Based on the Ansoff Matrix theories, Go Jek has applieda market penetration strategy that is an existing market and products that already exist in the Market. Other than that, the technology used by Airbus is the most advanced, so Airasia have to rely on the Airbus model. 5  Pages. It engages in an anchor pricing strategy in its marketing mix, which creates a base for pricing all operations carried under the AirAsia umbrella. In airline industry fixed cost are high, for example finance cost, lease cost, and staff costs. One common perception is that they may compromise safety to keep costs low. This is a threat to all airlines especially low cost airlines that tries to keep their cost as low as possible. So partnership with some other airlines is required at this stage. VAT Registration No: 842417633. also defined as the market and product matrix. No plagiarism, guaranteed! Secondly, it will explain on valuechain analysis by using VRIO framework to determine AirAsia and the Tune Group’s organisational capabilities. Igor Ansoff, Marketing, Marketing plan 1562  Words | but still most parts of these countries are under served. So it makes the industry highly competitive. The Strategic Analysis of Air Asia, can be done with the help of Michael Porter’s five forces. Igor Ansoff designed the Ansoff Matrix in 1957 and this was first published in the Harvard Business Review. AirAsia was founded by a government-owned conglomerate DRB-Hicom in 1993. Premium These strategies work a lot for AirAsia in order stay competitive in LCC market. For example, Singapore Airlines has created a low cost carrier Tiger Airways. AirAsia opened a 2nd hub in 2003 at Senai International Airport in Johor Bahru near Singapore and started its 1st international flight to Bangkok . Many countries have national airlines that are owned and operated by the government. It should only focus on airline business. Rising fuel prices have made operational costs high for the whole industry. Hypermarket, Brand management, Advertising 1093  Words | Quadrants 1, 2 and 3 are prioritised issues, which we report on. No. 5  Pages, an organization. Full rebranding to Indonesia AirAsia was completed on 1 December 2005. AirAsia Group (including its Thai and Indonesian affiliates) now operates a fleet of 90 aircraft and flies to more than 60 destinations from hubs in Malaysia, Thailand and Indonesia. 3. The best time for AirAsia Ads is during holidays when people are thinking to go on traveling. 7  Pages. A good number of the full service airlines have or planning to create a low cost subsidiary to compete with AirAsia and other low cost carriers. The way to gain more market share with the same product is to attract competitor’s customers and get more loyal customers by marketing. Air Asia is the leading low fare airline in Asia and Air Asia succeed to become the award winning, ‘Asia Pacific Airlines of the year 2003’ by Centre for Air Pacific Aviation (CAPA) in 2003. It also explains the threats of new entrants and already existing firms. [5] In the plan, AirAsia will build up and improve its route network by linking all the existing cities in the region and expanding further into Indochina, Indonesia, Southern China (Kun Ming, Xiamen, Shenzen) and India. Thus the buyers may be able to influence the airlines to reduce their prices. The airline brand is displayed on the helmets of Nico Rosberg and Alexander Wurz, and on the bargeboards and nose of the cars. Air Asia can increase its brand image by promoting low-priced, on time and safe traveling experience campaign. No. items sold to customers and markets as customers. AirAsia’s partnership with other service providers such as hotels, hospitals (medical tourism), car rental firms, Citibank (AirAsia Citibank card) has created a very unique picture among travelers. These factors have caused some key airlines to go out of business, in addition to most of the poorly established new entrants. BCG matrix evaluations shows that AirAsia has to apply few strategies which linked with their company’s operations. Read more about this important marketing tool. Market Penetration will not cost as much as Diversification. Introduction Currently they are operating from three countries Malaysia, Thailand, Indonesia and covering several destinations in China, India, Sri-lanka etc. The Ansoff Opportunity Matrix is another Strategic Management tool that describes and predicts an organization’s growth opportunities with the existing as well as new products and Markets (Capodagli & Jackson, 2007). Our ir-vision. In Market Penetration company will not introduce new products. Study for free with our range of university lectures! The partnering with Awair helps AirAsia to understand the condition of local market, so the company will have direction on how to enter and survive in the market by the help of an experienced partner (Awair). Some texts refer to the market options matrix, which