Introduction AirAsia Berhad is a Malaysian-based low-cost airline which is also Asia's largest lowfare, no-frills airline and a pioneer

of low-cost travel in Asia. AirAsia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines Thai AirAsia and Indonesia AirAsia have hubs in Suvarnabhumi Airport and Soekarno-Hatta International Airport respectively. AirAsia's registered office is in Petaling Jaya, Selangor while its head office is located inKuala Lumpur International Airport. Air Asia plans to open ASEAN regional headquarters in Jakarta by August or September 2011. AirAsia won the Skytrax World's best low-cost airline award in 2009, 2010 and 2011. It has the world's lowest operating costs at $0.035/seat-kilometre in 2010. It is also the first airline in the region to implement fully ticketless air travel system. AirAsia was established in 1993 and commenced operations on 18 November 1996. It was originally founded by a government-owned conglomerate DRB-Hicom. On 2 December 2001, the heavily-indebted airline was purchased by former Time Warner executive Tony Fernandes's company Tune Air Sdn Bhd for the token sum of one ringgit (about $USD0.40 at the time). This was after great deliberation as the initial offer was fifty sen. Fernandes proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 (US$0.27). In 2003, AirAsia opened a second hub at Senai International Airport in Johor Bahru near Singapore and launched its first international flight to Bangkok. AirAsia has since started a Thai subsidiary, added Singapore itself to the destination list, and commenced flights to Indonesia. Flights to Macau started in June 2004, while flights to Mainland China (Xiamen) and the Philippines (Manila) started in April 2005. Flights to Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the latter by Thai AirAsia. On August 2006, AirAsia took over Malaysia Airlines's Rural Air Service routes in Sabah and Sarawak, operating under theFlyAsianXpress brand, the routes were subsequently returned to MASwings a year later citing commercial reasons. AirAsia's CEO Tony Fernandes subsequently unveiled a five-year plan to further enhance its presence in Asia. In the plan, AirAsia will strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Indochina, Indonesia, Southern China (Kun Ming, Xiamen, Shenzen) and India. The airline will focus on developing its hubs in Bangkok

and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia. Hence, with increase frequency and addition of new routes, AirAsia expects passenger volume to hit 18 million by end-2007. On 27 September 2008, has on its list 106 new routes to be added to its current list of 60 over the next few years. The number of old routes discontinued has not been publicly disclosed.

Content 1. First mover advantage

The idea of first-mover advantage is similar to the old adage, "the early bird gets the worm." Just like Sun Zi said Those who arrive first in battleground will have sufficient time to rest and prepare against the enemy. In business, being the first company to sell a new product may provide long-lasting benefits or competitive advantages. As the first company to enter the market, they might have benefits in market dominance and higher-than-average profitability over time. Besides, the first mover should take the advantage to monopoly the market, be the market leader. The first company has the good chance to consolidate the market and enlarge their market share, the second company who arrive late might need some time to catch up their steps. First movers are often followed by competitors that try to capitalize on the original company's success. By the time, however, the first mover has usually accumulated enough market share, expertise and customer loyalty to remain on top. 2. Be flexible like water

No one victory is gained in the same manner as another. The tactics change in an infinite variety of ways to suit changes in the circumstances. Water constantly adapts. It constantly changes. You put a wall in front of it, it will go around it or eventually through it. You heat it, it turns to steam. You freeze it, it turns solid. Water is energetic. That is the power of flexibility. Like water, the flexible are able to overcome the adamant and the yielding are able to overcome the forceful. Just like in Sun Zi Art of War, in the conduct of war, there is no fixed situation and condition, just like water has no constant shape and configuration. Water changes its course in accordance with the contours of the land. In the same way, the leader also needs to change its strategies due to the changing conditions and situations of the competitor. Of the five elements, none is ever predominant; of the four seasons, none lasts forever; of the days, some are longer and others shorter; and of the moon, it sometimes waxes and sometimes wanes. Therefore, there are no constant tactics in business. A leader should be change with uncertainty and create opportunity to strike competitors weaknesses, thereby succeeds in winning may be said to be divine.

