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one of the market leaders in that industry. In order to maintain its brand which is famous with low cost carrier and to be consumers’ preference to choose using its services offered, AirAsia must be able to complete with competitors and new entrance by doing some sort of strategies. AirAsia has very clear vision and mission of the company and this enable each members of the company work hard to fulfill the vision and mission which has been declare and must achieve in future for both sort term and long term. But, AirAsia never escape from the problems in term of its operation and this must be solved by come out with new strategies and proper planning to cope with that problems. According to internal and external evaluation of the AirAsia show that the company is getting above 2.5 score for both of evaluation. This explained that AirAsia does not affect by any external and internal factors which mean it is good sign for the company. By look into external and internal factors the company would be also able to identify what kind of strategies and planning that the company should take in future. Then after identification and evaluation of external and internal factors, the company can go further steps with doing matrix evaluation. There are five matrix which are TOWS, space, Boston Consulting Group (BCG), Grand, Internal-External and competitive profile matrix. Most of the matrix evaluation shows that the company is in aggressive strategy level and further analysis shows that the AirAsia must do several strategies which connected with the company’s operation. The analysis of SWOT and strategic planning come out with the two important strategies that must be taken by the AirAsia in order to develop its performance of company in future. The two important strategies are market penetration and market development. These two strategies classified under aggressive strategies and commonly used to boost or increase sales of company’s services and automatically increase revenue too. Although both of these strategy have their own advantages and disadvantages, it is believed that both is the best strategy for the company to take in future based on analysis done towards the company itself. 1. BACKGROUND
Airasia as the second Malaysian National Airline, provides a totally different type of service in line with the nation’s aspirations to benefit all citizens and worldwide travelers. Such service takes the form of a no frills – low airfares flight offering, 40%-60% lower than what is currently offered in this part of Asia. Their vision is “Now Everyone Can Fly” and their mission is to provide ‘Affordable Airfares’ without any compromise to Flight Safety Standards. The story of emergence of AirAsia is similar to Ryanair, since both carriers underwent a remarkable transformation from a money-losing regional operator to a profitable, low cost airline. AirAsia was initially launched in 1996 as a full-service regional airline offering slightly cheaper fares than its main competitor, Malaysia Airlines. Before 2001, Airasia fail to either sufficiently stimulate the market or attract enough passengers from Malaysia Airlines to establish its own niche market. The turnaround point of AirAsia is in 2001, while it was up to sale and bought by Tony Fernandes. Tony Fernandes then enrolled some of the lending low-cost airline experts to restructure AirAsia’s business model. He invited Connor McCarthy, the former director of group operation of Ryanair, to join the executive team. What is mean by low cost airlines? A low cost airline generally has many features that differentiate it from the traditional carriers. These features include ticketless travel, online ticket sales, no international offices, no frequent flyer points, no free food and beverages, no in flight magazines, no club lounges, use of secondary city airports. Not all low cost airlines have these features, and not all airlines that have some these features are low cost airlines. For example, Virgin Express is low cost airline, but still offers complimentary coffee and in flight magazine, and they are based a Brussels primary airport. In late 2001, AirAsia was re-launched in Malaysia as a trendy, no-frills operation with three B737 aircraft as a low-fare, low-cost domestic airline. Asia’s leading airline was established with the dream of making flying possible for everyone. Since 2001, AirAsia has swiftly broken travel norms around the globe and has
risen to become the world’s best. With a route network that spans through more than 20 countries, AirAsia continues to pave the way for low-cost aviation through our innovative solutions, efficient processes and a passionate approach to business. Together with our associate companies, AirAsia X, Thai AirAsia and Indonesia AirAsia, AirAsia is set to take low-cost flying to an all new destinations.
AirAsia X Focusing on the low-cost, long-haul segment – AirAsia X was established in 2007 to provide high-frequency and point-to-point networks to the long-houl business. AirAsia X’s cost efficiencies are derived from maintaining a simple aircraft fleet and a route network based on low-cost airports, without complex code-sharing and other legacy overheads that weigh down traditional airlines without compromising on safety. Guests continue to enjoy low fares, through cost saving that we pass on to our guests. AirAsia X’s efficient and reliable operations are fully licensed and monitored by Malaysian and international regulators, and adhere to full international standards. AirAsia X is committed in offering X-citing low fares, X-emplary levels of safety and care, and an X-traordinary in-flight and service experience to all our guests – spreading the amazing AirAsia experience to X-citing destinations in Australia, New Zealand, China, Taiwan, Japan, Korea, India, Middle East and Europe.
Vision of the company Vision of the company is “Now Everyone Can Fly” in term 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.
Mission of the company
No Frills: Providing guests with the choice of customizing services without compromising on quality and services. 4. embracing technology to reduce cost and enhance service level Values We make the low fare model possible through the implementation of the following key strategies: 1. Streamline Operations: Making sure that processes are as simple as possible. Maintain the highest quality product. 5. Low fare of Indonesia-Malaysia trip 4 . 6. 3. Opportunities faced by AirAsia in light of external development a. 2. To attain the lowest cost so that everyone can fl y with AirAsia 4. Point to Point Network: Applying the point-to-point network keeps operations simple and costs low. Low Fare. Create a globally recognized ASEAN brand 3. assuring lower costs and higher productivity.1. Safety First: Partnering with the world’s most renowned maintenance providers and complying with the with world airline operations. Lean Distribution System: Offering a wide and innovative range of distribution channels to make booking and travelling easier. High Aircraft Utilization: Implementing the regions fastest turnaround time at only 25 minutes. To be the best company to work for whereby employees are treated as part of a big family 2.
d. which is owned by the family of Thailand’s Prime Minister.4 million. This recent development came barely a month after Thai AirAsia operations started its first international flight to Singapore in early February this year. allows subscribers of the Shin mobile phone flagship. Shin Corp. The cost fare provided by AirAsia help it open the Indonesia market. and Rp300. AirAsiA with its politically powerful backer may well grow up to bite. And charge Rp 150.88 one way). This helps it open the Singapore market. b. synergy in information technology and telecommunications. therefore 5 . It is much lower than the lowest fare SGD$56 offered by full-services carrier.000 for a SurabayaKuala Lumpur trip. Meanwhile. whereas a Jakarta-Kuala Lumpur air ticket from Malaysia Airlines available at travel agents cost Rp 1. which support AirAsia internet and mobile phone bookings. AirAsia. Low fare of Singapore-Bangkok service AirAsia will increase its services between Singapore and Bangkok by introducing a second daily flight to its existing schedule. LionAir on the same route. Thaksin Shinawatra. Malaysian government support The Malaysian government supported the establishment of AirAsia in 2001 to help boost the under-used Kuala Lumpur International Airport. Shin corp. c. Political connection AirAsia hold 49% of the Thai AirAsia with 1% being held by a Thai individual.000 (RM 88. advance information service.000 for a Bandung-Kuala Lumpur flight. being able to reserve tickets through its shortmessaging services (SMS). AirAsia’s flights from Senai are meant to develop Johor into a transport hub to rival Singapore.The fare for Jakarta-Johor Bahru trip cost Rp 100. charged Rp 1.99 (THB 499) one way from the 28th March to 30th October 2004.05 million. has financial strength. The remaining 50% is held by Shin Corp. This helps it open the Thailand market. AirAsia is offering its guests promotional fares to/from Singapore-Bangkok from SGD$23.
