1

How the airline industry of Thailand applies

international marketing as a means of competitive
advantage, a case study of Thai Airways

Project Proposal

Submitted as part of the requirement for the award of

MBA International Business Management
London School of Commerce

By

Miss WatchareepornSroithong

TABLE OF CONTENT
Content

Page

1.Introduction3
2. Background of Study....4
3. Aim and Objective.4
4. Research Question..4
5. Literature Review....5
5.1 Contextual Literature Review5
History and International Recognition5
International Strategies and Cooperation....5
5.2 Conceptual Literature Review...6
Competitive Advantage6
Value Chin in Airline Business....7
Air Business Management.......8
- Diversification Strategy.....8
- Specialisation Strategy..8
- SERVQUAL.8
6. Research Methodology10
6.1 Quantitative Approach...10
- Target and Sampling..10
- Quantitative Data Analysis....10
6.2 Qualitative Approach11
- Target....11
- Sampling11
- Scope of Group Interview.11
- Qualitative Data Analysis..11
7. Analysis12
8. Ethical Issue..13
9. Research Project Time Frame14
References..13

Topic: How airline industry of Thailand applies the international marketing as

a mean of competitive advantage; a case study of Thai Airways
1. INTRODUCTION
The high-technology in globalization age help people from different part of the world gets
closer and easier. The development in air-transportation is another factor helps convenience
us traveling across apparently faster than the past. In other word, the air-transportation has
been rapidly improved in the last century by both sides of market, increasing demand from
passengers and improving its technology on the business competition. The air-transportation
in Asia seems more exciting than others. The distinctively increasing in figures of GDP in
China leads more demands in the East-Asia air-transport business. (Economic Note, Feb
2010) The idea is supported by Yamaguchi (Pacific Economic Review, Feb 2011) stated that
the increasing in demand of traveling routs between 1000 and 2000 Km has grown fastest in
air transport market in East, including South-East Asia. And it is likely to continue expanding
in longer distance which is influenced by growing of economic factors in this region.
Thailand is another country which has been influenced by this factor and the market becomes
more competitive.
This study is inspired by the ideas mentioned previously. To enable those ideas to be possible
in academic research, the area of study is to focus on Thailand market. Moreover, the idea of
study is fulfilled by another interesting factor, competitive advantage of its business at the
international market. Thai Airways seems to be the best case study of air transport market in
Thailand. Then, the topic of this study is that How airline industry of Thailand applies the
international market as a mean of competitive advantage: A case study of Thai
Airways This study is to focus mainly on competitive advantage factors bringing Thai
Airways to international market.

2. BACKGROUND OF STUDY
The ideas of investigating in this topic are from my personal interests and previous
experience on traveling by air-transportation. During my journey through many countries
around the world by different airlines which mostly started at my motherland, Thailand, I
have noticed that there is competitive issue on the airline business. I have seen that there are
only some airlines could perform effectively at the international levels. Moreover, my
background education in business studies also inspires me to bring this issue to investigate.
Those key words remind me some theories from my study about competing in business.
Many passengers who usually travel by air-transportation rely on few airlines rely on some
airlines and become regular customers by some reasons Likewise, I only travel with some
airlines serve me most comfortable. There might be some reasons behind the customers

royalty. If we focus on this business, there are only some airline could gain trusts from
passenger internationally. The topic of this study is brought from those reason.
3. AIM AND OBJECTIVE

3.1 Aim
This study aims at investigating in the area of competitive advantage factors that bring Thai
Airways to international market and how those factors differ the airline from other local
peers.
3.2 Objective
The objective of this study is to seek the factors which bring Thai Airways to success at the
international market. Those issues are investigated from both internal and external factors of
organization. The internal factors are based on organisations resources enhancing itself to
economical of scale on operation which is giving the competitive advantage to its business.
Another external factor is elicited from market side, competitors, passengers etc.

4.

