Pest Analysis on Airasia

1425 Words Jan 13th, 2008 6 Pages
1.0 Introduction

Purpose
The purpose of this analysis is to conduct an environmental analysis in the context of AirAsia's international business operations, describing the major variables involved and the impact of the specific threats and opportunities confronted by AirAsia besides that, this analysis also helps to identify AirAsia's competitive strategy and analyse how the strategy is implemented to gain competitive advantage.

Background on AirAsia
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
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The Airbus A320's improved fuel efficiency and extra capacity which leads to better performance and reliability.

2.5 Summary of Opportunity and Threats
Opportunity
Low fares offer by AirAsia has encourage people from all walks of life style to fly. Especially, during economy down turn.
Airbus A320 would encourage greater passenger capacity and offer comfortable service to customers.
Introduction of SMS booking allows customer to book their seat at anytime and anywhere.
With the commitment in ensuring the security of staff and customers, they will have more confident to fly via AirAsia.
Threats
There are more no-frills airlines may take off in Asia to meet increasing consumer demand following the success story of Malaysia's budget carrier AirAsia. Singapore Airlines plans to launch a budget carrier, they see the success of AirAsia. They know how big the market is and how good the opportunity is in Asia.
Travelers may not choose AirAsia if they are to travel long distance flight. They will prefer airlines such as MAS or SIA which provide better services.
Demand to fly decreased via terrorism and outbreak of the SARS.

3.0 Competitive Strategy Employed by AirAsia
According to Chee and Harris (1998, p.237) much of the work on competitive strategy is pioneered by Michael Porter of Harvard University. Competitive strategies indicate the approaches that a company adopts in order to compete more

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