FACULTY OF ADMINISTRATIVE SCIENCE AND POLICY STUDIES

DIPLOMA IN CORPORATE ADMINISTRATIONS

INTRODUCTION TO STRATEGIC MANAGEMENT (ADM352)

TOPIC: CASE STUDY ANALYSIS

PREPARED BY:

NO NAME MATRIC NO CLASS

1 NUR EMYLIA BINTI MOHD AZZARUDIN 2019410566 AM1205B
2 NUR ATHIERAH BINTI MUSTAPAH KAMAL 2019266526 AM1205B
3 NABILAH BINTI ISMAIL 2019408028 AM1205B
4 FATIN NURHAYATI EZZATI BINTI TARMIZI 2019263254 AM1205B

PREPARED FOR:

MADAM NOORIE HARYANIEE BINTI MOULTON

ACKNOWLEDGMENT

First and foremost, we would like to praise and thank to Allah SWT for giving

us the strength and because of His blessing, we finally managed to accomplish this

assignment. Without His blessing, we wouldn't have gone this far. This assignment

cannot complete without effort and co-operation from our group member, which are

consist of Nur Emylia Binti Mohd Azzarudin, Nur Athierah Binti Mustapah Kamal,

Nabilah Binti Ismail and Fatin Nurhayati Ezzati Binti Tarmizi. We always work hard to

produce a good assignment with our full commitment and responsibility.

Therefore, we would like to acknowledge with thanks to our lecturer Madam

Noorie Haryaniee Binti Moulton because without her guide our assignment cannot be

done properly like this. She always gives us supports and guide on how to do our

assignment in purpose to produce a good outcome. She inspired us greatly to work

in this project. We also like to thank her for teaching us in this course.

Furthermore, we would like to express our thankfulness to University

Technology Mara (UiTM) Negeri Sembilan campus Seremban for giving us

opportunity to conduct this writing report assignment. Finally, an honorable mention

goes to our friends and respondents for the support and willingness to spend

sometimes with us to fill in the questionnaires.

 TABLE OF CONTENT

NO PARTICULARS PAGE NO
1 INTRODUCTION OF AIR ASIA 1
2 SUMMARY OF THE CASE STUDY 2
3 ANSWER FOR QUESTION 8 3-7
4 APPENDIXES 8, 9 & 10
5 REFERENCES 11
1.0 INTRODUCTION OF AIR ASIA

Generally, strategic management can be defined as setting goals, methods,

and objectives to enhance a company's or organization's competitiveness. According
to David & David, 2017, strategic management is planning, implementing the
strategies, evaluating cross-functional decisions which is known as the decisions that
is involved of all people that has to be made this decision will help a company to
meet its goals. In other words, strategic management is the process of defining an
organization's goals, formulating policies and plans to attain those goals, and
assigning resources to put the plans into action. There are six strategic management
model which is swot analysis, space model, experience curve, break-even point
model, product life cycle model and finally is porter five factor model. The swot
analysis is divided into four which is strength, weaknesses, opportunities, and
threats. SWOT Analysis is a tool that can assist a company in determining what it
does best right now and developing a successful future. Strength is the things that
company does well such as in term of its positive internal activities, processes, and
behavior. Weaknesses is the things that company does not perform well and this
swot weaknesses can stop company to achieve its goals and objectives. External
factors that may provide a competitive advantage to a company are referred to as
opportunities. Threats are elements that have the potential to cause harm to a
company.

Porter's Five Factor model is for evaluating the competitive environment of a

company. To gain a competitive advantage, a five forces analysis can be used to
influence business strategy. Porter's Five Factor model are power of suppliers, power
of customers, competition with other company, threats of substitute product to
company and new entrants potential to industry. Air Asia was founded in 1993 and
began operations in 1996. Anthony Francis Fernandes is the Tune Air Sdn. Bhd.
founder who introduced Malaysians to AirAsia, the first budget no-frills airline. AirAsia
Group is a company that operates in the airline business. The Group's main business
is AirAsia, a low-cost airline with significant operations in Malaysia, Thailand,
Indonesia, the Philippines, India, and Japan, among other countries. Air Asia is a
Malaysian low-cost carrier that is also Asia's largest low-cost, no-frills carrier. The
airline says that there are no administrative fees. AirAsia is an Asia-Pacific travel and
financial platform company that offers air transportation, travel and lifestyle goods, as
well as financial sectors. The vision of Air Asia is to be Asia's top sustainable travel
technology company, offering more than simply low fares and one of the mission

