1. 1Background

AirAsia was set up by Dato’ Tony Fernandes in 2001. In December 2001. Fernandes and his spouses set up Tune Air Sdn Bhd ( Tune Air ) . an air hose keeping company so bought over AirAsia. Now. AirAsia has become one of the most successful air hoses in the Southeast Asiatic part and the innovator of low cost and no frills travel in Malaysia. The taking low menu air hose in the Asia – AirAsia has been spread outing quickly since 2001. to go an award winning and the largest low cost bearer in Asia. With a fleet of 72 aircrafts. AirAsia flies to over 61 domestic and international finishs with 108 paths. and operates over 400 flights daily from hubs located in Malaysia. Thailand and Indonesia. To day of the month. AirAsia has flown over 55 million invitees across the part and continues to distribute its wings to make more extended path web through its associate companies. Thai AirAsia and Indonesia AirAsia.

AirAsia believes in the no-frills. hassle-free. low menu concern construct and feels that maintaining costs low requires high efficiency in every portion of the concern. Efficiency creates nest eggs which are so passed on to invitees so that low-cost air travel can go a world. Through our doctrine of ‘Now Everyone Can Fly’ . AirAsia has sparked a revolution in air travel with more and more people around the part taking AirAsia as their preferable pick of conveyance. As AirAsia continuously strives to advance air travel. we besides seek to make exhilaration amongst our invitees with our scope of advanced and individualized service.

The purpose of the probe

The purpose of this analysis is to carry on a PEST and SWOT analysis in the context of AirAsia’s international concern operations. placing the major variables involved and the impact of the specific menaces and chances confronted by AirAsia. Besides that. The intent of this study is to place its stakeholders and nucleus competences. carry out a probe of its external environment. reexamine a strategic analysis of Airasia to place chances and menaces it might confront. and to insulate cardinal strengths and any failings that need covering with. Furthermore a SWOT analysis will be carried out to measure the extent to which its schemes are suited to what is go oning in its present environment. Finally. after placing competitory scheme a Strategic program will be made to derive competitory advantage.

Chapter 2

Discussion

2. 1 Company Overview

AirAsia is presently one of the taking low cost air hoses in South East Asia which has expanded quickly and it’s still the 2nd largest air bearer in Malaysia. It dynamic nature of concern is based on domestic and international flights. vacation and concern agreements for its clients domestically and internationally around the part with the low menu. safe and convenience agencies of transit. ( World Wide Web. airasia. com ) .

AirAsia’s vision

To be the largest low cost air hose in Asia and functioning the 3 billion people who are presently underserved with hapless connectivity and high menus.

AirAsia’s mission

To be the best company to work for whereby employees are treated as portion of a large household Create a globally recognized ASEAN trade name
To achieve the lowest cost so that everyone can wing with AirAsia Maintain the highest quality merchandise. encompassing engineering to cut down cost and enhance service degrees

AirAsia’s values
AirAsia make the low menu theoretical account possible through the execution of the undermentioned cardinal schemes:

SafetyFirst:
Partnering with the world’s most celebrated care suppliers and following with the with universe air hose operations.

High Aircraft Use:
Implementing the parts fastest turnaround clip at merely 25 proceedingss. guaranting lower costs and higher productiveness.

Low Fare. No Frills:
Supplying invitees with the pick of custom-making services without compromising on quality and services. Streamline Operationss:
Making certain that procedures are every bit simple as possible.
Thin Distribution System:
Offering a broad and advanced scope of distribution channels to do engagement and going easier.

Point to Point Network:
Using the point-to-point web supports operations simple and costs. low.

Merchandises and Servicess offered By Air Asia
In-flight services:
• Air Asia offer nutrient and drinks on board programme.
• In-flight services customise repasts and ware bundle upon petition e. g. caps. Jerseies. and bloomerss.

Online services:
• Online engagement makes it more convenient for its clients to book online anyplace anytime. • Flight information is available to assist clients do questions on flight agendas reaching and going clip and day of the month. • Chatter –flight: Created for a group of people. concern travelers for intents like meetings. conventions. leisure or even exhibition.