RESEARCH QUESTION

The questions are based on its aim and objective seeking factors both of internal and external
of Thai Airways in order to criticism how the airline applies the international market by its
competitive advantage factors. The research questions are listed below;
- What are the internal factors of Thai Airways bringing itself to the competitive
advantage level of the business?
- What are the external factors of competitive advantage encouraging Thai Airways
to be outstanding at the international market?
- Who are the competitors from the same origin and playing major role in this
market?
- What are competitive advantage factors that competitors have?
- How does Thai Airways compete on its business based on those competitive
advantage factors?
Those questions are designed to fulfill aim and objective of its research topic and gain
most of significant factors to critical analysis as results of investigation.

5.

LITERATURE REVIEW

Regarding the research topic specifically focuses on competitive advantage, the

understanding of competitive advantage must be revealed firstly.

5.1 Contextual Literature Review;

Thai Airways to International Market
History and International Recognition
Thai Airways has its full-name as Thai Airways International Public Company Limited
(THAI) was found in May 1960, Bangkok, Thailand. It started with domestic routes and
extended to key international destinations over 34 countries. Thai Airways has been
recognised at the international level by received several compliments. Thai Airways was the
second rank at The Best Asian Carrier from Gold Award in 2009. In the same year, it was the
second rank in Best International Airline regarding to the announcement in Grand Travel
Award Ceremony.In addition, Thai Airways was complimented by Readers Digest as Trusted
Brand Award. The First Class Lounge at Suvannabhumi airport was ranked in the best by
Skytrax at the end of same year. (thaiairways.com) The details mentioned beforehand show
that Thai Airways is highly recognised international airline with its high service standard
which differ itself from regional and international airlines.

International Strategies and Cooperation

Thai Airways has joined the international codeshare airline as a Star Alliance member which
is a group of 27 airlines covering 1,172 destination airports in 181 countries.
(airlineinfo.com) Thejoining agreement gives Thai Airways benefits in extending their routes
and destinations at the international market which convenience its passengers by more
choices of travel. In other words, Thai Airways also gains international perception and
reputation from its passengers which are another key factor to bring the airline to success at
international market.
The cooperative advantage from joining Star Alliance membership is that Thai Airways is
instantly joined the frequency flyer programme of its alliance. The Star Alliance frequency
flyer programme creates its passengers loyalty by giving their mileage in every single time
when they fly with Thai Airways and member airlines of Star Alliance. The programme is
ideally joined with major city hotels all over their destinations in order to convenience
passengers to redeem their mileage points to stay in those hotels instead of paying money.
The programme gives opportunities to their passenger to redeem their points to other benefit
such as staying in hotels, air tickets etc. (staralliance.com) The programme obviously gives
Thai Airways opportunities in marketing to increaser passengers at international and create
their loyalty in the meantime.
The background of Thai Airways shows how Thai Airways created its standard and reputation
in order to compete at the international market.

5.2 Conceptual Literature Review

Regarding the research topic specifically focuses on competitive advantage, the
understanding of competitive advantage must be revealed firstly.

Competitive Advantage
Potter (1985, p.33) stated that Competitive advantage cannot be understood by looking at a
firm as a whole. It stems from many discrete activities a firm performs in designing,
producing, marketing, delivering and supporting its product and he also added that each
activities can contribute to a firms relative cost position and create a basis for differentiation.
Jackson (2003) also added that the one of the most concerned on competitive advantage could
be a cost advantage where products or service produced on a low-cost physical distribution
system with a highly efficient assembly processes.
On the other hand, Thai Airways has its own catering service section, Thai Airways
kitchen,and cargo services providing both of internal and public in all kind of needs.
(Thaiairways.com)The catering service function is very important issue could help airline
safe their operation cost. Shaw (2007) also indicated that cost leader airlines could save large
amount of their expenses on operation cost by providing non-food service onboard. In other
words, Thai Airways is the full-onboard service airline who convenience their passengers by
full-catering service, both in-flight and passenger waiting lounge. Thai Airways set up their
own catering service in order to reach the economy of scale on food production. Moreover,
the Thai Airways kitchen has been an outsourcing unit providing in-flight meals for many
other airlines that transit at Suvannabhumi airport, Bangkok. Likewise, the cargo is
occasionally hired by those airlines.
However, the competitive advantage must be compare one firm with other competitors in
order to see different of its competition (Potter, 1985)
These factors could encourage Thai Airways outstanding from other peers such as Bangkok
Airways. The cost competitive advantage is also another key factor to be investigated on this
study in order to indicate how Thai Airways has competitive advantage on this business
encouraging them to the international level.

