2.1 Strengths. We must consider the following series of factors to assess the bargaining power of suppliers. AirAsia launched their new event ticketing system called AirAsia RedTix On March 20, 2010, targeting on non-airline flight tickets such as events, sports, and music. In this situation AirAsia should not think about diversification. As I discussed above, a good number of the full service airlines have or planning to create a low cost subsidiary to compete with Air Asia. Presently there has been excess capacity on many routes; as a result, airlines have to participate in price wars in order to attract customers at all costs. As I discussed above people have negative perception about LCC. The first point is to be the best company to work for whereby employees are treated as part of a big family. AirAsia has strong presence in Asian region as compared to other low cost carriers. The slogan “Heart of Malaysia, Connecting Asia” represents all the elements mentioned above to represent AirAsia through the form of corporate advertising. Boeing. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. This plan developed by first line manager such as supervisor. Because of deregulation, airlines have been largely free to negotiate their own operating arrangements with different airports, enter and exit routes easily, and to levy airfares and supply flights according to market demand. Planning is one of the most important project management and management techniques. 1.4 Strategic Problems One of the strategic problems faced by AirAsia is sales shock that arises from seasonal demand, political unrest or market downturn. AirAsia Strategic Management 1. AirAsia Strategic Implementation Page 32 V. STRATEGIC CONTROL AND EVALUATION Page 33 i. SAFS Evaluation Framework Page 33 ii. Population of Asian middle class is increasing. At start, it may be a good strategy for AirAsia not to have its own maintenance, repair and overhaul facilities. Get in touch with our dedicated team to discuss about your requirements in detail. But now with hubs in Malaysia, Thailand and Indonesia and 97 planes currently owned and over 100 planes to be received in the next few years, AirAsia have to make sure proper and continuous maintenance of the planes which will also help to keep the overall costs low. Manager look for as many alternatives to solve the problem. Advertisements on television are expensive but effective to increase the brand image, so Air Asia may advertise on the television. It is plan with time frames extending beyond 3 years. In that strengths may consist of strong financial position, modern technology etc., whereas weaknesses may be an ineffective reporting system etc. Rising fuel prices have made operational costs high for the whole industry. AirAsia Planning and Decision Making Type of plan. The step five of planning process is select the best solution which is select the best alternatives that gives most advantages and fewest disadvantages.Air Asia choose the best solution is upgrade their facility so that can let their customer more comfortable. June 22, 2020 by Russell Furze, CSI. Thus, the threat is low for the industry. but still most parts of these countries are under served. The four is develop plan that are specific but flexible which means although the company made the plan to achieve goal ,if got some problem must change and discuss, don’t rigid to follow the original plan. Published Date: 23 Mar 2015. Heart of Malaysia emphasizes on the fact the company was found in Malaysia … Strategic Management: Airasia Strategic Management Content. Example Air Asia choose is lower the fares. Strategic Planning: Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended … but still most parts of these countries are under served. Market penetration and market development strategies require less money as compared to diversification strategy. The second type of plan is tactical plans. It is one of the famous company in Malaysia. Despite this, the airline industry has proceeded along the path towards globalization and consolidation, characteristics associated with the normal development of many other industries. Operated by AirAsia X. If there is terrorism happen in the area where AirAsia operates, it results in stopping their flights to ensure safety of passengers as well as the plane. Although it is rational but some time some customer change their ticket but no need charge the fees, so they not accurate and not follow the mission. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. It has done this through the establishment of alliances and partnerships between airlines, linking their networks to expand access to their customers. It is plans that are clearly defined and no room for interpretation. Every decision making process produces a final choice. Some countries have deregulated or start deregulating their Airlines, for example The United States, Australia, and to a smaller extent Brazil, Mexico, the United Kingdom and Japan. If AirAsia change to Boeing again, then the cost will be high, because training cost for staff to go well with the aircraft features must be offered. The cost of setting up of offices, leasing or buying aircraft, hiring pilots and other staffs incur a high cost. The company might have to recruit new employees who have knowledge about the new business. Aims: To help course participants consider the fundamental areas within management. