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AirAsia Strategic Management

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AirAsia Strategic Management

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  • Air Asia is a low fare airline of Malaysia, it had one of the largest number of airplanes and flying destinations. Know what Business Strategy made Air Asia a successful low budget Airline in Asia. SWOT Analysis of Air Asia & Porter Five Forces Model Analysis Watch this Case Study On Air Asia : https://www.youtube.com/watch?v=Ad3voE3UnvE
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  • Be careful with air asia, we had to fly from bali to perth, booking the flight the same day. two things happened, one the service counter person informed us one price and then changed it after booking the flight. secondly the price was almost five times the listed price on the web site for the next day, we paid for two persons, one way $1145.34 Australian. I have spoken to the customer service representative on the phone today and he tells me it is normal practice to charge passengers who need fly on the same day five times the advertised price. I am just giving people warning get prices in writing before booking otherwise you will end paying what we paid.
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AirAsia Strategic Management

  1. 1. MISSION To be the best company to work for whereby employees are treated as part of a big family Create a globally recognized ASEAN brand To attain the lowest cost so that everyone can fly with Air Asia Maintain the highest quality product, embracing technology to reduce cost and enhance service levels
  2. 2. 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.
  3. 3. 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).
  4. 4. PEST ANALYSIS
  5. 5. Political Malaysia • Fares charged by Malaysia government were the lowest International • Airline markets in ASEAN - India and China • Political uncertainty in India, Thailand and Indonesia
  6. 6. Economic Malaysia • Gross Domestic Product (GDP) increase • AirAsia low cost strategies gaining attraction in the region • Oil price International • H1N1 influenza • Economic reform “Doi Moi”
  7. 7. 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
  8. 8. 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 fastestgrowing market for international passengers and freight
  9. 9. 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 Rivalry among existing competitor • Indirect substitute • Direct substitute • Internet • Limited customer • Other low cost airlines
  10. 10. SWOT ANALYSIS STRENGTHS WEAKNESSESS Good promotion campaigns Strengthen geographic position Expanding skill workers Brand awareness through CSR Termination of Joint Venture Poor services Websites down Positive towards competition Utilization of aircraft and efficient operation OPPORTUNITIES THREATS Advertisements problem Additional aircraft Financial speculation Growth expectation Effect of fuel price Easy access Authority interferences and policy
  11. 11. SWOT MATRIX SO 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) ST STRATEGIES - Fuel conscious aircraft (S2, S5, S6, T3) Attractive designs of advertisements (S1, S4, T1, T4) Have the expertise on their own maintenance and services (W2, W3, O1, O2, O3) Establishing a tele-sales hotline (W2, W3, O1,O3) WT STRATEGIES - Train ground crew for higher airborne time (W2, T3, T4) Negotiator organisation within AirAsia staffs (T1, T2, T3, T4, S3, S4, S6)
  12. 12. SPACE ANALYSIS
  13. 13. INTERNAL ANAYSIS EXTERNAL ANALYSIS FINANCIAL POSITION (FP) Profit year end 2012 RM 4.95 billion (Increase by STABILITY POSITION (SP) 5.0 10%) World best low cost airline (Skytrax World -1.0 Airline Award 2011) Low-cost flight, increase in revenue by 60% 3.0 Fuel price increase to about USD 100 per barrel -1.0 Maintain high profitability & growth (Malindo 4.0 Seasonal demand -3.0 Joint Venture Tata Sons & Singapore Airlines -5.0 Airlines) Gain regional expertise (AXN) 3.0 Corporate Social Responsibility 1.0 Collapse of AirAsia Japan 1.0 COMPETITIVE POSITION (CP) Establishment brand name globally and INDUSTRY POSITION (IP) -5.0 domestically. Fast on-line and advance booking, reduce queue (Air Asia X) 6.0 -3.0 Increase demand in overseas routes (Air Asia X) 4.0 Internet service allow-online booking for -5.0 South-East Asia Region Customer Loyalty (36.97 million including Deregulation provides geographic and flight freedom. (Air Asia India) and hustle Kuala Lumpur prefer gateway into Malaysia and (India Market) 5.0 domestic and international flight. 1.0 Utusan refused to advertised ads -4.0 AirAsia faced fined issue 2.0
  14. 14. SPACE MATRIX
  15. 15. 7 FP 6 5 x-Axis = 1.17 y-Axis = -0.67 4 3 2 1 CP -7 -6 -5 -4 -3 -2 -1 0 -1 1 -2 2 3 4 5 6 7 COMPETITIVE STRATEGY -3 -4 • Market Penetration • Market Development • Product Development -5 -6 -7 SP IP
  16. 16. 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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