1.0 Executive Summary
This study examines the extensive strategic analysis of AirAsia Berhad that has enabled it to sustain its competitive advantage as Asia’s leading low cost carrier (LCC). The study demonstrates the diverse business-level, corporate level and competitive strategies of AirAsia Berhad, played crucial roles in the LCC to successfully penetrate the under-served market segment of the airline industry within the ASEAN region. An in-depth analysis using a wide array of academic resources, relevant financial, legal and management resources and authorized websites, including face-to-face interviews were used to provide a more consequential comprehension on the varied business and international strategies that were implemented by AirAsia Berhad. This research exhibits critical analysis pertaining to the current macro environment of the aviation industry which includes the PEST framework and Porter’s Industry Analysis. The competitive environment analysis for AirAsia Berhad is thoroughly scrutinized to examine the driving determinants that attributed to the organization’s competitive advantage in the industry. Further analysis using the BCG Matrix, lends evidence to the successful growth of the organization. Additionally, the international strategies that were implemented exhibit the foresight of the airline. The study concludes by adopting the balance scorecard framework to evaluate the organization from four pertinent perspectives of an organization which includes financial performance, customer knowledge, internal business process and learning and growth.
2.0 Introduction of AirAsia
2.1 Company Overview
AirAsia Berhad (AirAsia) is a leading Low-Cost Carrier (LCC) in the Association of Southeast Asian Nations (ASEAN) region. The Group focuses on providing high-frequency services on short-haul, point-to-point domestic and international routes. The Group implemented the low-cost carrier business model in the ASEAN region when it acquired the then loss making AirAsia from its Malaysian owner DRB-HICOM Berhad for a token of RM1 (USD0.25 cents), and agreed to assume the debts of the company. AirAsia was resurrected, re-branded and re-launched as a low-cost carrier following the acquisition of the Company by Tune Air Sdn Bhd in December 2001. With the drive and determination by Dato’ Sri Dr Tony Fernandes and with the support of his partners, the AirAsia Group (including its Thailand and Indonesian affiliates) operates a fleet of 90 aircraft and flies to more than 60 destinations from hubs in Malaysia, Thailand, Indonesia and in the upcoming future, Vietnam. AirAsia operates more than 3,500 flights a week and in its short history, has ferried more than 90 million guests. AirAsia offers a simple service at fares lower than those offered by other full-service airlines. It was modelled on U.S.-based Southwest Airlines and Dublin-based Ryanair. AirAsia was established to create a new aviation product in Malaysia, revolutionize air travel, and grow the local aviation market by providing low fares so more people can fly. AirAsia now flies to over 60 destinations in Malaysia, Thailand, Indonesia, Singapore, China, Philippines, Brunei, Cambodia, Laos, Vietnam and Myanmar. It also formed 2 successful joint ventures in Thailand through Thai AirAsia, and Indonesia through Indonesia AirAsia, expanded its fleet from the two to twenty eight. To date the AirAsia group, has carried over 35 million guests. By serving the underserved market segment has propelled AirAsia’s popularity with the masses. With over 130 routes linking three continents, Asia’s largest low-cost carrier is proud to be a truly ASEAN carrier, linking communities, cultures and cities across this diverse region by enabling affordable and convenient travel, stimulating regional and local economies and realising the ASEAN dream of integration. The Company and Group CEO Dato’ Sri Tony Fernandes have won numerous local, regional and international awards...
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