CHAPTER 1 COMPANY PROFILE

1.1 AirAsia Profile

AirAsia is a pioneer low cost carrier airline in ASEAN. With a route network

that spans through more than 20 countries, AirAsia believes in the no-frills, hasslefree, low fare business concept and feels that keeping costs low requires high efficiency in every part of business. Through the corporate philosophy of Now Everyone Can Fly, AirAsia has sparked a revolution in air travel with more and more people around the region choosing AirAsia as their preferred choice of transport. Together with the

associate companies, AirAsia X, Thai AirAsia and Indonesia AirAsia, AirAsia is

leading a way for developing low cost airlines and its promises to revolutionize the international market place

1.2 AirAsias Vision and Mission Vision : To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares. Mission : To be the best company to work for whereby employees are treated as part of a big family Create a globally recognized ASEAN brand To attain the lowest cost so that everyone can fly with AirAsia Maintain the highest quality product, embracing technology to reduce cost and enhance service levels

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1.3 AirAsias Values AirAsia makes the low fare model possible through the implementation of the following key strategies,

Safety First: Partnering with the worlds most renowned maintenance providers and complying with the with world airline operations.

High Aircraft Utilisation: Implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity.

Low Fare, No Frills: Providing guests with the choice of customizing services without compromising on quality and services.

Streamline Operations: Making sure that processes are as simple as possible.

Lean Distribution System: Offering a wide and innovative range of distribution channels to make booking and travelling easier.

Point to Point Network: Applying the point-to-point network keeps operations simple and costs low.

1.4 AirAsias Loyalty Programme BIG is the 'first of its kind' global loyalty programme where the customer earns BIG Points with every transaction to redeem FREE* AirAsia Flights. Members also enjoy priority booking, special offers and discounts exclusively as an AirAsia BIG Loyalty Member.

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1.5 AirAsias Achievement on 2011

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CHAPTER 2 EXTERNAL ENVIRONMENT ANALYSIS

External Strategy Factor Opportunities(O) The population of Asian 1. Large potential market 0,15 8 1,2 middle class is over 700 million by 2011. This Weight Ranking Score Comment

(asiafoundation.org)

creates a larger market and a huge opportunity for all low cost airlines in this region including AirAsia 2. ASEAN Open Skies Agreement 0,05 6 0.3 This agreement allows unlimited flights among ASEANs regional air carriers beginning December 2008. This will definitely increase the competition among the regional airlines. However, with the first mover advantage as well as its strengths in management, strategy formulation, strategy execution, strong brand and low-cost culture among its workforce, this agreement can be seen as more of an opportunity 3. New development in technology 0,15 9 1,35 Technologys one of the most important factor for a

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company, with using the newest technology, it can be a value-added especially for AirAsia, have to maximized IT and implementing ecommerce business. 4. Lifestyle changes 0,05 4 0,2 Nowadays, many people in AirAsia

likes travel around/abroad. This is an advantage for airlines company, because it means that the needs of air transportation will be higher 5. Consumer behavior which tends to prefer lower price 0,10 5 0,5 This is matched with the AirAsia because AirAsia is set to take low-cost flying.

Threats (T) 1. High fuel price 0,10 5 0,5 If the fuel price increases, there will be a risk of rising operational costs which

impact on flight fare.

2. The fluctuations of exchange rate currency

0,10

0,7

Most of the income of AirAsia obtained in rupiah . While purchases petroleum bought in the currency of dollars . Decrease in value of the rupiah against the dollar could cause the

potential loss . 3. Other airlines start to 0,15 9 1.35 Most of the full services

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cut costs to compete

airlines have or planning to create a low cost subsidiary to compete directly with AirAsia.

4. Terrorist attack, natural disasters, accident, etc.

0,10

0,7

Those are external factors that beyond the control of AirAsia and of course, it can be disadvantage for the company itself.

5. Users perception that budget airlines may

0,05

0,25

That kind of perception need to be solved quickly and properly by AirAsia because it related with the trust of using AirAsia

compromise safety to keep costs low

services. TOTAL 1,00 7,05

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CHAPTER 3 INTERNAL ENVIRONMENT ANALYSIS

Internal Strategy Factor Strenghts (S) 1. AirAsia has a very strong management 0,15 9 1.35 Good relationship between the stakeholders and the companys an advantage for AirAsia. So, the relationship and strong management should be maintained. 2. AirAsias brand name is well established in Asia Pacific 0,10 8 0.8 Their partnership with other service providers such as hotels and hostels, car rental firms, hospitals (medical tourism), Weight Rating Score Comment

team with strong links with government and airline industry leaders

Citibank (AirAsia Citibank card) has created a very unique image among travellers. Alliance with Galileo Distribution enables travel GDS System) agents (Global that from

around the world to check flight details and makes bookings have also contributed to their string brand name. 3. Air Asia is the low cost leader in Asia . 0,10 8 0.8

With the help of AirAsia Academy, AirAsia has successfully created a lowcost airline mentality among their workforce. The workforce is very flexible and high committed and very critical in making AirAsia the

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lowest cost airline in Asia.