3.

To dictate and not to be dictated

A company that is familiar with the market place can control very well in company operation, they can lead the workers in fighting against competitor. Instead of being controlled and manipulated, a company can eliminate another company by attack their weaknesses. A dangerous environment can be created to harm the competitor. A company can produce a new product that their competitors cant think of it. A company can choose a new market that the competitor not interested in or they may oblivious of it. When the competitor is well-encamped, a company can proceed with innovation that provokes them to move. Other than that, a leader should be expert in predicting plans and moves of the competitors accurately to win a victory. The competitor must not know the parts where the company intends to attack, so they need to defense in many parts. For should he strengthen his left, he will weaken his right; should he strengthen his right, he will weaken his left. If he sends reinforcements everywhere, he will everywhere be weak. Then, even though the competitor is much stronger, the company can still beat their competitor.

4.

Momentum and timing

Sun Zi said force and momentum of the adept in warfare are so overwhelming and ferocious, and his timing of engagement highly precise and swift. Also his stance and (potential) force is like that of a fully-stretched crossbow and his timing is exact like that of the release of the trigger (of the crossbow). These illustrate the magnitude of power, force and ferocity that are unleashed by a well-trained and mighty attacking force combined with the timing and accuracy with which it launches its assaults, it would completely overwhelm any competitors. Momentum and timing is extremely important in business, the sales and the popularity often depends very much on timing. Introduce the new product and offer at the right time will give profit, in another way, wrong timing will causes disastrous effect on the timing and easily defeated by enemy. 5. Important of swiftness

In war, it is better to go for swift victories rather than engage in prolonged military campaigns. The main purpose is of the war is to win the battle and not to prolong the battle. If it takes too long to end, effectiveness of the battle will be affected. Sun Zi said expenses incurred everyday in gold is 1000 pieces of gold, which is very high, war need to be ended as soon as possible to because it will cause loss of country. Just like in business, time is very

precious and speed is one of the way to reduce the organization operation cost. Organization who fails to maintain its speed, it will affect financially and for business who are selling speed concept, failing in maintaining its speed will cause downfall of its reputation. There are few strength with AirAsia which make it is the leader of the market now. One of strength they have is they are the first low cost airline in Malaysia and they have accumulated enough market share, expertise and customer loyalty to remain on top. Next, they always offer cheap and affordable airfare which is the main weapon of them and this bring many customers for them. Besides that, they also do their promotion at the right timing, during cold season where no one intend to fly, they can change this to become a profit too by offering low price ticket. Apart from that, a high portion of AirAsia costs was the salaries and benefits for its employees. Hence, the airline implemented flexible work rules, streamlining administrative functions which allowed employees to perform multiple roles within a simple and flat organizational structure. In AirAsias case, a flatter hierarchy improved (sped-up) communication, resulting in an effective and focused workforce. However, they are few weaknesses that AirAsia have. One of them is their flight always delayed, cancelled. Next, even though their air ticket is very affordable, however their service is not that satisfying, for example, they do not prepare food for passenger like what Malaysia Airlines, instead passenger have to buy their own food on the flight. Besides that, with its reliance on IT, there is a risk of system disruption due to AirAsias heavily reliance on online sales: any flight delays or calling their customer line to confirm bookings would indicate that AirAsias system is not robust enough to handle booking efficiently

