Business Level Strategy of Airasia
Business-Level Strategy of Air Asia
Introduction:
Aviation, an industry where it is full of fluctuations, has always been affected by various factors. It is not uncommon to see aviation-related companies keep changing their own strategies to make ends meet. Overall the air industry in Asia has continuously growth recently and maintains a high level of ranking. Among the explosive growth in budget airlines market, Air Asia is obviously the typical example for further study with the most fleet sizes and destinations. Air Asia was founded in 1993. There are now 57 Airbus serving 79 destinations where the passenger load factor in 2011 was 76%. Winning the Skytrax World’s best low-cost airline in the previous three year consecutively, it is well-known for its low-fare under the world’s lowest operating cost. With the increasing fleet size and capacity of seats, the average load factor had once been push up to 80% recently. Its positive performance has brought a strong direction to its future growth.
The core competences of a company should focus on satisfying customers’ requirements by adopting any business-level strategy which may provide value to consumers and present its competitive advantages. In terms of business-level strategy, there are mainly four different strategies including cost leadership, differentiation and hybrid and focus strategy. Firstly, cost leadership, as the name implies, maintaining low cost by tight control over production and overhead costs so that the company may compete for a wide range of consumers based on price. Putting continuous effort on lowering cost can lead a firm successfully be a cost leader. Air Asia is a typical example that further explanation will be made as major focus of the essay. Secondly, differentiation comes from unique characteristics and features of its product such as high quality of customer service, advanced technological features. For example, Cathay Pacific provides different types of services. While in some
Introduction:
Aviation, an industry where it is full of fluctuations, has always been affected by various factors. It is not uncommon to see aviation-related companies keep changing their own strategies to make ends meet. Overall the air industry in Asia has continuously growth recently and maintains a high level of ranking. Among the explosive growth in budget airlines market, Air Asia is obviously the typical example for further study with the most fleet sizes and destinations. Air Asia was founded in 1993. There are now 57 Airbus serving 79 destinations where the passenger load factor in 2011 was 76%. Winning the Skytrax World’s best low-cost airline in the previous three year consecutively, it is well-known for its low-fare under the world’s lowest operating cost. With the increasing fleet size and capacity of seats, the average load factor had once been push up to 80% recently. Its positive performance has brought a strong direction to its future growth.
The core competences of a company should focus on satisfying customers’ requirements by adopting any business-level strategy which may provide value to consumers and present its competitive advantages. In terms of business-level strategy, there are mainly four different strategies including cost leadership, differentiation and hybrid and focus strategy. Firstly, cost leadership, as the name implies, maintaining low cost by tight control over production and overhead costs so that the company may compete for a wide range of consumers based on price. Putting continuous effort on lowering cost can lead a firm successfully be a cost leader. Air Asia is a typical example that further explanation will be made as major focus of the essay. Secondly, differentiation comes from unique characteristics and features of its product such as high quality of customer service, advanced technological features. For example, Cathay Pacific provides different types of services. While in some