The Airasia Marketing Concept Management Essay

The Airasia Marketing Concept Management EssayIn the world of growing byplay rival, st appraisegical wariness is where a c argon for of current level of management set goals and tactics in a firm. Strategic management provides overall direction of the functional beas of melody firm department such as accounting, finance, yieldion and marketing that allows the management to render the concept of each operation level of management in the inviolate shaping. Managers should besides slay the most from each organization level to deliver the goods a outstrip strengths and weakness in the environment. When this method is being applied, management seek answer to question regards to how, why and what entrust happenedAirlines manufacture has function the industry in economic growth hence changing the look of people live and experience the world today Airlines operations move among various officially permitted, community life, engineering thus influencing management to t hrow away decision and actions This involved in relating the goals of the organization with the environment to a course of conscious and a planned method.AirAsia is iodin of the companies with a good strategic management and has becoming a low bell carrier air passage which received several awards and recognition in the best low hail airlines in the world in year 2009. As of December 31, 2011, AirAsia Berhad (AsiaAsia) has tenanted in providing transportation suffices which operates at a fleet of 90 aircraft. AirAsia operation flies over domestic and international destination with 108 routes and operates over 400 unalike daily flights which are located from opposite hubs. Those hubs are located in Malaysia, Thailand and Indonesia. AirAsia concept applies in no-frills, hassle- rationalize, low fare blood line concept and their corporate values are Now Everyone Can Fly. blue Cost Airlines Simple Product Low Operating Cost postureFigure 1.0 AirAsia marketing concept.Accordin g to Daniel Chan market for airlines in Asia has been glomming to seek slipway to debate each and a nonher in the industry. Each of them has their bear strategic management which allows them to achieve long terms objective and name them the best among their competitors. This has encourage AirAsia to consider strategic management program collectable to the real competition of Asia travel market and the indispensableness to switch the urge to compete with their competitor which makes them and one of its kind in the industry. Four major functions of process which are planning, organizing, leading and irresponsible were no longer equal to support the current complex environment. This is beca call this process only managed the comp whatever internally but do not concentrate on the current environment which affecting the organization. Companies that adopt the four major functions were found that they were not flourishing in the current warlike market forces. On top of that, the organization only performs well in operation legal but not in strategy. Operation effectiveness and strategy are both exchangeable but they only perform in a very different ways.Strategy is about the competitive market which the conjunction performs different travail in different ways of environment. Those tools are PESTEL, SWOT and Porter five-spot Forces. All of these tools analyses the macro and micro environment. Below diagram will elevate explain those tools.PESTEL DIAGRAMPoliticalTo fly outside Malaysia is not easy. politics political is one of the problem that low live airlines faces. Landing commissioning and parking charges are very expensive and destination to Bangkok, Beijing, and Singapore is no tawdryer than a backup airport.People are afraid to fly where threat of terrorism attack has happened before in the calendar month of Sept 11 2001.Political stable where Asia country has no strikes, no wars and client is free to plan their own traveling time.Econom icDue to the stiff competition from MAS, AirAsia tend to rear reduce pricing in tickets and a a few(prenominal) flight routes to compete with the current economic. The rising of Asia middle class universe of discourse growth has encourage customer to enjoy straightaway with a cheaper rate of ticketsMalaysia Tourism and hospitality has boost AirAsia economic by advertising the daub nameSocialHas created a huge people awareness and photograph on traveling within a limited budget in Asia countries. This motivation was created with the AirAsia slogan Now everyone nominate flyAirAsia has created different alert environment and culture by promoting different countriesAirAsia commit to Safety branch has outcome the fear of customer flying abroad collect to the outbreak of Several Acute Respiratory Syndrome (SARS).TechnologyAirAsia has the state of the art in IT applied science which offers E-commerce. In Aug 2003, AirAsia become the first to offer SMS booking where the online process allows consumer to book ticket online, offer seat choosing and luggage check in. The website besides offers suck uping in six different languages.GO holiday was