1
AirAsia is to deliver the greatest quality product while using technology to reduce cost
and improve service.

2.0 SUMMARY OF THE CASE STUDY

To sum it all up, Air Asia has many strengths and one of them is Air Asia is
very great at expending the amount of skill workers and this strength is one of the
reasons that make Air Asia still competitive in the airline industry. Meanwhile one of
the weaknesses of Air Asia is poor and limited at their services. This could be a
threaten factor if Air Asia does not acknowledge this weakness that can damage their
company reputation. Next, based on Porter Generic Strategy, in terms of Air Asia
cost leadership strategy, due to its low-cost fee tickets features they still can manage
to provide a good service and minimize its operational cost at the same time while
gaining high profit. Next, in terms of differentiation, Air Asia has done some
modifications that makes the firm different from its competitor. Such as Reduced
flight service, point-to-point travel, high aircraft utilisation, a single fleet type,
ticketless passenger booking systems, convenient flight turnaround, and high
employee flexibility. These differentiation and low-cost fee tickets makes Air Asia
become people’s choice and yet they still can manage to minimize its cost and
gained high profits. Moreover, in terms of focus strategy, Air Asia mainly focused on
cost monitoring, cost control, and fare distinction in order to maintain the low-cost
fare and at the same time increase their quality in services. The strategies that Air
Asia can implement to stay competitive in the market are enhance employee-
management communication, boost Air Asia's main flaw, which is its poor and
constrained service and be mindful of its opportunities and take advantage of them.

2
3.0 ANSWER FOR QUESTION 8

i) IDENTIFY THE STRENGTH AND WEAKNESSES OF AIR ASIA

STRENGTH

Expanding the amount of skill workers:

Every company need a well-trained crew. Many industries are becoming

increasingly competitive, and significant changes are taking place on a regular basis.
Having access to well-trained, adaptable, and knowledgeable employees means that
you can maintain high levels of performance no matter what your industry's present
issues are. Air Asia pioneered centralized training. Air Asia operations staff come
together as one in Kuala Lumpur and train to the same high-quality standards,
regardless of where they're from. To develop talent, we also operate pilot cadet and
engineering programmes in our key operation centres. Air Asia only hires the best
and most dedicated individuals. Air Asia is a firm believer in diversity in the workplace
and only hires the finest of the best, regardless of their background or gender. Since
our inception in 2001, AirAsia has had all-female ground teams as well as male ramp
teams. Our female pilots make up about 8% of our total, or nearly 190, which is
among the highest in Asia. Besides that, Air Asia also held a 12 -month program to
develop an inspiring and meaningful employer brand. This 12-month program will
provide the employees with the information, skills, and experiences necessary to
become a top HR executive. They will study how HR operates in a major
organization and acquire hands-on experience in a variety of areas, including
recruitment, colleague welfare, talent management, policy creation, and leadership
support, as part of the curriculum. If ones join this program, they can most likely gain
the confidence and persuasion skills needed to generate new ideas. and many more
benefits.

3
WEAKNESSES

Services are somewhat poor and limited:

Services are important to serve the customers and to ensure the customer
are satisfied with the services. Poor services will lead to failure since customer will
stop using our service. For instance, Air Asia check-in counter are so limited, and
customer need to get in line for too long to check in their luggage. Balancing service
quality and affordability is a difficult task. Its image as a low-cost carrier is Air Asia.
Customers, on the other hand, are unwilling to compromise on quality only to save
money, and customer happiness is determined on the quality of services provided.
As a result, the airline finds it difficult to strike a balance between quality and price,
and it has been said that quality has been compromised. There are many reviews
said that Air Asia flight are always delayed, and the information given is not clear to
all the passengers such as when the gates are change, people need to walk for a
long distance and need to wait in a long line. It is inconvenient for them especially
passengers with infants and the elderly. In order to gain customer’s satisfaction, Air
Asia need to always improve their service.

4
 ii) BY USING AIR ASIA AS AN EXAMPLE, EXPLAIN THE PORTER’S
GENERIC STRATEGY (15 MARKS)

Michael Porter’s Generic Strategies are cost leadership, differentiation, and

focus strategy. The implementation of any of these strategies can give a company a
competitive advantage and industry attractiveness in each market but It's important
to remember that no single firm can implement every strategy. Nonetheless, if a
company is capable and follows through on a strategy, it can gain a competitive
advantage in the market. As it is known that the consideration of this model is not
achievable since analysing the comparative benefit and industry trends is not a
straightforward task. The value chain analysis is also included at the other end of the
analysis. However, corporations would choose one of three generic strategies for
their execution.

First and foremost is cost leadership is when a company thrives because of

its cost advantage, which can be derived from a variety of factors such as scale
economies, preferential supplies, cheap overheads, and so on. This distinctiveness is
unavailable to other players. For instance, Air Asia Berhad was attested as the
largest airline in Malaysia with the lowest cost that offers the world’s major
destinations. Air Asia is one of obvious airline company in Southeast Asia that
successfully minimize its operational cost while still maintain to generate high profit
and still maintain in providing the low-cost ticket fee for their customer. For example,
for Air Asia to minimize its operational cost, additional charges will be taken for on
board meal but yet still in affordable price so the customer still feel satisfied with Air
Asia’s services and the passengers its selves can choose whether they want on
board meal or not. There is no compulsion. This strategy has embellished Air Asia
Berhad as the best low-cost airline in the world as endorsed by Skytrax World's Best
Low-Cost Airline in 11 years in succession from the year 2009 to the year 2019. Due
to its low-cost fare and good services makes many people in southeast Asia choose
Air Asia as their main airline company to travel which helps many people save cost in
travelling.