Another theory related to this topic is value chain which evaluating efficiency of business
operations. The value chain could tell how Thai Airways generates its productions as details
following;

Value Chain in Airline Business

Potter (1985) mentioned that every firm is a collection of activities that are perform to design,
produce, market, deliver and support its products. All these activities can be represented by
value chain. The figure below is showing value chain processes.

Figure1: Value Chain:

Source:Michel E. Potter, Competitive Advantage: Creating and Sustaining Superior
Performance, p. 36
He also added that if two airlines have different value chain embodying significant
differences in boarding gate operations, crew policies and aircraft operations, Differences
among value chains are a key source of competitive advantage. In other words, if Thai
Airways and their peers have different sources, those could indicate the efficient performance
in competitive advantage.
Therefore, this study aims to separate and investigate those factors of value chain influencing
in competitive advantage of Thai Airways and its competitors which is encouraging it to
compete at the international market.

Airline Business Management

To bring the Thai Airways to success at the international market, there are some key factors
apart from factors mentioned beforehand could support Thai Airways to success. There are
some management theories going to be revealed
Diversification Strategy
The theory of diversification strategy can take on a number of different forms.
However, by means of airline management, the strategy focus on activities in other business
industries which have diversified into travel-related such hotels and car rentals (Shaw, 2007)
As the details mentioned on contextual review about Thai Airways and its frequency flyer
programme, the airline has joined the programme which gives its opportunities on
diversification strategy. Those activities must be investigated in order to seek their success at
the international market after all.
Specialisation Strategy
This strategy is opposite diversification. It only focuses on specific development of
activities such as improving in-flight services, human resources and so on. (Shaw 2007) Thai
Airways always improves its organisation in every function of work such as ground service,
in-flight service, staffs training in order to reach highest result of productions.
(thaiairways.com) This factor would be taken as an issue in this study in order to seek and
discuss in term of competitive advantage.
SERVQUAL
This is another theory is to measure service quality. SERVQUAL is for measuring
post-transaction customers satisfaction than for measuring customers underlying
satisfaction with a service or an organization. (Hill et at., 2006, p. 242) The model of
SERVQUAL is showing as following;

Figure2: SERVQUAL;
Source:Rao, 2009: Service Marketing p.160
ws
Rao (2006) added that a service offer is a bundle of feature. Each part of its product
has its own role in contributing to the perceptions of customer The figure 2 shows roles of
each process. The core concept of SERVQUAL is that customers can evaluate firms service
quality by comparing their perceptions with their expectation. In other words, to success at
the international market, Thai Airways must be measured its service quality and organisation
by passenger. Without a good quality in both issues, Thai Airways would not be successful at
the international market. In this study, Thai Airways would be measured both in service
quality and organisation in order to reveal its quality at the international perception.

The next chapter is to explain how research methodologies are applied on this study. The
research scheme is considerably signed on the idea of this research top.

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6.

RESEARCH METHODOLOGY

Regarding this study is about toinvestigate in the competitive advantage of Thai Airways by
seeking factors that the airline applies the international market. The mixed research approach
is the most appropriate methodology of this study as Biber and Nagy (2010) mentioned that
the mixed research methodology is result of a convergent of factors. Then, to enhance this
study to academic level, the mixed research methodology could help investigate significant
factors effectively. Creswell (2003) mentionedthat a general framework of research design
could be adopted to provide the guidance of study from assessing the general philosophy of
ideas behind the enquiry to the detailed data collection and analysis processes.The research
methodological approach is considerably designed to reach the most effective to satisfy the
research aim and objective.The methodology of this research approach is designed to conduct
by both quantitative and qualitative tool.
In addition, this research focuses only on Thai Airways and its competitors in Thailand. The
area of investigation only conducts in Thailand.