too launch to introduce customer to book holiday packages online via real time.AirAsia has bought in A320 to replace Boeing 737 which the modernistic airbus has meliorate burn efficiency, bigger overhead bin, lower maintenance and extra seat which proven to better performance and reli tycoon. surroundingsThe raw(a) buy of A32 planes has an engine which burn less fuel technology which included lighter weight body. The modern planes engine maintenance and muffle program which proven to gain 1% to 2% efficiency.More amend pilot film training which are being train to take-off and landing much efficiently AirAsia green methods is by adapt the paper containers and cups when they server regimen during the flight route.Legal government activity policy has been set up to break that all disposal business tri p to engage with MAS airlines.The budget airlines in south-east Asia is under-develop due to the market of aviation is control by the government right agreement.Customer has taken legal action towards AirAsia for failing to describe the full price for some route attitude.Figure 1.0 Self created Pestel analysisBelow diagram shows the SWOT analysis. The internal factor jakes be look into the strength and weakness of the company where else the external factors would be the opportunities and threats in the external environment.SWOT DIAGRAMSTENGTHSWEAKNESSAirAsia has a very affectionate relationship with the government and airlines industry leadersThe current management team up is good in strategy formulation and implementation.The stigmaing of AirAsia was well established in Asia Pacific.One of Asia cheapest Airlines which are low provideress operations.The advance technology of the IT team such in emails alert and desktop alerts for a new promotionMulti-skilled staffed which are well equip and efficient in workforce.A single type of fleet which is easy to maintain and easy for pilot dispatch.AirAsia does not have own repair system, maintenance or draw (MRO) facility.Received a lot of complain from end partr due to overwhelming of ticket purchases on festive season.Flights always delay due to improper time management.A fix-cost in perishable product which are the airlines seat. This will encourages the airlines to cut down price to attempt to fill complete seats at a lower price than rather flying at a half empty plane.No central location or backup airport.Branding is always an issue in placing in market position.OPPORTUNITIESTHREATSThere increasing of oil price creates an opportunities for AsiaAsia to capture new or existing customer which are on budget travelers.The ASEAN broadcast Skies program allows competition among regional airlines which creates partner with other low cost airlines for example Virgin has join in to create a brand name for Asi aAsia.Increase of population of Asian middle class will increase 700 million by 2013 which creates a huge opportunities for AsiaAsia to cater the unavoidableness of user.Ongoing business prospect will open up new routes and new airport dealsRates such as airport departure, guarantor charges and landing charges are elastic price which beyond the control of the airlinesAirAsia benefit margin is about 30% and this creates a new competitor to arise such as Tiger Airways.User safety point of view is neglected due to cheaper cost of ticket. User need to purchase a separated insurance for the ticket.Oil price fluctuations which affect the Aviation turbine fuel (ATF) and other operational cost. This will add cost to AirAsia since the total cost fuel is higher than 26% for low cost airlines studyd to 20% for a full service airlinesLack of secondary backup airport infrastructure. opposite countries like Europe have a secondary airport to evacuate flying into mainland airports hence the y can skip to pay high cost of landing fees.System always down due to high record of online sales.Figure 2.0 Self created SWOT diagram.Porter five forces have been use to determine the competitive and the magnetism of the market value and to understand the AirAsia competitive advantage. Table below shows the porter five forcesPORTER FIVE FORCES hawkish rivalry within an industry.This would be the matrix segment of geographical and human ecology market. AirAsia competitor would be Tiger Airlines and Firefly which both of them besides provides cheap flight and several same routes. AirAsia withal claim that they dont have any additional fees which are not true. They have several hidden fees which are booking seats and luggage fees which could create a problem in price issue.Population of middle class income is increasing hence creates a huge opportunities for the airlines therefore airlines have to slash price among each some other due to customer are not loyal and they tend to t ack easy from different company to anotherThreat of new portalBranding is one of the major factors for new entry. Entry within this industry not only required high cost but also a branding image. New entry is required to impress the investors so that they can make a huge investment in the industry.Government legislation is also an issue where new airlines