This case study aims at evaluating the rationale of AirAsia’s strategic plan and how have these strategies been associated with its structure and system. It further aims at assessing the sustainability of the business model and its competitive advantage. AirAsia’s performance and business process management will also be discussed in details.
AirAsia- A Case Study
This case study aims at evaluating the rationale of AirAsia’s strategic plan and how have these strategies been associated with its structure and system. It further aims at assessing the sustainability of the business model and its competitive advantage. AirAsia’s performance and business process management will also be discussed in details. The case study will also discuss the culture and management style of AirAsia and its ability to address to the challenges faced by the company. Furthermore, the report aims at highlighting the expansions of AirAsia with future expectations. Background of AirAsia
Air Asia, an ailing, in debt, government owned airline was purchased by Tony Fernandes, a Malaysian Indian entrepreneur in 2001. Fernandes invested all his valuables and saving in purchasing this airline company that only possessed two Boeings and was deeply surrounded by many debts. Initially, when Fernandes purchased AirAsia, most of the leading entrepreneurs claimed that the airline won’t survive for long. Tony Fernandes appointed leading experts who possessed expertise in low cost airline strategies to reconstruct the business model of AirAsia. AirAsia was relaunched by the end of 2001 in Malaysia introduced as a low cost airline for domestic travels with three Boeings. Just after one year of his takeover, the company cleared all the debts it had and opened many new routes leaving behind the most dominating airline of that time, Malaysia Airlines. Within no time, AirAsia became a profit making firm from a debt ridden company. Mission Statement of AirAsia
The broad term mission of AirAsia is to gain global recognition as an ASEAN (Association of Southeast Asian Nations) brand and provide high quality products to its customers by reducing cost and enhancing the level of services provided. Its vision is to be known as the largest low cost airline whose objective is to let the passengers enjoy low fares with premium service in terms of safely, hospitability and simplicity. AirAsia also aims at integrating technology to cut down cost and enhance services for the valuable customers. Business Model
The competition between airline companies that provide full services and no-frills is getting intense across the world (O'Connel & Williams 2005). Businesses that excel high and dominate in the market tend to have a competitive advantage over others (Laudon & Laudon 2010). There are two main reasons of having a competitive advantage over other competitors, one having some special and unique resources that others cannot access and second having the ability to use the commonly used resources effectively and efficiently. The results of the mentioned reasons lead to profitability, productivity and growth of an organization. Low Cost Carriers
Low cost carriers (LCCs) offer low cost services to its passengers and in return provide ‘no-frills’ services to them. ‘No-frills’ means that the airlines eliminate all value added services such as meals and entertainment on flights. These facilities are made available to passengers travelling from full-service airlines. (Saha & Theingi 2009). AirAsia’s Business Model
AirAsia being a low cost airline follows the business model of Low Cost Carrier (LCC) for achieving its desired goals and objectives. A journal explains the sustainability of low cost carrier model by stating, ‘The LCC model is appropriate for the Southeast Asia environment. This is because the market environment in Southeast Asia remains favorable for the LCC model. Enormous, widely dispersed...
Bibliography: AirAsia. 2013. 'Corporate Porfile. from AirAsia ' Online at http://www.airasia.com/my/en/about-us/corporate-profile.page viewed on May 5, 2013.
Akan, O., Allen, R. S., Helms, M. M. and Spralls, S. A. 2006. 'Critical tactics for implementing Porter 's generic strategies. ' Journal of Business Strategy , 27 (1): 43-53.
Applegate, L. M., Austin, R. D. and Soule, D. L. 2009. Corporate Information Strategy and Management. New York: McGraw Hill.
Emerald Group Publishing Limited. 2007. 'Employee come first at high-flying Southwest Airlines: Model contrasts with the Ryanair approach to low-cost aviation. ' Human Resource Management International Digest , 15 (4): 5.
Fernando, Y., Saad, N. M. and Haron, M. S. 2012. 'New marketing definition: a future agenda for low cost carrier airlines in Indonesia. ' Business Strategy Series , 13 (1): 35.
Kho, C., Aruan, S. H., Tijtrahardja, C. and Narayansswamy, R. 2005. Air Asia - Strategic IT Initiative. The Univeristy of Melbourne, Department of Economic and Commerce, Melbourne.
Laudon, K. C. and Laudon, J. P. 2010. Essentials of Management Information Systems. Florida: Crashing Rocks Books.
O 'Connel, J. F. and Williams, G. 2005. 'Passengers ' perceptions of low cost airlines and full service carriers: A case study involving Ryanair, AerLingus, Air Asia and Malaysia Airlines. ' Journal of Air Transport Management , 11: 259-272.
Pitt, M. R. and Borwn, A. W. 2001. 'Developing a strategic direction for airports to enable the provision of services to both network and low-fare carriers. ' Developing a Strategic direction for Airports , 19 (1/2): 52.
Porter, M. 1985. Competitive Strategy: Creating and Sustaining Superior Performance. New York: The Free Press.
Saha, G. C. and Theingi. 2009. 'Service quality, satisfaction and behavioural intentions: A study of low cost airline carriers in Thailand. ' Managing Service Quality , 19 (3): 350-372.
Svensson, G. 2001. 'Glocalization of business activities: a "glocal strategy: approach. ' Management Decision , 39 (1): 6-7.
Please join StudyMode to read the full document