...1.0 Introduction "Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment." Strategic Management can also be defined as "the identification of the purpose of the organization and the plans and actions to achieve the purpose. It is that set of managerial decisions and actions that determine the long term performance of a business enterprise. It involves formulating and implementing strategies that will help in aligning the organization and its environment to achieve organizational goals."( Hambrick, D. C.; Chen, M.-J (2007).) Air Asia was established in 1993 and commenced operations on November 18, 1996.Initially established by the Government of Malaysia, state-run group DRB-Hicom. December 2, 2001, the former Time Warner manager Tony Fernandes private company Tune Air Sdn Bhd M & A heavily indebted airline, in order to 1 Ringgit acquire, together with the debt of 40 million ringgit. The turnaround in 2002, the creation of a number of new routes to the hub airport...
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...The AirAsia Group is a multi-national airline group headquartered in Kuala Lumpur, Malaysia. The group now operates a network of low-cost carrier's including AirAsia, AirAsia X, AirAsia Philippines, Indonesia AirAsia, Thai AirAsia, and AirAsia Japan. Opportunity In recent years, rapid economic growth resulted in a burgeoning middle class within Asia’s large population. For the Indonesia AirAsia, Indonesia has 12 million people who travel by air every year against 3 million passengers who fly everyday in the United State. It would call for at least a 5-6-fold increase in capacity. It points to a huge opportunity for AirAsia. The attractiveness of budget airlines is primarily their low ticket prices, which can be as low as 10-20% of those charged by full-service airlines. AirAsia differentiates its no frills product by offering less features at substantially low fares. However, this strategy will become generic with the entry of low cost carriers waiting in the wings. At that stage, low cost competition will each need to try and “be different”. Limited product differentiation is an opportunity, but must be approached with extreme caution. Anything (like frills) that adds costs and reduces price competitiveness is a bad trade-off. Airasia has the provision of in-flight food and drinks, and online sales of hotel, car, and holiday reservations, as well as travel insurance, and corporate travel services, with its own branded credit card; further increasing brand awareness and value...
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...Executive summary This assignment is to compare the capital structure, and cost of capital between two same companies in Bursa Malaysia and their effect to market valuation and firm’s performance. It is also to indicate how the companies gearing levels and cost of capital affect the firm’s value and profitability ratios. The ratios being used are for comparing and investigating the relationships between two companies’ financial information. Besides, it indicates if higher gearing level and higher cost of capital affect the firm’s value and performances. This assignment was focused on AirAsia and Malaysia Airline.A company's capital structure refers to the relative proportions of equity (raising money by selling shares) and debt (raising money by borrowing) which the company uses to finance its activities. The uses of capital structure are important to distinguish between market value and book values. In general, financial economic prefer to use market value went measuring debt ratio because it reflect current value whether than historical values. Financial economist does belief that current market value reflects true intrinsic value. In the other hand the uses of book value is very popular because of volatility of stock market it is frequently claimed that the inherent volatility of the stock market makes market-debt ratios move around too much. A company's capital structure can have an enormous impact on its earnings per share, taxes, and interest payments, even though...
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...O R B E S A S I A JUNE 4, 2007 Malaysia’s 40 Richest Sleepover in Kuala Lumpur: Tune Hotels, with rooms costing as little as $3 a night, are Fernandes’ attempt to provide cheap, clean lodging. he boasts. “For others it’s a cost, but we made a $50,000 profit.” Fernandes, 43, relishes turning costs into cash. After all, he built a small fortune by being budget-conscious. Less than six years ago he and a partner paid a debt-ridden Malaysian company 27 cents for a troubled carrier and assumed its $11 million in debt. He relaunched AirAsia Berhad as Asia’s first low-fare airline and the region’s first carrier to allow customers to buy tickets online and through mobile phones. The no-frills outfit got rid of complimentary food and drinks, frequent-flier programs, airport lounges, even cleaning crews; flight attendants now clean the cabins after flights. Ads are sold on the airplanes’ overhead bins and tray tables. All this has helped AirAsia become one of the world’s lowest-cost carriers, according to ABN Amro, as measured by costs per seat flown: just 2 cents for each kilometer, about half what it costs U.S. airline Southwest. Its average ticket price is $37. Its net profits are expected to triple to $100 million on sales of $340 million for the fiscal year...
