Air Asia Operational Information Management in Strategy and Operations

Topics: Airline, Low-cost carrier, Strategic management Pages: 8 (2801 words) Published: February 12, 2009
Operational Information Management in Strategy and Operations: A Case of Air Asia to venture into Regional and International Markets 1.0 Introduction This study was intended to analyze the electronic marketing strategy on a selected budget airline based in Malaysia, Air Asia which aims to identify its potential future market segments. The study also explore on how current information systems strategy adopted by the Air Asia, in which could help the company to strengthen its position as a leading low cost airline and effective new market segment help their mission practically. Therefore, this consulting study would provide a microscopic analysis on the impact of current electronic marketing strategy development process as desired in the following sections. The first part of this analysis would distinguish the information systems development in Air Asia to evaluate the changes of its business conduct and ultimately enable this company to identify the strategic opportunities The second part would blended the value chain SWOT model described the internal and external audit based on the outcomes of value chain levels of the company The third part of this report would apply Porter's five forces to outline the nature of the competitive environment that the organization faces currently. At last, this report would conclude three strategic focuses (cost leadership, focus and differentiation) in pursuing its global strategies while recommendations were made based on the findings. 2.1 An Evaluation of Development of Electronic Commerce in Air Asia E-Commerce was a general term for the conduct of business with the assistance of telecommunications, and of telecommunications based tools as per illustrated in Figure 2.1 on an E-Commerce model. Undeniable, the airlines industry was among the most active in the adoption and application of Information Technology. Information Technology usage was expanding very fast, especially with incorporation of computer technology in reservations and ticketing system since the mid 1970's (Timmer, P., 1999). Air Asia was the first budget airline company which practiced Business to Commerce (B2C) transaction in the airline industry in Asia. Since Air Asia introduced online booking air ticket through its website in May 2002 and hence used computer network to conduct its business operationally, it had recorded about 40% of the total revenue which were made via Internet transactions. In the past, E-Commerce has been inhibited by high cost and complex procedures (Lauden and Lauden, 1998). Nevertheless, the concept of E-Commerce strategy defined by Air Asia was significant, the usage of Internet has transformed from an auxiliary communication media for large organizations towards an entrenched communication media, which the always neglected medium and small size organizations become possible in attracting online users, ultimately, businesses were then able to expand while keeping the overhead costs within control (Asian Airlines & Aerospace, 2002a, 2002b). Especially, the World Wide Web has had changed this scenario radically, due to the development of E-Commerce and new Internet technologies emerged, the connectivity over the Internet was cheap, increasingly secure, reliable and built on standards that make communicating with any one a straightforward task (Feldman, J.M. 2001). The development of E-Commerce strategy in a small airline company, such as Air Asia was not just only happened over night (Miller, M., 2002). The implementation on E-Commerce strategy in this company has been taken at least two and half years since its operations. Until recently, there was evidence that this company has recorded a significant contribution from online businesses, almost 40% of total revenues in the same registered year (Malaysian Business, 2002). Air Asia enabled to upgrade E-Commerce strategy because of the socio-technological changes. Internet was far beyond the effect of Information Technology, where the connection to...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Operations management Essay
  • OPERATIONS MANAGEMENT Essay
  • operations management Essay
  • Service Operational Management of Air Asia Essay
  • Operations Management Study Notes Essay
  • Air Asia Business Strategy Essay
  • Blue Ocean Strategy in Air Asia Essay
  • Strategies management Essay

Become a StudyMode Member

Sign Up - It's Free