Analysis of External Environmental
In analyzing the macro-environment, it is important to identify the factors that might affect the AirAsia’s supply and demand levels and its cost. The external environment can be analyzed by conducting a PEST analysis and Poter’s 5 Forces model. Thereafter, an analysis of the industry and competitive environment of AirAsia will assist in identifying the main oppurtunities and threats.
PEST Analysis - Macro Environment
The PEST analysis is used to describe a framework for the analysis of a range of macro environment factors including the Political, Economical, Social, Technological environment.
The political influence on the airline industry is very relevant to the growth of the airline, specifically in the Asia-Pacific and ASEAN region. The important drivers of airline success in Asia is supported by government, most airlines in East and Southeast Asian countries had full or substantial state ownership, management, and control, often subsidized and protected by the governments from competition; with the pursuit of non-business goals, profits were often sacrificed for the sake of national objectives. The political environment in South East Asia for low cost airlines is benign and countries are trying to attract investment in their airline sector. The pressure is coming on to national governments because of high demand for services which was caused by the high annual GDP growth in the region. Some development countries like Myanmar, Vietnam and Cambodia, there are great enthusiasm among the government and regulators for inviting low cost airlines to operate, in order to connect the poorly served population as well as inbound tourists. In this environment, many new low-cost airlines have been set up in the increasingly liberalized regulatory environment. The markets are also getting to be very complex and challenging with a host of new entrants. b)
Asia’s rapid economic growth and sprouting...
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