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Example when Air Asia airplane got some emergency problem , then manger should made a clear decision to solve the problem. Our academic experts are ready and waiting to assist with any writing project you may have. Deregulation is also stimulating competition, such as that from small, low-cost carriers. A number of factors are forcing airlines to become more efficient. • To be able to provide affordable airfares, at the same time promoting Malaysian hospitality and the local food. AirAsia has strong presence in Asian region. It is long term and apply to entire organization. Planning is preparing a sequence of action steps to achieve some specific goal. AirAsia has strong position in Asian market. The step six of planning process is implementing the plan which means decide who will be involved determine, what resources need, how the plan be evaluated and how reporting will be handled. AirAsia's local presence in countries such as Indonesia (Indonesia AirAsia) and Thailand (Thai AirAsia) has effectively elevated the brand to become a regional brand. There are upcoming sports events like 2011 Cricket World Cup in India, Sri Lanka, Bangladesh, and 2012 Olympics in London. To help reduce the cost, advertisement time may be made shorter and advertisements may not be aired very frequently. Increasing delays and missed connections mean we all seem to be spending more time in airports these days. Other than that, the technology used by Airbus is the most advanced, so AirAsia have to rely on the Airbus model. In addition, flying from point to point can extremely reduce cost of the airline. *You can also browse our support articles here >. COVID-19 has fundamentally changed member and … Disclaimer: This essay has been written and submitted by students and is not an example of our work. Ads on Channels like BBC, National Geographic will work a lot. Pictorial Representation of Additional Routes: On 27 September 2008, AirAsia has on its list 106 new routes to be added to its current list of 60 over the next few years. When we don't understand how a price system works, we're more likely to feel like we're getting ripped off. Air Asia analyze and evaluate the environment after set their objectives like do survey. It is Asia's first "no-frills" online financial services portal. In a deregulated market the entry barriers for new entrants are lower. hailand ength of 1,533. The competition, together with pricing freedom, means that new entrants often take market share with highly cheap rates that, to a limited degree, full service airlines must match. AirAsia engages in direct sale through web site and call center. So, low switching cost attracts new entrants. This is clearly known as it has very strong links with the governements and airline industry leaders. So the power of supplier is strong. Airline is the fastest way to travel from one destination to another thus there is no Perfect Substitute available. It operates more than 3,500 flights a week. Customers can switch to other airline easily that makes the industry competitive. To cover these fixed costs airline companies have to gain more market share. Example , Air Asia need to plan a long term plan to achieve goals in this period of economic instability. AirAsia and her leadership have displayed a targeted and definitive strategy since their acquisition of the struggling AirAsia company in the early 2000s. -----Page 5 Step 3 Identify the organization’s external opportunities and threats. Successful airlines will be those that continue to tackle their costs and improve their products, thereby securing a strong presence in the key world aviation markets. Commencing in 1996, within fifteen years, AirAsia managed to expand its operations into another ten countries. We are here to help you our best in any way. Once objectives are established, manager must analyze their current situation and environment (internal& external)to determine what resources are available. The last is develop contingency plans and strategies. 4. The Company operates a fleet of 90 aircraft and flies to more than 60 destinations from hubs in Malaysia, Thailand and Indonesia. It will be 700 million by the end of 2010. Yet even before oil prices skyrocketed, the airline industry was at a low point. Help in reviewing the strategic dynamics and shifts in the industry. AirAsia is one of the award winning and largest low fare airlines in the Asia expanding rapidly since 2001. The third point of making decision to be ineffective decision is higher levels of uncertainty in today’s business environment. It is obstacle that males achieving a desired goal or purpose difficult. Market penetration and market development strategies only grow existing resources to get more profit or bigger market share, and usually the budget for these strategies are mostly taken from marketing budget. The third type of decision is strategies decision which means deals with long term plans which is important for growth and survival of organization. On 2 December 2001, former Time Warner executive Tony Fernandes's company Tune Air Sdn Bhd purchased the heavily-indebted airline for the token sum of one ringgit. Looking for a flexible role? Analysis of Air Industry Using Porter's Five Force Model: Before we proceed further in exploring the strengths and weaknesses of AirAsia, it is important to keep an eye on the potential opportunities and threats of Air industry. The other away is set a new objective and effective to follow the goal that is the first important thing. AirAsia declared a three-year partnership on 5 April 2007, with the British Formula One team