Indonesia habit 6 . Challenges faced by AirAsia in light of external development a. Issue of IPO Kamarudin Meranun. b. in southern Malaysia. The IPO strengthens AirAsia balance sheet. further cuts its existing low costs at 2. Opportunities faced by AirAsia in light of Internal Development a. and about 900 million Baht will be invested in Thai AirAsia over a five-year period. is owned by the family of Thailand’s Prime Minister. by using Senal Airport in Johor Bahru.5 US cents per ASK and accelerates our growth plans throughout Asia. oversees the finance and administration of Thai AirAsia while AirAsia shoulders the responsibility for marketing and operations. has financial strength and support AirAsia to grow. AirAsia’s Executive Director announced the appointment of Credit Suisse First Boston (CSFB) and RHB Sakura Merchant Bankers (RHB) as the book runners for the company’s upcoming Initial Public Offering (IPO). AirAsia with its politically powerful backer may well grow up to bite. The IPO also allows AirAsia to expand its fleets of 18 Boeing 737-300s. Political connections Thai AirAsia is a join venture established by AirAsia with Shin Corp. Shin Corp. Thaksin Shinawatra. Shin Corp.can provide an alternative route to travel to Bangkok.
However. a request that was not only rejected but also criticized. and therefore suffer from a higher cost. They have proved themselves as immune. Changi ha drawbacks of flightcongestion that could prevent the quick turnaround essential to keeping down costs. near Singapore. however. Moreover. This makes AirAsia cannot abandon the use of Changi airport. AirAsia prefers passengers with very light and minimum baggage. AirAsia wanted to start flight from the southern state of Johor. Singapore government rejection Initially. which means extra fuel costs. But Indonesian domestic airline companies are able to provide value-added extras like food and beverages as part of their service to the passengers. the SGD$21 departure and security tah of Changi is too high for AirAsia low-cost operation. All these affect AirAsia growth in Indonesian. and also their reluctance to bring light baggage. Furthermore. and managed to survive. b.Preferences of Indonesian passengers are quite different from the concept of cheap air travel without extra service for the passengers (free snacks and drinks). the Indonesian government or domestic airline companies had never announced the availability of a low-cost airline company of the country. it hoped to attract passengers by running a convenient bus service to the city-state. although at a relatively higher cost. If this is the case. known as tariff war. reflecting fears that Singapore’s Changi airport would lose business to Johor’s new Senai airport. Last but not least. The Singapore government said it would not approve a bus link for AirAsia because it was not ‘in her nation interest’. The comparative edge of Indonesian domestic airline companies compared to AirAsia concern habit (culture). AirAsia had asked the Singapore government to waive the fees. This is because AirAsia flying to Singapore needs to suffer from flight congestion of Changi. 7 . Singapore quickly quashed that idea. it may not last long. Indonesian domestic airlines were already trained with the low-cost air travel concept. AirAsia find it stuck between big planes and circling to wait for a slot to open up.
Asia’s middle class growth Low-cost airlines are anticipated to have greater potential in Asia as there are many Asian cities with a population above one million people each as well as a rising middle class population. Therefore. All these affect AirAsia external growth. the choice proved unpopular. c. However. However. as the route failed to attract Singaporeans because of the additional cost and inconvenience of having to travel in and out of Malaysia by road. and Thailand’s regulation that sets minimum air. he couldn’t name a date when this will be done. This growth of middle class in Asia provides a huge market potential for AirAsia to grow. by using Senai airport in Johor Bahru.Beside Singapore – Bangkok. Seeking to cater to the different markets. External changes which have impact on AirAsia a. will capture at least 25% of Asia’s air travel market within next 10 years and a lot of the will be new. more airlines or new comers would like to get a piece of the action. AirAsia will face more competitions at the same time. and affects Thai AirAsia to compete in the Thailand market.fare rates. in southern Malaysia. Budget airlines. it is estimated. fares for Johor Bahru – Bangkok are generally 20% lower in comparison to Singapore – Bangkok. This seems to be favoritism toward Thai Airways International’s domestic operations. AirAsia now provides an alternative route to travel to Bangkok. AirAsia currently operate daily flight to Bangkok from Johor Bahru. AirAsia still needs to compete with the conventional carriers. Minimum air-fare rates AirAsia faces challenges finding open takeoff and landing slots at opportune times. Although extra passengers of the low cost 8 . Although Transport Minister Suriya Jungrungreangkit said the current minimum air-fare regulations will be scrapped to open up the market. For example. Besides the low-cost airlines. traffic. as the market is becoming larger. not diverted.
Bangkok new Suvarnabhumi airport which will be able to handle 45 million passengers when it opens in 2005. etc. there is a realization among regional governments that they need smashing airports and feisty carriers or they are going to miss out big time. the Malaysian government supported the establishment of AirAsia in 2001 to help boost the under-used Kuala Lumpur International Airport. as there is a growth of several south-east Asian airports. in the second half of 2003. form a join venture with AirAsia that would benefit Bangkok’s new airport and create a new hub at Chiang Mai. Tiger Airways. some have launched a low cost airline to flight with AirAsia. Actions of Changi and nearby airports The growth of low-cost airlines in south-east Asia has a significant effect on which airport will dominate the regional aviation market. only months after the scheduled launch of ValuAir set up by one of its former executives. under this situation. Moreover. These airport include Johor’s new Senai airport in southern Malaysia. worked to improve operational 9 . Thai Airways have frequency and capacity to offer to their 13 domesttic destinations. Bangkok Don Muang which recently overtook Changi in passenger number. and Thai premier’s Shin Corp. to maintain Changi’s position as the air hub in the region. Therefore. this poses a challenge to the status of Singapore’s Changi airport as a regional aviation hub. Therefore. c. Singapore Airlines launched a low cost airline subsidiary. For example. b. Low cost airlines are seen as helping funnel more passengers to airport hubs. the growth may not be entirely ‘stolen’ from big flag carriers. They also have during the past two years. Singapore is proposing a budget airline terminal at Changi by 2005 and lower passenger taxes to attract low cost airlines. it helps AirAsia grow in Asia. This helps AirAsia grow and lower the cost. these governments are more willing to support low cost airlines. Therefore. Action of existing airlines The existing airlines in south-east Asia have several actions to compete with AirAsia.airlines will be coming from the new demand to be created by the low fares. for example.