cant get a new permit flight route from the government. For example if AirAsia want to add more flight route to other county, this would be a roadblock for them due to government permit and it will affect their profit.Different service product being offered by competitors where AirAsia provided travel packages around Asia besides only selling air ticket. AirAsia also have great connection with tourism companies around the Asia country thus making this harder for new competitor to compete. bargain power of supplier talk terms power of buyers is strong and cost of switching airlines is low. AirAsia is not the only the airlines whic h offer low cost operation in Asia. Other competitor prices are not so much different than AirAsia. This will create customer to choose their most suitable register of airlines that fits them the best.Two major planes supplier which is Airbus and Boeing. Both of them are having the same hackneyed aircraft which mostly AirAsia social clubed in a large amounts from Airbus in order to expand their flight routes. This creates a strong relationship and big discount.Bargaining power of buyerBuyers nowadays are more informed and IT savvy. They are more sensitive to price change making they have more choices to compare with other airlines which its easy for customer to change to other airlines that offer the same service.Customer of Airasia is mostly individual /group travelers which their air tickets purchase is being purchase individual. This makes the bargaining power buyer is strong.AirAsia also have bad image when it comes to flight delays issue. Customer tends to choose other airli nes to make sure they reach their destination on time.Threat of substitute productWhen the price of airlines is expensive, customer will look for a substitute. Price also depends on the booking time and flights date. The longer booking dates are cheaper compare to shorter booking dates. If the ticket is purchase last minute, which cost higher price, customer tends to switch to other airlines such as MAS or Singapore Airlines which offers pension servicesSome of the traveling purpose would be a business meeting which is now being taken over by the lucre industry. These meeting can be replaced with calls such as video conferencing which can take place within the office premises to save company traveling cost.Figure 3.0 Self created Porter louvre Forces diagram.AirAsia adapted the hypothesis of market segment where penetrate into the low cost carrier and the ability to compete among other competitor in the field business. Those methods areThe use of E-commerce in the AirAsia system .They have implement a E-commerce business tool making it one of the kind that allows a AirAsia to sell product, advertise, purchase supplies, bypass and skip inventory, cutting down the paperwork and sharing information over the e-portal. This system has improved productivity and higher profitability and yet minimizing the cost of expenses in the company According to Pultorak (2004), when a business strategy mix with IT, the IT platform can be modify to meet business needs and respond to certain user requirement.Example would be the IT platform online system that AirAsia implemented. Customer backlog system (CRS) is a user friendly web-based system which allows user to make reservation, choosing their own seat at various prices, printing out their own e-ticketing and self check-in online which saves ample times. This also helps to cut down the wholesaler or travel agents cost. All this was being implemented to archive the worst cost of an airline can possible achievedThe use of ERP system in the AirAsia system.Its a use of software that develops a support decisions with planning and controlling the business Its integrated software to make the IT system more effective and efficiently which has been successfully maintain the process of integrity data, reduced month end closing processing time, increase in speed up of data reporting and data retrieval process The system also helps AirAsia to capture their daily operation transaction as well as the operational cost.As the result from both of this system, AirAsia has move from the traditional business method and transform it into an E-commerce system which allows them to achieved their goals and objective to be one of the last carrier planing machines in the worldThis essay describes the strategic management use of implementation of certain tools such as PESTEL, SWOT and Porter Five Forces analysis. Those tools make AirAsia achieve their capability, scope and goals Making use of the IT system and E-commerce has also lead AirAsia to be one of the low cost carriers in the airplane industry. AirAsia chooses strategic management method based on the competition in airlines industry is tough. Other airlines companies are trying to figure out strategic ways to compete among their industry which strategic management has become one of the tools factor to survive in their business industry. None the less airlines need to consider on how to integrate the system as well as the main factors such as external and internal process