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...AirAsia : Indeed the Sky's the Limit! ASIAN JOURNAL OF MANAGEMENT CASES, 7(1), 2010: 7–31 SAGE PUBLICATIONS LOS ANGELES/LONDON/NEW DELHI/SINGAPORE/WASHINGTON DC DOI: 10.1177/097282011000700103 Lead Article AIRASIA: INDEED THE SKY’S THE LIMIT! Rizal Ahmad This article details the development of AirAsia Malaysia from 2005 to 2008 and builds on a prior case, ‘AirAsia: The Sky’s the Limit’. Within only four years, AirAsia managed to expand its operations into another ten countries. In addition, through its associate company AsiaX, it launched long-haul low-cost air services from Malaysia to Australia and the United Kingdom. The article documents AirAsia’s marketing strategy and discusses its approach towards ‘market development’ and ‘product development’. The Blue Ocean Strategy concept is used as a tool to examine AirAsia’s strategic moves. Keywords: Low-cost airlines, budget airlines, marketing strategy, Asian entrepreneurship In the case study ‘AirAsia: The Sky’s the Limit’, the authors Ahmad and Neal (2006) discussed AirAsia’s comeback from a debt-laden scheduled airline (US$ 10.5 million in December 2001. The airline was bought by Tune Air for a token sum of one ringgit1 or 0.26 US cents) to a profitable low-cost or budget airline that managed to attract US$ 200 million in additional capital through its initial public offering in October 2004. AirAsia Berhad or Malaysia AirAsia (hereafter referred to as AirAsia) was credited for its efforts in enabling Malaysian...
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...1) Introduction to the leader (autobiography or biography) Tan Sri Anthony Francis Fernandes CBE (born 30 April 1964; also known as Tony Fernandes) is a Malaysianentrepreneur and the founder of Tune Air Sdn. Bhd., who introduced the first budget no-frills airline, AirAsia, to Malaysians with the tagline "Now everyone can fly". He has since founded the Tune Group of companies. He rose to prominence by turning AirAsia, a failing government-linked commercial airline, into a highly successful budget airline public-listed company. Fernandes was also instrumental in lobbying the then-Malaysian Prime Minister, Tun Dr. Mahathir Mohamad in mid-2003, to propose the idea of open skies agreements with neighbouring Thailand, Indonesia, andSingapore. As a result, these nations have granted landing rights to AirAsia and other discount carriers. Early years Born in Kuala Lumpur to a Goan father, and Kristang mother, Ena Dorothy Fernandes.[2] At a young age, Tony used to follow his mother, a businesswoman, to Tupperware dealer parties and conventions. He was educated at Epsom College 1977-83 and then graduated from the London School of Economics in 1987. He worked very briefly with Virgin Atlanticas an auditor, subsequently becoming the financial controller for Richard Branson's Virgin Records in London from 1987 to 1989.[3] Tony was admitted as Associate Member of the Association of Chartered Certified Accountants (ACCA) in 1991 and became Fellow Member in 1996. Upon his return to Malaysia...
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...direct competition between full service airlines and no-frills carriers is intensifying across the world. The old business model of most airlines business focused on the full service, while the new business model focuses on using digital technology to make the business becomes more and more efficient, and thus, leading to cost advantage. Facing the digitalization era, by 2007, AirAsia had become one of the most successful budget airlines in the world. Having dominated Southeast Asia and entered China and India, AirAsia was poised to solidify its place as a top budget airline and one of the most consistently profitable globally. AIRASIA X Airasia X subsidiary of Airasia was founded in 2 November 2007 it’s a long-haul, budget airline based in Malaysia. The airline Airasia, is the international operation of the brand Airasia which is Asia's largest low-cost carrier. (LCC) The Airasia X is also affiliated to Virgin group and Air Canada. Focusing on the low-cost, long-haul segment - AirAsia X was established in 2007 to provide high-frequency and point-to-point networks to the long-haul business. AirAsia X's cost efficiencies are derived from maintaining a simple aircraft fleet and a route network based on low-cost...
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...Research in Transportation Business & Management 10 (2014) 40–44 Contents lists available at ScienceDirect Research in Transportation Business & Management Transferring low-cost marketing practices from air to rail services: The Ouigo case Paul Chiambaretto a,b, Anne-Sophie Fernandez c a b c MRM-Groupe Sup de Co Montpellier Business School, 2300 Avenue des Moulins, 34080 Montpellier, France Ecole Polytechnique, PREG-CRG, Bat. Ensta, 828 Boulevard des Maréchaux, 91762 Palaiseau, France MRM-ERFI, University of Montpellier 1, Espace Richter, Rue Vendémiaire, Bât. B, CS 19519, 34960 Montpellier Cedex, France a r t i c l e i n f o Article history: Received 24 October 2013 Received in revised form 11 May 2014 Accepted 12 May 2014 Available online 29 May 2014 Keywords: Low-cost High-speed train Replication strategy Intra and intermodal competition a b s t r a c t More and more airlines have adopted a low-cost business model and many scholars have studied the characteristics of such marketing strategy. While other transport modes have decided to copy and adopt this strategy, we investigate how they replicate this business model. To do so, we in-depth study the operational and marketing characteristics of Ouigo, the new low-cost offer launched by the French rail operator SNCF in 2013. Based on interviews and secondary data (press articles, reports, etc.), we analyze how the rail operator has adapted the low-cost model used by airlines to the...
