_Biman Bangladesh Airlines_ (jafar Sir).pdf

8/15/2019 _Biman Bangladesh Airlines_ (jafar Sir).pdf

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Assignment

On

“Biman Bangladesh Airlines”

Prepared for:

Md. Abu Jafar

Lecturer & Coordinator

BBA Department

Daffodil International University

Uttara Campus

Prepared By:

Md. Shariful Islam 131-11-516

Md. Ariful Islam 131-11-496

Md. Rakibur Rahman 131-11-501

Rehad Mahmud Ratul 131-11-489

Rahaman Mostafa 131-11-530

JannatulFerdous 131-11-517

Submission Date: 2nd

December, 2015


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Assignment On

“Biman Bangladesh Airlines”

Prepared By:



Md. Rakibur Rahman 131-11-501



JannatulFerdous 131-11-517

Submission Date: 2nd

December, 2015


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LETTER OF TRANSMITTAL

December 2, 2015

Md. Abu Jafar

Lecturer & Coordinator

BBA Department

Daffodil International University

Uttara Campus

Subject: Submission of assignment on“Biman Bangladesh Airlines”

Dear Sir,

We are very pleased and joyful for submitting assignment on “Biman Bangladesh Airlines”.

While us preparing our assignment on “Biman Bangladesh Airlines” we have tried to our level

best to provide all information as your instructions. We have tried to provide broad information

concerning of our assignment topic. If you have found any kind of mistake after justifying our

assignment, please provide us the right information so that we can make a better assignment in

future by correcting our mistakes.

We will be highly encouraged if your kind enough to accept our assignment.

Sincerely yours

Name ID


Jannatul Ferdous 131-11-517




Rakibur Rahman 131-11-501


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Executive Summary

Beginning of main body, we have described about “Biman Bangladesh Airlines” and its strategy

of its porters five forces model, SWOT analysis, BCG Matrix, PEST analysis, and Heptalysis.

In porter’s five forces model we have discussed about the strategy and the attractiveness

of “Biman Bangladesh Airlines”. That what strategy “Biman Bangladesh Airlines”follows for the

new entrants, for the suppliers, buyers, for the competitive revelry and for threat of substitute

goods or services.

By SWOT analysis we can identify “Biman Bangladesh Airlines” strength by which they can

beat the competitors’. And can find out that what is their lacking and what are the

opportunities that they can make it to their strength and try to overcome their weaknesses.

We have discussed the PEST analysis by that we can know how political, economic, social and

technological change impact on their business. And the things that they have to do for the

purpose of their guests.

From the BCG matrix we can see the product or service position in market that how much

market they already have gain and the future opportunities of “Biman Bangladesh Airlines”. By

using relative market share and market growth rate they prepare their product and service

position in “BCG Matrix”.

In Heptalysis we have discuss about the overall situation of the “Biman Bangladesh Airlines”.

About their market opportunity, services, marketing and promotional strategy, financial engine,

human capital, potential return and about margin of safety.

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Table of Content

Chapter Name of chapter Page number

Chapter-01 Company overview 4-5

Chapter-02 SWOT Analysis 6-7

Chapter-03 Porter’s Five Forces Model 8-10

Chapter-04 BCG Matrix 11-12

Chapter-05 PEST Analysis 13-14

Chapter-06 Heptalysis 15-20

Chapter-07 Conclusion 21


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Chapter-01

Company overview


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Biman Bangladesh at a Glance:

Biman Bangladesh Airlines Ltd. is the most reputed airlines in Bangladesh. It is popularly

known as Biman.Biman Bangladesh Airlines Ltd is the flag carrier airline of Bangladesh. As

a member of IATA, it flies passengers and cargo to 16 international destinations in Asia and

Europe. It goes to most of the destinations directly or via a stopover. Convenient transfer

connections from Dhaka to regional destinations are easily available. Biman is reputed for its

well-trained and dedicated crew with appreciable safety record.