Channelss of distribution

A figure of alternate ‘channels’ of distribution may be available:

Selling direct:
• Outbound gross revenues forcer
• Via mail order. Internet
• Telephone gross revenues

Selling indirect:
• Agent. who typically sells direct on behalf of the manufacturer • Distributor ( besides called jobber ) . who sells to retail merchants • Retailer ( besides called trader or reseller ) . who sells to stop clients

Gross saless and Selling

AirAsia is an international company. and traveling planetary invites a batch of competition. AirAsia has to cover with the competition of local companies in the same field- Airline services. Competition for AirAsia would besides be encountered in the practical world-the cyberspace. As they entered into the usage of modern engineering such as the public sphere would ask for competition on the planetary graduated table. Different vicinities and states have different technological criterions. and quality control policies. which AirAsia would hold to adhere to. by attachment to these policies ; certain intended developments may be possible in certain communities but non acceptable in others.

Harmonizing to CEO’s of the company. Mr. Fernandez. there are a batch workers or low wage wages earners who would wish to go frequently to run into their households particularly during particular occasions but due to how expensive it was that clip. their desire are non fulfilled. By presenting a low menu will give all those people chance to go if non more than one time in a twelvemonth. This enables them to place their mark market. Decreased monetary value gross revenues is one of the rudimentss of procuring a mark market for AirAsia. They cut down their monetary value to accommodate their category of clients

Branding

AirAsia went into intensive General advertizements and other high profile activities. which contributed to the high offering of their company’s image. They came with a trade name “ Now every one can fly” These points of contact with their mark client assist them to construct their image. which in bend created trueness from their clients.

Group Discounts and Offers

Discounts or other offers can assist exposure concern to new clients. ensuing in a gross revenues addition. AirAsia is a ticketless Airline that allows clients to buy their ticket online with at a discounted rate. They besides have a strategy of group price reduction and this aid to acquire more mark market. particularly internet based clients.

2. 2Core competences:

Computer Reservation System ( CRS )

AirAsia’s CRS ( Open Skies by Navitaire ) has helped it to turn at a dramatic gait in the past twosome of old ages. Tony Fernandes. CEO AirAsia described that Navitaire’s Open Skies engineering has genuinely enabled Airasia’s growing from 2 million riders to 7. 7 million riders in less than two old ages. Open Skies scaled easy to suit our growing. It is an incorporate web-based reserve and stock list system. It includes Internet. call centre. airport going control and more. It is a direct gross revenues engine that efficaciously eliminates the jobber ( travel agents ) and the gross revenues committees that need to be paid to them.

Enterprise Resource Planning System ( ERP )

AirAsia has late ( May 2005 ) opted for a full fledged ERP system implemented by Avanade advisers. By implementing this bundle AirAsia is looking to successfully keep procedure unity. cut down fiscal month-end shutting processing times. and speed up coverage and informations retrieval processes.

Self Check In

With the usage of the new ego cheque in service a quicker and more convenient manner to look into in utilizing nomadic phones. laptops etc. linking to the cyberspace. This system is easier and faster for clients and their household to look into in at or before they get to the airdrome without holding to line up up at the counter to look into in.

Air Asia recognition card

Air Asia offers a pick of recognition card installations to suit in their clients travel life manner be it concern. leisure. preparation or vacations. With an Air Asia recognition card a client can buy any goods or services while going anyplace in the universe online.

Go Holiday services

Air Asia has a merchandise called Go Holiday. with the aid of E-commerce Air Asia is able to expose their coverage maps. vacation resorts. first and mean category hotels. auto rental services. and activities in different states with their different rates and monetary values on Air Asia’s web page. . Using E-commerce. clients are able to choose and do a vacation and travel agreement with a hotel of their pick and category. a choice up auto and even medical services. And payments for all this can be done on the cyberspace utilizing recognition cards or other on-line E-payment methods in front of travel clip.

Foreign workers and Contractors scheme

AirAsia besides target most foreign workers from Indonesia. Singapore. Thailand. China. Macau who may non afford the expensive flight place and offer them the cheap menu which attracted most of them as would travel place really frequently without paying much.

2. 3 The Rivals

Companies in all industries have direct every bit good as indirect rivals. Direct rivals in the air power industry are companies that offer flights to similar finishs on comparable footings of travel. Direct rivals include: Malaysia Airlines: offering flights in same paths.

