Tuesday, 13 September 2016

Case Study: Air Asia- Now Everyone Can Fly


1) Identify five (5) of competitive advantages used by AirAsia

-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).
-Operates scheduled domestic and international flights and is Asia's largest low fare, no frills airlines
-Pioneered low cost travelling in Asia which is then followed by Tiger Airways, Jetstar Asia, Nok Air, Lion Air and Cebu Pacific.
-The first airline in the region to implement fully ticket less travel and unassigned seats




2) Which of the Porter's generic strategies were applied by AirAsia in the case study and
explain with examples.

- The Porter's generic strategies that was applied by AirAsia is cost leadership. Air Asia is becoming a low-cost producer in the industry that allows the company to lower prices to customers. AirAsia is pioneered low cost travelling in Asia which is then followed by Tiger Airways, Jetstar Asia, Nok Air, Lion Air and Cebu Pacific. Also, AirAsia  operates in broad market. It operates scheduled in domestic and international flights and is Asia's largest low fare, no frills airline. 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.




3) Based on Porter's Five Force Model, analyze AirAsia's buyer power and supplier power.

Buyer power
Air Asia assessed by analyzing the ability of buyers to directly impact the price to pay for an item. As an example Air Asia giving  a low cost travelling to their customers and also with the world's lowest unit cost of US $0.023 (ASK). Usually airline industry has high buyer power because of customer have many choices.


Supplier power

Air Asia assessed by the suppliers' ability to directly impact the price they are charging for suppliers. For example Air Asia is currently the main customer of the Airbus A320. The company has place an order of 175 units of the same plane to service its route network by connecting all the existing cities in the region and expanding further. Usually airline industry has high supplier power as there are limited plane and engine manufactures to choose from

No comments:

Post a Comment