4. The excellent utilization of IT . 0,05 8 0,4 The excellent utilization of IT have directly contributed to their promotional activities (email

alerts and desktop widget which was jointly developed with

Microsoft for new promotions), brand building exercise (with over 3 million hits per month and on the most widely surfed booking engines in the world) as well keep the cost low by enabling direct purchase of

tickets by consumer thus saving on airline agent fees Until this moment, AirAsia has a 5. Air Asia has a good reputation accidents rate in low 0,10 9 0.9 good reputation than any other company which is quite often have a mild or severe technical problem, in its operations. The level of accidents is still low. Weakness (W) 1. Limited level of services 0,15 8 1.2 Because the ticket price is cheap, service are provided limited to .

customers

Passengers who want service more , obliged to pay additional costs. 2. AirAsia receives a lot complaint from customers on their services 0,10 9 0.9 Examples of complaints are around flight delays, being

charged for a lot of things and not able to change flight or get a

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refund if customers could not make it. Good customer service and management is critical

especially when competition is getting intense. 3. Air Asia does not have its own maintenance, repair and overhaul 0,15 8 1.2 AirAsia have to ensure proper and continuous maintenance of the planes which will also help to keep the overall costs low. It is a competitive disadvantage not to have its own MRO facility 4. Limited human resources 0,05 5 0.25 Human resources is the

(MRO) facility.

important factor for a company which can help the company grow. So, AirAsia should be notice on this problem

5. Government interference

0,05

0,2

Theres still interference from the government and it can affecting the company activity.

TOTAL

1,00

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CHAPTER 4 COMPANYS POSITION

9 9

I
Up Concentration growth through integration 6 Middle vertical

II
Concentration growth through integration horizontal

III
Retrenchment Turn Around

IV
Cautiously Stability

V
Stability Nothing change strategy profit

VI
Retrenchment Cavtive Company

Low

VII
Concentric Diversification Growth

VIII
Conglomerate Diversification Growth

IX
Retrenchment Liquidation

Based on the calculation of EFAS and IFAS tables, in G.E. 9-Cell Matrix, AirAsia is in the upper lever with the strategy in concentrating growth through intergration horizontal. It means strategy of AirAsia shall involves expanding the AirAsia 's existing products into other locations and/or market segments, or increasing the range of products/services offered to current markets, or a combination of both. It amounts to expanding sideways at the point(s) in the value chain that the company is currently engaged in. With this horizontal intergration, AirAsia is able to choose from a fairly continuous range of choices, from modest extensions of present products/markets to major expansions -- each with corresponding amounts of cost and risk.

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CHAPTER 5 SUMMARY

The competition among airplane industries is very tough. Each Of Airplanes Company in the world trying to conduct some strategies to compete with another competitor in their industry. To compete with their competitor in the business environment, a company needs to make a strategy to achieve their long terms objective and can be successful for doing their business. AirAsia is one of the companies with good company strategic management and has a successful story in the airplane industry in the world. AirAsia now becoming the leading low cost carrier airline in the world and the achievement that AirAsia received to ascertain that AirAsia is one of the best airplane companies. The growing numbers or travelers worldwide can be the wonderful opportunity for AirAsia for running their business. The organization or company nowadays is faced with constantly changing external environments and needs to ensure that its own internal resources and capabilities are more than sufficient to meet the needs of the external environment. Organizations or companies do not exist simply to survive in the market place but want to grow and prosper in a competitive environment. In order to make sense of what is going on around them, firms, in this case is AirAsia must undertake an analysis of their external and internal environment. To be successful in the company management, AirAsia needs to consider the company ability and how to integrating it with the main factor in the internal and external factor. In conclusion, the external and internal analysis that AirAsia have is on of the major component to make AirAsia more strength in their business and can make they are able to compete with the same low cost carrier airline industry. Based on the calculation of EFAS and IFAS tables, in G.E. 9-Cell Matrix, AirAsia is in the upper lever with the strategy in concentrating growth through intergration horizontal. It means strategy of AirAsia shall involves expanding the AirAsia 's existing products into other locations and/or market segments, or increasing the range of products/services offered to current markets, or a combination of both.

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REFERENCES Chan, D. (2000). The development of the airline industry from 1978 to 1998 A strategic global overview. management development (Emerald journal): 489 Chan, D. (2000). Air wars in Asia: competitive and collaborative strategies and tactics in action. Emerald management and development 19: 483. http://business-strategy-competition.factoidz.com/strengths-and-weaknesses-ofairasia/ http://www.airasia.com/my/en/home.page

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