Singapore. Philippines. AirAsia became the first company on Yahoo Mobile in Malaysia and the success of the campaign showed how mobile marketing could help brands successfully communicate with the rapidly growing mobile consumer base. growth and profitability Philosophy Self-concept Concern for public image Concern for employees Criteria Stated Criteria Not Stated 10 . Thailand.1 IDENTIFY THE FIRM’S EXISTING MISSION Item 1 2 3 4 5 6 7 8 9 Criteria Customers Product/Services Markets Technology Concern for survival. 1. slashing unprofitable domestic routes. Taiwan. Asia’s leading low cost carrier. Aimed at generating and maintaining top-of-mind awareness with their reach.efficiency. strengthening yield management and controlling costs. Yahoo’s mobile marketing and advertising solutions provided a key advantage for AirAsia. All these make AirAsia face a huge competition. Indonesia. and Hong Kong. The goal was to encourage interaction with users and increase the overall awareness of AirAsia and its promotions throughout Asia. Marketing AirAsia. increasing flights on busy routes. The campaign saw tremendous success across seven target markets including Malaysia. recently partnered with Yahoo! Mobile for its very first mobile campaign.
(3) To attain the lowest cost so that everyone can fl y with AirAsia. (2.Existing mission statement of AirAsia: • • • • To be the best company to work for whereby employees are treated as part of a big family.4.5) 11 . (9) Create a globally recognized ASEAN brand. embracing technology to reduce cost and enhance service level. (1.8) Maintain the highest quality product.
2.2 Develop the academy as an aviation training ground towards fulfilling AirAsia’s aspiration in becoming a regional aviation training hub 1.2. assuring lower cost and higher productivity 1.3 IDENTIFY THE FIRM EXISTING STRATEGIES 1.3.2 IDENTIFY THE FIRM’S EXISTING OBJECTIVES 1.2 High Aircraft Utilization: Implementing the region fastest turnaround time at only 25 minutes.4 Streamline Operation: Making sure the process are as simple as possible 1.1.1 Provide full fledge training and development to AirAsia pilot. aircraft engineers.3 Low fare. cabin crew and guest service staffs 1.3.5 Lean Distribution System: Offering a wide and innovation range of distribution channels to make booking and travelling easier 12 .3 Serves as a platform to keep AirAsia on track with the latest industry development and to incorporate best practice into their operations 1.3. no frills: Providing guest with the choice of customizing services without compromising on quality and services 188.8.131.52 Safety First: Partnering with the world’s most renowned maintenance provider and complying with the world airlines operation 1.3.
6 Point to point Network: Applying the point to point network to keep operation simple and lower cost Key Result Objectives Key Areas 1 2 Marketing Innovation Objectives Ticket order by online Keep with the latest industry development 3 Human Organization 4 Financial Resources Allocate financial resources efficiently 5 Physical Resources Search the best physical resources for operation 6 7 8 Productivity Social Responsible Profit Provide best service in airline Low cost carrier Low cost operation 6 7 8 5 4 Training to all employees 3 Measure of performance 1 2 13 .1.3.
2.High quality and safety products and services .Provide low cost carrier for customers .Posses high technology in its operation .All company’s activities carry out in ethically .Low cost in its operation and maintain financial stability . DEVELOP NEW MISSION STATEMENT FOR THE ORGANIZATION (COMPRISING AL NINE ELEMENTS) Customer Products/Service Markets Technology Concern for survival Philosophy Self-Concept .To be leader in ASEAN airline industry Concern for public.To be the first choice in ASEAN airlines .Concern for public benefit and affordable to fly with AirAsia Concern for employees .Give rewards to employees who did the best work 14 .
2.1 Evaluation of New Mission Statement on Nine Criteria Item 1 2 3 4 5 6 7 8 9 Criteria Customers Products/Services Markets Technology Concern for survival Philosophy Self – Concept Concern for Public Image Concern for Employees Criteria Stated Criteria Not Stated 3. PROBLEM IDENTIFICATION No Problem Identification Major Problem/Minor Priorities Of The 15 .
184.108.40.206.220.127.116.11.4.1. Increasing Competition Customer decrease Rising fuel prices Minor Major Minor Problem 2 1(need immediate attention) 3 4.1. Asia’s middle income growth (soc) 18.104.22.168.1. Applying technology advances in airlines industry (techno) For example e-ticketing. 3.7. Economic in good condition (econ) 4. OPPORTUNITIES 4. The home government support (pol) 4.1 IDENTIFICATION THE ORGANIZATION EXTERNAL OPPORTUNITIES / THREATS 4.2.1. The change of lifestyle of the customer (soc) 4. it is easy for people who are busy with their work and no time to walk in to the counter for booking ticket 4. Limited substitutes for airplanes (substitutes) 16 .1. Political connection between home countries with other country (pol) 4.Problem 1. SWOT FRAMEWORK 22.214.171.124.5.1.
2.4. Users perception that budget airlines may compromise safety to keep cost 17 .2.1.9. and convenient mode of transportation 4.2.2. security charges and landing charges are beyond the control of airlines operator (pol).2.1. Price of oil increasing (econ) 4. The culture of passengers is different (soc) 126.96.36.199.3.e.2. THREATS 4.1. Many budget airlines growth (competitor) 4.1.Although there are several substitutes (i.2.1. This is a threat to all airlines especially low cost airlines that tries to keep their cost as lower as possible 4.5. Other government countries rejection (pol) 4.1.1. Certain rate like airport departure. viable.2.1.6. This create a large market and a hug opportunity for all low cost airlines in this regional 4.1. trains and ships) the geographical structure of Asia has made air travel an efficient.8. “ASEAN Open Skies” agreement (econ) It will allow unlimited flight among ASEAN’s regional air carriers beginning December 2008 4. The population of Asian middle class will be reaching almost 700 million by 2010(soc).