AT&T Williams. AirAsia’s experience in managing airlines and its expertise in low-cost formulas are exemplary and may benefit a merger with MAB, which has been reported to be relatively less cost-efficient. This is a main limitation on profitability for established carriers, which tend to have a higher cost base. AirAsia has some weaknesses but these do not seem to be very dangerous. If you do it effectively, you can reduce much the necessary time and effort of achieving the goal. AirAsia has the distinction of being the largest airline in terms of destinations and fleet size in its home country Malaysia. Thus the buyers may be able to influence the airlines to reduce their prices. Tony Fernandes (CEO) announced a five-year plan on 27 December 2006, to further improve its existence in Asia. Correction and Actions Discrepancies Page 35 VI. Through its idea of 'Now Everyone Can Fly', Air Asia has introduced a revolution in air travel with more and more people around the region choosing Air Asia as their preferred choice of transport. If you are unsure about what you exactly need, DAVAO: After establishing AirAsia Bhd on a strong footing in the Asian aviation market for the past 16 years, its Group Chief Executive Officer, Tan Sri Tony Fernandes plans to consolidate the low-cost carrier Southeast Asian units under one listed holding company. Strategic Management: Airasia Strategic Management Content. It done for a period of 1-5 years. Aircraft. In Air Asia have set their objective like made their ticket price more cheaper and provide better service. A good number of the full service airlines have or planning to create a low cost subsidiary to compete with AirAsia and other low cost carriers. Example customer is the first, then is distance , price, time, and the last is location. 737-300. Thus it has a great opportunity to capture some of the existing customers of full service and other low cost airline's customers. The company has a current fleet of ninety-two aircraft that include Airbus A321neo, Airbus A320neo and Airbus A320-200. Air Asia Strategic Management 1. a) AirAsia’s vision: • To be established as the leading low-cost carrier in the Asian region. The total AirAsia fleet (including Thai AirAsia, AirAsia X and Indonesia AirAsia) consists of the following aircraft as of 14 July 2010, 52 with AirAsia, 11 with Indonesia AirAsia, 15 with Thai AirAsia, 4 with Indonesia AirAsia, 6 with Thai AirAsia. While a strong foundation does not guarantee a solid house, it is the only basis upon which to build. For each alternatives, manager will look at the advantages or disadvantages. Example manager must trust their worker or employee when they made some decision. AirAsia acquired the then Non-operational Awair in 2004 with a 49% stake in the airline. Quantitative Strategic Planning Matrix (QSPM) Page 28 IV. The low fares provided would be proficient enough to attract a large number of customers who are price sensitive. The fluctuation of demand has negatively affected on the operating revenue. Some countries have deregulated or start deregulating their Airlines, for example The United States, Australia, and to a smaller extent Brazil, Mexico, the United Kingdom and Japan. Air Asia can increase its brand image by promoting low-priced, on time and safe travelling experience campaign. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of EssayCompany. The fourth type of plan is long term plan. AirAsia use Airbus models aircraft. What Is Blue Ocean Strategy. SHARES. Then the second point is create a globally recognized ASEAN brand. The first type of decision is organizational decision which means made by managers within their authority in accordance with organizational such as goals, policies, procedures, and strategies. Setting up airline business requires huge investment. SWOT analysis of Airasia Strengths Firstly, Air Asia has indeed a strong management team. Strategic management has played a key role in the success of many business organisations in the world including airlines and AirAsia is no exception. We're here to answer any questions you have about our services. The step seven of decision making process is implementing the decision. Example Air Asia lower fares because can made more customer buy and increase profit. Currently they are operating from three countries Malaysia, Thailand, and Indonesia and covering several destinations in China, India, Sri-Lanka etc. It cover short time period. Decision making can be regarded as the mental processes resulting in the selection of a course of action among several alternatives. A320-200. All work is written to order. In this article we will discuss about strategic planning, alternatives and implementation in an organization. It is known for its cheap and affordable price to various destinations. They had achieved the goals but the second point they haven’t achieved it because in this strong competitive era , too many company like Malaysia Airlines and Tiger Airways also want to be the globally recognized ASEAN brand, but they will work hard to achieve their goals. Established on 8 December 2003 as joint venture with Shin Corporation. Following is the distribution strategy of AirAsia: AirAsia stands for low pricing and a no frills policy. In 2008-2009, Air Asia got many problem that made their company loss. aIrasIa JaPaN Kaz joined AirAsia Japan in August 2011 as Chief Executive Office when it was founded. This is a threat to all airlines especially low cost airlines that tries to keep their cost as low as possible. Strategic