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...CONTENT PAGES 1.0 INTRODUCTION…………………………………………………………………2 About the product…………………………………………………….………….2 2.1 Company background…………………………….………………….....7 2.2 Business process and operation…………………..………………….9 2.3 Low cost carrier (lcc) business model……………….………………11 2.4.1 Business model……………………………………………...11 2.4 Competitive Advantages …………………………..…………………..12 2.5 Historical Performance………………………………..……………….13 2.0 ANALYTICAL SWOT ANALYSIS……………………………….……………..18 3.0 PRODUCT ANALYSIS…………………………………………….……………21 4.6 The product Life Cycle (PLC)………………………………....………21 4.0 STRATEGIS AND TACTICS………………………………………..………….24 5.0 SEGMENTATION, TARGETING AND POSITIONING ANALYSIS 6.7 Market Segmentation………………………………………..………….26 6.8 Target Market Profile……………………………………………………30 6.9 Positioning………………………………………………………….…….32 6.0 MARKETING STRATEGIES AND EVALUATION OF MARKET PROGRAM ELEMENTS………………………………………………………………………..33 Refferences…………………………………………………………………………………………………………….36 1.0 INTRODUCTION AND HISTORY a. Introduction of the product Name of the company: Air Asia Berhad ABOUT THE PRODUCT Air Asia is a low cost airline based in Kuala Lumpur, Malaysia. It operates scheduled domestic and international flights and is Asia’s largest low fare, no frills airlines. Air Asia pioneered low cost travelling in Asia. It is also the first airline in the region to implement fully ticketless travel and unassigned seats. Its main base...
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...date: 16 December 2015 1) AirAsia plan to be region’s biggest carrier Budget airline AirAsia Bhd has drawn up a six-year business plan that will see it carry 70 million passengers a year from 2014, which will make it Asia’s biggest carrier. The figure is 3.5 times higher than this year’s target of 20 million passengers. Group chief executive officer Datuk Tony Fernandes is optimistic of achieving the target, which will in turn make the low-cost carrier terminal at the KL International Airport the regional hub for budget travel, given the foundation laid out over the past six years. Factors going for the airline include its extensive regional network comprising 90 routes and its huge order of 175 Airbus A320s. “Six years going forward, I think things will look rosy and optimistic. This is mainly because we have worked to build the necessary foundation for the airline, namely in terms of network and the brand, and we have already acquired the aircraft to support our growth,” Fernandes told Business Times in an interview. “With the recent inclusion of Singapore in our network, we are basically connected to all points within the region; and what we are going to do now is to further develop each of these existing routes. We are indeed in a strong position now, stronger than we have ever been,” he said. From an unknown airline which started operations in 2001 with RM40 million debt inherited from its previous owner, DRB-HICOM, AirAsia has evolved into the region’s largest...
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...MALAYSIA AIRLINES SYSTEM AND AIRASIA AIRLINES COLLABORATION TAKES PLACE. TABLE OF CONTENTS QUESTIONS 1:- Analyze the current situation facing MAS and AIRASIA using the internal and external strategic environmental analysis model. Discuss what aspects and why did their collaboration take place? INTRODUCTION Various industries, specifically in airline business are attempting to improve their services to draw new passengers and travellers and to retain old passengers and travellers, and this objective is part of their business as well as their marketing model. In order to adjust with the stiff competition in the airlines business, airlines industries tend to come up with various businesses models and model to be competitive. Additionally, because of increasing competition among substitute industries, firms like AIRASIA, AIRASIA X and MAS. Airlines adopt strategic model to marketing and expend their market reach as well give better and satisfying service delivery to their target market. To sustain the market position as well as advantage business market model to management and marketing are being developed and utilized. MAS, AirAsia share swap not a win-win deal From its inception, it has not been plain sailing for the planned share swap between two of the country's most bitter airline rivals — Malaysia Airlines (MAS) and AirAsia — given the many issues involved...
