There is also some opportunity to partner with other low cost airlines as Virgin to tap into their existing strengths or competitive advantages such as brand name, landing rights and landing slots time to land.
Moreover, the national carriers, Indian Airlines or Air India, despite their domination of the Indian skies, do not seem to be much interested in operating low-cost services.
But being a low cost leader, AirAsia an upper hand because its cost will be still the lowest among all the regional airlines.
Therefore, there is a realisation among regional governments that they need smashing airports and feisty carriers or they are going to miss out big time. New entrants have to create brand loyalty by making huge investments to establish their reputation.
This creates a larger market and a huge opportunity for all low cost airlines in this region including AirAsia. Government policies have limitednew entrances, which is a good thing for Air Asia because they are already settled on the market. The workforce is very flexible and high committed and very critical in making AirAsia the lowest cost airline in Asia.
Airline AirAsia was established in which founded by government. The excellent utilization of IT have directly contributed to their promotional activities email alerts and desktop widget which was jointly developed with Microsoft for new promotionsbrand building exercise with over 3 million hits per month and on the most widely surfed booking engines in the world as well keep the cost low by enabling direct purchase of tickets by consumer thus saving on airline agent fees 2.
In theory, Asia has most of the ingredients for making a budget airline work which has a huge and dense population base, the emergence of underused regional airports, a growing propensity among some upwardly mobile people to travel, and relatively high Internet usage.
Indirect substitutes include train, bus, cruise and etc. The purchase agreement is for 25 Airbus A series aircraft. The number of old routes discontinued has not been publicly disclosed.
Power of buyer The power of buyers is quite high for AirAsia because although the AirAsia provide the lowest price to customers, but they still make the comparison between the airline companies.
With their strong working relationship with Airbus, they managed to get big discount for aircraft purchase which is also more fuel efficient compared to Boeing planes which is being used by many other airlines. Air Deccan, have launched their services there. The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines in US and Europe.
Now, only a few low cost airlines, e. Thus, it becomes a threat to Air Asia. These are the main resources to AirAsia for creating profits. Air Asiamust pay attention to this, not having its own MRO facility is a competitive disadvantage.
In this case, even Air Asia always provide lowest price to customers, but they still will make comparison between airlines. Air Asia Porters Five Forces Model Analysis Threat of Entry There is a high barrier entering airlines industry since it requires high capital to set up everything such as purchase or lease air craft, set up office, and hire staffs.
Mathematical, these three assumptions can be stated as: With these factors combined, AirAsia has displayed how synergies between management, employees and its environment can develop a competitive advantage that has over the past few years brought phenomenal success to the company and has allowed it to be the market leader amongst its competition.
With their strong working relationship with Airbus, they managed to get big discount for aircraft purchase which is also more fuel efficient compared to Boeing planes which is being used by many other airlines. This means there are no meals, drinks and snacks served free on the board.
Especially, when there are limited or no in-flight services. Yield management system as revenue management system it understands, anticipates, and reacts to the behavior of customer to maximize revenues for the organization. HafsahBinti Ahmad Submission Date: Threat of terrorism, people are afraid to fly after the September 11 terrorist attacks incident.
Thus, instead of creating brand awareness, new entry has to create brand loyalty as well.
To enter this industry not only is requiredhigh capital but also brand image. ERP was implemented by AirAsia as helps for time saving and speed up reporting and data restoration processes Procurement to search the best quality product among suppliers without driving the cost high To summarize, AirAsia has developed a considerable value chain in its approach to the strategy.
The increasing oil price at the first glance may appear like a threat for AirAsia. Air Asia also has some, for example customer can pre-booked checked baggage for lower rate or they can online book hotel or rent taxi and also AirAsia have voucher for flight delay.Thai AirAsia is a join venture established by AirAsia with Shin Corp.
Shin Corp. is owned by the family of Thailand’s Prime Minister, Thaksin Shinawatra, and about million baht will be invested in Thai Air Asia over a five-year period.
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Company Background and analysis of AirAsia This report conducts an analysis of AirAsia, the world’s Lowest Cost Airline.
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