Airasia Strategy Management

Introduction

I will introduce both industry and company I choose in this paper at the first place which are Low Cost Airline Industry and AirAsia Company.

Industry Background

Low Cost Airline Industry referring to the new type of airline carriers which providing cheaper fares than normal airline company, as fierce competition among airline industry, a number of small and medium airlines choosing to be lower fares as a selling point of advantages. A huge of customers just wants to reach their destination quickly and safely without advanced services, therefore, low-cost airlines became more and more popular.

Company Background

AirAsia is the awarding-winning low cost carriers (LCC) in Asia Pacific region, it was established in the year of 1993 and expanded rapidly since 2001, with a fleet of 194 aircrafts, and AirAsia Group operates both domestic and international flights to over 400 destinations across 25 countries. The Main hub of AirAsia is the Low-Cost Carrier Terminal (LCCT) located at Kuala Lumpur International Airport.

As the corporate philosophy of “Now Everyone Can Fly”, AirAsia believes that in the no-frills, low-fare and hassle-free that keeping high efficiency in every part of the business concept, more and more people choosing AirAsia as their favorite choice of transport.

According to Thompson, Strickland and Gamble (2011, p.29), a company’s value is the best way to illustrates that the beliefs, traits and behavioral norms of business company. The following will show the vision and mission of AirAsia values:

AirAsia Values

Vision To be the largest low cost airline company in Asia.

Mission Creating a work environment which treating employees as members of family.

Keep the lowest cost that everyone can fly with AirAsia.

Constantly advanced technology to reduce cost and enhance service levels.

 1.2 Porter’s Five Forces analysis of low cost airline industry

Porter’s five forces is very useful tool which enables analysis of the micro-environment of company Meanwhile Company is able to develop business strategy through understanding the five forces. The framework is showed as followed,

First of all, the low cost carrier business model has brought huge profit for low cost airlines hence high return market will attract competitors. The competition has been intense in low cost carrier (LCC) industries. In addition, the core strategy of cost advantages are copied easier by competitors meanwhile, there isn’t so much differentiation between services. Price still is main factor for competing. Direct head to