2.06 0.18 18 . hacked the airlines website and it will give bad impact to airlines 4.10 0.3.low (consumer). Natural disaster (demo) For example is flood.06 0.2. Consumer feels not safe to use budget airlines since their price is very low 4.1. the switching cost is high (i.12 4 5 6 Economic in good condition The changes of lifestyle of the customer Political connection between home country with other country 0. Supplier of airlines is limited (supplier) Power of supplier is high as there are limited (availability of) supplier (only Boeing and Airbus).1.e. EFE MATRIX (EXTERNAL FACTOR EVALUATION MATRIX) No.7. airplanes and their maintenance are costly) and there are few substitutes airplanes 4. Key External Factors Opportunities Weight Rating Weighted Score 1 2 3 Asia’s middle income growth The home government support Applying technological advances in airlines industry 0.12 0. overload of information of hackers.07 0.28 0. and earthquake at certain place will influence the business of airlines 4. Technology problem (techno) For example.9.8.1.05 0.2.04 2 4 3 0.06 2 2 3 0.12 0.1. tsunami.
00 3 3 3 0.07 0. security charges and landing charges are beyond the control of airlines operators 0.04 0.12 1 2 3 4 5 Price of oil increasing The culture of passenger are different Other government country rejection Many budget airlines growth Certain rate like airport departure.72 ENVIRONMENTAL THREAT AND OPPORTUNITY PROFILE (ETOP) Factors 1 2 3 4 5 6 Economic Political Social Technology Competitive Geographic Impact of factors 10 5 7 4 5 3 Important of factors 10 7 6 5 6 4 Environmental treat 19 .10 0.04 0.12 0.06 1.10 2 1 3 2 3 0.21 0.03 0.08 0.04 3 3 3 0.21 0.7 8 9 Limited substitutes for airplanes “ASEAN Open Skies” agreement The population of Asian middle class will be reach almost 700 million by 2010 Threats 0.30 6 Users perception that budget airlines may compromise safety to keep low cost 0.08 7 8 9 Supplier of airlines is limited Technology is limited Natural disaster Total 0.03 0.04 2 0.09 0.04 0.30 0.03 0.18 2.07 0.08 0.
188.8.131.52.1. For the major impact of factors is economic where the amount is 10 while.1.7 Natural Environment 8 5 • • Impact from 10 (strong positive) to 0 (strong negative) Importance of factor ranked from 0 (unimportant) to 10 (very important) Comment: The company is good since the total of EFE Matrix is 2. 4. for importance of their major factor is 6. which mean quiet important. They can continue their current strategy for improving their business. Geographic factor give less impact towards AirAsia business.1 STRENGHTS 4.1. Has many destinations (operation) 20 .2. Low cost for all passenger (mgt) It is suitable with their tagline ‘Everyone can fly’ mean to giving opportunity to all people to flight with the lowest possible fare and making them can flight even they only have less money 4.2 IDENTIFYING THE ORGANIZATION EXTERNAL STRENGTH / WEAKNESSES 4.
2. The customer can pay their booking ticket by credit card over phone (operation) 4.5. for example United Kingdom.1.2.1. AirAsia has successfully created a “low cost airlines mentality” among their workforce.4. Asia Pacific’s Best Marketing Campaign (mktg). Iran.2.2. It shows AirAsia have good image and performance since it got so many awards 4. AirAsia is the lowest leader in Asia (Operation) With the help of AirAsia Academy. Good marketing campaign such as making a year deal with Manchester United.7. New Zealand and France 4.Route network of AirAsia has more than 20 countries.184.108.40.206. This is one of the examples of good marketing strategy (mktg) 21 . Get mane awards such as “World’s Best Airlines” for the second year. High Technologies (mgt) The excellent utilization of IT have directly contributed to their promotional activities (email alert and desktop widget which was jointly develop with Microsoft for new promotion). China.1. brand building exercise (with over 3 million hits per month and the most widely surfed booking engine in the world) as well keep the cost low by enabling direct purchase of ticket by consumer thus saving on airlines agent fees 4. one of the English Football Club and recently had programmed at television “Travelog Asia”. The workforce is very flexible and high committed and very critical in making AirAsia the lowest cost airlines in Asia 4.1.
220.127.116.11. The current ratio is increase from 1.3 times to 1.47 times (fin) From 1 unit current liabilities can be covered by 1.47 unit of asset. It will make the company less risk 18.104.22.168. AirAsia has very strong management team with strong links with government and airlines industry leader (mgt) This is partly contributed by the diverse background of the executive management team that consist of industry expert and ex-top government officials 22.214.171.124. Increasing the profit 1061 million on year 2010 (fin)
126.96.36.199. AirAsia receive a lot complaint from customer on their service (mgt) Examples of complaint are around flight delays, being charged for a lot of things and not able to change flight or get a refund if customer could not make it. Good customer service and management is critical especially when competition is getting intense 188.8.131.52. The facilities at the airport (mgt) There has limited chairs at waiting area
184.108.40.206. The waiting period between check in and depart is too long (operation) It takes around 2 hours for international departure 220.127.116.11. Apply autocratic management (mgt) They only considered opinion from top management to make the decision without asking from the other worker opinion 18.104.22.168. Rely on debt to much since ratio for year 2010 is 73.15% (fin) It is more than half its capital gets from borrower. It will risk the company 22.214.171.124. The average collection period is quite high which 76 days (fin) It means the companies have to wait until 76 days to collect their debt from borrower 126.96.36.199. No MRO (maintenance, repair, overhaul) facility (operation) Thus AirAsia cannot maintain its own planes. With an increasing fleet this is a competitive advantage 188.8.131.52. No frills (operation) They only provide the transportations services. The customer has to make pre-order for their heavy meal such as nasi lemak during booking their tickets. If not, they only can buy the chip and beverages
4.1.1. IFE (INTERNAL FACTOR EVALUATION)
Key Internal Factors
Strengths 1 2 3 4 5 Low cost for all passenger Has many destination AirAsia is the lowest leader in Asia High Technologies Get mane awards such as “World’s Best Airlines” for the second year, Asia Pacific’s Best Marketing Campaign 6 The customer can pay their booking ticket by credit card over phone 7 8 Good marketing campaign The current ratio is increase from 1.3 times to 1.47 times 9 AirAsia has very strong management team with strong links with government and airlines industry leader 10 Increasing the profit 1061 million on year 2010 Weaknesses 1 AirAsia receive a lot complaint from customer on their service 2 3 The facilities at the airport The waiting period between check in and depart is too long 4 5 Apply autocratic management Rely on debt to much since ratio for 0.05 0.03 2 2 0.10 0.06
0.13 0.03 0.05 0.05 0.03
4 3 4 3 2
0.52 0.09 0.20 0.15 0.06
15% 6 The average collection period is quite high which 76 days 7 No MRO (maintenance. repair.00 3 0.75.6 0.06 2 0.75 0. overhaul) facility 8 No frills Total 0.15 2.05 1. They can continue their current strength to cover their weaknesses to grab the opportunities on the industry Assessment of culture elements Score (0-9) for each Importance of culture Compatibility with Strategic Management 1 2 3 4 5 Founder's beliefs and values Key executive's style Maturity of organization Cohesiveness and collaboration Openness and trust 7 7 8 8 6 25 .year 2010 is 73.15 4 0.12 Comment: The company is a good since total of IFE matrix is 2.
