Host Country Political and Legal Environment Affect of Airasia in International Marketing

Topics: Low-cost carrier, Airline, AirAsia Pages: 18 (6038 words) Published: November 22, 2012
a. Introduction
b. Company bibliography
c. Entry mode to international market (through exporting, joint venture, franchising, licensing, etc)
d. How do the international market / culture, management styles and business system affect the company performance?
Do they have to adjust / alter their product or services to fit with the host country market needs?
How does the company face the competition?

e. How does a host country political and international legal environment or trade barrier affect the Malaysian companies in their international marketing activities?

Bagaimana sebuah negara tuan rumah persekitaran politik dan antarabangsa undang-undang atau perdagangan halangan menjejaskan syarikat-syarikat Malaysia dalam aktiviti pemasaran antarabangsa mereka? Bagaimana sebuah negara persekitaran politik dan undang2 antarabangsa memberi kesan kepada syarikat Malaysia dalam aktiviti pemasaran antarabangsa mereka? f. SWOT analysis of the company in term of their 4 Ps

(product, price, promotion and place)
g. Any others additional information
h. Conclusion
i. References

a,b,h - part 1
c - part 2
d - part 3
e - part 4(fathi)
f - part 5

each person choose one to do it n leave a comment which part u all do yea... tq

BUS 488 Strategy - T01
Question 1
AirAsia, which is one of the earliest low cost carriers (LCC) in Asia, has become a LCC since 2001. So far, it has expanded its network from Malaysia to Thailand to Singapore, Macau and even the Mainland China in 2006. In short, Air Asia “jumped out” from an intra-Malaysia and Thailand market to a “real Air Asia” in the continent. Thus, what are the possible core competencies to ensure that there is quantum leap to success? The internal analysis on the company below will answer the question.   Resources, Capabilities & Core Competencies Analysis

a)Accounting Ratio Analysis
In 2004, Air Asia’s earnings margin before interest and taxes (16.8), return on capital employed (14.6) and return on equity (37.7) accounting ratios were above the industry average – 14.5 is the industry average for earnings margin, 11.6 for return on capital employed and 21.2 for return on equity. This above average results indicates that the company has been managed well and thus is able to achieve high above-average returns. The increase in current ratio from 1.24 (US$49. 206 million / US$39.643 million)to 5.60 (US$230.024 million / US$41.099 million) also serves as a confident booster to investors and shareholders in that Air Asia’s solvency had strengthened and thus is able to fulfill its debt obligations. In fact, the debt-to-asset ratio in the last 5 years was low and decreasing too. As a matter of fact, in 2005, it was merely 0.14, which was comparatively lower than many low cost carriers. b) Finance Resources

Air Asia’s net profit ending Jun 2005 was reported US$29.2 million, a 126%increase year-on-year. The end of June 2005 financial summary showed that Air Asia, the leading low cost airline in Asia, had a huge reserve (bank and cash balances) of US$86.6million. This is the company’s strength as very few low cost airlines of similar size have such large reserves. With such huge reserves and low debt-to-asset ratio, Air Asia is thus capable of generating internal funds to finance any expansion. It is certainly Air Asia’s strength. c)Organization Design and Organizational Resources

Air Asia’s organizational structure is rather simple and flat as it involves a group of staff in the company reporting to one manager. This serves Air Asia well as the business requires a structure with fewer levels of management so as to achieve more consistency and cost reduction. In addition, the cost leadership strategy that the company adopted also allows Air Asia to focus more intensely on areas such as in/out-bound logistics, operations, marketing, services and customers. This in turn helps to create synergy and capability to deliver the full...
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