Discussion AirAsia Berhad applied some theories of Sun Tzi Art of War in their business strategy in order for them to be one of the successful company. For the strategy of first mover advantage, AirAsia is the first low cost airline in Malaysia and now AirAsia is largest low-fare, no-frills airline and a pioneer of low-cost travel in Asia. AirAsia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Being the first low cost airline in Malaysia, AirAsia becomes main choices of many people as it is more economic, and earlier it is one and only low cost airline Malaysian can consider. AirAsia also continue to be a first mover in other aspect, it is the first airline in the region to implement fully ticketless air travel system and also introducing the Worlds First lie-flat bed seats on a Low Cost Carrier. Even though nowadays there are other competing low cost airlines in Malaysia like Firefly, but the foundation and reputation of AirAsia built earlier as the first mover still undefeatable, the first name that come to Malaysians mind when talk about low cost airline is always AirAsia. Next, AirAsia also applied the concept of be flexible like water. They are very flexible in order to attract customer, instead of sticking into one plan. Throughout the years, AirAsia non-stop offering attractive prices of airfare in order to get more customer. Few examples of offer, AirAsia recently offered Big Thank You Sale which only cost RM3 to few popular destinations, also flight from Stansted to Gatwick cost only RM1039. Besides that, they also offer customer to save on flights and rooms from RM39. AirAsia willing to offer much cheaper airfare compare to market price in order to attract customer, they are not only focusing in getting small amount of profits with expensive airfare, instead they are flexible to lower down the price in order to get much more profits. Comparing to Malaysia Airlines which is their main competitor, Malaysia Airlines did not offer as many promotions as AirAsia, and airfare they offered is less affordable compare to AirAsia. This causes many people to choose AirAsia instead of Malaysia Airlines. Besides that, AirAsia also applied the concept to dictate and not to be dictated. In facing their strong competitor, Malaysia Airlines, AirAsia come out with many strategies in order not to be dictated. Throughout the years, AirAsia offered many tempting promotion in order to compete with Malaysia Airlines. For example, AirAsia promoted a 10 cent airfare to compete the MAS low fare promotion. Malaysia Airlines started with a big capital support

from government and AirAsia started from 2 airplane and loan capital. However, AirAsia is dictating the market now, destination of Malaysia Airlines been reduce every year and it has been face big loss previously and changed CEO. For AirAsia, every year net profit double up increasing and it emerged as the world best low cost carrier. MAS suffered a 15.6% reduction in passenger numbers, resulting in a 5.5 ppts reduction in load factor to just 65.3% while AirAsia reported a 21% surge in demand and a 0.8 ppts increase in load factor to 78.4%. Apart from that, AirAsia also very good in momentum and timing. Low cost airfare is AirAsia best force and momentum to defeat other competitor. They also applied their force and momentum at perfect timing. For example, during popular festivals like Chinese New Year or school holidays, AirAsia will always have some promotion tickets to few interesting places in order to attract more customer, at the same time, they will also slightly increase the prices of normal tickets in order to make some profits as this is the time where most of the people must use aeroplane to go back to hometown or go for vacation. During cold season when no one intend to fly, AirAsia will then offer various promotion such as Zero fare which cause people will choose to travel because of the low price. They know when the right time to offer cheap airfare is and when is the right time to increase the price. Even though MAS also did offered lower airfare, however the price AirAsia offered is still lower than MAS. However, there are some problems faced by AirAsia, one of them is flight delay. This problem is much related to important of swiftness. There are many cases about AirAsias flight delay and this causes downfall of reputation. There is even a saying Delay is AirAsias tradition among the peoples. Failing to take off on time will cause many problems to customer, customers holiday planning might be messed up because of the delay, customer cant attend a function or meeting on time and their mood will be affected as they feel impatient while waiting for the flight. Besides that, whenever there is a delay, AirAsia have to give compensate or sometimes even refund to the customers as apology, this will cause great loss to the company. Therefore, swiftness and keeping on time is one of the major factors in business world.