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Climate and organization Recognition of individual Rewards for performance Support of individual Participation in decisions Consistent communication Enforcement policies Degree of social interaction Opportunity for growth Level of job security Level of technology Degree of innovation Sense of belonging Latitude in job execution Sense of urgency 6 4 5 6 8 8 8 7 10 6 7 9 5 6 5 Company capability profile – Managerial factors 0% 1 2 3 4 5 6 Corporate image responsibility Use of strategic plan and strategic analysis Environmental assessment and forecasting Speed of response to changing condition Flexibility of organizational structure Management communication and control 26 Weak Neutral Strong 100% .
7 8 9 Entrepreneurial orientation Ability to attract and retain highly creative people Ability to meet changing technology 10 Ability to handle inflation 11 Aggressiveness in meeting competition 12 Others: 27 .
Average Very high Average Very high Average Very high Average Very high 32 . Besides.Financial ratio profile Profitability Very Low Liquidity Very Low Leverage Very Low Activity Very Low Comment: Overall the company has strong financial position. the company has relied more on debt but they still can generate net profit to shareholders and others. They should decrease the number of debt towards reducing the risk.
financial stability Ability to compete on prices Capital investment. capacity to meet demand Stability of costs Ability to sustain effort in cyclic demand Price elasticity of demand Others: 33 .Company capability profile – Financial factor Neutral 0% Weak 50% Strong 100% 1 2 3 4 5 6 7 8 9 10 11 12 Accessed to capital when required Degree of capacity utilization Ease of exit from market Profitability. return on investment Liquidity availability internal funds Degree of leverage .
5.1. one of the English Football Club and recently had 34 . New Zealand and France 3. Has many destinations Route network of AirAsia has more than 20 countries. Iran. MATRIXES 5. Good marketing campaign such as making a year deal with Manchester United. brand building exercise (with over 3 million hits per month and the most widely surfed booking engine in the world) as well keep the cost low by enabling direct purchase of ticket by consumer thus saving on airlines agent fees 4. TOWS MATRIX Strengths 1. Low cost for all passengers It is suitable with their tagline ‘Everyone can fly’ mean to giving opportunity to all people to flight with the lowest possible fare and making them can flight even they only have less money 2. for example United Kingdom. China. High Technologies The excellent utilization of IT have directly contributed to their promotional activities (email alert and desktop widget which was jointly develop with Microsoft for new promotion).
O2) and no time to walk in to the counter for (Market penetration) booking ticket 3. Increase destination all over the world (S2. O4) 4. O1) industry (techno) For example e-ticketing.S5 & O5) 5. This is one of the examples of good marketing strategy 5. O3. Increase website service to make people easy to make transaction (S3.Limited substitutes for airplanes (substitutes) 3. Asia’s middle income growth (soc) 2. Improve new technology for making people easy for people who are busy with their work more convince using this airplane (S3.Political connection between home countries with other country (pol) 5.O2) Threats ST 35 . Economic in good condition (econ) The change of lifestyle of the customer (soc) 4. AirAsia has very strong management team with strong links with government and airlines industry leaders This is partly contributed by the diverse background of the executive management team that consist of industry expert and ex-top government officials Opportunities 1. Improve management for increase marketing strategies to attract people (S4. Add new facilities to attract people for using AirAsia for going to vacation (S1 & S2.programmed at television “Travelog Asia”. Applying technology advances in airlines SO 1. it is 2.
Deal with supplier for cheaper in maintenance cost (S1. and earthquake at certain place will influence the business of airlines 1.e. airplanes and their maintenance are costly) and there are few substitutes airplanes 5.Price of oil increasing (econ) 2.T2) 3. S6 & T4) (Backward Integrations) Weaknesses 1. Supplier of airlines is limited (supplier) Power of supplier is high as there are limited (availability of) supplier (only Boeing and Airbus). The culture of passengers is different (soc) 3. Certain rate like airport departure. AirAsia receive a lot complaint from 36 .1. security charges and landing charges are beyond the control of airlines operator (pol) This is a threat to all airlines especially low cost airlines that tries to keep their cost as lower as possible 4. tsunami.S6 & T1) 2. the switching cost is high (i. Hire new stewardess for different culture to make passenger feel comfortable using this service (S2. Do research and development (R&D) to find other alternative to reducing in use oil (S1. Natural disaster (demo) For example is flood.
O1 37 . The waiting period between check in and depart is too long (operation) It takes around 2 hours for international departure 4. With an increasing fleet this is a competitive advantage Opportunities 1. Apply autocratic management (mgt) They only considered opinion from top management to make the decision without asking from the other worker opinion 5. The facilities at the airport (mgt) There has limited chairs at waiting area 3.customer on their service (mgt) Examples of complaint are around flight delays. repair. No MRO (maintenance. overhaul) facility (operation) Thus AirAsian cannot maintain its own planes. Good customer service and management is critical especially when competition is getting intense 2. Asia’s middle income growth (soc) WO 1. being charged for a lot of things and not able to change flight or get a refund if customer could not make it. Improve existing facilities in airport (W2.
Supplier of airlines is limited (supplier) Power of supplier is high as there are limited (availability of) supplier (only Boeing and Airbus). Target on middle – income customer by affordable price (W1. it is easy for people who are busy with their work and no time to walk in to the counter for booking ticket 3.2.e. the switching cost is high (i. Manage wisely the waiting period in order our passenger come from anywhere (W3.Limited substitutes for airplanes (substitutes) 2.Political connection between home countries with other country (pol) 5. Applying technology advances in airlines & O2) industry (techno) For example e-ticketing. security charges and landing charges are beyond the control of airlines operator (pol) This is a threat to all airlines especially low cost airlines that tries to keep their cost as lower as possible 4. The culture of passengers is different (soc) 3. O1 & O3) (Market Penetration) 3. Improve management in service such as prediction in time (W1. O2) Threats 1. airplanes and their maintenance are costly) and there are few substitutes airplanes WT 1. Price of oil increasing (econ) 2. Efficiently manage the compliant from passenger to avoid external threat (W1. T2) (Retrenchment) 38 . T3) 2. Economic in good condition (econ) 4.Certain rate like airport departure.
tsunami. Natural disaster (demo) For example is flood.2 SPACE (STRATEGIC POSITION AND ACTION EVALUATION) MATRIX Strategic Position and Action Evaluation (continued) Factors Determining Environmental Stability Technological changes Many 1 2 Rate of inflation High 1 2 Demand variability Large 1 2 Price range of competing products Wide 1 2 Barriers into entry to market Few 1 2 Competitive pressure High 1 2 Price elasticity of demand Elastic 1 2 Others 1 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 Few Low Small Narrow Many 39 Low Inelastic . and earthquake at certain place will influence the business of airlines 5.5.