The airline’s 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. Its main hub is Shahjalal

International Airport in Dhaka and also operates flights from Shah Amanat International

Airport in Chittagong, earning revenue from the connecting service to Osmani International

Airport in Sylhet. Biman 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

only flies to 16. 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,

Balaka Bhaban, is located in Kurmitola, Dhaka.

In addition to its own aircraft, Biman’s 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

Hazrat Shahjalal International Airport, Dhaka.

Though Biman has been facing huge amount of financial loss from last few years, the loss has

been diminishing.

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Vision

To establish Biman Bangladesh Airlines Ltd. in the aviation market as a world-class airline.

Mission:

To provide safe, reliable, efficient, adequate, economical and properly co-coordinated air

transport services and to satisfy customers’ expectations while earning sustainable profit and

continuing to be a caring employer.

Main Objectives:

To provide and develop safe, efficient, adequate, economical and properly coordinated air

transport services, internal as well as international.

The core businesses/activities

-Air transportation of passengers,

-Air transportation of cargo.

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Chapter-02

SWOT Analysis


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External Analysis:

Strength:

1. Leading Airlines Company in Bangladesh.

2. They serve Domestic as well as International Flight.

3. Certified by European Aviation Safety Agency(EASA).

4. Barriers of market entry.

5. They provide both passenger and cargo service.

6. It has air service agreement with 42 countries.

7. Wholly owned and managed by the government.

Weakness:

1. Shortage of investment in R&D

2. Idle workforce.

3. Delay of flight4. Technological Default

5. Recondition Aircrafts

6. Shortage of aircrafts

7. Week promotional team.

8. Lack of marketing strategy.

9. Less innovation.

10. Disappointing promotion system of workers.

Internal Analysis:

Opportunities:

1. Increasing income level.

2. Creating market opportunities.

3. Few competitors in domestic market.

4. Large number of customer in foreign market and domestic market.

5. The airline has made a deal with Boeing for ten new aircraft, along with options for ten

more.

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Threats:

1. Increasing cost

2. Tax rate change

3. Substitute transports

4. Government regulation

5. Rising of fuel price simultaneously.

6. Inflation.

We can observe from the above explanation that SWOT analysis help us to find out the

competitive advantage, our strength by using which we can increase our profit and minimize our

cost. And the lacking that we can make a barrier to maintain our business and opportunities that

we can make it as our strength in future. The competitive advantage of our company is that it is

totally maintain by government. The inflation, tax rate increasing that are threat for as. And the

Large number of demand of customer in foreign market and domestic market is the great

opportunity that we can make it as our strength.

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Chapter-03

Porter’s Five Forces Model


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Analysis of Porter’s five forces model

Porter’s Five Forces Model is a very important tool to analyze the industrial parameters and to

develop business strategy. It helps to determine the competitive strength and therefore

attractiveness of an Industry. If these forces negatively affect any organization that can decrease

their profit, customer, market growth rate as well as market share. So the effective Porter’s five

forces model analysis is must for any company to develop proper business strategy. That would

help them to survive as leading company with the competitors’. Here five different factors would

be discussed to highlight the attractiveness and productivity of “Biman Bangladesh Airlines”.

Porter’s 5 forces model:

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The airline industry is different from all other service industry. It transports people with a high

level of expediency and effectiveness that cannot be served by other industry. By porter five

forces model we can know the industry overall position easily and that help us to identify the

competitors, business environment, rivalry groups that effect to continue our business smoothly

and more efficiently. The porter five forces model of Biman Bangladesh airlines is given below:

1. Potential new entrants:

In case of airline industry, if new company wants to develop business it will be a great

threat for Biman Bangladesh airline. If the new company provide better service with

relatively lower cost than customer will shift to that new company. In that case if

Bangladesh Biman airlines invest a large amount of capital to improve their quality and

service they can make an entry barrier to the new entrants. On the other hand, if

Bangladesh Biman airline can make a strong brand loyalty by their high quality service

the customer will not shift to the other airline company. It is threat foe entry because

when they enter decide to enter the market they have to become licensed which can take

about a year. So it also can make an entry barrier to the new company.

