I. MICROECONOMIC
Micro-environment is preferred as ‘the operating system’ which includes the forces that has significant impacts on and can affect the organization’s ability to operate and serve its customer (Chaffey et al, 2009). This is influenced by the need of customers and how services are provided to them through the competitors, marketing intermediaries, and suppliers within the marketplace (Chaffey et al, 2009).
1. Customer
Airasia provides to its customers the basic flight carrier service and carry the customer ‘s purpose of traveling between different destinations, but at a lowest fare among other airlines.(AirAsia Annual Report, 2010) The customers of Airasia are mostly from low and middle class people in society. The
…show more content…
1. Demographic force
Job catalogue and income aspects are the key focuses of Airasia for targeting the segmentation(Kotler et al, 2010). Most the customers of Airasia are students and low or middle class income people. Students and low incomes people are likely to concern more about fare price, while middle income people want a balance between price and quality. Eventually, Asia is becoming the potential market of the world and this creates more opportunities for traveling and carrier services especially in Asia Pacific region.
2. Geographic force
Choosing and activating flight destinations of an airline is critically important, as it will affect the productive of market scale and business expanding trend (Kotler et al, 2010). For Airasia, the current cities and countries that it is mostly operating are the big cities in Asia and no local flight in one destination country. This tactic can achieve the faster expanding market goal (AirAsia Annual Report, 2010).
3. Culture force
The customers’ consumption propensities are differential as national differences (Jones & Miskell, 2007) which mean of differences in culture. However, Asia has tried to build up a mixture of cultures and to give different experiences to its customers. In general, Asia cultures prefers to spend less money and save more, thus spending too expensive flight ticket for traveling is still not an absolute choice for all the Asia customers and because
The supply and demand simulator provides students with a real world situation of several factors within economics. The factors covered within the simulator are: microeconomics and macroeconomics principles with concepts, the shift of the supply curve and shift of the demand curve; simulator also discussed price ceilings which all affect the rent price and the occupancy rate of residents. The scenarios are based on the information of Goodlife Management within the city of Atlantis. The scenarios are based on the situations that occurred in which the user is faced with factors that influences the equilibrium such as adjusting the rental rate of the apartments in order to maximize revenue. Other
In 2010, views on whether low-fare airlines would continue to flourish in Asia varied. Three factors regulation, population demographics, and socioeconomic trends -drove this calculus. Although the target consumer base for AirAsia was enormous -more than 500 million
AirAsia X’s main strength is the low price that it offers for customers. For most airlines in the industry, it is extremely difficult to keep the price low for long-haul flights as the full services offered in most airlines increase the operating costs. In addition, X also benefited from the expansive network, infrastructure and customers that AirAsia already has that enabled them to grow fast with good financial outcomes. On the other hand, X’s main weakness is the technology. The website always crashes and the company doesn’t have its own database of customers. X also doesn’t enjoy from a strong relationship with the Malaysian Transport Ministry. This can be detrimental to the company as it finds competing with Malaysia Airlines in some profitable routes to be difficult. However, X has some opportunities. For example, in order to keep the low price ticket, cooperating with fuel companies which will offer low fuel price and increasing demand in low cost airlines will bring profits. The major threat for AirAsia X is the protectionist measures taken by the Malaysian government that prevented X from flying planes to some destinations with high demand. This would have been a very
Additionally, Sally is withdrawing $34,000 from her savings account that pays 4% interest/year to purchase the furniture and equipment; she will quit her current job that pays $25,000 per year. She expects total revenues from the new business in the first year to be $70,000. Calculate the following:
21) Huey has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming
Expansionary Activities: Like what I describe previously about the three monetary policy tools that the Fed can use to increase the money supply. Which are open market purchases of securities, discount rate decreases, and reserve requirement decreased? All else constant, whenever the Federal Reserve carried out the purchases of securities in the open market, reserve accounts of banks (and thus, the money base) increase. And whenever the discount rate is being lower by Fed, this results in a lowering of interest rates in the economy. Lastly, if reserve requirement decreased, all else constant, it results to an increase in reserves for all banks. Two out of these three cases (open market operations and reserve requirement changes), an increase
We will make these calculations automatically for each student—you don’t have to “opt in” or “opt out” of one or the other weighting. We will make certain you receive the highest grade to which you are entitled.
1: The micro-environment: This environment holds the forces close to the company that affect its ability to serve its customers. These are the employees, suppliers, stakeholders and customers. Relationships in the micro environment can change over time. It influences the company directly and is the environment where the company can enforce some control or influence.
Question 1: "The economic rationale for road pricing is compelling", Institute for Fiscal Studies, May 2012. Critically discuss this statement.
AirAsia focused on ensuring a competitive cost structure as its main business strategy. It has been able to achieve a cost per average seat kilometer (ASK) of 2.5 cents, half that of Malaysia Airlines and Ryanair and a third that of EasyJet. AirAsia can lease the B737-300s aircraft at a very competitive market rates due to the harsh global market conditions for the second-hand aircrafts because of the September 11th event in 2001.
AirAsia believes in the hassle free, no frills, low fare business concept and feels that keeping costs low needs high efficiency in every part of the business. Efficiency creates savings which are then passed to the customers so that they will able to purchase on the affordable price but still with a high quality of air travel. AirAsia targets people who want to travel around Asia for leisure or business purposes. The fares of Air Asia are relatively known as a lower fares than the other airlines. Selected strategy used by Air Asia targeting to passengers who are willing to travel without frills of meals, airport lounges or frequent flyer miles in exchange for fares which is
Young college educated professionals and college or graduate students between 21 and 45 years old represent the perfect target market for the low cost fare airline because both groups share similar psychological and behavioral traits. They are meticulous with their money to the extent that price is important when they are purchasing an item or paying for a service because most of them are recent college graduates entering the workforce and others are still pursuing an education with a limited income. Even if they have limited income, they still want to satisfy their lifestyle preferences. They want to obtain maximum value for their money without sacrificing personal comfort. These groups will be targeted because they are open to new experiences and they are price sensitive.
The airline industry is a large and growing industry. Air travel plays a very important role in economic growth and world trade. It is expanding for either of the following reasons that is for business purpose or leisure travel. It helps in increasing the international investment as well as tourism. The airlines have made it more comfortable to travel from one place to another, and now are offering reasonable rates. Affordable rates encourage people to travel further to new places. As a result, people have started traveling to new exotic destinations. Billions of passengers are traveling every year by way of the airline industry. The airline industry is not only growing in developed countries but it is growing in developing countries also.
With a network spanning over 20 countries, Air Asia leads the way for low-cost air service through efficient processes, innovative solutions and a steady business plan. Along with its subsidiaries in other countries, it is ready to propel low-cost flying into newer markets and newer destinations.
Q1. Define micro and macro economics, Distinguish between them, and explain the scope, importance and its limitations