This is because the low cost leader in Air Asia. This could make them get many passengers over the world. Strategic position and Action (SPACE) (continued) Factors Determining Industry Strengths Growth potential Profit potential Financial stability Technological know-how Resource utilization Capital intensity Barriers of entry into market Others Average = (-4.Average= (-3. This is because Air Asia is a low cost flight for all passengers and they have a good link for their marketing so can attract many peoples to use it’s as second alternative to go everywhere. Strategic Position and Action Evaluation (continued) Factors Determining Competitive Advantage Market share Service quality Product life cycle Product replacement cycle Customer loyalty Competitor's capacity utilization Technological know-how Others Small Inferior Late Variable Low Low low Low 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 Large Superior Early Fixed High High High High 40 .00) Critical factors: Low Low Low Simple Inefficient High Easy Low 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 High High High Complex Efficient Low Difficult High The most factors effect industry strength is profit potential.00) Critical factors: The most factors effect this environmental stability is demand variables.
Air Asia also build good relationship with their supplier of oil to make sure the cost not increase due to increasing price of oil now. This is because in previous year Air Asia has bought new airbus and from that investment Air Asia get good in return. This is because this organization tries to maintain their service with give lower cost for all passengers. 41 .Average = (-4. Air Asia may expand their business also. Strategic Position and Action Evaluation (continued) Factors Determining Financial Strength Return on investment Leverage Liquidity Capital required/capital available Cash flow Ease of exit from market Risk involved in business Others: Low Imbalanced Imbalanced High Low Difficult Much Slow 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 High Balanced Balanced Low High Easy Late Fast Average= (-4.00) Critical factors: The most factors effect financial strength is return on investment. Other than that.29) Critical factors: The most factors effect competitive advantages are product life cycle.
00 + (+4.29 42 .00 Directional Vector Coordinates: x – axis:-3.00 FP Average is +28 / 7 = 4.00) = -0.29 + (+4.Conclusion CP Average is -30 / 7 = -4.29 IP Average is +28 / 7 = 4.00 Y – axis: -4.00 Y=-0.00 SP Average is -21 / 7 =-3.00) = 1.29 FP CP IP Competitive Profile X= 1.
000 22.30% 6.25 0.119.000 165.01% 15.00% 43 .443.952.000 3.459.000 68. LTD Total 1.22 0.774.739.000 98.571.788.40 0.S P 5.705.00% 239.61% 0.28 Growth Rate % 17 10 -10 18 15 1.000 719. LTD Air Asia Go Holiday Co.000 488.000 487.957.206.083.735.55 0.000 28.000 453.63% 100.46% 46.3 BCG MATRIX Relative Industry Division Revenues(Mil) % Revenue Profit(Mil) % Profit Market Share PT Indonesia Air Asia Air Asia Hong Kong LTD AA International LTD Thai Air Asia Co.73% 28.63% 11.06% 12.98% 18.61% 9.000 100.864.061.411.000 1.
LTD contributes highest percentage in revenue market share followed by other association under Air Asia which is PT Indonesia Air Asia. Air Asia Hong Kong LTD.0 Go Holiday Hong Kong Thai Air Asia PT Indonesia Medium AA International Low -20 For BCG Matrix. It means this 44 . Ltd is fall under Stars.5 Low 0. we can use above table and figure that Thai Air Asia Co. LTD. Air Asia Go Holiday Co.0 High +20 Medium 0.RELATIVE MARKET SHARE POSITION IN THE INDUSTRY High 1. AA international LTD. Association for Thai Air Asia Co.
product development and market development. For PT Indonesia Air AsiaAir Asia Go Holiday LTD.association for Air Asia should do backward. product development and divestiture. This is because this four association for Air Asia are new in the industry so should do market penetration. forward and horizontal integration also.4 GRAND STRATEGY MATRIX Quadrant II Market Development Market Penetration Product Development Horizontal Integration Divestiture Liquidation Weak Competit ive Position Quadrant III Retrenchment Related Diversification Unrelated diversification Divestiture Liquidation Rapid Market Growth Quadrant I Market Development Market penetration Product Development Forward Integration Backward Integration Horizontal integration Related Diversification Strong Competit ive Position Quadrant IV Related diversification Unrelated diversification Joint ventures Slow market growth 45 . market development. divestiture and liquidation. For AA International LTD falls under Dogs. this association will have opportunities to make more profit in the future by doing more aggressive strategies such as market penetration. In additional. Air Asia Hong Kong. It is shown that this division should do retrenchment. LTD it falls in under Question Marks which it shows that the division which is also doing aggressive strategies to promote products. 5.
30% 6.61% 3.00 3.01% EFE 3.206.739.000 Air Asia Go Holiday LTD Total 719.000 AA International LTD 453.952. this company has the strength to launch related diversified products into more promising growth areas. Air Asia has now has Route network of Asia within more than 20 countries for example United Kingdom.000 98. and France.00 100. Air Asia also high cashflow levels and limited internal growth needs.000 Thai Air Asia Co.083. LTD 1.46% 46.63% 100. New Zealand.000 % Profit 22.98% 18.000 488.73% 28.705.443.10 2.00% Profit (Million) 239. Iran.571.788.80 2. In addition.Air Asia CO. falls under Quadrant II because AirAsia have done many market development in industry such as launch its first routes to India to Tiruchirapali (Trichy) in the Southern India state of Tamil Nadu means Air Asia make market development with open new destination for attract passengers.000 68.61% 9.30 2.63% 11. So this quadrant is suitable for Air Asia because they already diversified many services.000 1.957.20 2.00 1.774. 5.55 3.5 IE MATRIX Division PT Indonesia Air Asia Air Asia Hong Kong Revenues (Million) 1.459. In quadrant I also explained that Air Asia has strength in market penetration to take advantage on growth in new global markets because of high demand for lowest possible fare.119. China.000 165.000 % Revenue 28.000 3.411.50 LTD 487.864.735.00% 46 .061.06% 12. Furthermore.30 IFE 2.000 15.