involves examining the options available to the organization from a broader perspective. CPA Program–professional level Clarification to the Ansoff product-market matrix Ford Falcon example Thus it has a great opportunity to capture some of the existing customers of full service and other low cost airline’s customers. Airlines offer air transport services for passengers or cargo, normally with a recognized operating license. Published: 16th Jan 2018 in With CAE’s extensive expertise and vast experience, AirAsia would receive world-class aviation training for its pilots, cabin crew, engineers, ramp handlers, guest … 08/04/2015 Air Asia has successfully positioned itself in customers’ mind by using the “ Now Everyone Can Fly” slogan. The. Assignment title: Additionally, the Price of Air Travel however is a hurdle which let customers to think to take other available options. affection of the industry with elaborating competitive rivalry amongst the firms in the industry to the bargaining power of customers and suppliers. Market penetration and market development strategies require less money as compared to diversification strategy. The competitive environment analysis for AirAsia Berhad is thoroughly scrutinised to examine the driving determinants that attributed to the organisation’s competitive advantage in the industry. So strategies like market development and market penetration will be preferred at the moment. These strategies are Diversification (substantive growth strategy), market penetration and market development (limited growth strategies). On 2 December 2001, former Time Warner executive Tony Fernandes’s company Tune Air Sdn Bhd purchased the heavily-indebted airline for the token sum of one ringgit. Premium of employees : 3,000 employees that everyone can fly with To attain the lowest cost so AirAsia. The total AirAsia fleet (including Thai AirAsia, AirAsia X and Indonesia AirAsia) consists of the following aircraft as of 14 July 2010. Now a days LCC market is becoming very competitive. 1. The main purpose of using the services is to get to the destination planned. Check out airasia.com and get only the best deals today! Some countries have deregulated or start deregulating their Airlines, for example The United States, Australia, and to a smaller extent Brazil, Mexico, the United Kingdom and Japan. Many new competitors like Tiger Airways directly threatening its market share. ANSOFF Matrix. Global Strategy and Leadership Here in markets may be defined as customers, and products as items sold to customers (Lynch, 2003). (It switched from Boeing 737s in 2005) A single aircraft type offers economies in purchasing, pilot training, maintenance and aircraft utilization. (1) Product strategies for growth: a useful way of looking at growth opportunities is offered by the. Premium Air Asia is established on 12 December 2001 by Mr. Tony Fernandes, the CEO of Air Asia and expanding rapidly since that. Answer1: But now with hubs in Malaysia, Thailand and Indonesia and 97 planes currently owned and over 100 planes to be received in the next few years, AirAsia have to make sure proper and continuous maintenance of the planes which will also help to keep the overall costs low. Market Penetration – tool used to increase organisations share in the market with its current product line. So in promotions AirAsia should try to change these negative perceptions. Their new venture in the short haul, low-cost carrier begins … In 2003, the author Lynch suggested that the, appropriate example of each. Thus, bargaining power of suppliers is strong. Research objective:1- Comment on strategies of Air Asia’s market expansion by using Ansoff matrix. Introduction Premium 4  Pages. Through its idea of ‘Now Everyone Can Fly’, Air Asia has introduced a revolution in air travel with more and more people around the region choosing Air Asia as their preferred choice of transport. Air Asia believes in the no-frills, hassle-free, low fare business idea and feels that keeping costs low needs high efficiency in every part of the business. Singapore Airlines, Avianca, Airline 1634  Words | Analyse the strategy of AirAsia using the strategy tools we have discussed (Porter 5 Forces SWOT, Life Cycle, Ansoff Matrix and more). The Asean super app for booking flights, hotels, activities, food, unlimited deals and so much more! The world leading low fare airline in the Asia, Air Asia has been growing rapidly since 2001, to become an award winning and the major low cost carrier in Asia. This has facilitated AirAsia to start up and capture significant market share in Thailand. But, to establish new business, open up a new company, strong management and financial ability is required to make it successful, but if it is not successful, it might create unbalanced circumstances for Air Asia because of loss of money and resources. Premium 5  Pages. It is Asia’s first “no-frills” online financial services portal. AirAsia Case StudyMatriculation Number 40414735 Bachelor of Arts Business Management Edinburgh Napier University Executive Summary AirAsia is a low-cost carrier operating in Malaysia. Airlines can be classified as being intercontinental, intra continental, domestic, or international and may be operated as planned services or charters. 