Strategic Management

Assignment

Air Asia Value Chain

Analysis
Prepared By:
Gagan Chitkara
Roll No. 281021
FMG28 A
Air Asia - Introduction
• AirAsia is a Malaysian low-cost airline.

• Initially it was a Malaysian Govt. controlled company.

• It was re-launched in Jan 2002 as an LCC (Low Cost Carrier) after takeover by Tony
Fernandes.

• It operates scheduled domestic and international flights.

• AirAsia is a pioneer of low-cost flights in Asia and is the largest Asian no-frills airline.

• In a very short time, after launching as an LCC, Air Asia converted from a debt ridden
company to a profit making company.

Value Chain Analysis

PRIMARY ACTIVITIES:
The primary activities in Porter’s Value Chain for Air Asia are as follows:

 Inbound Logistics: As inbound logistics includes various classes in carrier industry for
instance how to plan flights, watching out for their rivals that what technique they are
embracing how to support in market, and how to remove their cost as they oversee eco-
friendliness by obtaining it advance when costs are low, and how to design courses as
they for the most part plan short courses so their expenses are low.

 Outbound Logistics: As air Asia, for the most part, utilizes their operations through
online as their ticketing procedure is absolutely on the web and client can get their tickets
book on the web and they can likewise print their loading up card from their homes, Air
Asia utilizes general electric motor for their client wellbeing as clients are the
fundamental inclination of the organization.

 Operations: Air Asia’s ticketing process is completely online which means that the
customer can get their tickets booked online and can also print their boarding pass from
their homes. Air Asia uses general electric engine for their customer safety as customers
are the main preference of the company.
  Sales & Marketing: Air Asia has a strong brand name. Marketing today has become an
essential booster of sales hence, Air Asia does advertise by sponsoring “The Amazing
Race”, and associating itself with Manchester United (MU) football club. They have a
computer reservation system which contributes significantly to the sales.

 Services: Presently a day’s holding a client is a troublesome undertaking so to overcome

this Air Asia give diverse sort of administrations to it's client like on the off chance that
flight is postponed by increasingly, at that point three hours then u$ 61 e-blessing
voucher is given, traveller can likewise pre-book their checked things for a lower rate,
and clients can likewise online book lodgings, inns, lease a vehicle and medicinal
administrations.

SUPPORT ACTIVITIES:
The support activities that Air Asia has to follow in order to keep their business operational are:

 Firm Infrastructure: Air Asia has a strong firm infrastructure using which they have
evolved from a classic LCC into an integrated service provider; they are focusing towards
their goals of providing cheapest fare while exploring new markets. It encourages the
employees to support the overall strategy.

 Human Resource Management: Air Asia hires capable workers who possess variety of
skills so that they can overcome their price in terms of human resource and can maintain
their company mission of low cost and they also compensate their employees in terms of
performance in order to motivate them to perform better.

 Technology development: Air Asia uses different type of technology to minimize its
cost and to make their operation easy and efficient, they are using yield management
system (YMS) which takes into account the operating cost and expected revenues, and
they also use computer reservation system (CRS) as it is web-based reservation and
inventory system as it is a direct sale engine which eliminates the middle man. They have
also implemented enterprise resource planning system (ERP) which helps to save the
time at month end closing, and speed up reporting and data retrieval processes.
 MALAYSIAN AIRLINES

Primary Activities

 INBOUND LOGISTICS- Supplier Scheduler, Material

Management
 OPERATIONS-Aircraft Maintenance
 OUTBOUND LOGISTICS- Buying Tickets
 MARKETING & SALES-Market Research, Analysing needs of
customers

Support Activities
 HRM- Talent Management, Recruitment, Training
 TECHNOLOGY- Online Booking System, R&D
 PROCUREMENT- Suppliers Relations, Subcontracting,
COMPARISON BETWEEN THE 2 AIRLINES

Both firms follow a different route network but are similar in terms of
cost. Air Asia is a cost efficient company and has around 78 aircrafts.
It has around 1/3 of employees when compared with Malaysian
Airlines.