e.LTD can explore to new market in order to boost their sales.0 to 1. 0 VII VIII IX As the result.0 to 2. and horizontal integration. Other than that.0 Low 1.6 COMPETITIVE PROFILE MATRIX 47 . Thai Air Asia Co.0 2. market penetration. market development.0 to The EFE Total Weighted Scores 4. Intensive (backward. Ltd service and the company can also do market development and product development strategy since Air Asia is one of company who give lowest cost airline in Asia.99 Weak 1. product development) strategies can be more appropriate for this area.0 to Strong 3. 0 I II III . LTD for i. 5. Medium IV V VI 2. ii and iv which is “grow and build”. LTD can improve the intensive strategy for market penetration b create interesting marketing or events to attract people know well about this Thai Air Asia Co. 0 2. Matrix under (division falls into cell I. Thai Air Asia Co.0 1.The IFE Total Weighted Scores Average 2.0 3.0 3. forward.0 to 3.0 High 3. It means that the company can increase their advertising and marketing strategies in order to compete with their other associate company.0 to 4. Thai Air Asia Co.
12 Market share 4.27 1 0. The overall performance made by MAS achieved is better than competitiveness.39 1 0.36 1 0.09 26 3.13 7. Investment in new product development by R&D 8.36 3 0. Customer loyaltydistribution costs 0.17 5. Advantage taken of market growth potential 10. Use of life cycle of products and replacement cycle 7.48 2 0.12 3 0.09 5.45 2 0. Global expansion 0.18 14 2. Customer loyalty 1.12 4.24 2 0.30 2 0. Price competitiveness 0.00 Air Asia Rating Score 3 0. Air Asia gives lower rate comparing others.10 3.30 2 0.From the CPM table. 9.48 1 0. Air Asia also can compare with MAS based on their price. it shows that overall performance goes to MAS where the company get a total highest score compare with Air Asia and Fire Fly.24 3 0.31 12 1. uniqueness Critical Success Factor Weight 2. Advertising 0.24 2 0.51 2 0.20 3 0. Market share 0. quality.13 3 0.15 8. As we know.12 4 0. Use of experience curve for pricing TOTAL 1.12 2.54 Weak Neutral (50%) Strong 100% 6. The larger different for MAS comparing others is quality and services.20 2 0. Product quality 0.68 2 0.34 4 0. In additional. Product strength. Management 0. Low selling and 6. Financial position 0. Company Capability Profile – Competitive Factors 0% 1. High barriers to entry into the company's markets.26 2 0..30 3 0.39 MAS Fire Fly Rating Score Rating Score 4 0. Supplier strength and material availability 48 . This is because MAS already conquer based on their services is same like high class services comparing Air Asia and Fire Fly.
Others: 49 . Customer concentration 12.11.
04 AS 3 2 - TS 0.06 0. It is easy for people who are busy with their work and no time to talk in to the counter for booking ticket 4 5 Economic in good condition (E) The changes of lifestyle of the customers (So) 6 Political connection between home country with other countries (P) 7 Limited substitutes for airplanes (SU) -Although there are several substitutes 0.18 0.07 0.10 4 0.18 3 - 0.18 0.05 0.18 - - - 2 0. QUANTITATIVE STRATEGIC PLANNING (QSPM) Key Factors Weight Market Development Market Penetration AS 3 TS 0.10 0.7.18 - OPPORTUNITIES 1 2 3 Asia’s middle income growth (So) The home government support (P) Applying technological advances in airlines industry (T) -For example e-ticketing.14 - 3 3 0.40 - - 50 .06 0.06 0.
16 THREATS 1 2 Price of oil was increasing (E) The cultural of passengers are different (S) 3 4 5 Other government countries rejection.06 1 0. This is a threat to all airlines especially low cost airlines that tries to keep their cost as low as possible 6 User’s perception that budget airlines may compromise safety to keep costs low (C) 0.30 3 0.04 0.04 0. viable. the geographical structure of Asia has made air travel an efficient.(trains and ships).08 0.08 - 51 .04 0.07 0.08 4 0. and convenient mode of transportation 8 ‘ASEAN Open Skies’ agreement .21 0.04 0. security charges and landing charges are beyond the control of airline operator.12 0.04 2 0.It will allow unlimited flight among ASEAN’s regional air carriers beginning December 2008 0.10 3 1 3 0. (P) Many Budget airlines growth (C) Certain rates like airport departure. This creates a larger market and a huge opportunity for all low cost airlines in this region 0.03 2 2 0.04 - - - - 9 The population of Asian middle class will be reaching almost 700 million by 2010.
the switching cost is high (airplanes and maintenance are costly).20 - - 52 . means to giving an opportunity to all the people to flight with the lowest possible fare and making them can flight even they only have less money 2 Has many destination -Route network of AirAsia has more than 20 countries.09 4 0.03 - - - - 9 Natural disaster – flood.7 Supplier of airplanes is limited (S) -Power of supplier is high as there are limited suppliers (only Boeing and Airbus). tsunami and earthquake at certain place will influence the business of airlines 0. China. and there are few substitutes for airplanes 0.13 4 2.05 4 0.52 4 0. Iran. UK.06 3 0.52 0. For example.18 2 0.03 3 0.07 - - - - 8 Technology problem (T) -overload of information or hackers hacked the airlines website and it will give bad impact to airlines 0.03 1. New Zealand and France 3 AirAsia is the low cost leader in Asia 0.12 0.36 TOTAL STRENGTH 1 Low cost for all passenger -it is suitable with their tagline ‘Everyone Can Fly’.18 0.
03 - - 2 0.08 3 0. 4 High technologies -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 promotions).05 3 0.04 2 0.12 0.06 53 . AirAsia has successfully created a “low cost airline mentality” among their workforce.15 6 The consumer can pay their booking by credit card over phone 0. The workforce is very flexible and high committed and very critical in making AirAsia the lowest cost airline in Asia. It shows AirAsia has a good image and performance since it get so many awards 0. Asia Pacific’s Best Marketing Campaign.-With the help of AirAsia Academy. brand 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 5 Get many award -Such as the “World Best Airlines” for the second year.