6.1 Quantitative Approach

The quantitative research approach is a method of explaining phenomena by collecting
numerical data that are analysed by using mathematical based method (Muijs 2004). Hence,
this study aims to acquire primary data by using questionnaires. The questions within the
interview form are to draw out significant factors that enable Thai Airways to be a significant
player in the international market from intervieweess opinions.
Target and Sampling: Franses et al. (2001) stated that the quantitative approach by
using questionnaire could be scoped by certain number of interviewees. This study expects to
have effective respondents at 100 interviewees.
Quantitative Data Analysis: SPSS is the most best programme of measuring
quantitative research approach by using questionnaire (Biber and Nagy, 2010) Then, this
study would apply this programme on its quantitative data analysis.

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6.2 Qualitative Approach

The focus group interview is applied as a quantitative research tool on this study. This tool is
very popular and widespread used among applied social research. (Robon 2005).This
research tool is potentially raising consciousness and empowering participants on the
interview. It is adopted into this study on the reason of elicitinginterviewees opinion who are
currently working with Thai Airways in management level that they could explain and
indicate the competitive advantage of Thai Airways which encourage itself to international
level.

Target: the research expects respondents from management staff of Thai Airways so
that they could give essential information to answer this research questions.
Sampling: The numbers of sampling on qualitative research tools are depend on
frequency of data collection which mentioned by Silverman (2001). In additional, he also
recommended that the at least sample should be 20 interviews or until such time as we reach
the frequency of number on answers to enable analysis. Unless, this study expects only 10
interviews due to the quantitative research results are together analysed with qualitative
results.
Scope of focus group interview: the scheme of this focus group interviews is based on
semi-structure interview that all of questions are promptly prepared to answer in sequence.
(Robson 2005) The interviews should start asking question at the initial of topic to access the
best results on its interview (Flick 2002). The scope of the question is to define the
competitive advantage factors of Thai Airways in the airline business. The semi-structure
interview gives advantage on controlling interviewees concentration and area of interview.
Moreover it immediately picks up interesting factors rose up during conversation. Some
unexpected ideas could be essential in analysis.
Qualitative Data Analysis; The collected qualitative data must be shown in context or
recording voice. Then, it must be strictly decoded and analysed on academic qualitative data
analysis research scheme as following:
An interesting analysis tool for qualitative research such as focus group given by Boyatzis
(1998) that is widespread used in qualitative analysis scheme. The collected qualitative data
would be decoded into conversation list as Box 1 showing below. The thematic analysis is
applied to decode the conversation into ideas. Those ideas are separated into 4 or 5 themes
regarding research topics questions. Those themes would be coloured by different shades by
different ideas. The details of each idea would be decoded into main points which are going
to answer research questions and aim and objectives.

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Box 1 Example of a short description of a case

for me, technology has a tranquillizing side
The interviewee is a female French information technology engineer, 43
years old and with a son of 15. She has been working for about 20 years
in various research institutes. As present, she works in a big institute of
social science research in the computer centre and is responsible for
developing software, teaching and consulting employees. Technology
has to do a lot with security and clarity for her, To mistrust technology
would produce problems for her professional self-awareness. To master
technology is important for her self-awareness. She narrates a lot using
juxtapositions of leisure, nature, feeling and family to technology and
work and repeatedly mentions the cultural benefit from technologies,
especially from television.

Figure 3: Example of a short description of a case. Uwe

Source: Flick 2002 An Introduction to Qualitative Research. P. 187
The thematic analysis is an only tool to analyse the qualitative data gained from the interview.
This is the most effective tool is given by Boyatzis (1980) which is the most appropriated tool
on this study.
7.

