airasia strategic management
DESCRIPTION
AirAsia Strategic ManagementTRANSCRIPT
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MISSION
To be the best company to work for whereby employees are treated as part of a big family
Create a globally recognized ASEAN brandTo attain the lowest cost so that everyone can
fly with Air AsiaMaintain the highest quality product,
embracing technology to reduce cost and enhance service levels
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VISION
To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares.
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HISTORY OF AIR ASIA
• Air Asia was established in 1994 and started the operations on 18 November 1996.
• On 2 December 2001, Air Asia debt is about USD 11 million (MYR 40 million).
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PEST ANALYSIS
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Political
Malaysia• Fares charged by Malaysia government were
the lowestInternational• Airline markets in ASEAN- India and China• Political uncertainty in India, Thailand and
Indonesia
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Economic
Malaysia• Gross Domestic Product (GDP) increase• AirAsia low cost strategies gaining attraction in
the region• Oil priceInternational• H1N1 influenza• Economic reform “Doi Moi”
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Social
Malaysia• Main sector Malaysia economy is the tourism• AirAsia commits to "Safety First“International• Towards increased transportation consumption • Jain-vegetarian foods for India market• Vietnam trained workforce, charges relief to
airlines
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Technology
Malaysia• AirAsia provides the online service • Introducing the GO holiday• From Airbus A320 replace Boeing 737 International• USTDA - long-term effort to promote Indian aviation
infrastructure• Vietnam will become the world’s third fastest-growing
market for international passengers and freight
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Porter 5 forces
Threat of new entry
• High capital • Brand
awareness & brand loyalty
• Government legislation
Bargaining power of supplier
• Air Bus & Boeing
• Global economic crisis
Bargaining power of buyer
• Sensitive to price
• Switch to other airlines service
Threat of substitute products
• Indirect substitute
• Direct substitute
• Internet
Rivalry among existing competitor
• Limited customer
• Other low cost airlines
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SWOT ANALYSISSTRENGTHS WEAKNESSESS
Good promotion campaigns
Strengthen geographic position
Expanding skill workers
Brand awareness through CSR
Positive towards competition
Utilization of aircraft and efficient operation
Termination of Joint Venture
Poor services
Websites down
OPPORTUNITIES THREATS
Additional aircraft
Growth expectation
Easy access
Advertisements problem
Financial speculation
Effect of fuel price
Authority interferences and policy
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SWOT MATRIXSO STRATEGIES WO STRATEGIES
- Focus on improving basic quality of services to improve prices (S1, S2, S3, O1, O2, O3)
- Soft bundling tour packages (S1, S2, S5, O1, O2)
- Have the expertise on their own maintenance and services (W2, W3, O1, O2, O3)
- Establishing a tele-sales hotline (W2, W3, O1,O3)
ST STRATEGIES WT STRATEGIES
- Fuel conscious aircraft (S2, S5, S6, T3)
- Attractive designs of advertisements (S1, S4, T1, T4)
- Train ground crew for higher airborne time (W2, T3, T4)
- Negotiator organisation within AirAsia staffs (T1, T2, T3, T4, S3, S4, S6)
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SPACE ANALYSIS
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FINANCIAL POSITION (FP) STABILITY POSITION (SP)
Profit year end 2012 RM 4.95 billion (Increase by 10%)
Low-cost flight, increase in revenue by 60% Maintain high profitability & growth (Malindo
Airlines) Gain regional expertise (AXN) Corporate Social Responsibility Collapse of AirAsia Japan
5.0
3.04.0
3.01.01.0
World best low cost airline (Skytrax World Airline Award 2011)
Fuel price increase to about USD 100 per barrel Seasonal demand Joint Venture Tata Sons & Singapore Airlines
(India Market)
-1.0
-1.0-3.0-5.0
COMPETITIVE POSITION (CP) INDUSTRY POSITION (IP)
Establishment brand name globally and domestically.
Fast on-line and advance booking, reduce queue and hustle
Kuala Lumpur prefer gateway into Malaysia and South-East Asia Region
Customer Loyalty (36.97 million including (Air Asia X)
-5.0
-5.0
-3.0
-4.0
Deregulation provides geographic and flight freedom. (Air Asia India)
Increase demand in overseas routes (Air Asia X) Internet service allow-online booking for
domestic and international flight. Utusan refused to advertised ads
AirAsia faced fined issue
6.0
4.0
5.0
1.0
2.0
INTERNAL ANAYSIS EXTERNAL ANALYSIS
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SPACE MATRIX
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0 1 32 4 5 6 7-7 -6 -5 -4 -3 -2 -1
1
3
2
4
5
6
7
-1
-3
-2
-4
-5
-6
-7
FP
SP
CP IP
x-Axis = 1.17 y-Axis = -0.67
• Market Penetration• Market Development• Product Development
COMPETITIVE STRATEGY
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RECOMMENDATION• Improve local responsiveness- Flight and routes ( avoiding flight delayed)• Improve on advertisement- Guerilla marketing and promotion• Giving extra luggage allowance- High utilization of aircraft- Give convenience to passengers• Expand business sponsorship- Next summer Olympic 2016( Rio de Janeiro,Brazil): to increase the income, expose and maintain the brand in future.
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