E-Commerce Air Asia

Topics: Airline, Low-cost carrier, AirAsia Pages: 15 (4555 words) Published: October 31, 2010
Importance of e-Commerce and m-Commerce
Corporate Appraisal
Competitive Advantages
5.1 Differences of m-Commerce & e-Commerce
6.1 Benefit of Microsoft Vista and m-Commerce to AirAsia
6.2 Benefit of Microsoft Vista and m-Commerce to Customers

1.0 Introduction
Purcel and Toland (2004, 241) said “Internet and Communication Technology offer the opportunity to reduce the barriers of distance, and give…. countries better access to global economy”. This is where e-Commerce comes into picture which covers electronics trading of goods and services, electronic fund transfer, online procurement, direct marketing, electronic billing, etc, through internet. It is very important for businesses to embrace the latest technology to conduct their business, whereby switching the traditional business models into a better model in terms of efficiency, productivity, profitability and competitiveness.

This report intends to analysis how the technology of e-Commerce and revolution of m-Commerce impacts airlines industry in worldwide, especially low cost carrier. The report begins by examining the strength, weakness, opportunities and threats (SWOT) for AirAsia by using Porter’s Value Chain; and analyses AirAsia’s competitive advantages by using Porter’s Generic Strategies model. The discussion then moves to review the characteristics of Mobile Commerce (m-Commerce), compare the differences between m-Commerce and e-Commerce. The discussion continues to review how Microsoft Vista can be applied to m-Commerce and the benefit to AirAsia and its customer. Lastly, summary and recommendations will be made to identify the strategies that AirAsia can stay competitive and maintain its market share.

2.0 Importance of E-commerce and M-commerce in Airline Industry According the finding of Gillan and Lall (2002), traditionally in airline industry, majority of air tickets were purchase through travel agent or call centers. By 2003, the numbers of population in Malaysia owning a personal computer has been increase to 18%, this technology enable the development of low cost carriers (LCC).

LCC pursued simplicity, efficiency, productivity and high utilization of assets to offer low fares. E-commerce helps LCC to simplify the process of purchase by online reservation and issuing of e-ticket, as such no middleman is required in this process. In terms of efficiency, LCC are able to perform real time transaction to a global customer for 24 hours a day and 7 days a week. The data provide in online booking combine with the right software will ease the business administration task to stored and categorized automatically, update in real time and accessed on demand. This is whereby LCC save cost on manpower to data entry this information. LCC also can fully utilize the resources of information such as booking seat, customer database to plan ahead their business strategy; this will help to minimize the empty seat and maximizes the sales of seat. E-commerce and m-Commerce also provide convenient to customers, they can easily compare the airline company to choose before purchase in terms of quality, price and availability. Customers will purchase upon their satisfactory after comparison; this business strategy is to create customer loyalty. The first successful and pioneered LCC was AirAsia in asia. It is also the first airline in the region to implement online reservation and fully ticketless travel.

3.0 Corporate Appraisal
Porter’s (1985) Value Chain and SWOT Analysis

In business, we can say that people take raw input (for example, resin) and “add value” to convert it into something that customer are willing to pay money for( fo r example, plastic container). The more value you added, more customers are ready to pay a good price for you product or service, and keep buying from you. In year 1985, Michael Porter...

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