Singapore Airlines: offering flights on same paths between London and Kuala Lumpur. Thai Air: runing flights between Bangkok an Kuala Lumpur. Air Srilanka: runing flights between Colombo and Bangkok. AirAsia are confronting strong competition with major international and national air hoses on the market portions In contrast to other air hoses. AirAsia offers better value for money

2. 4Analysis of Environmental Factors

In analysing the macro-environment. it is of import to place the factors that might impact a figure of critical variables that are likely to act upon the organization’s supply and demand degrees and its costs ( Kotter and Schlesinger 1991 ) . The external environment of any organisation can be analyzed by carry oning a PEST analysis. The acronym PEST is used to depict a model for the analysis of a scope of macro environmental factors including the Political. Economical Social and Technological environment.

Plague Analysis for AirAsia:

Political

Flying outside Malaysia is hard. Bilateral understanding is one of the chief obstructions in the manner of low cost bearers. Landing charges is besides another large influencing factor on costing of low menu air hoses. The low- cost air hose industry in south-east Asia has been underdeveloped because the air power market is tightly regulated by bilateral air rights understandings. Menace of terrorist act. people is afraid to wing after the September 11 terrorist onslaughts incident.

Economic

In malice of strong competition from Malayan Airline ( MAS ) . AirAsia’s low-priced bearers offering inexpensive tickets and few in-flight services are deriving attractive force in the part. Current recession hit the air power concern. But with this economic system decelerating down. more people will desire to bask its inexpensive tickets. Oil monetary values is another regulative factor for this type of air hoses. If oil monetary values go high. it is really hard to command cost of operation.

Social

Passengers are loath to board a no-frills air hose for a long-haul flight. Increasing world’s population. tourers and figure of educated people helpful for the growing of air power industry. Outbreak of the Severe Acute Respiratory Syndrome ( SARS ) has scare people to wing. AirAsia commit to “Safety First” ; comply with all regulative bureaus. set and keep systematically high criterions ; guarantee the security of staff and invitees.

Technology

AirAsia provides on-line service that combines air fining with hotel engagements. auto hire and travel insurance. To assist maintain costs in cheque. Air Asia has pushed cyberspace engagement services. AirAsia besides late introduced GO Holiday. the airline’s online programme where invitees can book vacation bundles online in existent clip AirAsia has bought in A320 to replace Boeing 737. The Airbus A320’s improved fuel efficiency and excess capacity which leads to break public presentation and dependability.

SWOT analysis for AirAsia

Strengths

Low operational and care cost by holding a individual aircraft type fleet i. e. from Boeing 737 to Airbus A-320. Economy of scales benefits. Low runing cost due to being No Frill. online reserves system. speedy cheque in etc. There is immense untapped market in the part. particularly for concern travelers and “for-the-first-time-flying” section. As it is low cost air hoses. it can aim clients who are presently utilizing non-aircraft manners like. Bus. Trains. auto to go to distances.

Failing

Huge investing to buy air planes and implementing latest engineerings there is high sum of operational cost. Rising fuel monetary value. Increased the operational cost.
The flight times are more or less limited to 2. 5 hours. So they can non run flights of longer continuance without any Frill. so No-Frill becomes impossible to implement for riders.

Opportunity

Low menus offer by AirAsia has encourage people from all walks of life manner to wing. Particularly. during economic system down bend. Airbus A320 would promote greater rider capacity and offer comfy service to clients. Introduction of SMS booking allows client to book their place at anytime and anyplace. With the committedness in guaranting the security of staff and clients. client will hold more confident to wing via AirAsia.

Menaces

There are more no-frills air hoses may take off in Asia to run into increasing consumer demand following the success narrative of Malaysia’s budget bearer AirAsia. Singapore Airlines plans to establish a budget bearer. they see the success of AirAsia. They know how large the market is and how good the chance is in Asia. Travelers may non take AirAsia if they are to go long distance flight. They will prefer air hoses such as MAS or SIA which provide better services. Demand to wing reduced via terrorist act and eruption of the SARS.

