environmental elements
Strengths A. Biman is in the process of procuring more new generation aircraft such as Boeing 777-300ER, 787-8 Technological resources and 737-800 for its fleet. Human Resources B. E