Differentiation is a type of strategic plan in which a company attempts to

differentiate itself from its rivals' products or services to be distinct, as if it were
creating its own industry and being the only player. As a result, its products and
services stand out from those of its competitors. A company could use this strategy

5
to differentiate itself by using creative advertising, distinctive brand features, better
quality, improved results, exemplary service, or modern technology. Customers who
are loyal to a company's brand have created a differentiating strategy that has
mitigated competition. As a result, businesses that pursue expansion depend heavily
on branding and customer loyalty. Because of the impact of their distinctiveness,
companies that use this strategy typically price their products lower than competitors.
Considering AirAsia's success storey, which included the successful execution of the
Low-Cost Aviation Carrier (LCC) business model and the quirky slogan "Now
Everyone Can Fly," Reduced flight service, point-to-point travel, high aircraft
utilisation, a single fleet type, ticketless passenger booking systems, convenient flight
turnaround, and high employee flexibility are among the modifications introduced by
Air Asia to distinguish the difference itself. These cost-cutting attributes have enabled
Air Asia Plus to provide low-cost flight tickets to everyone, distinguishing the
company from other airlines and establishing Air Asia as a successful airline that
provides low-cost fares with world-class service.

The focus strategy is divided into two categories namely cost leadership and
differentiation strategies. In either case, the focus strategy entails focusing initiatives
on customers with specific requirements and preferences, also known as niche
markets. With this level of customer focus, a company can either generate a
specified cheaper product or introduce new products and services with distinctive
elements and traits that fulfil the demand or wants of the target market. Either focus
strategy subcategory provides a distinct advantage. For instance, Air Asia keep
striving to reach their vision which is to become Asia's largest low-cost airline,
allowing passengers who previously couldn't travel owing to excessive fares and
poor access to do so. They want to make it possible for everyone to connect at a low
cost. So, Air Asia Berhad is mainly focused on cost monitoring, cost control, and fare
distinction to maintain the low-cost fare and at the same time increase their quality in
services. Low-cost airline passengers may be charged extra for services and facilities
such as checked baggage, on-board food, assigned seating, early boarding, and
carry-on luggage for them to keep focus in serving the best service for the
passengers and can give satisfaction to their employees. Moreover, Air Asia Berhad
also really focus and concerned on customers complaint about their service and
aircraft issue. So, Air Asia Berhad planned to always prepare staff and managers to
address and minimise passenger complaints to show at the passengers that their
complaints, Air Asia really prioritise it and Air Asia want to overcome these issues
quickly so the customers satisfaction can be achieved. As it is known that

6
passengers on low-cost airlines are aware of the differences in service between low-
cost and mainstream airlines. So, Air Asia Berhad’s focus here is to put an end to
these barriers as the company wants to provide a low-cost airline with a world class
service in all over Asia.

iii) SUGGEST STRATEGY CAN BE ADOPTED BY AIR ASIA TO REMAIN

COMPETITIVE IN THE MARKET (5 MARKS)
There are many strategies that can be applied for Air Asia to stay ruthless in
market. One of strategies that Air Asia can implement is to enhance employee-
management communication. Since AirAsia's company structure is relatively flat and
it will make it simpler for workers to provide feedback and suggestions. By including
employees in team meetings, they should feel as if their opinions are valued. This will
formulate fresh and accurate ideas that will lead Air Asia into a better airline
company. On top of that, once the employees feel appreciated when their ideas and
suggestion has been listened by Air Asia, this will make the employees feel energetic
to do their jobs and indirectly, will lift Air Asia’s performance and services. Moreover,
Air Asia Berhad can boost Air Asia's main flaw, which is its poor and constrained
service. To do that is by providing a good training for the employees of Air Asia
Berhad and enhance the authorize by the management so it will smoothen up the
operations of the company. Not only that, bad feedback from the customer also can
be quickly addressed and solved by the management of Air Asia Berhad. This can
magnify customer satisfaction towards Air Asia Berhad’s service and professional
management. Next strategy is Air Asia needs to be mindful of its opportunities and
take advantage of them. To achieve this, Air Asia Berhad should match capacity to
demand. This means that a flexible strategy for allocating resources (including
personnel) to meet demand fluctuations is required. AirAsia has many resources that
are distributed during peak travel times or when demand is expected to rise. 

7
4.0 APPENDIXES

8
9
10
11
5.0 REFERENCES
(n.d.). Retrieved from https://careers.airasia.com/

(n.d.). Retrieved from https://www.ipl.org/essay/Company-Background-Air-Asia-

Berhad-PKFQ7X36JED6

(n.d.). Retrieved from https://airasiainformationsystem.weebly.com/company-

background.html

(n.d.). Retrieved from https://www.aavplc.com/en/thai-airasia-taa/taa-vision-mission

Bhasin, H. (2 February, 2019). SWOT analysis of Air Asia. Retrieved from

MARKETING91: https://www.marketing91.com/swot-analysis-of-air-asia/

12