2. Bargaining power of buyer:

In airlines industry there are a lot of Airlines Company. The Company which will provide

the low cost and better service than the customer will try taking their service. in that case

it will be a great threat for the BangladeshBiman,the customer of Biman Bangladesh

airlines can switch to other airline if the service quality is low,schedule problem if the

airline does not maintain the time and the customers have to wait in the airport hours to

hours, safety problem is another cause to switch to other airlines, poor infrastructure

system of aircraft is another cause to switch the customer. For this kind of reason,the

bargaining power is high for BangladeshBiman airlines.

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3. Bargaining power of supplier:

Generally,Biman Bangladesh airlines does not buy new aircrafts. They purchase dumped

aircrafts from different countries. so the bargaining power of suppliers is low. on the

basis of price and quality Biman Bangladesh can easily shift from supplier to supplier. If

they bought new aircrafts from manufacturers, then the bargaining power of supplier

would be high.

4. Product substitutes

In transportation we can see so many alternative ways that public can use. if a passenger

wants to travel from Dhaka to Chittagong he/she can use flight, can hire a car, can also

use bus or train. Generally sophisticated class use airlines to move within the country so

few substitutes are existing for them like private car royal class busses etc. but if we think

about time and royalty airlines is the best alternative way that a passenger can use.

5. Rivalry among existing competitors:

The last stage of porter five forces model is rivalry among existing competitors. the

rivalry among Biman Bangladesh is high in prospectus of porters five forces model. The

strong competitor of Biman Bangladesh airlines are Regent airways, Novo air, united

airways. Us-Bangla Airline. There is a strong competition among these countries.

BecauseBiman Bangladesh airline is in maturity stage but the Novo air and the regent

airway is in the growth position they can anytime beat the BimanBangladeshairline, the

united is also can take the high position. But if Biman bangle airlines try to maintain their

brand image and give the height service to the passengers and can satisfy them with their

great hospitality and can maintain the cost efficiently than it would be possible for them

to maintain their existing position.

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Chapter-04

BCG matrix


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BCG matrix

By using Boston Consulting Group (BCG) Matrix model we can analyze the business

position of Biman Bangladesh airlines. By using market growth and market share we can

define that in which position our company belongs to and who are the competitor of our

business and the maintenance strategy that will help us to invest more effectively. The

BCG matrix of Biman Bangladesh airlines:

By the following picture we can explain that the position of Biman Bangladesh

airline on star because they are in now at growth stage as their market share and

market growth rate is high. Regent airways and novo air is now in growth position

so they belong to introduce stage and it is a great threat for Biman Bangladesh

airlines. Because recent they have high market rate and any time they can change

their position by increasing their relative market share.

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The united airways and US- bangle is now in cash cow position in maturity stage,

they also can be a threat for Biman Bangladesh airlines. The reason is that they

can create market growth rate any time. And the GMG airline is now in dog

position as they are in declined stage.

Using BCG matrix model, airline can analyze their product whether it is Question Mark,

Star, Cash Cow or Dog. It is a good method to identify the product based on

certain BCG characteristic so that airlines can have good decision making. In fact,

BCG also helps airlines to manage their expenditures revenue and investment

process. BCG matrix is a real comparison method for airlines to sustain their

survival in today industry environment.

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Chapter-05

PEST Analysis


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Political impact:

Any type of business of a country totally depends on its political situation. If the political

situation of a country is strong and systematic than it would be so much easier for the

business person to continue the business smoothly. But it is a matter of sorrow that the

political situation of Bangladesh is not so high, so that the airline business faces a great

threat. They cannot maintain their time perfectly; sometime they have to delay their flight

for the unrest situation. People demanded refunds for the tickets booked earlier. People

canceled the bookings and tickets alike due to the high risk of traveling during the dire

times. Sometime the foreigners don’t want to come in Bangladesh .so that the net income

can reduce.

