Competitive Strategy

Malaysian low-cost airline headquartered in Kuala Lumpur, Malaysia. named as the world's best low-cost airlinea pioneer of low-cost travel in Asia.AirAsia group operates scheduled domestic and international flights to 100 destinations spanning 22 countries. main hub:Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, AirAsia Japan and AirAsia Zest have hubs in Don Mueang International Airport, SoekarnoHatta International Airport, Clark International Airport,Narita International Airport, Ninoy Aquino International Airport and Mactan-Cebu International Airport respectively. AirAsia's registered office is in Petaling Jaya, Selangor while its head office is at Kuala Lumpur International Airport.Task 1- Background- AirAsia BerhadVisionTo be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares.

MissionTo be the best company to work for whereby employees are treated as part of a big familyCreate a globally recognized ASEAN brandTo attain the lowest cost so that everyone can fly with Air AsiaMaintain the highest quality product, embracing technology to reduce cost and enhance service levels

The key to delivering low fares is to consistently keeping cost low. Attaining low cost requires high efficiency in every part of the business and maintaining simplicity. Therefore every system process must incorporate the best industry practices.

SWOT Analysis

- structured planning method-to determine the situation faced by organisation

Internal AnalysisStrength : Unique resources that the organisation hasAirAsia- cheap air tickets cause they sacrificed in other sectors such asthere is no free in flight mealluggage weight limitprovide low cost courierPopular/ good reputation Tony FernadesUnique selling proposition- Everyone can flyLarger Fleet size as compared to other airlinesWeakness: Areas/activities which the organisation does not do well or resources it needs but does not possess.

Low On Time PerformanceFrequent flight delayed. Based on measurement performed by international agency of airline statistics Air Asia, On Time Performance (OTP) is below 80%In some Subsidiary as low as 69%.

Opportunities: Positive trends in external environmental factors- Frequent-flyer programThe airline has signed an agreement to start ajoint venturewith financial services firmTune Moneyto launch a programme called "BIG". Under this programme it will issue loyalty points to AirAsia customers and third-party merchants.

Holidays around the cornerPeak season for travellingMost of people will choose low cost courier to save on budget

External AnalysisThreat: Negative trends in external environmental factors

-The Malaysia Competition Commission (MyCC) has ruled in its proposed decision that MAS& AirAsias 2011 collaboration agreement violated the Competition Act 2010, and fined each company RM10mil.

- A lot of budget airlines in the business E.g. (Malaysia)AirAsiaFireflyMalindo Air

Lion Air to set up budget carrier in MalaysiaAirbus wins landmark order worth US$20bil from Lion Air, a challenger to AirAsia

Competitive StrategyQuality Sustaining Quality as a competitive advantageCustomers and continues improvement Satisfy customers need for qualityMay result an advantage that cannot be taken awayCurrent problems faced by customersFoodToo little selection of foodsHigh price for foodsPriceIts not a low cost flight ,a lot of addition to fares such as baggage fees,seat selection fees,meal fees.Every service is charged in the flightRent of blanketRent for blindfoldSeats are cramped

Tarnish AirAsias goal, to be the leading low cost carrier

Solutions in the futureBalance seats between business class and economy classProvide full information to customers about the fees that is required to be paidDo not charge customers with a low price flight fees but a high price in serviceSustaining competitive advantageEnables the organisation to keep its edge despite competitors' actions or evolutionary changesAir Asia charges flight for a low price.AdvantagesDefinitely improve the quality of the airlinesIncrease chances to be the leading company for airlines

DisadvantagesHigh maintenance costSome planes will not be available due to servicing for improvement-causing competitive advantage to declineCorporate strategiesOne that determines what businesses a company is in or wants to be in and what it wants to do with those businesses.Growth strategyStability strategyRenewal strategyGrowth strategyUsed when an organization wants to expands the number of markets served Concentration, vertical integration, horizontal integration or diversificationGrowth through concentrationFocuses on its primary line of businessIncrease number of products or services offeredIncrease number of seats and baggages allowedVertical integrationBackward or forward or bothBackwardGain control of its inputs by becoming its own supplier-Owns its own airplane factoryForwardOrganization becomes its own distributor and able to control outputsOpen its own airport under AirAsia.Horizontal integrationCompany grows by combining with other organization in the same industryAirAsia joins up with MAS to compete with other international Air Flights. Goals like this, to improve the countrys economyDiversificationRelated or unrelatedMerging with forms in different but related industries(related)Air Asia acquire food companies that is required for making pre-made food for flights.It is cheaper to own the food company than to do a partnershipUnrelated diversificationCompany grows by merging with or acquiring firms in different and unrelated industries.AdvantagesBoost the companies peformanceIn the long term,maintence cost will be reducedDisadvantagesRequired a long period of time to achive the strategyBefore strategy is achive,cost of maintainence is high.Stability strategiesAn organization continues to do what it is currently doing.

Not recomemded because companies need to look for strategies to compete in rapidly growing market. Renewal strategiesA corporate strategy designed to address declining performance.Retrenchment and turnaround strategy

Retrenchment strategyA short-run renewal strategy. For minor performanced problem.Cutting on unprofitable routes (to India or Europe)

Turnaround strategyA renewal strategy for situations when the organisations performance problems are more serious.Cooperating with other airlines (Air Canada, Virgin Air) to stay ahead from competitors Handing of rural routes to firefly because of lack of suitable equipments