Air Asia 3
1. STRATEGY IS KEY:
a) What is the macro and industry environment in the South East Asian region for the entrance of new budget airlines? What opportunities and challenges are associated with that environment?
The South East Asian region offers huge opportunities for the entrance of new low-fare airlines. Analyst revealed that low fares are often the deciding factors for budget-conscious travelers in Southeast Asia. This region represents a huge population, which offers low-fare airlines a vast market with promising profits. China’s huge population alone offers a great market for low-fare airlines. Demand may differ for low-fare services between the South East Asian region and in North America and Europe. In Europr and America customers the Asia Pacific region low airfare is the main driving force for choosing an airline carrier. In European and American customers usually look for a more traditional airline which offers factors such as comfort, food, cleanliness, etc… Governments pose a significant obstacle to the expansion of low-fare airlines in Asia. Government airline regulations in Asia prohibit competition to take place amongst airline carriers, allowing the government opportunities to be manipulated and bribed. The manipulation of the government by competing airlines can limit the growth for alternative airlines to offer service to Asia-Pacific regions, leading Asia to have few choices amongst air carriers.
b) Compare AirAsia’s generic strategy (cost leadership, differentiation, focus) with the strategies of other incumbent carriers and with Southwest and Ryan Air. How is it similar to and different from the strategies of those carriers?
2. Create three non-financial performance metrics for Air Asia management’s use in assessing how well the Company has performed on each of the following Balanced Scorecard dimensions (a total of nine measures, three for each dimension):
· Customer Satisfaction
· Business Process
· Learning and Growth
a) What is the macro and industry environment in the South East Asian region for the entrance of new budget airlines? What opportunities and challenges are associated with that environment?
The South East Asian region offers huge opportunities for the entrance of new low-fare airlines. Analyst revealed that low fares are often the deciding factors for budget-conscious travelers in Southeast Asia. This region represents a huge population, which offers low-fare airlines a vast market with promising profits. China’s huge population alone offers a great market for low-fare airlines. Demand may differ for low-fare services between the South East Asian region and in North America and Europe. In Europr and America customers the Asia Pacific region low airfare is the main driving force for choosing an airline carrier. In European and American customers usually look for a more traditional airline which offers factors such as comfort, food, cleanliness, etc… Governments pose a significant obstacle to the expansion of low-fare airlines in Asia. Government airline regulations in Asia prohibit competition to take place amongst airline carriers, allowing the government opportunities to be manipulated and bribed. The manipulation of the government by competing airlines can limit the growth for alternative airlines to offer service to Asia-Pacific regions, leading Asia to have few choices amongst air carriers.
b) Compare AirAsia’s generic strategy (cost leadership, differentiation, focus) with the strategies of other incumbent carriers and with Southwest and Ryan Air. How is it similar to and different from the strategies of those carriers?
2. Create three non-financial performance metrics for Air Asia management’s use in assessing how well the Company has performed on each of the following Balanced Scorecard dimensions (a total of nine measures, three for each dimension):
· Customer Satisfaction
· Business Process
· Learning and Growth