industry dynamics. It is long term and apply to entire organization. In airline industry customer's priority is to look at price and flight schedule that suits them the best when buying air tickets. It also a broad plans. For diversification huge investment is required, because the company might have to build a factory or buy/rent new premises. Planning is also crucial for meeting your needs during each action step with your time, money, or other resources. In the leisure market, the availability of large aircraft such as the Boeing 747 made it convenient and affordable for people to travel further to new and exotic destinations. Example ,Air Asia wan to be a globally recognized ASEAN brand. Besides, intense competition in the industry also serves as a threat to AirAsia. Strategic planning during COVID-19. AirAsia engages in direct sales through its web site and call centre. If Air Asia want make their customer more comfortable, then the best away is buy the new and bigger airplane. Example they want reception customer about 100million a day. Its profit margins attract many new competitors. AirAsia try to cover the Asia region market first before they try to serve people all around the world. The first one is mission statement & objectives of organization are not clear and precise enough for planning which means the company not follow their step to achieve the goals , it will affect all organization progress, example Air Asia want charge the several fees if customer booking already the ticket but suddenly want change. The Asean super app for booking flights, hotels, activities, food, unlimited deals and so much more! Asia’s leading airline was established with the dream of making flying possible for everyone. Please click this link to view samples of our professional work witten by our professional essay writers. By sponsoring these events AirAsia can further improve its image. … This can be done by applying porter's five forces on the air industry. Strategic Management: Airasia Strategic Management Content Step 1 Identify the firm’s existing vision, mission, objectives, and strategies.-----Page1 Step 2 Develop vision and mission statements for the organization. In the past decade, air travel has grown by 7% per year. It offers long-haul services from Kuala Lumpur to Australia and China using an Airbus A330-300. AirAsia’s mission: • A low cost airline carrier that offers five-star service with 95% of on-time performance. 1.4 Strategic Problems One of the strategic problems faced by AirAsia is sales shock that arises from seasonal demand, political unrest or market downturn. The output can be an action or an opinion of choice. Fernandes advanced to engineer an outstanding spin, turning a profit in 2002 and introducing new routes from its hub in Kuala Lumpur International Airport. For more details, view our copyright notice. The main purpose of using airline services is to reach the destination. Decision making process is very important to any company. STRATEGY Strategy-Customer Strategy that AirAsia uses is the low-cost strategy for everyone can fly with AirAsia. Choose the best alternatives and with the highest total weight and with the most advantages & fewest disadvantages. Currently they are operating from three countries Malaysia, Thailand, Indonesia and covering several destinations in China, India, Sri-lanka etc. It might happen in many ways of terrorism either in certain countries or it might happen in the plane itself. Example lower fares can make more customer come to buy , location no far than 700km, time about 2-3 hours. With a fleet of 72 aircrafts, AirAsia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand, and Indonesia. Sometime some manager cant not get incomplete information so he will made wrong decision. Expansion of the AirAsia network in a prudent and disciplined manner. The Strategic Planning of AirAsia Airline AirAsia fleet (including Thai AirAsia, AirAsia X and Indonesia AirAsia). The strategic plan is to combine the values, mission and vision of the company into a motto which can help stabilize the reputation and financial strength of the company. Assigning a weight to each item places the items in the correct priority order of their importance in the decision making process. Example, they promotion and discount the ticket to let more people can fly. It is a message that is well understood by each AirAsia employee and considers it that this is their culture. As, if your competitor is in a position to offer good rates and customer service, than you are simply out of the way. AirAsia have been aggressive on branding. The step four of decision making process is developing alternatives. Example identify advantages or disadvantages of lower fares. AirAsia opened a 2nd hub in 2003 at Senai International Airport in Johor Bahru near Singapore and started its 1st international flight to Bangkok. Can AirAsia effectively compete in long-haul air travel given the nature of its existing strategy and the nature of the cost advantages that underpin AirAsia’s existing strategy? Step 1 Identify the firm’s existing vision, mission, objectives, and strategies.