1. PART 1: Introduction Ansoff (1957) designed a framework called Ansoff Matrix. For example, governments often interfere to stop airline labor actions in order to guard the free flow of people, communications, and goods between different regions without compromising safety. It helps decide whether an organization should pursue future expansion in new markets and products or should it focus on existing markets and products. Certain charges like landing charges, security charges and departure charges are beyond the control of airline operators. It might happen in many ways of terrorism either in certain countries or it might happen in the plane itself. This strategy helps identifying corporate growth opportunities, also analysing companies based on market, product with possible growth opportunities which can be established by merging current and new products. The Star. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. International Airlines have a very less or no threat regarding other options. As I discussed above, a good number of the full service airlines have or planning to create a low cost subsidiary to compete with Air Asia. AirAsia Flying Low Cost with High Hopes has viably utilized this instrument to develop a procedure for accomplishing competitive advantage in the industry and various markets it operates in. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. To keep stronger position in the market AirAsia has to adopt combination of market penetration and market development strategies. Low-cost airlines, AirAsia, Term 846  Words | It was a government-owned Malaysian Airline that was bought over by Mr Tony Fernandes and Dato Kamarudin Meranum for 1 Ringgit (MYR). It will go with the same products in the same market. Private airlines are under government regulation for economic, political, and safety issues. In Kuala Lumpur. “Orders, Deliveries and Operational – Asia Pacific”. Betriebswirtschaftliche und volkswirtschaftliche Grundlagen To asses the attractiveness and identifying the sources of competition for Airline industry we use porter’s five forces model. Customers can switch to other airline easily that makes the industry competitive. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Airlines differ from those with a single aircraft carrying mail or freight, through full-service international airlines operating hundreds of aircraft. Introduction For example, Shin Corporation (formerly owned by the family of former Thai Prime Minister- Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. There are three strategies that Air Asia can follow in order to be a major player in the Low Cost Carrier market. The largest airline in Malaysia the business is known to be highly employee centric. In horizontal diversification, the company developed activities that are directly complementary to a company’s present activities. Discuss what is good and bad about this strategy. It also explains the threats of new entrants and already existing firms. (1) Product strategies for growth: a useful way of looking at growth opportunities is offered by the Ansoff Matrix as it is a practical framework for thinking about how growth can be achieved through product strategy. “AirAsia embarks on 2nd chapter”. Efficiency generates savings which are then passed on to customers so that inexpensive air travel can become a reality. The approach is to be easy to book, pay and fly and most of the seats are sold through online, this is in line with its motto ‘Now Everyone Can Fly’. Discuss how AirAsia and the Tune Group used their existing capabilities to grow and diversify their business. Terrorism is affecting tourism and confidence in the airlines. Population of Asian middle class is increasing. It was a government-owned Malaysian Airline that was bought over by Mr Tony Fernandes and Dato Kamarudin Meranum for 1 Ringgit (MYR). Thus, the threat is low for the industry. Premium 70446465 January 2010. http://www.airbus.com/fileadmin/backstage/documents/od/January_2010.xls. Synopsis It is becoming disadvantage not to have its own repair & maintenance facilities. AirAsia announced On February 2010 that it has purchased a 30% stake in VietJet and changed the name to VietJet AirAsia. If Airasia change to Boeing again, then the cost will be high, because training cost for staff to go well with the aircraft features must be offered. AccountID: A business can create market share by the combination of developing new products or exiting products in emerging markets or established markets which are indicated in the Ansoff