Air Asia

Essay by clausB, September 2014

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Case study for AirAsia in SouthEast Asia

Unit Code/Name: MGW3681/International Management

Tutorial Day/Time: Monday/3-4PM

Student Name (Student ID):



Tan Wing Wai (2340671)

Tracy Tan Tze Thong (23740752)

Lecturer/Tutor: Dr Teh Pei Lee/Ms Joseph Saramma

Executive Summary

The report was assigned to analyse the opportunity and threat that AirAsia will face in the SouthEast Asia and provide recommendation for AirAsia to expand its business furthermore. In 1993, AirAsia Berhad is established which then only commenced operations in the year 1996. In the year 2001, Tony Fernandes's company, Tune Air Sdn Bhd purchased the airline from DRB-Hicom. The first and main base of Air Aisa is at the Low Cost Carrier Terminal (LCCT) at the Kuala Lumpur International Airport (KLIA).

The industry analysis shows the overall competitiveness in the South East Asia market. Then the difference difference between the Asia region compare to the European and North America market are the price sensitivity from the consumer as the European and North America market have more substitution than Asia market.

Besides, the strategy that adopts to be the market leader is cost leadership strategy to tackle the underdeveloped low cost carrier (LCC) market in the ASEAN region. In differentiation strategy, AirAsia has adopted Southwest's culture on how the employees are treated as the priority and followed by the customers. Where focus strategy is to target price sensitive customers and first-time flyers for leisure and business purposes. However, there is risk in doing business in South East such as the Political and Economic risk. Moreover, the report will discuss Fernandes's entrepreneurial strategy such as the "walk around" management, employees oriented and the used to technology to motivate its customer to explore the webpage of AirAsia. The report will point out the possible growth in the future Asia market...