CASE STUDY - AIR ASIA "NOW EVERYONE CAN FLY"

QUESTION 1
Identify five (5) of competitive advantages used by AirAsia.

1. Launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed.
2. Undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 (US $0.27).
3. AirAsia operates scheduled domestic and international flights and is Asia's largest low fare.
4. AirAsia pioneered low cost travelling in Asia.
5. The first airline in the region to implement fully ticketless travel and unassigned seats.

QUESTION 2
Which of the Porter's generic strategies were applied by AirAsia in the case study and
explain with examples.

- From my opinion AirAsia applied cost leadership from the porter's generic strategies. For example from the article, AirAsia operates scheduled domestic and international flights and is Asia's largest low fare,no frills airline. AirAsia pioneered low cost travelling in Asia which is then followed by Tiger Airways, Jetstar Asia, Nok Air, Lion Air and Cebu Pacific.Becoming a low-cost producer in the industry allows the company to lower prices to customers.Competitors with higher costs cannot afford to compete with the low-cost leader on price.

QUESTION 3
Based on Porter's Five Force Model, analyze AirAsia's buyer power and supplier power.

-  Based on POrter's Five Model, AirAsai's buyer power is the customers.it will HIGH when buyers have many choices of whom to buy while it will LOW when their choices are few. To reduce the buyer power (and create competitive advantage), an organization must make it more attractive to buy from the company not from the competitors. From the AirAsia they have AirAsia operates with the world's lowest unit cost of US$0.023/ASK(available seat per kilometer) and a passenger break-even load factor of 52%.AirAsia is currently the main customer of the Airbus A320. The company has placed an order of 175 units of the same plane to service its routes.For the supplier power, Air Asia assessed by the suppliers' ability to directly impact the price they are charging for suppliers. For example Air Asia is currently the main customer of the Airbus A320. The company has place an order of 175 units of the same plane to service its route network by connecting all the existing cities in the region and expending further. Usually airline industry has high supplier power has an there are limited plane and engine manufactures to choose from.