Business Strategy of Airasia

1045 Words Nov 21st, 2011 5 Pages
Business Strategy Air AsiaCompany BackgroundAir Asia is one of the companies that very successful in adopting the cost leadership strategy as one of their competitive advantages. Air Asia had been established on 12 december 2001 with Dato Sri TonyFernandez as the CEO. As what the slogan says now everyone can fly which actually attract thecustomers to buy the ticket and also they offer a lot of promotions to many destinations around asia andcustomers are chasing around in getting their promotions even though the customers are not reallymeant to go somewhere. This is also part of their marketing strategies in creating the customerawareness about their brand.
2.1 Company Background AirAsia is one of the businesses that have
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According to Sachs (1997), ³demographicfundamentals of large populations, rising middle classes with increasing leisuretime and disposable incomes, combined with the lack of competitive forms of transportation, paint an extremely encouraging demand picture in the long run´.Furthermore, air travel market is bound to continue to grow due to a rapidlyincreasing urbanisation trends (Centre for Asia Pacific Aviation, 2002). Archipelago geographical structure of Asia continent is also contributable to theimportance of air transportation. For example, there is no other viable andefficient mode of transportation between East and West Malaysia other than byair (Lawton and Solomko, 2003). While the impact of terrorism and SARS can benegative for the growth of LCCs, the long run forecast continues to be verypositive.
Porter¶s five forces is utilised to perform the micro-environmental analysis specific to LCC industry in Asia. The overall power of supplier is high due tolimited number of suppliers (only Boeing and Airbus). The power of buyer is
306-669 Strategic Enterprise Systems Group Project

moderately high due to almost no switching cost for customers to switch fromone LCC to another. In addition, the access to the internet allows customers tohave close to full information on prices charged by the LCCs. Threat of substitutes is moderately low; there are several substitutes such as
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