Economic Impact:

The income level of people of Bangladesh and the total GDP growth rate is increasing

day by day. The business activity is also increasing. So the economy of level and the life

style of people is also increasing. As the social class is developing the demand for aircraft

will also be increase in future rather than the road, rail way and seas. On the other hand,

the rising of ticket price accordingly may not set well with the minimum income level of

people of Bangladesh so it is a great worry for Biman Bangladesh. The economic crisis is

having a great impact on Biman Bangladesh airlines.

Social Impact:

Bangladesh belongs to very protective culture. People have to go with these protective

rules and regulation. But now a day the visions are changing. the work force is increasing

in aircraft sector with career oriented who like to work in a better work environment. We

also can see that at past women are not allowed to involve in airline industry but now

women are involving in this industry tremendously. Other that in Bangladesh various

religions and castes and every one of the travelling in aircraft want to customized service.

As Bangladesh is a Muslim country they cannot serve hum which is popular in western

passengers.

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They also have to serve food consciously because they have number of Hindu passengers

who are not like to take beef.

So in the time of their service they have to be more careful for those social boundaries.

Technological Impact:

Technology plays an important role in airline industry. One of the main cost of airline

industry is fuel cost. Due to innovation air crafts can be more fuel efficient. Also due to

technological development air crafts can be safer and cover more ground without any

transit. Customer can book their ticket in advance through website. Also company

website is an important tool for communication and promotion. By the help of technology

can enjoy unique comfortable journey.

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Chapter-06

Heptalysis


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Heptalysis:

To Heptalysis we found seven factors that impact on Biman Bangladesh airlines. The details of

these seven factors highlighted below:

1. Market opportunity:

The market opportunities of Biman Bangladesh airlines are discussed below:

The potential customers of Biman Bangladesh airlines are business persons,

tourists, Bangladeshi people who are stay in abroad.

It mainly provides transportation service, emergency service, cargo service, save

customers time by providing comfortable journey.

It provides domestic and international transfer service.

The main competitive advantage of Biman Bangladesh airlines is that it is wholly

maintain by government. The other airline service provider’scompanies are Novo

airlines, regent airways, US-Bangla, united airways that are fully private owned

airlines service provider.

Airline business is a long time service industry so Biman Bangladesh airlines are

a sustainable business.

2. Service:

Biman Bangladesh airlines is a service providing company. They mainly

provide different kinds of domestic and international flight.

Follow-up products of Biman Bangladesh airlines: recently they have

contract with USA government to direct flight from Shahjalal international

airport to USA. As well as development of present domestic market through

all over the country.

-Deliver baggage on time

-Support an increase in the baggage liability limit

-provide prompt quick ticket refunds.

-Properly accommodate disabled and special needs of passengers.

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-Meet customers' essential needs during long, on-aircraft delays.

-Disclose travel itinerary, cancellation policies, frequent flyer rules, and

aircraft configuration.

-Be more responsive to customer complaints.

-Focusing on the Training for personnel who assist passengers with

disabilities and children.

3. Marketing & Promotion:

Advertising:

No broadcast Advertisement is available for Biman Bangladesh Airline.

Advantage Program:

No advertisement camping was occurring in past or still do not bring the

concentration of top management about its necessary.

Promotion:

As a matter of fact, that in the past, Biman did not realize the necessary

of marketing in their service. But nowadays competition is increasing in the

industry and a good number of newcomers have already stepped in. Thus in

reply, Biman has started various kinds of Advertising and Promotions for

more ticket selling and thus revenue. They are constantly attracting customer

through discounts on special occasions like Eid-ul-Fitr and Eid-ul-Azha. They

have some other facilities and coupons for the purpose of attracting customer.

In reality, these are not sufficient to come out from the veil of losses as their

sales are continuously decreasing for their poor service quality.