matrix. Buy high-quality essays & assignment writing as per particular university, high school or … product choices available to a company. Analyse the strategy of AirAsia using the strategy tools we have discussed (Porter 5 Forces SWOT, Life Cycle, Ansoff Matrix and more). Easy Payment Channel Air Asia Red Carpet Services AirAsia X PORTER'S 5 GENERIC STRATEGIES AirAsia- Type 1 Cost Leadership-Low Cost DEFENSIVE STRATGEY Retrenchment Strategy Bargaining Power of Buyers Intensive Strategy Market Penetration … The Ansoff Matrix There are upcoming sports events like 2011 Cricket World Cup in India, Sri Lanka, Bangladesh, and 2012 Olympics in London. Using Ansoff’s Product/Market Matrix, analyse the case evidence on which growth directions AirAsia and the Tune Group have pursued and make recommendations on future growth options. AirAsia has strong position in Asian market. Registered Data Controller No: Z1821391. 6  Pages. At start, it may be a good strategy for AirAsia not to have its own maintenance, repair and overhaul facilities. Study of Air-Asia : Strategic Role of Information System in Business BUSINESS Growth and Diversify by applying Ansoff’s Product/Market MatrixAnsoff’s matrix help to determine and analysis to grow AirAsia business via market penetration, product development and market development with the aid of this matrix AirAsia able to access their business on the business life cycle. In this context products may be determined as Ansoff matrix Cash Cows Cash cows are in the lower left quadrant. Through unrelated diversification (conglomeration), AirAsia might spread risk if suddenly airline industry is having difficulties and have elevated profit opportunity from the new business. The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool used by firms to analyze and plan their strategies for growth Sustainable Growth Rate The sustainable growth rate is the rate of growth that a company can expect to see in the long term. As a result it avoids paying commissions to middlemen. So low switching cost attracts new entrants. as a franchise of AirAsia. Air Asia leading airline was established with the dream of making flying possible for everyone. AirAsia has some weaknesses but these do not seem to be very dangerous. AirAsia can peruse this strategy by using marketing budget and using the existing marketing department. The Ansoff product-market matrix shows different ways organisations can achieve growth. AirAsia has strong presence in Asian region as compared to other low cost carriers. AirAsia declared a three-year partnership on 5 April 2007, with the British Formula One team AT&T Williams. 1. Partnership with Virgin Airline will provide great opportunity to expand its business in Asia as well as in other parts of the world. The strengths, weakness, opportunities and threats for AirAsia are as follow: AirAsia operates a single type of aircraft, the airbus model. As we know AirAsia has strong management team, which will surly make these strategies successful. Do you have a 2:1 degree or higher? Tanju Colak It is now the award winning with the largest operation low fare in Asia. The Ansoff matrix presents the four major strategies that are used by the business organizations to achieve corporate growth. If there is terrorism happen in the area where AirAsia operates, it results in stopping their flights to ensure safety of passengers as well as the plane. *You can also browse our support articles here >. Here in markets may be defined as customers, and products as items sold to customers (Lynch, 2003). • To be able to provide affordable airfares, at the same time promoting Malaysian hospitality and the local food. 2- Analysing Air Asia’s Investment appraisal 3- Using the PEST analysis to analyse the external environment that may affect Malindo Air. The company might have to recruit new employees who have knowledge about the new business. Premium AirAsia engages in direct sale through web site and call center. Often referred to as G, the sustainable growth rate can be calculated by multiplying a company's earnings … Internet technology resulted in increasing the bargaining power of buyer. New product development, Marketing, Management 766  Words | Air Asia is a low-cost airline headquartered in Malaysia. For example Air Asia can open up new routes to other places than the existing routes. Setting up airline business requires huge investment. Because the buyers are now able to compare the prices more easily and in view of no switching costs, they could choose whichever airline offers a low price. AirAsia planes prepare for take off at Don Mueang International Airport in Bangkok, Thailand, June 29, 2016. AIRASIA’S MATERIALITY MATRIX Materiality refers to issues that reflect an organisations’ most significant economic, environmental and social impacts (X-axis), and the concern of stakehoolders (Y-axis).
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