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...Introduction PEST Analysis is the Political, Economic, Social culture and Technology analysis that a company does to determine the overall business environment. A PEST analysis is a look at the external environment of a company or a business that plays an important role in managing and decision making of a company. It is crucial for a company to consider its environment before relating with the public or customers. The PEST analysis examines the impact of each of the factor on the company. Thus, political factor considers the impact of legislatives changes, stability of the economy and event that related with the government and politics that may affect the business. Influence of economy, such as interest rate, stability of economy, inflation levels and such helps the company make better decision on how to operate their company effectively. Besides that, the social drive is a crucial part on PEST analysis. Creating and developing a social culture takes time and effort and a new motive driven company such as Air Asia has to develop me method on how to connect with the society's lifestyle, demographics, and media. Technological point of PEST analysis relates with competing technology development with other competitors and effective information and communication between the market and the company. Political Analysis Political Analysis mainly states about the aviation acts and regulation which needed by aviation company such as Air Asia to operate their business. The political...
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...CONTENTS PAGE 1 INTRODUCTION 2-6 1.2 INTERPERSONAL ROLE 1.2.1 Figurehead 1.2.2 Leader 1.2.3 Liaison 1.3 INFORMATIONAL ROLE 1.3.1 Monitoring 1.3.2 Disseminator 1.3.3 Spokesperson 1.4 DECISIONAL ROLE 1.4.1 Entrepreneur 1.4.2 The Disturbance Handler 1.4.3 Resources Allocator Roles 1.4.4 Negotiator Role 2.0 FIRST ARTICLE 7-9 2.1 Role as a Figurehead 2.2 Role as a Spokesperson 2.3 Role as an Entrepreneur 2.4 Role as a Negotiator 3.0 SECOND ARTICLE 10-11 3.1 Role as a Liaison 3.2 Role as a Disseminator 3.3 Role as a Negotiator 4.0 THIRD ARTICLE 12-13 4.1 Role as a Spokesperson 4.2 Role as a Negotiator 4.3 Role as a Disseminator 5.0. CONCLUSION 14-15 6.0 REFERENCE 16 ASSIGNMENT ANSWER INTRODUCTION A Manager is someone who is responsible to make plans and direct the work of a group of individuals, lead the team, monitor the way the doing the task, and find the way to resolve a conflict and take corrective action when it is necessary. Some managers know how to inspire the team, some good in motivating the team, and others fail to engage their employees. Manager job can be described in multiple terms of roles or organized sets of behaviors associated with a particular position in the organization. There are three type of manager in the organization. First is the Top-Level Manager that is the highest level manager in organization...
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...1.0 Introduction AirAsia originally was founded by government and on 2 December 2001 was bought by Tony Fernandes. AirAsia was established in year 1993. AirAsia has travel around the earth and ascend to become the world’s best in year 2001. AirAsia continues to spread out the way for low-cost aviation through the innovation, efficient and passionate approach to business with a route a network that extent through over 20 countries. There are some companies which link with AirAsia such as AirAsia X, Thai AirAsia, Philippines’ AirAsia Inc., AirAsia Japan and Indonesia. In addition, for the vision part in AirAsia, AirAsia aims 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. While for the mission of AirAsia, AirAsia wants to be the best airline company to work whereby employees are treated as part of the big family. Besides, AirAsia try to maintain the lowest cost hence everyone can fly with AirAsia. Highest quality product, embracing technology to lower the cost and improvement in service levels will be maintained by the AirAsia airline also. Lastly, create a globally recognized ASEAN brand will be the mission part of AirAsia. In the values part, AirAsia will implement trough the following key strategies which are: * Safety * Low fare, no frills * Lean distribution system * Point to point network * High aircraft utilization * Streamline operation The loyalty...
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...PEST and SWOT analysis of AirAsias international business operations 1.1Background AirAsia was set up by Dato' Tony Fernandes in 2001. In December 2001, Fernandes and his partners set up Tune Air Sdn Bhd (Tune Air), an airline holding company then bought over AirAsia. Now, AirAsia has become one of the most successful airlines in the Southeast Asian region and the pioneer of low cost and no frills travel in Malaysia. The leading low fare airline in the Asia - AirAsia has been expanding rapidly since 2001, to become an award winning and the largest low cost carrier in Asia. With a fleet of 72 aircrafts, AirAsia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand and Indonesia. To date, AirAsia has flown over 55 million guests across the region and continues to spread its wings to create more extensive route network through its associate companies, Thai AirAsia and Indonesia AirAsia. AirAsia believes in the no-frills, hassle-free, low fare business concept and feels that keeping costs low requires high efficiency in every part of the business. Efficiency creates savings which are then passed on to guests so that affordable air travel can become a reality. Through our 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. As AirAsia continuously strives to...
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