-----Page Step 2 Develop vision and mission statements for the organization. The first of effective decision making is provide time for decision to be made which means manager should not rush and be pushed to make a decision, especially crucial. External environment included PEST which is policies, economic, social, technology and competitor. The strengths, weakness, opportunities and threats for AirAsia are as follow: AirAsia operates a single type of aircraft, the airbus model. One common perception is that they may compromise safety to keep costs low. Published: 7th Jun 2017 in If you need assistance with writing your essay, our professional essay writing service is here to help! The fifth type of plan is short term plan. In my opinion, any company must be planning and decision making because if any company loss any one , will made the company not direction, no achieve goals, and other. It engages in an anchor pricing strategy in its marketing mix, which creates a base for pricing all operations carried under the AirAsia umbrella. Air Asia sometime will think that plans will use many costly and if the plan no success will wasting time , so in 2008 their company did not get mush profit. -----Page 6 Step 5 Construct an … AirAsia Price/Pricing Strategy: Following is the distribution strategy of AirAsia: AirAsia stands for low pricing and a no frills policy. Activities in Strategy Implementation Page 31 ii. The fourth of effective decision making is learn from past decisions which means managers should look at decision that worked and decision that did not & use them as a guide. After I research this company ,I learn more about planning and making decision. In this case study, AirAsia’s business plan and strategy, sustainability, cost and competitive advantage it has and its management style has been discussed in details. For airlines, the future will hold many challenges. This is partly contributed by the diverse background of the executive management teams which consists of industry experts and ex-top government officials. Tune Hotels.com is a hotel chain established by AirAsia CEO Tony Fernandes. Passengers have some negative perception about low cost carriers. To keep stronger position in the market AirAsia has to adopt combination of market penetration and market development strategies. Air Asia list many alternatives like connect to other company, let their worker learn more language and upgrade their facility. Because of that AirAsia has a lot of potential to grow, but grow sensibly and grow at the right pace. In airline industry fixed cost are high, for example finance cost, lease cost, and staff costs. In 2006 A new budget terminals, the 1st of its kind in Asia was opened in Kuala Lumpur International Airport. This is the logo and the organization which I interested and I want to intro the planning process and Decision Making in this company. QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM) FOR AIRASIA Current situation AirAsia best strategic alternatives being The four type of decision is tactical decision which means deals with routine and operational activities. Maximise Shareholders' Value. Scheduled airlines carried 1.5 billion passengers last year. The airline brand is displayed on the helmets of Nico Rosberg and Alexander Wurz, and on the bargeboards and nose of the cars. January 2010. http://www.airbus.com/fileadmin/backstage/documents/od/January_2010.xls. Dissertation Samples (Written by Students), Please click this link to view samples of our professional work witten by our professional essay writers. Free resources to assist you with your university studies! Because the buyers are now able to compare the prices more easily and in view of no switching costs, they could choose whichever airline offers a low price. hai AirAsia as launched on ebruary 2004 t entur. Invest and enhance the AirAsia brand to increase investors' returns. AirAsia is a Malaysia-based company engaged in the provision of air transportation services. APS system will improve AirAsia's strategic and operational performances particularly in the inbound and operational activities (See Appendix 1). Company Registration No: 4964706. AirAsia can partnership with other low cost operators such as virgin to tap into their existing strengths or competitive advantages like brand name, landing rights and landing slots. The step eight of decision making process is evaluating decision effectiveness which means monitor or provide feedback on how well the decision has been implemented or is there any adjustment and corrective action need. http://biz.thestar.com.my/news/story.asp?file=/2006/12/27/business/16419327&sec=business, ^ AirAsia sponsors the Formula One team Williams. "AirAsia embarks on 2nd chapter". The important of planning involves like defining organization goals, establish strategies to achieve goals,and develop plans to integrate & coordinate work activities. Example manager must have self confidence when decide a high risk plan . In 2006, he was made Price of Air Travel however is a hurdle which let customers to think to take other available options. AirAsia is presently the largest customer of the Airbus A320. Besides, intense competition in the industry also serves as a threat to AirAsia … Ticketless travel, new interactive entertainment systems, and more comfortable seating are just some of the product enhancements being introduced to attract and retain customers. This plan is made by middle level management such as manager. There are resources to be evaluated before choosing a strategy, such as budgets, human resources, and network analysis. Page 3 Airasia: An overview • Vision: To be the largest low cost airline in Asia • Strategy: – Safety First – High Aircraft Utilization – Low Fare, No Frills – Streamline Operations – Lean Distribution System – Point to Point Network • Business Model: Low-cost-carrier 4.
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