PEST Analysis is the Political, Economic, Social culture and Technology analysis that a company does to determine the overall business environment. A PEST analysis is a look at the external environment of a company or a business that plays an important role in managing and decision making of a company. It is crucial for a company to consider its environment before relating with the public or customers. The PEST analysis examines the impact of each of the factor on the company. Thus, political factor considers the impact of legislatives changes, stability of the economy and event that related with the government and politics that may affect the business. Influence of economy, such as interest rate, stability of economy, inflation levels and such helps the company make better decision on how to operate their company effectively. Besides that, the social drive is a crucial part on PEST analysis. Creating and developing a social culture takes time and effort and a new motive driven company such as Air Asia has to develop me method on how to connect with the society’s lifestyle, demographics, and media. Technological point of PEST analysis relates with competing technology development with other competitors and effective information and communication between the market and the company.
Political Analysis mainly states about the aviation acts and regulation which needed by aviation company such as Air Asia to operate their business. The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. Political stability is inessential to create a safe economy market that enables the market to grow. Political issues may cause problems in the outcome of the company. Some of the political factors that may affect a company are events that affect the operation of the company; therefore regarding an aviation company such as AirAsia political events will affect the result of the company. Event such as political uncertainty in Thailand on 25 November 2008; when anti-government protesters recently blocked flights for a week in Bangkok’s main airport. This issues affects AirAsia’s political analysis’s because AirAsia as just newly opened franchises in Thailand AirAsia X which begun operating 2 November 2007. Another political issue that came abroad was the 2002 Bali bombings that occurred on 12 October 2002 in the tourist district of Indonesia. The attack was the worst terrorist attack in Indonesia approximately 202 died. This affected the whole flight aviation around South East Asia due to political pressure and death of tourist. Due to this mayhem AirAsia had to make security measure to secure the security of the flights. Government decided to take drastic measures due to this issue and highlight the Civil Aviation Offences Act 1984 (Act 307). Besides that, the 2009 flu outbreak worldwide has seriously affected the whole world causing serious damage in US, Europe and Asia. In Malaysia, a large flu pandemic subtype H1N1 has made an outbreak, therefore many airports had been closed due to this affect. Economic Analysis
In 2009, the world hardly managed to cope with H1N1 influenza pandemic. Even so the similar year the world witnessed a global economic slowdown that affected the economic stability. For AirAsia it was business as usual according to their financial statement 2009 AirAsia managed to produce 148% increase on operating profit RM447million that is approximately 22million passengers more than the previous year 2008. AirAsia is Asia’s largest low cost carrier with the widest route connectivity and the largest customer base. Where else while the economic is going through recession AirAsia managed to make a higher profit, this may due to their low cost carriers which passengers favorably choose. Air Asia is one of the businesses that have successfully adopted cost leadership through operational effectiveness and efficiency. The...
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