2. 5 Selling Plan

Cost advantages activities:

AirAsia already introduced cost advantages activities. Some of them describe below: Using one type of aircraft ( Boeing 737-300 which will be to the full replaced with Airbus A320 ) consequences in decrease of care cost ( one of the major disbursals in air hose industry ) . scheduling cost. administrative cost. and stock list of parts. Creative and low-priced advertisement significantly reduces selling cost. On the other manus. AirAsia direct gross revenues through cyberspace. call Centres. walk-in airdrome gross revenues. and gross revenues offices significantly cut down the committee fee to go agents as AirAsia merely assigned its gross revenues to limited travel agents

AirAsia assigned multi-skilled cabin crews ( 2-3crews/flight ) . cost-efficient preparation. public presentation based wages and inducements systems

Target Market:
Low- income Customers and touristry section
Malaysia outgrowth as a regional concern and touristry hub has provided AirAsia plentifulness of room for growing and has fuelled regional air rider traffic.

Theodolite riders
Kuala Lumpur is the operational hub for AirAsia. which is the best connexion point between Europe and Asia/Australia has supported the growing of their concern. AirAsia has been utilizing this “connection point” to advance their concern.

2. 6 Proposed Strategy for farther enlargement of AirAsia

Widening New Paths:

Widening current services into new markets may be helpful to farther growing of this company. It is possible to accomplish this scheme by establishing bing services into new geographical country or new market sections. Adding new paths and finishs are possible ; particularly there is growing Malaysia and East Asia touristry.

Activities related to this scheme:

Marketing research
Feasibility Study
Contract with hotels and tourer bureau at new finishs
Finding out strategic spouse
Marketing new paths and finish
Time frame and cost:
It will take 1 to 2 old ages to get down a new path and estimated cost around $ 200 million to new aircraft and for marketing cost. Organizational alteration:
Enrolling new employees
Arranging developing for new employees
Opening new office in new finish
Evaluation standards:
New finishs are implemented to accomplish new market development. Flight figure in new finish is the best manner to mensurate consequence of this scheme.

Private Suite for concern client:
Introducing new services into bing markets implies merchandise development. This scheme involves the development of fresh competences and requires concern to spread out customized services which can use to current markets. That’s why Emirate Airlines introduce high quality foremost category private sofas to pull concern travellers.

Activities related to this scheme:

Technical and feasibleness Study
Allocated budget
Contract with a company to put in new installation.
Installation and alteration of aircraft’s onboard installations Time frame and cost:
It will take 6 months to 1 twelvemonth to finish installing new installations in a individual aircraft and estimated cost around $ 0. 2 million to new aircraft and for marketing cost. Organizational alteration:
Enrolling new employees to function concern client
Contract with new or bing company for providing service for concern client. Evaluation standards:
Quantitative measuring of this merchandise would be figure of booking or tenancy.

Chapter 3
Decision

3. 1 Decision

By analyzing PEST. SWOT and selling analysis. it could be said that AirAsia is situated in standard rhythm markets where it acquire competitory advantage for its concern policy and scheme. Supplying clients with superior merchandises and services with low menu is synonymous to the AirAsia trade name. However. it is necessary that Airasia should re-evaluate its schemes and concentrate on nucleus values and competences. For this why. AirAsia should reconsider their market and specific paths to obtain value other than monetary value and last the competition. From this survey. it is possible to state that still there is some other option to spread out this company. Adding new path and presenting concern category suite may be suited option for AirAsia for farther growing.

3. 2 Recommendations

To stay leader in the market in functioning clients. AirAsia has to re-evaluate their current scheme. Recommendation for betterment can be outlined as follows: AirAsia should do any major alterations to their scheme after proper proficient and feasibleness survey to avoid unneeded hazards. Oil monetary value is a large factor to low menu air hoses. So this company should do longer contracts with fuel providers for more stableness As Airasia operates their fight really often. so they should hold a spare aircraft at each location to avoid holds. AirAsia should see environmentally friendly operation system every bit such as C countervailing to salvage environment.

REFFERENCE

Daniels. J. D. & A ; Radebaugh. L. H. ( 1998 ) . International Business ‘Environments and Operations. 8th edition. Addison-Wesley. USA. Peng Mike W. 2006. Global Strategy. Thompson. United States
Porter Michael E. 1998. Competitive Advantage. The Free Press. United States. Web sites:
World Wide Web. airasia. com
World Wide Web. navitaire. com/res