Recommendation There are some recommendation can be done. Firstly, AirAsia should open more Asian market since now the market of AirAsia still small. AirAsia is a low cost airlines that 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. It is time for AirAsia to exploit the potentials of affordable air travel by Asias growing middle class. Besides starting services to the Pearl River Delta in south China in 2004, AirAsia can expand its services to the coastal cities in China. Besides the growth of Asian middle class, the liberalization of aviation sector of India is another reason for AirAsia to open more Asian market. The Indian government has liberalized the aviation sector long dominated by the national carriers. Now, only a few low cost airlines, e.g. Air Deccan, Airone Feeder Airline Pvt Ltd, Crescent Air, have launched their services there. 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. Therefore, it is a good chance for AirAsia to open the Indian market. The bigger the market AirAsia open, the more benefit AirAsia will get. Next, induction of smart cards can be used in AirAsia. AirAsia can issue a smart card which is compatible with the existing ticketless booking. It can offer 2 kinds of smart cards. The first kind of smart card, aimed at ordinary travellers, will offer instant rewards when topped up, offering greater value than its purchase price. For example a RM500 card may be worth RM550. The card can also be used by other people with the same family name as the cardholder. The second kind of smart card will offer unlimited travel for frequent flyers. Priced provisionally at RM2000, cardholders will be allowed make as many trips as they want within a specified period. Besides that, a simple notification can be an opportunity for a valued dialogue. Certainly, AirAsia has done well on event notification; repurchase reminder, reward information and whichever that focuses on targeting marketing, merchandising and promotions. The portion that AirAsia miss out is service follow up. Service follows up such as a thank you or a satisfaction check is to ensure that each customer leave with a smile on their face, a feeling of having been well taken care of and for having purchased just what they needed or wanted; which provide positive customer experience. Satisfaction guaranteed but not a guarantee, regular studies or market research shall be carried out periodically to measure levels of

customer satisfaction. A dissatisfied customer is our most important source of knowledge (Bill Gates).The results will provide excellent feedback on the efforts to improve quality and value-added. Make sure customers are recognized at all contact point rather than early part of customer life cycle. Customers time is precious, respond quickly to customer queries whether by email, sms or come to the service counter. In addition, Airasia should empower their staff to have a good service. Poor service after sales and problem on customer complaint is mostly due to front line staff cant timely decisions nor effectively facilitating customer dissatisfaction and defection. Front line staff such as flight attendant (FA), customer services staff shall be provided training on better knowledge and soft skill on customer service and communication skill to deliver service excellence. Basically, front line staff shall have good listening skills, problem solving skills and to be proactive and anticipate customer problems. Employees should be evaluated on their ability to deliver high level of service, and provide additional incentives to encourage employees to exceed customer expectations.

Conclusion AirAsia Berhad is a Malaysian-based low-cost airline which is also Asia's largest lowfare, no-frills airline and a pioneer of low-cost travel in Asia. Nowadays, it is getting stronger and stronger and dominating the market of low-cost airline in Asia. The reason that AirAsia able to grow so fast is because they are good in applying business strategies into their business. Interpret their strategy by using Sun Zi Art of War, they have the first mover advantage as the first low-cost airline in Malaysia. Being the first mover, AirAsia take the initiative to offer various tempting low price ticket and this has successfully attracted many customer for them. For be flexible like water, they are flexible enough to lower down the air fare in order to attract more customer. For dictate and not to dictated, even though facing their huge enemy-Malaysia Airlines, they are able to turn the situation over and dictate the market. Next, they are good in momentum and timing, as they know when is the right time to raise the price and when is the right time to lower the price. Lastly, AirAsia should improve their speed in their flight services and understand the concept of important of swiftness. This is because they are many cases of AirAsia flight delayed. From this assignment, we have learned and understood Sun Zis art of war and how they are apply in business strategies today. From this assignment, we learned that in order to be the leader on the market, one must take the initiative to be the first mover, be flexible, want to dictate the market, do things at the right timing, and be fast. By planning strategy properly, even though facing huge enemy, we still be able to turn the situation over and overtake him.

Appendix III

1. EdD, D. W. (2003). Sun Zi's Art of War & Business Strategies. UTAR Faculty of business & finance (FBF). 2. Wikipedia. (17 July, 2011). AirAsia. Retrieved from Wikipedia : http://en.wikipedia.org/wiki/AirAsia