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4. Management Hierarchy:

5. Safety performance of Biman Bangladesh Airlines

Biman Bangladesh Airlines has successfully passed its ICAO IASA (International Aviation

SafetyAssessment) audit, a universal safety program that monitors adherence to international

aviation safety standards.The airline is working on obtaining the approval of the US TSA

(Transport Security Administration for their screening and secondary screening processes for

international passengers, and continues work with the Bangladesh Civil Aviation Authority to

secure a Category One rating in the FAA'sInternational Aviation Safety Assessment Program.

The latter is a prerequisite for any airline thatwants to introduce new services to the USA.FlightSafety Department plays a pivotal role in ensuring and maintaining safety standards of

BimanBangladesh Airlines Ltd. Their data driven safety approach relies on data from various

sources and looks past to take lesson for future plan.

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Managing Director &

CEO

Director CustomerService

Director Engineering &

Material Management

Director Flight

Operation

Director Finance

Director Planning

Director Marketing &

Sales

Director

Administration


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They received data through Air Safety Report (ASR) form, Crew de-briefing, Mandatory

Occurrence Report (MOR), Confidential Report, Adverse Training Record, Inspection and

Surveillance, Safety audit, Investigation into accident-incident and liaison with external agency.

Raw data are sorted, organized and analyzed and reports are prepared. If it is within the purview

of Chief of Flight Safety, then she/ he takes necessary action in accordance with the report

otherwise issues are brought to the Safety Review Board chaired by Managing Director and

CEO. Safety Review Board comprising of following senior executives meets once in every three

months to review the safety issues and to take necessary actions.

6. Financial Analysis

Due to certain limitations, coming out with the latest Financial Analysis of Biman Bangladesh

was difficult and time consuming. Therefore, in this part of Financial Analysis,

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We have taken into account two things:

1. The overall Profit/Loss from 2007-2014;

2. The Source Wise Contribution in the Revenue (particularly 2012-13)

Firstly, in this first part of the financial analysis, an overall picture of the Profit/Loss curve

(2007-2014) has been shown. It is clearly visible that in 2007-08, 2008-09 Biman Bangladesh

made a profit of 6cr and 15cr respectively. Although this is considered to be scanty with respect

to the profits other international flights are making. Stepping the next year shows some horrible

downfall of Biman Bangladesh Airlines, this stretched until 2011-12. This is with no doubt that

there were some strategically changes that have caused Biman to accept this amount of losses.

This picture becomes clearer when the existence of the loss curve along the years in the graph is

taken into light.

Although Biman is yet to climb out of years of suffering losses, the national flag carrier is

expected to reduce its annual losses by 38.86% from the previous year as a result of improved

punctuality and enhanced customer service.

According to the officials at the Biman Bangladesh Airlines- 'the carrier would be able to

overcome the massive losses suffered during the months of political unrest ahead of January's

parliamentary polls, and end the fiscal year with an estimated loss of Tk118 crore, much lower

than the previous fiscal losses of Tk 93 crore'.

Secondly, Bangladesh has an aviation market of about 3.5 million passengers in respect of

passenger travel and about 10 million tons in respect of cargo. The market is expanding rapidly.

Biman, being the national carrier used to carry loin portion of this market but due to the different

cause Biman has lost its reputation and carrying less portion of the market. The different charts

in this page will show the performance of Biman in terms of source wise contribution in the

overall revenue.

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In spite of all the problems with political unrest and losses in November and December 2013,

Biman still expects to make its [improved] loss target for 2013-14, and be fully profitable in

2014-15.

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Chapter-07

Conclusion


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Conclusion:

“Biman Bangladesh Airlines” is a well-known airline company in airline industry with

high relative market share and high market growth rate which makes “Biman Bangladesh

Airline” as a better position in domestic as well as internationally. The strategy which

they follow to run their business is strongly helps them to stable in the market place.

Their experience, knowledge, intelligence and cooperative nature is the main cause to

compete with competitor and uphold their brand name to the market. Not only in

Bangladesh but also in global market, they are well known as a strong airline.

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