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A presentation on Air Asia Strategic Management for Past, Present and Future
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Partha Pratim MahantaDibakar SinhaDipankar Nath
Pranjal Pratim NeogSamiron MoranAbhijit Ramchiary
CASE STUDYPartha Pratim MahantaDibakar SinhaDipankar Nath
Pranjal Pratim NeogAbhijit RamchiarySamiron Moran
MBA 3rd SEMESTER SECTION- B
25-5, Block H, Jalan PJU 1/37Dataran Prima, 47301 Petaling JayaSelangor Darul Ehsan, Malaysia
OBJECTIVES
To show the profile of our company i.e. Air Asia.
To know the business strategies and operations of Air Asia by using different strategy models.
To show you the future of Air Asia by SWOT analysis.
To show you some of the future planning with reference to future growth.
Our 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.
AirAsia
Our Mission :To be the best company to work.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.
Asia's leading airline. It was established in 1993 with the dream of making flying possible for everyoneHeadquarters : Sepang, Selangor and MalaysiaNo. of planes (including Joint ventures) : 78 planesNo. of employees : 3,000 employeesNo. of customers : 16,000,000 per yearTurnover per annum : $60,000,000
CORPORATE PROFILE
CORPORATE PROFILE
Our Values :Safety First, Low Fare and No
FrillsHigh Aircraft UtilisationStreamline OperationsLean Distribution System and
Point to Point Network
Our Corporate objectives :Leanest cost structureMaximize shareholders valueSafetyPassion for Guests’ satisfactionTransparency Human Capital Development
WHERE WE FLY
Air Asia Airlines over the years
Dates and years Milestones18 April 2002 AirAsia became Asia’s first airline to go
ticketless.
10 May 2002 It introduced its first online booking.
19 August 2003 It introduced world’s first SMS booking.
8 December 2003 It’s first international flight took off to Phuket.
8 December 2004 It announced a joint venture with PT AWAIR of Indonesia.
21 February & 29 March 2005
Launched Go-Hostel & Go-Car.
Year 2007 The lowest cost in the World, 51 000 passengers per day, 54 planes.
Year 2008 Launch of Air Asia X.
FREQUENT FLIGHTS SAFETY FIRST LOW FARE NO FRILLS
COST OPTIMIZATION OPERATION GUEST’s CONVENIENCE
Business Strategy and Operations
The airline ensures fast turnaround of about half-an-hour which is the fastest in
the region
The airlines complies with the conditions of the
International Aviation Safety and is regulated by the Malaysian Dept. of Civil
Aviation
It’s fares are significantly lower than those of other
operators
Faster turnaround time Improving aircraft
utilization Crew efficiency Using one type of aircraft
for saving training cost
Ticketless service Internet booking Reservations and sales office Easy payment channels and
authorized travel agents Nationwide call centers
ANALYSIS
SWOT ANALYSIS OF AIRASIA
Internal Comp- -etence Factor
Exte
rnal
En
viro
nm
en
tal
Facto
r
STRENGTH
OPPORTUNITY
WEAKNESS
THREATS
Growth in revenue Low distribution cost Low operational costs Attractive ticket price Strong Brand presence in Asia Malaysian government support Diversification strategy + Joint ventures
Does not have its own maintenance, repair and overhaul (MRO) facility. Receives a lot of complaints from customers on their service.
Liberalization of ASEAN capital routes Asia’s middle class growth The “ASEAN Open Skies” allows unlimited flights among ASEAN’s regional air carriers beginning December 2008.
Increasing competitionIncreasing oil priceSubstitute productsIncreasing of maintenance cost
PORTER ANALYSIS OF AIRASIA
Potential Entrants
Suppliers
Substitutes
Buyers
IndustryCompetitors
Rivalry AmongExisting Firms
Bargaining Power of Suppliers
Threat of New Entrants
Bargaining Power
of Buyers
Threat of Substitute Products or Services
Many customers but high sensibility to prices.
Development of substitute products.
Medium
Low
Hard competition between Airbus, Boeing, ATR and others.
Medium
Train, bus and car travel are developing.Mediu
m
Full services Air Line might consider going low cost. Development of new low-cost companies.
BCG Matrix analysis of AirAsia according to the country that their fleets are operating
Indonesia
Brunei
Malaysia
Macau and
Thailand Singapore
FUTURE ANALYSIS
SWOT Analysis15 years Down the Line
STRENGTH WEAKNESS
OPPORTUNITY THREATS
Brand Name Long-term future Strong management team Strategy formulation and execution Low cost leader in Asia Excellent utilization of IT
Relatively high price High operation cost Investment cost in high technology Strong competition
Demographic advantages Growing of Middle Class Partner with other low cost airlines High fuel prices will squeeze out unprofitable competitors Air Asia will get inherent advantage in long distance travel Developed innovation technology
Entrance of other LCCs High fuel price decreases yield Accident, terrorist attack and disaster and affect customer confidence Aviation regulation and government policy Increase in operation cost in producing value-added services System disruption due to heavily reliance on online sales
FUTURE STRATEGY
Yield Management System (YMS)
Computer Reservation System (CRS)
Enterprise Resource Planning System (ERP)
Travelling planning
Reservations and ticketing
Frequently flyer program
Campaign management
Customer care
Business intelligence
Layered Adaptive Security
“Equivalent Visual” Operation
“Super Density” Airport Operations
Airborne Information Net
FUTURE PLANNING
To maintain the high level of profitability. 1. Act on the prices :
Expensive tickets to be distributed when the demand is high (week-end).
Prices increasing according to the demand. Cheap tickets available during the middle of the week.
2. Act on the cost : Offer more on board services/ products to the
passengers. Taxi booking service Internet WIFI access on board Newspapers Place advertisings on the plane’s cabin
Fund-raising Fresh money could be used to finance strategic
projects.
Invest in joint ventures. Maintain international development across Asia in
association with local budget airlines. It would increase the airline’s offer.
Diversification Acquire new know-how in a view to offer more service
to the consumer. E.g. To take over an online travel agency.
FUTURE PLANNING
Conclusion
The strategies of Air Asia focus more on the management and access of
information rather the creation of irrelevant airline services.
For this reason, Air Asia has developed a unique set of guiding principles
- simplicity, cost-efficiency and effectiveness.
Total commitment to these principles makes the airline services of Air
Asia very user-friendly to its customers.
SWOT analysis of AirAsia with reference to sustainability and future
growth shows more opportunities than threats.
AirAsia is fully determined to exploit these opportunities and convert
more threats into opportunities for success.
THANK YOU