Market Strategy and Recommendations to Enhance the USP

Topics: Airline, AirAsia, Low-cost carrier Pages: 11 (3782 words) Published: February 13, 2013
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Market strategy and recommendations to enhance the USP
Air Asia share price has been volatile, with the possible reasons for this volatility. Marketing: Discuss the Market Strategy and recommendations to enhance the USP by using Models and diagrams. Operation Management:

Analysis of prioritise operations issues which are of strategic nature for the company and possible solutions. Module Code: MGTM IM 002
Submitted to: Programme Administration Team (Kaplan Financial) Submitted by: Group 11
Group members Name: Student ID No.
Chanakya C0346816
Buddha C0364220
Musharaf C0361333
Saif C0360683
Submission Date: Friday 23rd April, 2010
Table of Contents
Table of Contents 2
1. Introduction: 3
2. Company Background 3
3. Meaning of Share Price Volatility: 3
3.2. Possible reasons for this volatility: 4
4.2. Mareketing Strategy of Air Asia: 8
4.3. Environmental Analysis of Air Asia on the basis of Porter’s Five Forces (Chart-3) 9 5.1. Air Asia Business Process 11
5.2. Air Asia prioritises issues: 12
5.3. Possible solutions 13
6. Conclusion 14
7. References: 14
1. Introduction:
The company chosen for this report is Air Asia assigned by Kaplan Financial and assignment requirements as follow: A report of no more than 3500 words
Possible reasons for the share volatility
Market strategy to enhance USP
Operational issues and possible solutions
2. Company Background
Air Asia was initially established in 1996 as a full-service regional airline offering slightly cheaper fares than its competitors. It was not performing well and its turning point was 2001 when it was bought by Tony Fernandes. Tony Fernandes restructured the company and re-established in Malaysia by enrolling some low cost airline expert like Connor McCarthy (formal director of successful European LCC Ryan air) in late 2001 as first no –frills, low cost carrier(“LCC”) in Asia, then it got huge success and become awards winner and largest low fare airlines in the Asia. Now Air Asia flies to over 61 domestic and international destinations with 108 routes with its own 72 aircrafts and operates over 400 flights daily. Air Asia believes in the no-frills, hassle free, low fare business concept and feels that keeping costs low requires high efficiency in every part of the business. Through its unique selling point (USP), “NOW EVERYONE CAN FLY”, Air Asia gained a revolution in airline business with more and more people choosing as their preferred choice of transport. 3. Meaning of Share Price Volatility:

Many of us use the word volatility in a loose sense, in a way that belies the accuracy with, which it can be calculated. In fact, volatility is a statistical measure of the scale of fluctuations in the price of a share, a commodity or a stock market index in the recent past. It is generally taken to be a good measure for the relative riskiness of an asset - the higher the volatility, the greater the risk of losing money. Volatility, however, is not a static thing. It fluctuates - sometimes quite sharply - over time. (Peter Temple 02.08.2007) 3.1 Air Asia Share Price Volatility:

As per Air Asia case study the share price of Air Asia has been volatile. Exhibit 5: Case Study
Price on
3Dec 2007
Price on
11 Jan 2008
Share Price
Air Asia
Period of Change in Share Price:
In a very short term of a period share price of Air Asia goes down by -16% in a period of 1 month and 1 week this is extreme change in share price so this is the sign of high volatility in share price. Air Asia Volatility from 2005-2009 (Chart -1)

3.2. Possible reasons for this volatility:
There are lots of reasons for share volatility here in our case study of Air Asia. We have calculated on the basis of each year that volatility graph of Air Asia shown above. Latest Information in Stock Market: Investing on share price needs lots of information about company’s...
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