04 3 0.06 WEAKNESSESS 1 AirAsia receives a lot complaint from customers on their services -Examples of complaints are around flight delay.06 2 0. being charged for a lot of things and not able to change flight or get a refund if customer service and management is critical especially when competition is getting intense 2 The facilities at the airport -There are limited chairs at waiting area 3 The waiting period between check in and 0.47 times (fin) From 1 unit or current liabilities can be covered by 1.12 54 .12 3 0.07 3 0.03 2 0.12 0.21 9 AirAsia has a very strong management team with strong links with governments and airline industry leaders -This is partly contribute by the diverse background of the executive management team that consist of industry experts and ex-top government officials 0.7 Good marketing campaign -Such as making a year deal with Manchester United 0.12 8 The current ratio is increase from 1. 0.08 3 0.3 times to 1.21 3 0.18 0. It will make the company less risk.06 2 0.04 2 0.47 unit of asset.18 3 0.06 3 0.
06 0.depart is too long -It takes around 2 hours for international departure 4 Apply autocratic management -They only considered opinion from top management to make the decision without asking opinion from the other workers 5 Rely on debt too much since the debt ratio for year 2010 is 73. overhaul) facilities -Thus.06 0.06 2 0. LONG TERM OBJECTIVES AND ALTERNATIVES STRATEGY 8. AirAsia cannot maintain its own planes.20 0.92 8.29 1. It is more than half of the capital get from borrower 6 The average collection period is quite high which 76 days. It means the company has to wait until 76 day to collect their debt form borrower 7 No MRO (maintenance.05 - TOTAL 2. repair.1 To increase net profit and sales of AirAsia for the future 55 .05 4 0.1.15%.15 3 0.03 2 0.20 4 0.1 LONG TERM OBJECTIVES OF MARKET DEVELOPMENT 8.45 0. With an increasing fleet this is a competitive disadvantage 8 No frill 0.
184.108.40.206.1.2 It also can build the customer preference to use AirAsia services for reach their destination 8.1 It will increase the number of sales of AirAsia and also makes more profit for the company 220.127.116.11 STRATEGY 1: Enter the new geographical area such as Africa.2.2.2 DISADVANTAGES 18.104.22.168.22.214.171.124.2 ALTERNATIVE STRATEGIES 8.1 ADVANTAGES 8.2.2. United Arab Emirates (UAE) 8.1.1 It has high risk whether the AirAsia airline will be accepted or not at the new places 8.2 Uncertainty of demand of consumers towards the company new location since the other airline company offered to that location before AirAsia enter 56 .2 To conquer the airline market share in the world 8.
2.2.2. indirectly can increase the AirAsia profit and sales 126.96.36.199. hire additional employees to fulfill the service 57 .2 STRATEGY 2: offer new destination that hardly to reach 8.2 Increase customer loyalty towards AirAsia for providing them chance to go hard reach location with low cost rate 8.1 ADVANTAGES 8.2.1 Offer an additional location that hard to reach to the customer to need to go there in fast.188.8.131.52 AirAsia has high expenses due to buy the new airplane such as Fokker.2.2 DISADVANTAGES 184.108.40.206.2.1 AirAsia incurred higher risk in case if there has no demand towards the service and it will affect the number of sales and profit of the company 220.127.116.11.
STRUCTURE The company must be the divisional structure based on geographic area such as Indonesia. STRATEGY The strategy of market development and market penetration must be implemented in the company in term of its operation. The market penetration strategy is such as do mass marketing via many sources especially media to attract customer using airline services offered by the company.1. STRATEGY IMPLEMENTATION (POLICIES & ALLOCATE RESOURCES) 9. and other destinations of airlines because this will make the company more focus on its geographical area of airlines performance. The market development strategy means such as opening the new routes for airlines in new location to attract more customers.1. Thailand.1.9. Filipina. 58 .1. 9.2.MICKINSEY 7’s IMPLEMENTATION FRAMEWORK 9.
For that can the company can obtain loyalty from their customer and maintaining high revenue.1.1. 9. 59 .4. 9. Staff should always know the current development and changes which are the company made.9.1. STAFF Provide development training to all staff for always maintain its services that have been provided to customers.1.6. STYLE Maintaining its current style of promotion must be based on its present current tagline “Low Cost Carrier”.3.5. They will feel it is worth it to invest in the company and definitely drag others investors to invest. SHARED VALUE Concern more towards its shareholders by increase of dividend payments to them to get full support and loyalty towards the company. Any complaint or problems could be managing efficiently by doing this system. 9. SYSTEM The company must be come out with new management information system within company for effectively disseminate any important information to staff and top management of the company.
10. CONCLUSION AND RECOMMENDATION In conclusion. 60 .1.9.7. Nowadays AirAsia is such a well known and establish company in airlines industry and conquer the Asia market. SKILL The company should look out more to employ expertise in term of develop its operational system and also marketing strategies. This is because nowadays customers tend to be attracted with implementation of mass marketing by using latest technology devices. the AirAsia Company has a good performance after it launches the new strategy which is the cost carrier in Asia for airline industry. Clearly state vision and mission of the company helps the company to set a proper conduct and action to achieve the two important things.
These two strategies is important for the company in future development because they can help the company to maintain its current perfectly performance and the most important can help company to obtain higher revenue and sales. According to the five matrix ways. We recommend that AirAsia should open new operation in the new geographical area that have never been reached before by the AirAsia company such as the Africa and United Arab Emirates in order to enlarge its current market share in airlines industry. Grand Strategy matrix. In our recommendation. and lastly Competitive Profile matrix. This is because both of the external and internal factors evaluation is above 2. Whenever the company feels worth it to open operation in India and quite high in demand. there are two strategies who get the first and second highest scores and for that the two strategies have been chosen as the most appropriate strategies that the company must implemented and take action regarding on that. 61 .5 and made us realized that the company is not really affected with both factors. Next is the company formulation of strategies. The two strategies are market development and market penetration. we actually based on these two strategies which are market development and market penetration. the company will open the same thing but different area in India is called market penetration.Based on the external and internal evaluation factors shows us that the AirAsia Company can cover or face any barrier come from the both factors. BCG matrix. This is one of example market development strategy. SPACE matrix. By doing this hopefully can increase the company’s revenue or sales by attracting more consumers using AirAsia services. in strategic management do has five ways in order to determine the appropriate strategies for the AirAsia Company. The five ways are TOWS matrix. the AirAsia opened its route of airlines services to India which is not ever implemented before. For example.
we also recommend that AirAsia Company should open new operation or make an additional route to the company’s airlines at place which the companies already open the operation before. Basically this has been done to increase the market share of the company and also as one of the mass marketing ways to increase revenue of the company.Besides that. 62 . For example currently the company had opened its operation in India and the company should open the new operation in the other part of India and this is what market penetration strategy will be implemented.
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