DATA ANYLYSIS

There are two different methods of collecting data, quantitative and qualitative approach.
Therefore, the collected data from different method would be analysed by the appropriate
tool. The results from those different tools would be analysed again in the last process in
order to access the most effective results of analysis. Most of the research questions could be
answered by combining those results.

8.

ETHICAL ISSUES

This study is ethically conducted by means of no distortions or changes from the original
sources of investigation. All of respondents and original sources of data are willing to give
and reveal their details. The analysis methods are strictly conduced following the academic
schemes belonging to all scholars who have given their tools and mentioned as references.
The results are genuinely analysed on the steps mentioned on its methodology schemes. The
results from this study must be trustable.

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9. RESEARCH PROJECT TIME FRAME

Time scale of this project follows the section of dissertation. This study is divided into 5
chapters; introduction, literature review, research methodology, research finding and
discussion and conclusion. In fact, it might take more time on significant details to finish this
dissertation due to the integration of research methodology. The time scale is approximately
divided into 15 weeks from presenting this proposal to advisor which is counted as the first
week.

Figure4 : The Time Scale for research study

Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1. Proposal presentation and
Introduction of study
2. Literature review
3. Research design and
evaluation (Research Methodology)
4. Design the questionnaires and
data collection
5. Data analysis
6. Conduct the result and analysis
session
7. Report preparing
8. Final document

---------------------------------------------- END 3,215 WORDS-------------------------

References

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Books;
Biber, Hesse and Nagy, Shalene (2010) Mixed Method Research: Merging Theory with
Practice, The Guilford Press
Boyatizis, R. E. (1998). Transforming Qualitative Information: Thematic Analysis and Code
Development.Sage Publication.
Franses, Hans Philip et al. (2001) Quantitative Method in Marketing Research, Cambridge
University Press
Muijs, Daniel (2004) Doing Quantitative Research in Education with SPSS, SAGE
Publication Ltd

Creswell, John. (2003) Research Design Qualitative, Quantitative and Mixed Methods
Approach (2nd edition) SAGE Publication, Inc
Flick, Uwe. (2002) An Introduction to Qualitative Research. (2nd edition). Sage Publications
Hill, Nigel (2006) The Handbook of Customer Satisfaction and Loyalty Measurement.
Ashgate

Jackson, E. Susan et al. (2003) Managing Knowledge for Sustained Competitive Advantage:
Designing Strategies for Effective Human Resource Management, Jossey-Bass
Potter, E. Micheal (1998) Competitive Advantage: Creating and Sustaining Superior
Performance, The Free Press
Robson, C. (2005) Real World Research. (2nd edition).Blackwell Publishing.

Shaw, Stephen (2007) Airline Marketing and Management (6th edition) Ashgate Publishing
Limited
Silverman, George (2001) The Secret of Word Of Mouth Marketing: How to trigger
exponential sales through runway, American Management Association

Journals;

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Yamaguchi, Katsuhiro (2011) Cross-Border Integration in Northeast Asian Air Transport

Market, Pacific Economic Review, Vol. 16 Issue 1, p47-63, 17p
Wahid, Abu and Jalil, Abdul (2010) Financial Development and GDP Volatility in China,
Economic Notes, Vol. 9 Issue 1/2, p. 27 - 41

Websites
http://www.thaiairways.com/about-thai/company-profile/en/developments-andadvancements-of-thai-ad-1969-1978.htm [Accessed 14 Aug 2011]
http://www.thaiairways.com/about-thai/company-profile/en/developments-andadvancements-of-thai-ad-2009-current.htm [Accessed 15 Aug 2011]
http://www.airlineinfo.com/Sites/DailyAirline/web-content/osthtml/276.html [Accessed 15
Aug 2011]
http://www.staralliance.com/en/benefits/frequent-flyer/ [Accessed 15 Aug 2011]