AIRASIA: THE SKY’S THE LIMIT
WONG CHOO YENSCM 016372DIPLOMA IN ADVERTISING DESIGN
GEUAN KHIM KOOISCM 014562DIPLOMA IN ADVERTISING DESIGN
LEE JIA YANSCM 015157DIPLOMA IN GRAPHIC DESIGN
DATE: 10 OCTOBER 2012
LECTURER: MS. MAZLIZA ISMAIL
Table of Contents
Questions for Discussion
1. What are the micro and macro environmental factors that have contributed to the early success of AirAsia?4
2. Discuss the micro and macro factors that would affect AirAsia’s performance in the current competitive environment described in the case?7
3. By focusing on low prices, has Airasia pursued the best strategy? Why or why not?9
4. Given AirAsia’s current situation with bigger competitors following its business model, what other recommendations would you make to CEO Tony Fernandes for the future of his company?10
Questions for Discussion
1. What are the micro and macro environmental factors that have contributed to the early success of AirAsia?
Micro environmental factors deals with the actors that are close to the company that affect its ability to serve its customers – the company, suppliers, marketing intermediaries, customer markets, competitors and publics (Kotler and Armstrong, 2012). The Company
AirAsia was founded in year 2001 by CEO Tony Fernandes and his three partners. Fernandes is a strong believer in leading by example whereby he sets the company’s mission, objectives, strategies and policies together with his team on a cooperative corporate culture. Besides that, Fernandes is also a humble person as he is usually working alongside his team as a crew member or baggage handler. By doing that, it allows him to get to know his staffs better and listen to customers’ feedback. As a CEO, he is very responsible as he gives all his staff his mobile telephone number to ensure that he is accessible to them.
AirAsia collaborates with partners to fulfil their customers’ needs although they have limit resources. For example, some of the travelers are uncomfortable with making their bookings through internet, therefore AirAsia appoints the authorized travel agents to accomplish the travelers needs. As for those who does not have credit cards, they have an option to pay for their tickets by cash at any Alliance Bank branch in Malaysia. Competitors
In 2001, the domestic market was dominated by Malaysia Airline System (MAS). However, AirAsia’s strategy of low-cost air travel offers savings of up to 60% compared with MAS’ prices which enables them to fulfil their company’s tagline of “Now everyone can fly” which reflects to the company’s promise to their customers.
The improvement of media coverage on LCC’s helped consumers to understand the no- frills concept. Besides that, the Internet also provided AirAsia with the opportunity to reach more customers through online booking via their official website.
Customers are the most important actors in the company’s microenvironment. AirAsia fulfils the consumer market by providing them a cheaper alternative of travelling via their airlines. They also provide convenience to customers in booking tickets for their travelling purposes through their website, and also make available travel agents to assist the customers to make their bookings through cash. Also, customers are able to pay for tickets using cash at any Alliance Bank branch in Malaysia.
Besides that, customers no longer look at flying as an expensive choice of transportation, but instead rather one of the economically justified ways of traveling is to domestic and international destinations.
Macroenvironment consists of broader forces that affect the actors in the microenvironment. It is a large force that...